SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to (S) 240.14a-11(c) or (S) 240.14a-12
Brunswick Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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Notes:
[LOGO OF BRUNSWICK]
1 N. Field Ct., Lake Forest, Illinois 60045-4811
March 26, 2001
Dear Brunswick Shareholder:
You are cordially invited to attend the 2001 Annual Meeting of Brunswick Share-
holders to be held on Tuesday, May 1, 2001, at 3:00 p.m. at Brunswick's corpo-
rate offices, 1 N. Field Court, Lake Forest, Illinois. Brunswick's offices are
northwest of Chicago, Illinois, on Route 60, one-half mile east of I-294/94
(the Tri-State Tollway).
The formal Notice of Annual Meeting and Proxy Statement accompanying this let-
ter describe the business to be acted on at the meeting.
It is important that your shares be represented at the meeting. Please submit
your vote according to the instructions on the enclosed PROXY card as promptly
as possible in order to ensure your representation at the meeting. Even if you
have given your proxy, you may still vote in person if you attend the meeting.
Please note, however, that if your shares are held of record by a broker, bank,
or other nominee and you wish to vote at the meeting, you will NOT be permitted
to vote in person at the meeting unless you first obtain a proxy issued in your
name from the record holder.
Shares held in the Brunswick Employee Stock Ownership Plan (BESOP), Retirement
Savings Plan (BRSP) or Rewards Plan may not be voted in person at the meeting.
Finally, please note that you now have additional voting options. You may vote
either by telephone or via the Internet at www.proxyvote.com. Please refer to
the enclosed PROXY card for further instructions concerning these voting alter-
natives.
We look forward to seeing you at the meeting.
Sincerely,
/s/ George W. Buckley
George W. Buckley
Chairman
NOTICE OF ANNUAL MEETING
The Annual Meeting of Shareholders of Brunswick Corporation will be held at
Brunswick's corporate offices, 1 N. Field Court, Lake Forest, Illinois, on
Tuesday, May 1, 2001, at 3:00 p.m. for the following purposes:
(1) To elect directors,
(2) To approve an amendment to the 1991 Stock Plan increasing the maxi-
mum number of shares authorized for issuance to an individual em-
ployee during a calendar year,
(3) To ratify the appointment of Arthur Andersen LLP as auditors, and
(4) To consider such other business as may properly come before the
meeting.
Brunswick shareholders of record at the close of business on March 2, 2001,
will be entitled to notice of and to vote at the meeting and any adjournment
thereof.
By order of the Board of Directors,
/s/ Dustan E. McCoy
Dustan E. McCoy
Secretary
Lake Forest, Illinois
March 26, 2001
[LOGO]
PROXY STATEMENT
The Board of Directors of Brunswick Corporation is soliciting proxies from
its shareholders for the annual meeting to be held on May 1, 2001. This proxy
statement is first being mailed to shareholders on or about March 26, 2001. Any
shareholder submitting a proxy may revoke it at any time before it is voted. If
a shareholder is participating in Brunswick's Dividend Reinvestment Plan or Em-
ployee Stock Investment Plan, any proxy given by such shareholder will also
govern the voting of all shares held for the shareholder's account under those
plans, unless contrary instructions are received.
Only holders of Brunswick's 87,553,537 shares of Common Stock outstanding as
of the close of business on March 2, 2001, the record date, will be entitled to
vote at the meeting. Each share of Common Stock is entitled to one vote. The
representation in person or by proxy of a majority of the outstanding shares of
Common Stock is necessary to provide a quorum at the annual meeting. Absten-
tions are counted as present in determining whether the quorum requirement is
satisfied, but they have no other effect on voting for election of directors.
Abstentions are the same as a vote against on other matters. In instances where
brokers are prohibited from exercising discretionary authority for beneficial
owners who have not returned a proxy ("broker nonvotes"), those shares will be
counted for quorum purposes. The broker nonvotes will not be included in the
vote totals for a proposal and therefore will have no effect on the vote for
the proposal.
ELECTION OF DIRECTORS
Brunswick's Restated Certificate of Incorporation provides that the Board of
Directors shall be divided into three classes, each consisting, as nearly as
may be possible, of one-third of the total number of directors. The Board is
comprised of 14 directors. Three directors are to be elected at the meeting.
The Board of Directors has nominated Nolan D. Archibald, Jeffrey L. Bleustein
and Robert L. Ryan for election as directors to serve for terms expiring at the
2004 annual meeting or until their respective successors shall have been
elected and qualified. Messrs. Archibald, Bleustein and Ryan have served as
directors since 1995, 1997 and 1998, respectively.
Kenneth Roman will be retiring from the Board at the 2001 annual meeting in
accordance with Brunswick's written Board of Directors Principles and Practic-
es, which establish a normal retirement age of 70 for independent directors.
It is intended that votes will be cast, pursuant to authority granted by the
enclosed proxy, for the election of the nominees named above as Brunswick's di-
rectors, except as otherwise specified in the proxy. Directors shall be elected
by a plurality of the votes cast at the annual meeting on the election of di-
rectors, and votes withheld or broker nonvotes will not affect the outcome. In
the event any one or more of such nominees shall be unable to serve, votes will
be cast, pursuant to authority granted by the enclosed proxy, for such person
or persons as may be designated by the Board of Directors. Biographical infor-
mation follows for each person nominated and each person whose term of office
will continue after the annual meeting.
1
Nominees for Election for Terms Expiring at the 2004 Annual Meeting
Nolan D. Archibald Director since 1995
[PHOTO] Chairman of the Board, President and Chief Executive Officer of
The Black & Decker Corporation, a consumer and commercial prod-
ucts company, since 1986; age 57
Jeffrey L. Bleustein Director since 1997
[PHOTO] Chairman of the Board of Harley-Davidson, Inc., a motorcycle
manufacturer, since 1998; President and Chief Executive Officer
of Harley-Davidson, Inc., since 1997; President and Chief Oper-
ating Officer of the Motorcycle Division of Harley-Davidson,
Inc., 1993 to 1997; age 61
Robert L. Ryan Director since 1998
[PHOTO] Senior Vice President and Chief Financial Officer of Medtronic,
Inc., a medical technology company, since 1993; director of
United Healthcare Corporation; age 57
The Board of Directors recommends a vote FOR the nominees named above.
Directors Continuing in Office Until the 2003 Annual Meeting
George W. Buckley Director since 2000
[PHOTO] Chairman of the Board and Chief Executive Officer of Brunswick
since June 2000; President and Chief Operating Officer of Bruns-
wick, May to June 2000; Executive Vice President of Brunswick,
February to May 2000; President--Mercury Marine Group, 1997 to
2000; Senior Vice President of Brunswick, 1998 to 2000; Vice
President of Brunswick, 1997 to 1998; President of the U.S.
Electrical Motors Division of Emerson Electric Co., a manufac-
turer of electrical, electronic and electromagnetic products,
1996 to 1997; and President of Emerson's Automotive and Preci-
sion Motors Division, 1994 to 1996; age 54
Michael J. Callahan Director since 1991
[PHOTO] Financial consultant; Executive Vice President and Chief Finan-
cial Officer of FMC Corporation, a producer of chemicals and ma-
chinery for industry and agriculture, 1994 to 1999; Executive
Vice President and Chief Financial Officer of Whirlpool Corpora-
tion, a manufacturer of major home appliances, 1992 to 1994; di-
rector of Material Sciences Corporation; age 62
Manuel A. Fernandez Director since 1997
[PHOTO] Chairman of the Board of Gartner, Inc., an information technol-
ogy company, since 1995; Chairman and Chief Executive Officer of
Gartner Group, Inc., 1995 to 1998; and President and Chief Exec-
utive Officer of Gartner Group, Inc., 1991 to 1997; Managing Di-
rector--SI Ventures, LLC, a venture capital partnership, since
1998; age 54
2
Peter B. Hamilton Director since 2000
[PHOTO] Vice Chairman of the Board of Brunswick and President--Brunswick
Bowling & Billiards since 2000; Executive Vice President and
Chief Financial Officer of Brunswick, 1998 to 2000; Senior Vice
President and Chief Financial Officer of Brunswick, 1995 to
1998; Vice President and Chief Financial Officer, Cummins Engine
Company, Inc., a designer and manufacturer of diesel engines and
related products, 1988 to 1995; director of The Kemper Insurance
Companies; age 54
Roger W. Schipke Director since 1993
[PHOTO] Private investor; Chairman of the Board and Chief Executive Of-
ficer of The Sunbeam Corporation, a consumer products firm, 1993
to 1996; Chairman of the Board and Chief Executive Officer of
The Ryland Group, a company engaged in mortgage banking and home
building, 1990 to 1993; director of Legg-Mason, Inc., Oakwood
Homes Corporation and The Rouse Company; age 64
Directors Continuing in Office Until the 2002 Annual Meeting
Dorrit J. Bern Director since 2000
[PHOTO] Chairman of the Board, President and Chief Executive Officer of
Charming Shoppes, Inc., a company operating a chain of women's
specialty apparel stores, since 1997; Vice Chairman of the
Board, President and Chief Executive Officer of Charming
Shoppes, Inc., 1995 to 1997; age 50
Peter Harf Director since 1996
[PHOTO] Chairman of the Board and Chief Executive Officer of Joh. A.
Benckiser, GmbH, an international consumer products company,
since 1988, and Chairman and Chief Executive Officer of its
U.S.-based international cosmetics business, now called Coty
Inc., since 1993; age 54
Jay W. Lorsch Director since 1983
[PHOTO] Louis E. Kirstein Professor of Human Relations since 1978,
Chairman of Doctoral Programs, 1995 to 1999, and Senior Associ-
ate Dean and Chairman of Executive Education Programs, 1990 to
1995, Harvard University Graduate School of Business Administra-
tion; age 68
Bettye Martin Musham Director since 1993
[PHOTO] Chairwoman of the Board and Chief Executive Officer of Gear
Holdings, Inc., a design, marketing and communications firm,
since 1999; President and Chief Executive Officer of Gear Hold-
ings, Inc., 1977 to 1999; director of Footstar, Inc. and Wallace
Computer Co.; age 68
Committees and Meetings
The Board of Directors has Executive, Audit and Finance, Human Resource and
Compensation, and Corporate Governance Committees. The Audit and Finance, Human
Resource and Compensation, and Corporate Governance Committees are composed
solely of independent directors.
3
Members of the Executive Committee are Messrs. Buckley (Chairman), Calla-
han, Fernandez, Lorsch and Schipke.
Members of the Audit and Finance Committee are Messrs. Callahan (Chairman),
Bleustein, Harf and Ryan and Ms. Bern.
Members of the Human Resource and Compensation Committee are Messrs.
Schipke (Chairman), Archibald and Lorsch.
Members of the Corporate Governance Committee are Messrs. Fernandez (Chair-
man) and Roman and Ms. Martin Musham.
The Executive Committee did not meet in 2000. The Executive Committee takes
any necessary actions requiring Board decisions between regular Board meetings
when it is impossible to convene a special meeting of the entire Board. Any
action taken by the committee will be reported to, and ratified by, the full
Board at its next regular meeting.
