<PAGE>
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
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(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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(4) Proposed maximum aggregate value of transaction:
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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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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[BRUNSWICK LOGO]
March 22, 2000
Dear Brunswick Shareholder:
You are cordially invited to attend the 2000 Annual Meet-
ing of Brunswick Shareholders to be held on Wednesday, April
26, 2000, at 3:00 p.m. at Brunswick's corporate 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 letter describe the business to be acted on
at the meeting.
It is important that your shares be represented at the
meeting. Therefore, I urge that you MARK, SIGN, DATE and RE-
TURN PROMPTLY the enclosed PROXY in the envelope furnished
for that purpose. If you are present at the meeting, you may,
if you wish, revoke your proxy and vote in person. I am look-
ing forward to seeing you at the meeting.
Sincerely,
[LOGO OF PETER N. LARSON]
Peter N. Larson
Chairman
<PAGE>
NOTICE OF ANNUAL MEETING
The Annual Meeting of Shareholders of Brunswick Corpora-
tion will be held at Brunswick's corporate offices, 1 N.
Field Court, Lake Forest, Illinois, on Wednesday, April 26,
2000, at 3:00 p.m. for the following purposes:
(1) To elect directors,
(2) To ratify the appointment of Arthur Andersen LLP
asauditors, and
(3) To consider such other business as may properly
comebefore the meeting.
Brunswick shareholders of record at the close of business
on February 28, 2000, will be entitled to notice of and to
vote at the meeting and any adjournment thereof.
By order of the Board of Directors,
[LOGO OF Dustan E. McCoy]
Dustan E. McCoy
Secretary
Lake Forest, Illinois
March 22, 2000
<PAGE>
[Brunswick Logo]
PROXY STATEMENT
The Board of Directors of Brunswick Corporation is soliciting proxies from
its shareholders for the annual meeting to be held on April 26, 2000. This
proxy statement is first being mailed to shareholders on or about March 22,
2000. 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 Employee 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 91,608,340 shares of Common Stock outstanding as
of the close of business on February 28, 2000, the record date, will be enti-
tled 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.
Abstentions are counted as present in determining whether the quorum require-
ment is satisfied, but they have no other effect on voting for election of di-
rectors. Abstentions are the same as a vote against on other matters.
ELECTION OF DIRECTORS
Brunswick's Certificate of Incorporation provides that the Board of Direc-
tors 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. Six directors are to be elected at the meeting. The Board of
Directors has nominated George W. Buckley, Michael J. Callahan, Manuel A. Fer-
nandez, Peter B. Hamilton and Roger W. Schipke for election as directors to
serve for terms expiring at the 2003 annual meeting or until their respective
successors shall have been elected and qualified, and Dorrit J. Bern for elec-
tion as director to serve for a term expiring at the 2002 annual meeting, or
until her respective successor shall have been elected and qualified. Messrs.
Callahan, Fernandez and Schipke have served as directors since 1991, 1997 and
1993, respectively.
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. 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. Bio-
graphical information follows for each person nominated and each person whose
term of office will continue after the annual meeting.
1
<PAGE>
Nominees for Election for Terms Expiring at the 2003 Annual Meeting
George W. Buckley
Executive Vice President of Brunswick since February 2000, President--Mercury
Marine Group since 1997 and responsible for the Igloo Division since 1999; Se-
nior Vice President of Brunswick and President--Mercury Marine Group, 1998-
2000; Vice President of Brunswick and President--Mercury Marine Group, 1997-
1998; President of the U.S. Electrical Motors Division of Emerson Electric Co.,
a manufacturer of electrical, electronic, and electromagnetic products, 1996-
1997; and President of Emerson's Automotive and Precision Motors Division,
1994-1996; age 53
Michael J. Callahan Director since 1991
Financial consultant; Executive Vice President and Chief Financial Officer of
FMC Corporation, a producer of chemicals and machinery for industry and agri-
culture, 1994-1999; Executive Vice President and Chief Financial Officer of
Whirlpool Corporation, a manufacturer of major home appliances, 1992-1994; di-
rector of Material Sciences Corporation; age 61
Manuel A. Fernandez Director since 1997
Chairman of the Board of Gartner Group, Inc., an information technology compa-
ny, since 1995; Chairman and Chief Executive Officer of Gartner Group, Inc.,
1995-1998; and President and Chief Executive Officer of Gartner Group, Inc.,
1991-1997; age 53
Peter B. Hamilton
Executive Vice President of Brunswick since 1998 and responsible for the Bruns-
wick Indoor Recreation Group, the Life Fitness Division and the Bicycle Divi-
sion since February 2000; Executive Vice President and Chief Financial Officer
of Brunswick and Chairman--Indoor Recreation, 1998-2000; Senior Vice President
and Chief Financial Officer of Brunswick, 1995-1998; Vice President and Chief
Financial Officer, Cummins Engine Company, Inc., a designer and manufacturer of
diesel engines and related products, 1988-1995; director of Mallinckrodt Inc.
and The Kemper Insurance Companies; age 53
Roger W. Schipke Director since 1993
Private investor; Chairman of the Board and Chief Executive Officer of The Sun-
beam Corporation, a consumer products firm, 1993-1996; Chairman of the Board
and Chief Executive Officer of The Ryland Group, a company engaged in mortgage
banking and home building, 1990-1993; director of Legg-Mason, Inc., Oakwood
Homes Corporation and The Rouse Company; age 63
2
<PAGE>
Nominee for Election for Term Expiring at the 2002 Annual Meeting
Dorrit J. Bern
Chairman of the Board, President and Chief Executive Officer of Charming
Shoppes, Inc., a company operating a chain of woman's specialty apparel stores
under the names "Fashion Bug," "Fashion BugPlus," "Catherines," "Added Dimen-
sions" and "The Answer" since 1997; Vice Chairman of the Board, President and
Chief Executive Officer of Charming Shoppes, Inc., 1995-1997; age 49
The Board of Directors recommends a vote FOR the nominees named above.
Directors Continuing in Office Until the 2002 Annual Meeting
Peter Harf Director since 1996
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 53
Peter N. Larson Director since 1995
Chairman of the Board and Chief Executive Officer of Brunswick since 1995; Ex-
ecutive Officer, Johnson & Johnson, a health care company, 1991-1995, where he
served as Chairman of the Worldwide Consumer and Personal Care Group and was a
member of the Executive Committee and the Board of Directors; director