The Audit and Finance Committee met eight times during 2000. Pursuant to a
written charter adopted by the Board and attached to this proxy statement as
Exhibit A, the Audit and Finance Committee provides assistance to the Board in
fulfilling the Board's responsibility to Brunswick shareholders and the in-
vestment community with respect to Brunswick's accounting, auditing and re-
porting practices, its internal controls and the integrity of its financial
information. The committee maintains free and open communication with the
Board, the independent auditors, the internal auditors and management. The
committee's responsibilities include reviewing the performance of the indepen-
dent auditors and recommending to the Board the appointment or discharge of
the independent auditors; reviewing the scope and terms of engagement of the
independent auditors; confirming and assuring the independence of the indepen-
dent auditors; reviewing Brunswick's internal audit function; reviewing sig-
nificant risks and exposures, audit activities, significant audit findings and
recommendations of the independent and internal auditors, together with man-
agement's responses; reviewing the adequacy and effectiveness of Brunswick's
internal controls; reviewing the audited annual financial statements and the
independent auditors' opinion rendered with respect to the financial state-
ments; reviewing legal, environmental or regulatory matters that may have a
material financial or disclosure impact; reviewing the annual report to share-
holders; reviewing periodic reports on the ethics program; considering other
matters in relation to Brunswick's financial affairs; conducting or authoriz-
ing investigations into any matters within the committee's scope of responsi-
bilities; meeting with the independent auditors and internal auditors without
members of management present; reporting to the Board periodically on its ac-
tivities; and reviewing the committee's charter annually.
The Human Resource and Compensation Committee met eight times during 2000.
The Human Resource and Compensation Committee is responsible for determining
compensation paid to Brunswick's senior executives and developing policies for
the administration of all compensation and benefit plans in which other senior
managers participate. The committee reviews all executive compensation plans
to satisfy the Board that these plans will motivate achievement of corporate
objectives. The committee also reports on the compensation paid to executives
under these plans and its relationship to Brunswick's performance, as required
by the Securities and Exchange Commission, and approves the performance crite-
ria for all bonus plans for subsequent performance periods. In addition, the
committee coordinates the Board's review of management succession plans and
activities.
The Corporate Governance Committee met four times during 2000. The Corpo-
rate Governance Committee is responsible for the functioning of the Board, in-
cluding assessing the Board's composition, the Board's agenda and calendar,
the information directors receive, director compensation, and the Board's
other processes and procedures. The committee establishes and recommends to
the Board criteria for new directors to be added to the Board and, working
with the Chairman and Chief Executive Officer, screens new potential nominees
before they are recommended to the Board. The committee also oversees the ori-
entation of new directors to assure they are able to make a timely contribu-
tion to the Board's work. The committee also reviews the perfor-
4
mance of each incumbent director at the time of his or her re-nomination. The
Chairman of the committee, together with the Chairman of the Board, communi-
cates the results of this review to the nominee on behalf of the Board. The
committee coordinates an annual review of the Board's functioning and recom-
mends any needed changes. The committee is also responsible for determining the
Chairs and membership of Board committees, upon recommendation from the Chair-
man of the Board. The committee also monitors, on the Board's behalf, changes
in Brunswick's organizational structure and its corporate governance.
The By-laws provide that nominations for the election of directors may be
made by the Board of Directors or a committee appointed by the Board of Direc-
tors. The Corporate Governance Committee will consider qualified director can-
didates that are suggested by shareholders in written submissions to
Brunswick's Secretary. In addition, the By-laws provide a procedure for share-
holder nominations. Shareholders intending to nominate director candidates for
election must deliver written notice thereof to Brunswick's Secretary not later
than (i) with respect to an election to be held at an annual meeting of share-
holders, 90 days prior to the anniversary date of the immediately preceding an-
nual meeting of shareholders, and (ii) with respect to an election to be held
at a special meeting of shareholders, the close of business on the tenth day
following the date on which notice of such meeting is first given to sharehold-
ers. The notice of nomination shall set forth certain information concerning
such shareholder and the shareholder's nominee(s), including their names and
addresses, a representation that the shareholder is entitled to vote at such
meeting and intends to appear in person or by proxy at the meeting to nominate
the person or persons specified in the notice, a description of all arrange-
ments or understandings between the shareholder and each nominee, such other
information as would be required to be included in a proxy statement soliciting
proxies for the election of the nominees of such shareholder and the consent of
each nominee to serve as a director of Brunswick if so elected. The chairman of
the shareholders' meeting may refuse to acknowledge the nomination of any per-
son not made in compliance with the foregoing procedure.
The Board of Directors met ten times during 2000. All directors attended 75
percent or more of the board meetings and meetings of committees of which they
were members during 2000.
Director Compensation
Directors who are not employees and who are not committee chairpersons are
entitled to an annual fee of $50,000, and directors who are chairpersons of the
Audit and Finance, Human Resource and Compensation, and Corporate Governance
Committees are entitled to an annual fee of $57,500. One-half of each direc-
tor's annual fee is paid in Brunswick Common Stock, and each director may elect
to have the remaining one-half paid in cash or Common Stock. Receipt of this
Common Stock may be deferred until after retirement from the Board. New non-em-
ployee directors receive an award of Common Stock that has a value of $25,000
at the time they are first elected to the Board, with receipt deferred until
after retirement from the Board.
Non-employee directors at the time of Brunswick's 2000 annual meeting of
shareholders each received options to purchase 3,000 shares of Common Stock at
a price of $19.125 per share. New non-employee directors receive options to
purchase 3,000 shares of Common Stock if they first are elected to the Board of
Directors within six months after the most recent annual meeting of sharehold-
ers or options to purchase 1,500 shares of Common Stock if they first are
elected after six months following the most recent annual meeting of sharehold-
ers. The exercise price of these options is 100 percent of the fair market
value of the Common Stock based on the closing stock price on the date of
award. Options for one-half of these shares become fully exercisable one year
after the date of award, and options for the other one-half become exercisable
two years after the date of award. In addition, the options become exercisable
upon a change in control of Brunswick. The options may be exercised at any time
after becoming exercisable until the tenth anniversary of the date of award.
Directors are encouraged to use Brunswick products to enhance their under-
standing and appreciation of the business. Directors may receive up to $10,000
of Brunswick products annually. The value of the products is included in the
directors' taxable income, and Brunswick reimburses Directors for applicable
tax liability associated with the receipt of products. Directors may lease
boats from Brunswick at no charge except for the payment of applicable taxes,
and all or a portion of their $10,000 product allowance may be applied to de-
fray such taxes. In addition, Directors may purchase Brunswick products at
Brunswick's wholesale prices.
5
SHAREHOLDERS
Each director, each executive officer listed in the summary compensation ta-
ble, and all directors and executive officers as a group owned the number of
shares of Brunswick Common Stock set forth in the following table, with sole
voting and investment power except as otherwise indicated:
Number of Shares Percent
Name of Individual Beneficially Owned of
or Persons in Group as of February 1, 2001 Class
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Nolan D. Archibald 32,179(1) *
Dorrit J. Bern 3,296(1) *
Jeffrey L. Bleustein 21,218(1) *
George W. Buckley 101,355(2) *
Michael J. Callahan 53,101(1) *
Manuel A. Fernandez 18,576(1) *
Peter B. Hamilton 241,865(2) *
Peter Harf 47,248(1) *
Jay W. Lorsch 46,240(1) *
Bettye Martin Musham 25,542(1) *
Kenneth Roman 43,412(1) *
Robert L. Ryan 8,820(1) *
Roger W. Schipke 43,184(1) *
William J. Barrington 188,175(2) *
Dustan E. McCoy 5,197(2) *
Victoria J. Reich 31,061(2) *
Peter N. Larson 1,681,367(2) 1.92%
All directors and executive officers as a group 2,924,150(1)(2) 3.35%
* Less than 1 percent
(1) Includes the following shares of Common Stock issuable to non-employee di-
rectors, receipt of which has been deferred: Messrs. Archibald 7,179
shares, Bleustein 8,718 shares, Callahan 20,960 shares, Fernandez 11,076
shares, Harf 12,248 shares, Lorsch 24,699 shares, Roman 10,176 shares, Ryan
4,320 shares and Schipke 23,084 shares, Ms. Bern 3,296 shares, Ms. Martin
Musham 7,967 shares, and all non-employee directors as a group 133,723
shares. Also includes the following shares of Common Stock issuable pursu-
ant to stock options exercisable within 60 days: 10,000 shares for each of
Messrs. Archibald, Harf and Roman; 15,600 shares for each of Messrs. Calla-
han, Lorsch and Schipke and Ms. Martin Musham; 7,500 shares for each of
Messrs. Bleustein and Fernandez; and 4,500 shares for Mr. Ryan.
(2) Includes the following shares of Common Stock issuable pursuant to stock
options exercisable within 60 days: Messrs. Buckley 62,000 shares, Barring-
ton 146,500 shares and Hamilton 182,000 shares, Ms. Reich 21,500 shares,
Mr. Larson 1,187,255 shares, and all directors and executive officers as a
group 1,759,395 shares. Includes the following shares of Common Stock held
by the Brunswick Employee Stock Ownership Plan trustee and the Brunswick
Savings Plan trustee as of December 31, 2000: Messrs. Buckley 346 shares,
Barrington 9,159 shares, and Hamilton 615 shares, Ms. Reich 404 shares, Mr.
Larson 2,906 shares, and all directors and executive officers as a group
22,079 shares. Also includes the following shares of Common Stock held for
the benefit of family and family partnerships: Mr. Hamilton 43,250 shares,
Ms. Reich 40 shares, Mr. Larson 1,000 shares, and all directors and execu-
tive officers as a group 44,290 shares.
6
The only shareholder known to Brunswick to own beneficially more than 5 per-
cent of Brunswick's outstanding Common Stock is:
Shares Beneficially
Name and Address of Owned as of Percent
Beneficial Owner December 31, 2000 of Class
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Barclays Global Investors, N.A. 5,402,050(1) 6.18%
45 Fremont Street
San Francisco, CA 94105
(1) Barclays Global Investors, N.A.; Barclays Global Fund Advisors; Barclays
Funds Limited; Barclays Global Investors, LTD.; and Barclays Trust and
Banking Company (Japan) Ltd., jointly reported sole voting power for
4,984,868 shares and sole dispositive power for 5,397,574 shares, of which
Barclays Global Investors, N.A., reported sole voting power for 4,507,781
shares and sole dispositive power for 4,912,505 shares (5.62 percent) and
Barclays Global Fund Advisors reported shared dispositive power for 4,476
shares, in a Schedule 13F dated February 14, 2001.
REPORT OF THE HUMAN RESOURCE AND COMPENSATION COMMITTEE
The Human Resource and Compensation Committee of the Board of Directors (the
"Committee") is comprised entirely of independent, non-employee directors. The
Committee is responsible for overseeing all compensation plans in which the
Chairman and Chief Executive Officer and other senior executives, including
group and division presidents and senior corporate executives ("Senior Execu-
tives"), participate.
Executive Compensation Program
Executive compensation programs are designed to attract, retain and motivate
the senior executive talent required to ensure continued success. The programs
also aim to support creation of shareholder value and ensure that pay is con-
sistent with performance. During 2000, Brunswick, with the assistance of inde-
pendent compensation consultants, redesigned its executive compensation pro-
grams for 2001 to better support these objectives. A Hewitt Associates survey
of 31 peer companies was commissioned in connection with this redesign. The
peer companies consisted primarily of manufacturers with revenues similar to
Brunswick's. One of these peer companies, Fortune Brands, Inc., is also in-
cluded in Brunswick's peer group index in the performance table immediately
following this Report of the Human Resource and Compensation Committee. The
Hewitt Associates survey indicated that base salaries and total compensation
for Brunswick's Senior Executives and other key managers generally approximate
the fiftieth percentile among the peer companies selected for this purpose.
Base Salaries: Base salaries and salary increases reflect an executive's re-
sponsibilities and performance, as demonstrated over time, and will be managed
around median peer salary levels. Salary ranges are used to ensure that compen-
sation opportunities are externally competitive and internally equitable. Gen-
erally, executive salaries are reviewed every 12 months.
The Brunswick Performance Plan ("BPP"): BPP rewards achievement of annual
financial goals. For 2000, BPP rewarded annual performance as measured 80 per-
cent by earnings per share for corporate executives and for division executives
by Brunswick Value Added ("BVA"), defined as division contribution less a work-
ing capital charge, and 20 percent by achievement of specific organizational
development objectives central to the continued strength of the business. For
Senior Executives, BPP opportunities generally range from 75 to 125 percent of
salary.
Bonuses earned by Senior Executives for 2000 were reviewed and approved by
the Committee based upon an assessment of performance against goals. For corpo-
rate executives, BPP awards were determined based on earnings per share from
continuing operations, and for division executives awards were based on divi-
sion BVA as defined above. All Senior Executive BPP awards were measured 20
percent on achievement of organizational development objectives.
7
Going forward, all annual BPP funding will be based 100 percent on BVA,
redefined to reflect after-tax profits, inclusive of the cost of total capital
("Redefined BVA"). Individual awards will reflect both team performance as mea-
sured by Redefined BVA and individual contribution to success.
Strategic Incentive Plan ("SIP"): SIP rewards achievement of mid-term finan-
cial goals and performance against leading indicators of success. For Senior
Executives, SIP opportunities generally range from 75 to 100 percent of salary.
SIP awards are denominated in a combination of cash and Brunswick Common Stock
(generally 75 to 100 percent stock for Senior Executives). The stock unit value
for purposes of SIP awards is determined by calculating the average of the
Brunswick Common Stock price at the beginning and end of the SIP performance
period.
For 2000 and in prior years, SIP had a two-year performance period, with a
new cycle beginning each year, and rewarded earnings per share, BVA perfor-
mance, and performance versus established strategic goals. Going forward, SIP
will have three-year performance periods and will reward Redefined BVA perfor-
mance and performance against identified strategic goals. With respect to the
Redefined BVA component, SIP will have overlapping cycles with a new three-year
cycle beginning annually (except that to facilitate transition to the Redefined
BVA, one-, two- and three-year cycles begin in 2001). With respect to the stra-
tegic goals component, SIP will have "end-to-end" three-year performance peri-
ods. Due to these changes in the SIP plan performance periods, both the 1999-
2000 cycle and the 2000-2001 cycle were ended in 2000.
In accordance with the criteria described above, SIP awards earned by Senior
Executives for 2000 were reviewed and approved by the Committee based upon an
assessment of performance against goals. Individual SIP awards for 2000 were
determined based on earnings per share from continuing operations, BVA perfor-
mance, and performance versus established strategic goals.
Stock Options: Brunswick uses stock options, with exercise prices set at 100
percent of fair market value, to reward long-term success as measured by Bruns-
wick Common Stock price appreciation. Options generally have a ten-year term
with options granted in 2000 vesting 25 percent on each of the first, second,
third and fourth anniversaries of the date of grant.
Stock Ownership Guidelines: The Chief Executive Officer is expected to own
Brunswick Common Stock with a minimum value of five times annual salary. Cer-
tain other Senior Executives are expected to own stock with a minimum value of
one to three times base salary. Ownership requirements are expected to be met
within five years from the later of guideline adoption or attainment of senior
executive status. For executives not satisfying applicable stock ownership
guidelines in 2000, up to 100 percent of SIP awards were paid in Brunswick Com-
mon Stock.
Elective Deferral Program: Senior Executives may elect to defer salary, BPP
or SIP awards. Beginning in 2001, Senior Executives voluntarily electing to de-
fer SIP awards into deferred stock units (number of units to equal deferred
award value divided by the fair market value of Brunswick Common Stock as of
the last day of the performance period) will have the number of deferred stock
units credited to their account increased by 20 percent. If the original defer-
ral is withdrawn before the third anniversary of the deferral, the 20 percent
premium will be forfeited.
Compensation of the Chief Executive Officer
From January 1, 2000, until May 8, 2000, George W. Buckley was President of
Mercury Marine, a division of Brunswick. Mr. Buckley was named President and
Chief Operating Officer of Brunswick on May 8, 2000, and his salary was in-
creased from $470,000 to $650,000. On June 27, 2000, Mr. Buckley was named
Chairman and Chief Executive Officer of Brunswick and his salary was increased
to $800,000, placing him slightly above the fiftieth percentile among the peer
companies utilized in the Hewitt Associates survey described above.
8
Mr. Buckley participates in the Brunswick Performance Plan, an annual in-
centive plan for key managers (see above for description). For 2000, Mr.
Buckley's BPP award was based on the following:
. From January 1 to May 8, his target opportunity was 125 percent of his
then base salary, with 80 percent of his award based on Mercury Marine
BVA and 20 percent on Mercury Marine strategic initiative performance;
. From May 8 through December 31, 2000, his target opportunity was 150 per-
cent of base salary with 50 percent of his award based on Mercury Marine
performance and 50 percent based on overall Brunswick earnings per share
performance, measured as earnings per share from continuing operations.
Based on Mercury Marine and overall Brunswick performance in accordance
with the formula outlined above, the Committee recommended and the Board of
Directors approved a BPP award to Mr. Buckley of $1,100,000 for 2000.
Mr. Buckley also participates in the Strategic Incentive Plan, a mid-term
incentive plan for key managers (see above for description). Mr. Buckley's
target incentive opportunity is 100 percent of base salary, with awards denom-
inated in stock units at the end of the performance period.
For performance periods ending in 2000, Mr. Buckley's SIP award was based
75 percent on Mercury Marine performance and 25 percent on Brunswick perfor-
mance. Based on the criteria discussed above, for the 1999-2000 cycle and the
2000-2001 cycle the Committee recommended and the Board of Directors approved
SIP awards to Mr. Buckley of $550,000 and $ 310,000, respectively. The
$310,000 award for the shortened 2000-2001 cycle is scheduled to be paid in
early 2002.
On being named President and Chief Operating Officer of Brunswick, Mr.
Buckley was granted 300,000 stock options, the maximum then allowed any indi-
vidual in a single year under the 1991 Stock Plan. Options were granted with
an exercise price at the then current market value with vesting provisions
similar to options awarded others.
Compensation of Former Chairman and Chief Executive Officer
Peter N. Larson resigned his position as Chief Executive Officer of Bruns-
wick effective June 27, 2000. Mr. Larson's compensation for the year through
that date was determined in accordance with an Amended and Restated Employment
Agreement entered into between Brunswick and Mr. Larson on January 4, 1999
(the "Agreement"). Mr. Larson is also entitled to certain benefits under the
Agreement in connection with his resignation as Chief Executive Officer, which
are described in the Employment Agreements and Other Transactions section be-
low.
During 2000, Mr. Larson received $450,000 in salary and $450,014 in pay-
ments in lieu of salary following his resignation as Chief Executive Officer
in accordance with the Agreement. Mr. Larson was eligible to receive an annual
bonus under a plan that provided for a maximum of 200 percent of his annual
salary based upon the achievement of specific financial goals established by
the Board. For 2000, the Board determined that the established goals had not
been achieved and no annual bonus was awarded.
Mr. Larson also participated in the Strategic Incentive Plan, under which
he could earn a maximum of 100 percent of base salary per year in each cycle
upon the achievement of performance goals approved by the Board. For 2000, the
Board determined that the established goals had not been achieved and no SIP
award was made.
9
On January 3, 2000, Mr. Larson was awarded 50,000 shares of Brunswick Com-
mon Stock pursuant to the Agreement. These shares vested upon his resignation
as Chief Executive Officer.
Omnibus Budget Reconciliation Act of 1993
The Omnibus Budget Reconciliation Act of 1993 places a $1 million tax de-
duction limit on compensation paid to any executive employed by Brunswick on
December 31 of each year and named in the summary compensation table, with
certain exceptions. Senior Executives will defer receipt of compensation that
is not deductible by Brunswick, under the terms of an automatic deferral plan
established for this purpose.
Submitted by Members of the Human Resource and Compensation Committee of
the Board of Directors.
R. W. Schipke, Chairman
N. D. Archibald
J. W. Lorsch
10
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
BRUNSWICK, S&P 500 INDEX AND PEER GROUPS
[LINE GRAPH]
Brunswick New Peer Group Former Peer Group S&P 500 Index
--------- -------------- ----------------- -------------
1995 100.00 100.00 100.00 100.00
1996 102.08 117.61 102.38 169.37
1997 131.31 124.38 109.00 225.76
1998 109.16 106.33 128.41 290.55
1999 100.22 112.25 111.72 347.28
2000 84.52 104.84 115.41 312.07
The basis of comparison is a $100 investment at December 31, 1995, in each
of (i) Brunswick, (ii) the S&P 500 Index, (iii) a peer group of five recreation
manufacturing companies (Cybex International, Inc., Huffy Corporation, Johnson
Worldwide Associates, Inc., K2, Inc., and Polaris Industries, Inc.) utilized
for comparison in prior years (the "Former Peer Group"), and (iv) Brunswick's
new peer group (the "New Peer Group") as discussed in the following paragraph,
weighted by the beginning of the year market value of each company. All divi-
dends are reinvested. Coleman Company, Inc. ("Coleman"), which was part of the
Former Peer Group, was acquired by Sunbeam Corporation and was delisted in Feb-
ruary 2000; accordingly, Coleman is not reflected in either the Former Peer
Group line or the New Peer Group line above.
Brunswick reexamined its peer group following its June 27, 2000, announce-
ment of its decision to divest its bicycle, camping and fishing businesses. Two
companies from the Former Peer Group, Huffy Corporation ("Huffy"), a manufac-
turer of bicycles and other products, and Johnson Worldwide Associates, Inc.
("Johnson"), a manufacturer of camping and outdoor equipment and other prod-
ucts, were included in the Former Peer Group based in large part on product
overlap. In light of Brunswick's divestiture of its bicycle and camping busi-
nesses in 2000, coupled with the fact that these companies have significantly
smaller market capitalizations than Brunswick, Huffy and Johnson were not in-
cluded in the New Peer Group.
No single manufacturer competes with Brunswick in all product groups. There-
fore, in identifying peer companies Brunswick attempts to identify companies
that are comparable based on their participation in recreation product manufac-
turing generally and their market capitalization. The New Peer Group is com-
prised of Cybex International, Inc., K2, Inc., and Polaris Industries, Inc.,
all of which were included in the Former Peer Group, and Callaway Golf Company
("Callaway") and Fortune Brands, Inc. ("Fortune Brands"), which are new to
Brunswick's peer group. Fortune Brands is a manufacturer of sporting goods and
other products, and Callaway is a manufacturer of golf equipment and related
products. Both Callaway and Fortune Brands have market capitalizations more
comparable to Brunswick than that of either Huffy or Johnson.
11
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation for each of the last three
years of the Chief Executive Officer, the former Chief Executive Officer, and
each of the four other most highly compensated executive officers.
Annual Compensation Long-Term Compensation
----------------------------------- --------------------------------
Awards Payouts
--------------------- ----------
Other Restricted Securities Long-Term
Annual Stock Underlying Incentive All Other
Name/Position Year Salary Bonus(4) Compensation(5) Award(6) Options(#) Payouts Compensation(7)
- -------------------------------------------------------------------------------------------------------------------
George W. Buckley(1) 2000 $660,625 $1,410,000 $306,120 0 300,000 $ 550,000 $ 41,032
Chairman and Chief 1999 442,548 595,600 24,536 0 40,000 338,222 33,321
Executive Officer 1998 403,397 628,800 14,959 0 35,000 356,190 33,706
- -------------------------------------------------------------------------------------------------------------------
Peter B. Hamilton 2000 $502,116 $ 766,950 $ 43,013 $285,938 45,000 $ 342,733 $ 81,941
Vice Chairman and 1999 442,548 473,280 24,687 0 40,000 252,181 79,495
President--Brunswick 1998 403,397 391,200 15,861 0 30,000 209,534 81,448
Bowling and Billiards
- -------------------------------------------------------------------------------------------------------------------
William J. Barrington 2000 $458,402 $ 726,163 $ 76,895 0 40,000 $ 435,980 $ 91,896
Vice President and 1999 421,699 604,000 56,732 0 35,000 311,255 96,960
President--Sea Ray Group 1998 387,973 431,200 17,628 0 30,000 342,833 76,925
- -------------------------------------------------------------------------------------------------------------------
Dustan E. McCoy(2) 2000 $343,694 $ 413,800 $ 2,123 0 45,000 $ 170,000 $ 63,331
Vice President and 1999 108,539 96,890 44,806 0 20,000 42,509 32,700
President--Brunswick
Boat Group
- -------------------------------------------------------------------------------------------------------------------
Victoria J. Reich 2000 $307,097 $ 442,785 0 0 45,000 $ 136,307 $ 13,151
Senior Vice President 1999 212,769 179,550 0 0 15,000 97,676 10,335
and Chief Financial 1998 191,462 132,240 0 0 10,000 62,136 9,679
Officer
- -------------------------------------------------------------------------------------------------------------------
Peter N. Larson(3) 2000 $450,000 $1,096,875 $431,215 0 0 $ 0 $665,835
Former Chairman and 1999 900,000 1,181,250 301,819 0 175,000 900,000 224,003
Chief Executive Officer 1998 808,493 2,397,800 221,379 0 150,000 1,110,483 229,287
- -------------------------------------------------------------------------------------------------------------------
(1) On being named President and Chief Operating Officer of Brunswick in May
2000, Mr. Buckley's salary was increased from $470,000 to $650,000. Mr.
Buckley's salary was increased to $800,000 in June 2000 when he was named
Chairman and Chief Executive Officer.
(2) Mr. McCoy joined Brunswick as Vice President, General Counsel and Secre-
tary in September 1999 and in October 2000 was elected President--Bruns-
wick Boat Group.
(3) Mr. Larson resigned as Chief Executive Officer in June 2000.
(4) Bonuses for 2000 include regular Brunswick Performance Plan ("BPP") bonus
amounts plus accruals for the 2000 to 2001 Brunswick Strategic Incentive
Plan ("SIP") due to a shortening of the SIP performance period from two
years to one year in connection with adjustments to the SIP. SIP awards
for 2000-2001 will not be paid until 2002 and are subject to forfeiture.
The following table sets forth the BPP and SIP components of each named
executive's bonus.
Executive BPP SIP
--------------------------------------
G. W. Buckley $1,100,000 $310,000
P. B. Hamilton 567,508 199,442
W. J. Barrington 500,000 226,163
D. E. McCoy 300,000 113,800
V. J. Reich 310,000 132,785
P. N. Larson 0 0
For 2000 Mr. Buckley's annual incentive was based on a combination of Mer-
cury Marine and overall Brunswick Corporation performance, as described in
the Report of the Human Resource and Compensation Committee above.
12
The annual bonus amount in 2000 for Mr. Larson represents the value of
50,000 shares of stock awarded on January 3, 2000. The annual bonus amount
in 1999 for Mr. Larson represents the value of 50,000 shares of Common Stock
awarded on January 4, 1999. The annual bonus amount in 1998 for Mr. Larson
includes $1,725,000 representing the value of 50,000 shares of Com-mon Stock
awarded on April 1, 1998. Receipt of these awards has been de-ferred until
January 1, 2002, as described in the Employment Agreements and Other
Transactions section below.
(5) 2000 amounts include the following: for Mr. Buckley, $95,076 for relocation
allowances and $107,137 reimbursed for payment of taxes; and payments of
above-market interest on deferred compensation for Messrs. Barrington
$76,220, Hamilton $43,013, and Larson $429,834.
(6) On May 4, 2000, Mr. Hamilton was awarded 15,000 restricted shares of Common
Stock. These shares will vest on May 4, 2003. The amount shown in this col-
umn is the value of the restricted shares as of the date of grant. As of
December 31, 2000, these restricted shares were worth $246,562. Dividends
are paid on these restricted shares, and dividends in the amount of $5,625
were paid in 2000. Brunswick had no other restricted stock outstanding as
of December 31, 2000.
(7) All Other Compensation for 2000 for the named executive officers is com-
prised of the following: (i) Brunswick contributions to the Brunswick Re-
tirement Savings Plan for Mr. Buckley $3,060, Mr. Hamilton $3,060, Ms.
Reich $3,060, and Mr. Larson $890; (ii) Brunswick contributions to the
Brunswick Employee Stock Ownership Plan for Messrs. Buckley $334, Barring-
ton $334, Hamilton $334, and McCoy $334, and Ms. Reich $334; (iii) Bruns-
wick contributions to the Brunswick Rewards Plan for Messrs. Barrington
$11,050, and McCoy $10,200; (iv) Brunswick contributions to the Brunswick
Restoration Plan for Messrs. Buckley $8,831, Barrington $55,850, Hamilton
$5,978, and McCoy $21,446, Ms. Reich $2,825, and Mr. Larson $2,095; (v)
payments to Mr. Larson in the amount of $450,014 in connection with his
resignation as Chief Executive Officer as described in the Employment
Agreements and Other Transactions section below; and (vi) the value of
split dollar life insurance premiums paid by Brunswick on behalf of the
named executive officers. This value represents the cost of term life in-
surance provided during the year as well as the present value of the poten-
tial cash surrender value attributable to this year's premium payment. This
present value is determined by assuming an interest free loan to the named
executives until Brunswick is reimbursed for its portion of the premiums.
These amounts are: Messrs. Buckley $28,807, Barrington $24,662, Hamilton
$72,569, and McCoy $31,351, Ms. Reich $6,932, and Mr. Larson $212,836.
OPTION GRANTS IN 2000
Potential Realizable Value
at Assumed Annual Rates
of Stock Price Appreciation
Individual Grants(1) for Option Term(4)
------------------------------------------------- ----------------------------------
Number of
Securities % of Total
Underlying Options Granted
Options to Employees Exercise Expiration
Executive Granted in 2000 Price Date 0% 5% 10%
- ---------------------------------------------------------------------------------------------------------------
George W. Buckley 300,000 18.15%(2) $19.0625 05/04/10 0 $ 3,596,491 $ 9,114,215
William J. Barrington 40,000 2.42% 18.8750 07/26/10 0 474,815 1,203,276
Peter B. Hamilton 45,000 2.72% 18.8750 07/26/10 0 534,167 1,353,685
Dustan E. McCoy 45,000 2.72% 18.8750 07/26/10 0 534,167 1,353,685
Victoria J. Reich 45,000 2.72% 18.8750 07/26/10 0 534,167 1,353,685
Peter N. Larson 0 0 0 0 0 0 0
All Employee Optionees 1,652,500 100% $18.9074(2) Various 0 $ 19,649,490 $ 49,795,666
All Shareholders(3) N/A N/A N/A N/A 0 $1,038,585,517 $2,631,979,613
Employee Optionees' Gain
as % of All
Shareholders' Gains N/A N/A N/A N/A 0 1.89% 1.89%
(1) Non-qualified stock options awarded during 2000 were granted at 100 percent
of the closing price on the date of grant with a ten-year option term. When
exercising options, an option holder may deliver previ-
13
ously acquired shares of Common Stock or may request that shares be with-
held to satisfy required withholding taxes. Options vest in 25 percent in-
crements on each of the first, second, third and fourth anniversaries. Op-
tions vest earlier if there is a change in control of Brunswick and are
transferable only to immediate family members, estate planning vehicles or
others approved by the Human Resource and Compensation Committee.
(2) Weighted average exercise price of all employee option shares awarded dur-
ing 2000.
(3) The potential realizable values for all shareholders were calculated using
the weighted average exercise price ($18.9074) of all employee option
shares awarded during 2000 and the total outstanding shares of Common
Stock on December 31, 2000 (87,343,872). At 5 percent and 10 percent an-
nual appreciation, the value of the Common Stock would be approximately
$30.80 per share and $49.04 per share, respectively, at the end of the
ten-year period.
(4) No gain to the optionees is possible without an increase in stock price,
which will benefit all stockholders commensurately. A zero percent stock
price appreciation will result in zero dollars for the optionee.
OPTION EXERCISES AND YEAR-END VALUE TABLE (/1/)
Number of Securities Value of Unexercised,
Underlying the In-the-Money
Unexercised Options Held at
Options at 12/31/00 12/31/00(2)
------------------------- -------------------------
Executive Exercisable Unexercisable Exercisable Unexercisable
- --------------------------------------------------------------------------
George W. Buckley 62,000 363,000 $0.00 $0.00
William J. Barrington 146,500 94,500 0.00 0.00
Peter B. Hamilton 182,000 103,000 0.00 0.00
Dustan E. McCoy 0 65,000 0.00 0.00
Victoria J. Reich 21,500 65,500 0.00 0.00
Peter N. Larson 1,187,255 0 0.00 0.00
(1) No options were exercised by any named executive in 2000.
(2) Represents the difference between the option exercise price and the fair
market value of Brunswick Common Stock on December 31, 2000.
LONG-TERM INCENTIVE PLAN--AWARDS DURING 2000
During 2000, Brunswick's Strategic Incentive Plan ("SIP") was modified as
described in the Report of the Human Resource and Compensation Committee set
forth above. The SIP performance criteria were redefined and the performance
period lengthened from two years to three years, beginning in 2001. To allow
for immediate use of both redefined performance criteria and the longer per-
formance period, the original 2000-2001 performance period was reduced to re-
flect 2000 only and accrued based on one-year performance. As a result, the
2000 SIP awards were reclassified as annual bonus payments and no long-term
incentive awards were made.
14
PENSION PLANS
The following table shows the maximum retirement income which may be payable
as a straight life annuity pursuant to Brunswick's salaried pension plans at
age 65 under various assumed conditions prior to reduction for Social Security
benefits.
Average of
the
Three
Highest
Consecutive
Years' Retirement Income for
Earnings as Years of Participating Service
a -------------------------------------
Participant 15 20 25 30
- --------------------------------------------------
$ 600,000 $198,000 $264,000 $330,000 $ 396,000
800,000 264,000 352,000 440,000 528,000
1,000,000 330,000 440,000 550,000 660,000
1,200,000 396,000 528,000 660,000 792,000
1,400,000 462,000 616,000 770,000 924,000
1,600,000 528,000 704,000 880,000 1,056,000
The salaried pension plans are non-contributory plans providing for benefits
following retirement under a formula based upon years of participation in the
plans up to 30 years, the average of the three highest consecutive years' earn-
ings (salaries, annual bonuses and commissions, but excluding payouts under the
Strategic Incentive Plan), and age. The 2000 earnings used for purposes of cal-
culating Mr. Buckley's benefits under the salaried pension plans are
$1,206,225, which include his 2000 salary and the bonus paid in 2000 for 1999
performance. The 2000 earnings used for purposes of calculating Mr. Larson's
benefits under the salaried pension plans are $900,014, which include his 2000
salary and payments made in lieu of salary in connection with his resignation
as Chief Executive Officer. The 2000 grant to Mr. Larson of 50,000 shares of
stock valued at $1,096,875 is not included in calculating his pension.
The years of service of the officers named in the summary compensation table
are: Mr. Buckley 8 years, Mr. Hamilton 17 years, Ms. Reich 4 years, and Mr.
Larson 21 years. Mr. Barrington and Mr. McCoy do not participate in any sala-
ried pension plan. Mr. Buckley's 8 years of service include 5 additional years
of service that were credited to him upon his completion of 3 years of employ-
ment with Brunswick. In addition, if Mr. Buckley remains employed by Brunswick
until age 60, his pension benefit will be enhanced to provide 40 percent of his
final average earnings at age 60, and will be further increased by 3 percent
each year thereafter to a maximum of 55 percent of his final average earnings
at age 65. Mr. Hamilton's 17 years include 12.5 years when he was employed by
Cummins Engine Company, Inc., in accordance with Brunswick's agreement to pro-
vide Mr. Hamilton with a pension calculated as if he had been employed by
Brunswick for those 12.5 years, reduced by the pension he receives from Cummins
Engine Company, Inc. Mr. Larson's 21 years include 15 years when he was em-
ployed by Johnson & Johnson in accordance with his employment agreement, which
provides that Brunswick will pay him a pension as if he had been employed by
Brunswick for those 15 years, reduced by the pension he receives from Johnson &
Johnson and reduced by his Social Security benefit. Mr. Larson may elect to re-
ceive his supplemental pension benefit in a lump sum.
If there is a change in control of Brunswick on or before March 1, 2004, and
if there is a termination, merger or transfer of assets of the salaried pension
plans during the five years following the change in control, benefits would be
increased so that there would be no excess net assets. Also, in the event of
the involuntary termination of employment (other than for cause) of a partici-
pant in the salaried pension plans during the five years following such change
in control of Brunswick, the participant's pension would not be reduced as a
result of early retirement. A change in control of Brunswick is substantially
the same as the definition in Mr. Buckley's change in control agreement, which
is described in the Employment Agreements and Other Transactions section below.
15
EMPLOYMENT AGREEMENTS AND OTHER TRANSACTIONS
Under an agreement with Brunswick dated November 1, 2000, Mr. Buckley would
be entitled to certain severance benefits in the event his employment is termi-
nated other than for cause or disability. The agreement defines termination to
include resignation by Mr. Buckley under certain circumstances, including a
significant change in his duties and responsibilities; a reduction in his sala-
ry; a reduction in his target bonus after a change in control as described be-
low; or a relocation of Brunswick's principal executive offices or Mr.
Buckley's primary place of work.
If a termination covered by the agreement does not involve a change in con-
trol, Mr. Buckley would be entitled to a severance payment equal to two times
his base salary and target annual bonus for the year in which termination oc-
curs. If such termination does involve a change in control, Mr. Buckley would
be entitled to a severance payment equal to three times the sum of (i) his an-
nual salary, (ii) the larger of his targeted annual bonus for the year of ter-
mination or the year in which the change in control occurs, and (iii) his most
recent full cycle target percentage under the Strategic Incentive Plan (SIP),
plus any applicable premium determined as if the award were paid in stock.
The definition of a change in control includes: (i) the acquisition of 25
percent or more of the outstanding voting stock of Brunswick by any person
other than an employee benefit plan of Brunswick; (ii) a tender offer for stock
of Brunswick which has not been negotiated and approved by Brunswick's Board of
Directors once (a) the offeror owns or has accepted for payment 25 percent or
more of the outstanding voting stock of Brunswick, or (b) three business days
before the offer is to terminate, unless the offer is withdrawn first, if the
offeror could own 50 percent or more of the outstanding voting stock of Bruns-
wick as a result of the offer; (iii) the failure of the incumbent Board of Di-
rectors to constitute a majority of Brunswick's Board of Directors, excluding
new directors who are approved by a vote of at least 75 percent of the direc-
tors then comprising the incumbent board and did not join the Board following a
contested election of directors; (iv) a merger of Brunswick with another corpo-
ration, other than a merger in which Brunswick's stockholders receive 75 per-
cent of the voting stock outstanding after the merger or a merger effected to
implement a recapitalization of Brunswick in which no person acquires more than
25 percent of Brunswick's voting stock; or (v) a complete liquidation or disso-
lution of Brunswick or sale of substantially all of Brunswick's assets.
In addition to the severance benefits outlined above, in the event of a cov-
ered termination Mr. Buckley would be entitled to receive any annual bonus
earned for the preceding year that has not yet been paid at the time of termi-
nation, plus a pro rata annual bonus for the year in which termination occurs
unless the termination occurs in the first quarter of the year. Mr. Buckley
would also receive continuance of other benefits and perquisites for up to two
years (three years in the event of a change in control). If termination occurs
following a change in control, Mr. Buckley would also be entitled to a lump sum
payment of accrued pension and supplemental pension benefits, calculated as if
he had worked for an additional three years beyond the date of the change in
control; accrued profit-sharing benefits; accrued deferred compensation contri-
butions; and full vesting in all outstanding stock options and restricted stock
awards.
The terms of the agreement require Mr. Buckley to assent to certain confi-
dentiality, non-competition and non-solicitation provisions, and to execute a
general release.
In connection with his being named President and Chief Operating Officer in
May 2000, Mr. Buckley was required to relocate from Fond du Lac, Wisconsin, to
the Lake Forest, Illinois, area. Under Brunswick's relocation program,
Brunswick's relocation service provider, Primacy Relocation, LLC ("Primacy"),
purchased Mr. Buckley's Wisconsin home for $1,050,000, based on an independent
appraisal commissioned by Primacy. In connection with Mr. Buckley's purchase of
a new home in the Lake Forest, Illinois, area, Brunswick loaned Mr. Buckley
$800,000 during 2000, to be repaid in five annual installments commencing Au-
gust 1, 2001. This loan is secured by a mortgage on Mr. Buckley's home and will
be interest-free except in the event of default.
16
Brunswick's other Senior Executives are entitled to severance and change in
control benefits substantially similar to those outlined above for Mr. Buck-
ley, except that (i) the severance payment triggered by a termination that
does not follow a change in control is equal to 1.5 times base salary plus a
target annual bonus as determined in the discretion of the Chief Executive Of-
ficer for the year in which termination occurs, and (ii) the maximum period
for which certain benefits and perquisites would continue following termina-
tion after a change in control is 18 months.
Mr. Larson and Brunswick entered into an agreement on March 12, 2001 (the
"Agreement") relating to Mr. Larson's resignation as an officer and director
and his rights under the Second Amended and Restated Employment Agreement en-
tered into between Brunswick and Mr. Larson on January 4, 1999. The Agreement
provides for aggregate cash compensation of $3.5 million (including $450,014
included in the Summary Compensation Table set forth above under the "All
Other Compensation" column), payable between July 1, 2000 and January 1, 2002.
Under the Agreement, Mr. Larson is vested in 50,000 deferred stock units cred-
ited as of January 3, 2000 (included in the Summary Compensation Table under
the "Annual Bonus" column) and 50,000 deferred stock units credited as of Jan-
uary 1, 2001. The Agreement provides that Mr. Larson will be entitled to group
life, accident, medical and hospital insurance coverage, tax and financial
planning and retiree medical benefits through June 30, 2002. All of Mr.
Larson's deferred compensation credited as deferred stock units were converted
to cash deferrals as of March 14, 2001, based upon the closing price of Bruns-
wick Common Stock on March 13, 2001, and thereafter will be credited with in-
terest at the rate of 7.5 percent per annum. Commencing April 1, 2001, the in-
terest credited on all other amounts in Mr. Larson's cash deferral account
will be at the rate of 7.5 percent per annum. Mr. Larson's deferred compensa-
tion will be paid January 1, 2002.
Mr. Larson will also be entitled to continuing coverage under any directors
and officers liability insurance policy, indemnification by-law or indemnifi-
cation agreement then maintained or offered by Brunswick. The Agreement also
entitles Mr. Larson to have life insurance of 3.5 times his final base salary
of $900,000 maintained for him for two years following his resignation as
Chief Executive Officer. Mr. Larson may elect to reduce the amount of life in-
surance provided to him and to receive the premiums which otherwise would have
been paid for the insurance.
In addition, as of the date of his resignation as Chief Executive Officer,
restrictions on Mr. Larson's options lapsed, and options that were then exer-
cisable or became exercisable because of the lapse of restrictions shall re-
main exercisable until the earlier of (i) their expiration or (ii) June 30,
2005.
The Agreement prohibits competition with Brunswick by Mr. Larson during the
term of the Agreement and for two years thereafter and requires confidential-
ity on the part of Mr. Larson during and after the term of the Agreement.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Ms. Martin Musham filed one late Form 4 to report a purchase by her spouse
of shares of Common Stock as to which Ms. Martin Musham disclaims beneficial
ownership. Mr. B. Russell Lockridge, Vice President and Chief Human Resources
Officer, timely filed a Form 5 for 2000 reporting the acquisition of shares of
Common Stock in connection with his 1998-1999 Strategic Incentive Plan award.
However, a portion of that award which was allocated to stock units in Mr.
Lockridge's deferred compensation account was inadvertently omitted from his
original Form 5, and was subsequently reported on an amended Form 5 filed six
days after the filing deadline.
PROPOSAL TO APPROVE AN AMENDMENT TO THE 1991 STOCK PLAN
INCREASING THE MAXIMUM ANNUAL NUMBER OF SHARES AUTHORIZED
FOR ISSUANCE TO ANY EMPLOYEE UNDER THE PLAN
General
Shareholders approved Brunswick's 1991 Stock Plan (the "Plan") at the 1991
annual meeting of shareholders and approved amendments to the Plan at the 1996
and 1999 annual meetings of shareholders. On
17
February 6, 2001, the Board of Directors approved an amendment to the Plan,
subject to shareholder approval, to increase the maximum number of shares as to
which a participant may receive stock options and stock appreciation rights in
a calendar year from 300,000 shares to 1,000,000 shares.
The Plan provides for the grant of incentive stock options, nonqualified
stock options, stock appreciation rights, restricted stock, and other stock-
based awards to management employees of Brunswick and its subsidiaries. The
purpose of the Plan is to promote the long-term financial interests and growth
of Brunswick by (i) attracting and retaining management personnel, (ii) moti-
vating management personnel by means of growth-related incentives, (iii) pro-
viding incentive compensation opportunities that are competitive with those of
other major corporations and (iv) further aligning the interests of partici-
pants with those of the shareholders of Brunswick.
In 1996, shareholders approved an amendment providing that the maximum num-
ber of shares as to which a participant may receive stock options and stock ap-
preciation rights in a calendar year would be 300,000 shares. The setting of a
maximum share limit was effected to ensure that awards under the plan would
qualify as fully deductible "performance-based compensation" under section
162(m) of the Internal Revenue Code of 1986, as amended. Increasing the maximum
number of shares as to which a participant may receive stock options and stock
appreciation rights in a calendar year from 300,000 to 1,000,000 will not im-
pair the deductibility of awards under the Plan.
The amended Plan provides for the issuance of a maximum of 16,200,000 shares
of Common Stock of Brunswick from the Plan's inception in 1991 (subject to ad-
justment as described below). The shares may be authorized but unissued shares
or treasury shares. Of the 16,200,000 shares authorized, as of March 2, 2001,
8,724,625 shares are subject to outstanding awards, 3,926,926 shares are avail-
able for future grants and 3,548,449 shares have been issued for exercised op-
tions and other awards. Awards of restricted stock under the Plan occurring af-
ter February 9, 1999, may not exceed 2,000,000 shares in the aggregate.
Shares related to awards that expire unexercised or are forfeited, terminat-
ed, surrendered, cancelled, withheld for taxes or settled in cash in lieu of
stock or in such manner that all or some of the shares covered by an award are
not issued to a participant shall immediately become available for additional
awards under the Plan.
The closing price of the Common Stock on March 2, 2001, as reported on the
New York Stock Exchange Composite Tape, was $21.60 per share.
A copy of the Plan as proposed to be amended is set forth as Exhibit B to
this Proxy Statement. The following descriptions are qualified in their en-
tirety by reference to the full text of the amended Plan set forth as Exhibit
B.
Eligibility and Participation
Participants in the Plan are selected by the Human Resource and Compensation
Committee of the Board of Directors (the "Committee") which administers the
Plan. The Plan contemplates that awards will be granted to management employees
and that participants will be such employees of Brunswick and its subsidiaries,
including officers of Brunswick, as from time to time are designated by the
Committee. Approximately 500 employees are eligible to receive awards under the
Plan. Directors of Brunswick are not eligible to participate unless they are
also employees.
Administration
Under the Plan and subject to the limitations thereunder, the Committee is
authorized: (i) to select participants in the Plan, (ii) to make awards in such
forms and amounts as it shall determine, (iii) to impose such limitations, re-
strictions and conditions upon such awards as it shall deem appropriate, (iv)
to interpret the Plan and to adopt, amend and rescind administrative guidelines
and other rules and regulations relating to the Plan, (v) to correct any defect
or omission or to reconcile any inconsistency in the Plan or in any award
granted thereunder and (vi) to make all other determinations and to take all
other actions necessary or advisable for the implementation and administration
of the Plan.
18
Amendment and Termination
The Board of Directors or the Committee may suspend or terminate the Plan
or any portion thereof at any time and may amend it from time to time in such
respects as the Board of Directors or the Committee may deem advisable, pro-
vided, however, that no such amendment shall be made without shareholder ap-
proval to the extent such approval is required by law, agreement or the rules
of any exchange upon which the Common Stock is listed. No such amendment, sus-
pension or termination shall impair the rights of participants under outstand-
ing awards without the consent of the participants affected thereby.
The Committee may amend or modify any award in any manner to the extent
that the Committee would have had the authority under the Plan to initially
grant such award, except that the Committee may not adjust the exercise price
of options other than for changes in capitalization and similar changes. No
such amendment or modification shall impair the rights of any participant un-
der any award without the consent of such participant.
Changes in Capitalization and Similar Changes
In the event that each of the outstanding shares of Common Stock shall be
changed into or exchanged for a different number or kind of shares of stock or
securities of Brunswick or of another corporation (whether by reason of merg-
er, consolidation, recapitalization, reclassification, stock dividend, stock
split, combination of shares, or otherwise), then there shall be substituted
for each share of Common Stock then offered or available for offer under the
Plan the number and kind of shares of stock into which such outstanding shares
of the Common Stock of Brunswick shall be so changed or for which such shares
shall be so exchanged. The Committee may make any necessary equitable adjust-
ments. In the event of a spin-off, extraordinary dividend, or other distribu-
tion or similar transaction, the Committee may adjust equitably the exercise
price of any outstanding options or the terms of any outstanding stock appre-
ciation rights.
Awards
Under the Plan, an employee to whom an option is granted will have the
right to purchase the number of shares of Common Stock covered by the option,
subject to the terms and provisions of the Plan. The option price to be paid
by a participant is determined by the Committee and cannot be less than 100
percent of the fair market value of the Common Stock on the date on which the
option is granted. The Committee may require options, other than incentive
stock options, to be purchased by participants for a purchase price determined
by the Committee.
The exercise price of an option granted under the Plan is payable in cash,
by the surrender of shares of Common Stock at the fair market value on the
date on which the option is exercised, or by any combination of cash and such
shares. Any option granted under the Plan will be exercisable for specified
periods determined by the Committee.
In addition to stock options, participants may be awarded stock apprecia-
tion rights and restricted stock, performance shares and other forms of awards
that the Committee in its discretion may determine are consistent with the ob-
jectives and limitations of the Plan. Such awards may be payable in Common
Stock, cash or both, and shall be subject to such restrictions and conditions
as the Committee shall determine.
The amount and type of awards to be granted in the future to the named of-
ficers, to all executive officers as a group and to all other employees are
not currently determinable.
Federal Income Tax Considerations
The discussion which follows is a summary, based on current law, of some
significant federal income tax considerations relating to stock options
awarded under the Plan. A participant who is granted a stock option
19
will not be subject to federal income tax at the time of grant, and Brunswick
will not be entitled to a tax deduction by reason of such grant. Generally,
upon exercise of a non-qualified option by an employee, the difference between
the option price and the fair market value of the Common Stock will be consid-
ered ordinary income to the participant at the time of exercise and will be de-
ductible by Brunswick at that time. Upon subsequent disposition of the shares
by the participant, the participant will generally realize a capital gain or
loss, with the basis for computing such gain or loss equal to the fair market
value of the stock at the time of exercise. Upon exercise of an incentive stock
option (as defined in the Internal Revenue Code), although no taxable income
will be recognized by the participant and Brunswick is not entitled to a tax
deduction by reason of such exercise, the excess of the fair market value on
the date of exercise over the exercise price is treated by the participant as
an item of tax preference for alternative minimum tax purposes. If the partici-
pant does not sell or otherwise dispose of the stock within two years from the
date of the grant of the incentive stock option or within one year after re-
ceiving the transfer of such stock, then, upon disposition of such shares, any
amount realized in excess of the exercise price will be taxed to the partici-
pant as capital gain, and Brunswick will not be entitled to any deduction for
federal income tax purposes. A capital loss will be recognized to the extent
that the amount realized is less than the exercise price. If shares purchased
pursuant to the exercise of an incentive stock option are sold within two years
from the date of grant or within one year after the transfer of such shares to
the participant, then the difference, with certain adjustments, between the
fair market value of the shares at the date of exercise and the option price
will be considered ordinary income to the participant. Generally, Brunswick is
entitled to an income tax deduction for any ordinary income taxed to the par-
ticipant.
If the amount realized exceeds the value of the shares on the date of exer-
cise, any additional amount will be capital gain. If the amount realized is
less than the exercise price, the participant will recognize no income, and a
capital loss will be recognized equal to the excess of the exercise price over
the amount realized upon the disposition of the shares.
Brunswick may withhold amounts from participants to satisfy withholding tax
requirements. Participants may have Common Stock withheld from awards, may ten-
der Common Stock back to Brunswick or may deliver previously acquired Common
Stock to satisfy withholding tax requirements.
Vote Required to Amend the 1991 Stock Plan
The affirmative vote of the majority of shares present in person or repre-
sented by proxy and entitled to vote on the proposal is required to approve the
amendment of the 1991 Stock Plan.
The Board of Directors recommends a vote FOR this proposal.
REPORT OF THE AUDIT AND FINANCE COMMITTEE
OF THE BOARD OF DIRECTORS
The following is the report of the Audit and Finance Committee with respect
to Brunswick's audited financial statements for the fiscal year ended December
31, 2000.
Audit and Finance Committee Charter
The Board of Directors has adopted for the Audit and Finance Committee a
written charter, a copy of which is attached to this Proxy Statement as Exhibit
A.
Independence of Audit and Finance Committee Members
The Board of Directors has determined that all members of the Audit and Fi-
nance Committee are independent, in accordance with the New York Stock Exchange
audit committee requirements.
20
Review with Management
The Audit and Finance Committee has reviewed and discussed Brunswick's au-
dited financial statements with management.
Review and Discussions with Independent Accountants
The Audit and Finance Committee has discussed with Arthur Andersen LLP,
Brunswick's independent auditors, the matters required to be discussed by SAS
61 (Codification of Statements on Auditing Standards).
The Audit and Finance Committee has also received written disclosures and
the letter from Arthur Andersen LLP required by Independence Standards Board
Standard No. 1 (which relates to the accountant's independence from Brunswick
and its related entities) and has discussed with Arthur Andersen LLP its inde-
pendence from Brunswick. The Audit and Finance Committee has also reviewed the
non-audit services provided by Arthur Andersen LLP, as described below, and
considered whether the provision of those services was compatible with main-
taining Arthur Andersen LLP's independence.
Conclusion
Based on the review and discussions referred to above, the Audit and Fi-
nance Committee recommended to Brunswick's Board that the audited financial
statements be included in Brunswick's Annual Report on Form 10-K for the fis-
cal year ended December 31, 2000.
Submitted by Members of the Audit and Finance Committee of the Board of Di-
rectors.
M. J. Callahan (Chairman)
D. J. Bern
J. L. Bleustein
P. Harf
R. L. Ryan
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of its Audit and Finance Committee, the Board of
Directors has appointed Arthur Andersen LLP, independent public accountants,
auditors for Brunswick and its subsidiaries for the year 2001. The Board of
Directors recommends the appointment of Arthur Andersen LLP as auditors for
Brunswick and its subsidiaries be ratified. If shareholders do not ratify the
appointment, the selection of auditors will be reconsidered by the Audit and
Finance Committee and the Board of Directors. Representatives of Arthur Ander-
sen LLP will be present at the annual meeting of shareholders with the oppor-
tunity to make a statement, if they desire to do so, and will be available to
respond to appropriate questions from shareholders.
Fees Incurred for Services of Arthur Andersen LLP
For 2000, Brunswick incurred the following fees for services rendered by
Arthur Andersen LLP:
Audit Fees: Brunswick incurred $1,491,900 in fees for audit services ren-
dered by Arthur Andersen LLP in connection with the audit of Brunswick's an-
nual and quarterly financial statements for 2000.
Financial Information, Systems Design and Implementation Fees: Brunswick
incurred no fees for financial information, systems design and implementation
services rendered by Arthur Andersen LLP during 2000.
All Other Fees: Brunswick incurred $3,277,900 in fees for all services ren-
dered by Arthur Andersen LLP during 2000 other than audit and financial infor-
mation, systems design and implementation services.
The Board of Directors recommends a vote FOR this proposal.
21
SHAREHOLDER PROPOSALS
If a shareholder wants a proposal to be included in Brunswick's proxy state-
ment for the 2002 annual meeting, pursuant to Rule 14a-8 under the Securities
Exchange Act of 1934, the proposal must be received by Brunswick no later than
November 26, 2001. The proposal must be delivered to Brunswick's offices at 1
N. Field Court, Lake Forest, Illinois 60045-4811, Attention: Secretary, and
must otherwise meet the requirements of the rules of the Securities and Ex-
change Commission. The date after which a shareholder proposal submitted out-
side the processes of Rule 14a-8 is considered untimely for the 2002 annual
meeting is February 9, 2002, calculated as provided in Rule 14a-4(c)(1) under
the Securities Exchange Act of 1934.
OTHER MATTERS
If any matters other than those referred to in the Notice of Annual Meeting
should properly come before the meeting, it is the intention of the persons
named in the accompanying form of proxy to vote the proxies held by them in ac-
cordance with their best judgment. Management does not know of any business
other than that referred to in the Notice that may be considered at the meet-
ing.
The entire expense of proxy solicitation will be borne by Brunswick. In ad-
dition to solicitation by mail, telephone, facsimile, telegraph and personal
contact by its officers and employees, Brunswick has retained the firm of
Georgeson & Co. to assist in the solicitation of proxies. Reasonable out-of-
pocket expenses of forwarding the proxy material will be paid by Brunswick. For
its services, Georgeson & Co. will be paid a fee of approximately $9,900.
In order to assure the presence of the necessary quorum and to vote on the
matters to come before the annual meeting, please indicate your choices on the
enclosed proxy, and date, sign and return it promptly in the envelope provided.
Alternatively, you may vote your proxy by telephone or via the Internet by fol-
lowing the instructions included with your proxy card.
By order of the Board of Directors,
/s/ Dustan E. McCoy
Dustan E. McCoy
Secretary
Lake Forest, Illinois
March 26, 2001
22
EXHIBIT A
Board of Directors of Brunswick Corporation
Charter of the Audit and Finance Committee
Statement of Policy
The audit and finance committee (the Committee) shall provide assistance to
the board of directors (the Board) in fulfilling the Board's responsibility to
oversee the Corporation's accounting, auditing and reporting practices, its
system of internal controls and the quality and integrity of its financial in-
formation. In so doing, the Committee shall maintain free and open communica-
tion with the Board, the independent auditors, the internal auditors and man-
agement.
The Committee's role is one of oversight and it recognizes that the Corpora-
tion's management is responsible for preparing the Corporation's financial
statements and that the independent auditors are responsible for auditing those
financial statements. Consequently, in carrying out its oversight responsibili-
ties, the Committee is not providing any expert or special assurance as to the
Corporation's financial statements or any professional certification as to the
work of the independent auditors.
Membership
. The Committee shall be comprised of three or more members of the Board,
one of whom shall be appointed as the chairman of the Committee.
. The Committee shall be composed of directors who in the opinion of the
full Board have no relationship to the Corporation that may interfere
with their exercise of independence from management and the Corporation.
. The Committee's members must be financially literate, or become finan-
cially literate within a reasonable period of time after appointment to
the Committee, and at least one Committee member will have accounting or
related financial management expertise, as determined by the Board.
. Vacancies in the Committee may be filled at any meeting of the Board.
Responsibilities
The independent auditors are ultimately accountable to the Board and the
Committee. The Committee, subject to any action that may be taken by the full
Board, shall have the ultimate authority and responsibility to select, evaluate
and, where appropriate, replace the independent auditors.
The Committee shall:
. Review the terms of engagement of the independent auditors, including the
scope and timing of their audits and related fees.
. Review the independence of the independent auditors, including a review
and approval of the independent auditors' non-audit services and related
fees.
. Receive from the independent auditors annually, a formal written
statement delineating the relationships between the Corporation and
the auditor that may be thought to bear on independence.
. Discuss with the independent auditors all disclosed relationships and
their impact on the independent auditors' independence.
. Recommend that the Board take appropriate action as applicable to
satisfy itself of the independent auditors' independence.
A-1
. Review with management, the independent auditors, and the internal audi-
tors:
. The Corporation's internal audit function, including its authority
and audit scope;
. Significant risks and exposures, audit activities, significant audit
findings and recommendations of the independent and internal audi-
tors; and
. The quality and adequacy of the Corporation's internal accounting
controls.
. Meet periodically with the independent auditors and internal auditors
without members of management present.
. Receive reports from the internal audit function which shall report
jointly to the chairman of the Committee and to management.
. Review and discuss with management and the independent auditors, prior to
the filing of the Corporation's Form 10-Q, the Corporation's interim fi-
nancial results to be included in the Corporation's quarterly reports and
the matters required to be discussed by the independent auditors with the
Committee, including the quality of the Corporation's financial state-
ments.
. Review and discuss with management and the independent auditors the au-
dited financial statements that are to be included in the Corporation's
Annual Report on Form 10-K (or the Annual Report to shareholders if dis-
tributed prior to filing the Form 10-K) and the matters required to be
discussed by the independent auditors with the Committee, including the
quality of the Corporation's financial statements. Based on these discus-
sions, the Committee shall advise the Board whether it recommends that
the audited financial statements be included in the Annual Report on Form
10-K (or the Annual Report to shareholders).
. Review matters that include:
. Changes in the Corporation's accounting policies and practices and
significant judgments that may affect the financial results;
. Legal, environmental, regulatory or other matters that may have a ma-
terial financial or disclosure impact, and any unusual or significant
commitments or contingent liabilities, together with the underlying
assumptions and estimates of management; and
. The effect of changes on accounting standards that may materially af-
fect the Corporation's financial reporting practices.
. Review the Corporation's annual report to shareholders and other SEC fil-
ings, as it deems appropriate.
. Conduct or authorize investigations into any matters within the Commit-
tee's scope of responsibilities. The Committee shall be empowered to re-
tain independent counsel or others to assist it in the conduct of any in-
vestigation.
. Annually review the Committee's charter and assess the Committee's effec-
tiveness.
. Periodically receive reports on the Corporation's ethics program.
. Periodically report to the Board on the Committee's activities.
. Consider other matters in relation to the financial affairs of the Corpo-
ration and in relation to the internal auditors and independent auditors,
as the Committee or the Board deems appropriate.
A-2
EXHIBIT B
BRUNSWICK CORPORATION
1991 STOCK PLAN
(As proposed to be amended)
1. Purpose. The purpose of the Brunswick Corporation 1991 Stock Plan (the
"Plan") is to promote the long term financial interests and growth of Brunswick
Corporation (the "Company") by (a) attracting and retaining management person-
nel, (b) motivating management personnel by means of growth-related incentives,
(c) providing incentive compensation opportunities that are competitive with
those of other major corporations, and (d) furthering the identity of interests
of participants with those of the stockholders of the Company.
2. Definitions. The following definitions are applicable to the Plan:
"Affiliate" means any entity in which the Company has a direct or indi-
rect equity interest which is so designated by the Committee.
"Code" means the Internal Revenue Code of 1986, as amended, and any suc-
cessor statute.
"Committee" means the Human Resource and Compensation Committee of the
Board of Directors of the Company.
"Common Stock" means the Common Stock, par value $.75 per share, of the
Company or such other securities as may be substituted therefor pursuant to
paragraph 5(c).
The "fair market value" of the Common Stock shall be determined in ac-
cordance with procedures established by the Committee.
"Participant" means any management employee of the Company or an Affili-
ate selected by the Committee.
"Rule 16b-3" means such rule adopted under the Securities Exchange Act
of 1934, as amended, or any successor rule.
3. Limitation on Aggregate Shares. The number of shares of Common Stock with
respect to which awards may be granted under the Plan and which may be issued
upon the exercise or payment thereof shall not exceed, in the aggregate,
16,200,000 shares (of which no more than 2,000,000 shares may be awards granted
pursuant to paragraphs 4(c) or (d) after February 9, 1999), except for adjust-
ments provided for in paragraph 5(c) of the Plan and provided, however, that
shares related to awards that expire unexercised or are forfeited, surrendered,
terminated, cancelled, withheld for taxes, or settled in cash in lieu of stock
or in such manner that all or some of the shares covered by an award are not
issued to a participant shall immediately become available for additional
awards under the Plan. Such 16,200,000 shares of Common Stock may be either au-
thorized and unissued shares, treasury shares, or a combination thereof, as the
Committee shall determine.
4. Awards. The Committee may grant to participants, in accordance with this
paragraph 4 and the other provisions of the Plan, stock options, stock appreci-
ation rights ("SARs"), restricted stock and other awards. The maximum number of
shares of Common Stock as to which a participant may receive stock options and
stock appreciation rights under the Plan in 1996 or in any subsequent calendar
year is 1,000,000 subject to the provisions of Section 5(c) hereof.
(a) Options.
(i) Options granted under the Plan may be incentive stock options
("ISOs") within the meaning of Section 422 of the Code or any successor
provision, or in such other form, consistent with the Plan, as the Com-
mittee may determine.
(ii) The option price per share of Common Stock shall be fixed by
the Committee at not less than 100% of the fair market value of a share
of Common Stock on the date of grant, provided that in no event shall
the option price be less than the par value.
B-1
(iii) The Committee may require options other than ISOs to be pur-
chased by participants for a purchase price determined by the Commit-
tee.
(iv) Options shall be exercisable at such time or times as the Com-
mittee shall determine at or subsequent to grant, except that no op-
tions may be exercised after ten years from the date of their award.
(v) Options shall be exercised in whole or in part by written notice
to the Company (to the attention of the Corporate Secretary) and pay-
ment in full of the option price. Payment of the option price may be
made, at the discretion of the optionee, and to the extent permitted by
the Committee, (A) in cash (including check, bank draft, or money or-
der), (B) in Common Stock (valued at the fair market value thereof on
the date of exercise), (C) by a combination of cash and Common Stock or
(D) with any other consideration (including payment in accordance with
a cashless exercise program under which, if so instructed by the par-
ticipant, shares of Common Stock may be issued directly to the partici-
pant's broker or dealer upon receipt of the option price in cash from
the broker or dealer).
(b) SARs.
(i) An SAR shall entitle its holder to receive from the Company, at
the time of exercise of such right, an amount equal to the excess of
the fair market value (at the date of exercise) of a share of Common
Stock over a specified price fixed by the Committee multiplied by the
number of shares as to which the holder is exercising the SAR. SARs may
be in tandem with any previously or contemporaneously granted option or
independent of any option. The specified price of a tandem SAR shall be
the option price of the related option. The amount payable may be paid
by the Company in Common Stock (valued at its fair market value on the
date of exercise), cash or a combination thereof, as the Committee may
determine, which determination shall be made after considering any
preference expressed by the holder.
(ii) An SAR shall be exercised by written notice to the Company (to
the attention of the Corporate Secretary) at any time prior to its
stated expiration. To the extent a tandem SAR is exercised, the related
option will be cancelled and, to the extent the related option is exer-
cised, the tandem SAR will be cancelled.
(c) Restricted Stock.
(i) The Committee may award to any participant shares of Common
Stock, subject to this paragraph 4(c) and such other terms and condi-
tions as the Committee may prescribe (such shares being called "re-
stricted stock"). Each certificate for restricted stock shall be regis-
tered in the name of the participant and deposited, together with a
stock power endorsed in blank, with the Company.
(ii) There shall be established for each restricted stock award a
restriction period (the "restriction period") of such length as shall
be determined by the Committee. Shares of restricted stock may not be
sold, assigned, transferred, pledged or otherwise encumbered, except as
hereinafter provided, during the restriction period. Except for the re-
strictions on transfer and such other restrictions as the Committee may
impose, the participant shall have all the rights of holder of Common
Stock as to such restricted stock. At the expiration of the restriction
period, the Company shall redeliver to the participant (or the partici-
pant's legal representative) the certificates deposited pursuant to
this paragraph.
(iii) Except as provided by the Committee at the time of grant or
otherwise, upon termination of employment for any reason during the re-
striction period all shares still subject to restriction shall be for-
feited by the participant.
(d) Other Awards. Other awards, including, without limitation, perfor-
mance shares and other forms of awards measured in whole or in part by the
value of shares, the performance of the participant or the performance of
the Company, may be granted under the Plan. Such awards may be payable in
Common Stock, cash or both, and shall be subject to such restrictions and
conditions, as the Committee shall determine. At the time of such an award,
the Committee shall, if applicable, determine a performance period
B-2
and performance goals to be achieved during the performance period, subject
to such later revisions as the Committee shall deem appropriate to reflect
significant unforeseen events. Following the conclusion of each performance
period, the Committee shall determine the extent to which performance goals
have been attained or the degree of achievement between maximum and minimum
levels during the performance period in order to evaluate the level of pay-
ment to be made, if any.
5. Miscellaneous Provisions.
(a) Administration. The Plan shall be administered by the Committee.
Subject to the limitations of the Plan, the Committee shall have the sole
and complete authority: (i) to select participants in the Plan, (ii) to
make awards in such forms and amounts as it shall determine, (iii) to im-
pose such limitations, restrictions and conditions upon such awards as it
shall deem appropriate, (iv) to interpret the Plan and to adopt, amend and
rescind administrative guidelines and other rules and regulations relating
to the Plan, (v) to correct any defect or omission or to reconcile any in-
consistency in the Plan or in any award granted hereunder and (vi) to make
all other determinations and to take all other actions necessary or advis-
able for the implementation and administration of the Plan. The Committee's
determinations on matters within its authority shall be conclusive and
binding upon the Company and all other persons. All expenses associated
with the Plan shall be borne by the Company, subject to such allocation to
its Affiliates and operating units as it deems appropriate. The Committee
may, to the extent that such action will not prevent the Plan from comply-
ing with Rule 16b-3, delegate any of its authority hereunder to such per-
sons as it deems appropriate.
(b) Transferability. An award under the Plan may be transferred only (i)
by will or the laws of descent and distribution, (ii) in accordance with
guidelines established by the Committee, or (iii) pursuant to a qualified
domestic relations order as defined by the Code or Title I of the Employee
Retirement Income Security Act, or the rules thereunder (but only if per-
mitting such transfer will not affect the status of the award under the
Code). Any purported transfer contrary to this provision will nullify the
award.
(c) Changes in Capitalization and Similar Changes. In the event that
each of the outstanding shares of Common Stock shall be changed into or ex-
changed for a different number or kind of shares of stock or securities of
the Company or of another corporation (whether by reason of merger, consol-
idation, recapitalization, reclassification, stock dividend, stock split,
combination of shares, or otherwise), then there shall be substituted for
each share of Common Stock then offered or available for offer under the
Plan the number and kind of shares of stock into which such outstanding
shares of the Common Stock of the Company shall be so changed or for which
such shares shall be so exchanged. The Committee in its sole discretion
shall make any equitable adjustments as may be necessary. No fraction of a
share of Common Stock shall be delivered if an adjustment in the number of
shares is necessary. In the event of a spin-off, extraordinary dividend or
other distribution or similar transaction, the Committee may adjust equita-
bly the exercise price of any outstanding options or the terms of any out-
standing SARs.
(d) Tax Withholding. The Committee shall have the power to withhold, or
require a participant to remit to the Company, an amount sufficient to sat-
isfy any withholding or other tax due with respect to any amount payable
and/or shares issuable under the Plan, and the Committee may defer such
payment or issuance unless indemnified to its satisfaction. A participant
may elect to have shares of Common Stock otherwise issuable under an award
withheld, tender back to the Company shares of Common Stock received pursu-
ant to an award or deliver to the Company previously acquired shares of
Common Stock having a fair market value sufficient to satisfy all or part
of the Company's withholding tax obligations for the participant associated
with the transaction. Such election must be made by a participant prior to
the date on which the tax obligation arises.
(e) Listing and Legal Compliance. The Committee may suspend the exercise
or payment of any award so long as it determines that securities exchange
listing or registration or qualification under any securities laws is re-
quired in connection therewith and has not been completed on terms accept-
able to the Committee.
B-3
(f) Rights to Participants. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any participant's
employment at any time, nor confer upon any participant any right to con-
tinue in the employ of the Company for any period of time or to continue
his or her present or any other rate of compensation. No employee shall
have a right to be selected as a participant, or, having been so selected,
to be selected again as a participant.
(g) Amendment, Suspension and Termination of Plan. The Board of Direc-
tors or the Committee may suspend or terminate the Plan or any portion
thereof at any time and may amend it from time to time in such respects as
the Board of Directors or the Committee may deem advisable; provided, how-
ever, that no such amendment shall be made, without stockholder approval to
the extent such approval is required by law, agreement or the rules of any
exchange upon which the Common Stock is listed. No such amendment, suspen-
sion or termination shall impair the rights of participants affected
thereby or make any change that would disqualify the Plan, or any other
plan of the Company intended to be so qualified, from the exemption pro-
vided by Rule 16b-3.
The Committee may amend or modify any award in any manner to the extent
that the Committee would have had the authority under the Plan to initially
grant such award, except that the Committee may not adjust the exercise
price of any options other than as provided in Section 5(c) hereof. No such
amendment or modification shall impair the rights of any participant under
any award without the consent of such participant.
6. Change in Control. "Change in Control" of the Company means the occur-
rence of any of the following events:
(a) any Person other than a trustee or other fiduciary of securities
held under an employee benefit plan of the Company or any of its subsidiar-
ies, is or becomes a Beneficial Owner, directly or indirectly, of stock of
the Company representing 30% or more of the total voting power of the
Company's then outstanding stock and securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction described
in Clause (A) of paragraph (d), below;
(b) a tender offer (for which a filing has been made with the Securities
and Exchange Commission ("SEC") which purports to comply with the require-
ments of Section 14(d) of the Securities Exchange Act of 1934 and the cor-
responding SEC rules) is made for the stock of the Company, which has not
been negotiated and approved by the Board of Directors of the Company, then
the first to occur of
(i) any time during the offer when the Person making the offer owns
or has accepted for payment stock of the Company with 25% or more of
the total voting power of the Company's stock, or
(ii) three business days before the offer is to terminate unless the
offer is withdrawn first if the Person making the offer could own, by
the terms of the offer plus any shares owned by this Person, stock with
50% or more of the total voting power of the Company's stock when the
offer terminates;
(c) individuals who, as of the date hereof, constitute the Board of Di-
rectors (the "Incumbent Board") of the Company, cease for any reason to
constitute a majority thereof; provided, however, that any individual be-
coming a director whose election, or nomination for election by the
Company's stockholders, was approved by a vote of at least 75% of the di-
rectors then comprising the Incumbent Board shall be considered as though
such individual was a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of office occurs
as a result of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened solicitation
of proxies or consents by or on behalf of a Person other than the Board of
Directors of the Company;
(d) there is consummated a merger or consolidation of the Company (or
any direct or indirect subsidiary of the Company) with any other corpora-
tion, other than (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior to such
merger or consolidation continuing to represent (either by remaining out-
standing or by being converted into voting securities of the surviving en-
tity or any parent thereof) at least 75% of the combined voting power of
the stock and securities of the Company or such surviving entity or any
parent thereof outstanding immediately after
B-4
such merger or consolidation, or (B) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly or indirectly,
of stock and securities of the Company representing more than 25% of the
combined voting power of the Company's then outstanding stock and securi-
ties; or
(e) the stockholders of the Company approve a plan of complete liquida-
tion or dissolution of the Company or there is consummated an agreement for
the sale or disposition by the Company of all or substantially all of the
Company's assets other than a sale or disposition by the Company of all or
substantially all of the assets to an entity at least 75% of the combined
voting power of the stock and securities which is owned by Persons in sub-
stantially the same proportions as their ownership of the Company's voting
stock immediately prior to such sale.
"Person" shall mean any person (as defined in Section 3(a)(9) of the Se-
curities Exchange Act (the "Exchange Act"), as such term is modified in
Section 13(d) and 14(d) of the Exchange Act) other than (1) any employee
plan established by the Company, (2) the Company or any of its affiliates
(as defined in Rule 12b-2 promulgated under the Exchange Act), (3) an un-
derwriter temporarily holding securities pursuant to an offering of such
securities, or (4) a corporation owned, directly or indirectly, by stock-
holders of the Company in substantially the same proportions as their own-
ership of the Company. "Beneficial Owner" shall mean beneficial owner as
defined in Rule 13d-3 under the Exchange Act.
The Committee may provide in any award that in the event of a Change in Con-
trol, the participant may (a) exercise any outstanding Options or SARs which
would not then be exercisable by the participant absent the Change in Control;
(b) require the Company to release all restrictions on shares of restricted
stock awarded to the participant; and (c) require the Company to pay the par-
ticipant the fair value (prorated to the date of the Change in Control) of any
other awards under the Plan then held by the participant.
B-5
___________________ VOTE BY INTERNET--www.proxyvote.com
Use the Internet to transmit your voting
B R U N S W I C K instructions and for electronic delivery of
___________________ information up until 11:59 P.M. Eastern Time
the day before the cut-off date or meeting
C/O PROXY SERVICES date. Have your proxy card in hand when you
P.O. BOX 9142 access the web site. You will be prompted to
FARMINGDALE, NY 11735 enter your 12-digit Control Number which is
located below to obtain your records and to
create an electronic voting instruction form.
VOTE BY PHONE--1-800-690-6903
Use any touch-tone telephone to transmit your
voting instructions up until 11:59 P.M.
Eastern Time the day before the cut-off date
or meeting date. Have your proxy card in hand
when you call. You will be prompted to enter
your 12-digit Control Number which is located
below and then follow the simple instructions
the Vote Voice provides you.
VOTE BY MAIL--
Mark, sign, and date your proxy card and
return it in the postage-paid envelope we
have provided or return it to Burnswick
Corporation., c/o ADP, 51 Mercedes Way,
Edgewood, NY 11717.
TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: [x] BRNSWK
KEEP THIS PORTION FOR YOUR RECORDS
- --------------------------------------------------------------------------------
DETACH AND RETURN THIS PORTION ONLY
THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.
________________________________________________________________________________
BRUNSWICK CORPORATION
The Board of Directors recommends
a vote FOR proposals 1, 2 and 3,
For Withhold For All
Director Vote All All Except
1. Election of Directors-Nominees [_] [_] [_]
01) Nolan D. Archibald
02) Jeffrey L. Bleustein
03) Robert L. Ryan To withhold authority to
vote, mark "For All Except"
and write the nominee's
number on the line below.
___________________________
Vote On Proposals For Against Abstain
2. Approval of Amendment to 1991 Stock Plan [_] [_] [_]
3. Ratification of Arthur Andersen LLP as Auditors [_] [_] [_]
4. In their discretion on such other business as may properly come before the
meeting
This proxy will be voted as directed by the shareholder. If no direction
is made, this proxy will be voted for proposals 1, 2 and 3.
Note: Please sign exactly as name(s) appear hereon. When signing as attorney,
executor, administrator, trustee, or guardian, please give full name as such.
_________________________________ _________________________________
_________________________________ _________________________________
Signature Date Signature Date
(PLEASE SIGN WITHIN BOX) (Joint Owners)
- -------------------------------------------------------------------------------
Proxy
Solicited on behalf of the Board of Directors of
BRUNSWICK CORPORATION
The undersigned hereby appoints G.W. Buckley, V.J. Reich and D.E. McCoy,
and each of them, as proxies with power of substitution, and hereby authorizes
them to represent and to vote, in accordance with the instructions on the
reverse side, all shares of Common Stock of Brunswick Corporation that the
undersigned may be entitled to vote at the Annual Meeting of Shareholders to be
held on May 1, 2001, of any adjournment thereof.
The proxy also provides voting instructions for shares held by the Bank of
New York, the trustee for the Brunswick Employee Stock Ownership Plan, and
Vanguard Fiduciary Trust Company, the trustee for the Brunswick Retirement
Savings Plan and the Brunswick Rewards Plan, and directs such trustees to vote
as indicated on the reverse side of this card any shares allocated to your
account in these plans. The Trustees will vote your shares as you direct. The
Trustees will vote allocated shares of the Company's stock (except shares
acquired with tax credit contributions) for which proxies are not received and
unallocated shares in direct proportion to voting by allocated shares for which
proxies are received.
This proxy/voting instruction card is solicited pursuant to a separate
Notice of Annual Meeting and Proxy Statement, receipt of which is hereby
acknowledged. This card should be voted, by mail, internet or telephone, in time
to reach the Company's proxy tabulator, Automatic Data Processing, by 9:00 a.m.
on Tuesday, May 1, 2001, for all registered shares to be voted and by 5:00 p.m.
on Friday, April 27, 2001, for the Trustees to vote the Plan shares. Individual
proxy voting and voting instructions will be kept confidential by Automatic Data
Processing and will not be provided to the Company.
- ---------
BRUNSWICK
- ---------
TWO ADDITIONAL WAYS TO VOTE
================================================================================
Vote by Internet
================================================================================
It's fast, convenient, and your vote is immediately confirmed and posted. You
may also give your consent to have all future proxy statements and annual
reports delivered to you electronically.
Go to website
www.proxyvote.com
Follow these four easy steps:
. Read the accompanying Proxy Statement and Proxy Card.
. Go to website www.proxyvote.com.
. Enter your unique 12-digit Control Number located on your Proxy Card.
. Follow the simple instructions.
===============================================================================
================================================================================
Vote by Telephone
================================================================================
It's fast, convenient, and your vote is immediately confirmed and posted.
Call toll-free on a touch-tone phone in the U.S. or Canada
1-800-690-6903
Follow these four easy steps:
. Read the accompanying Proxy Statement and Proxy Card.
. Call the toll-free phone number above.
. Enter your unique 12-digit Control Number located on your Proxy Card.
. Follow the simple recorded instructions.
===============================================================================
VOTE 24 HOURS A DAY
DO NOT RETURN PROXY CARD IF YOU ARE VOTING BY INTERNET OR TELEPHONE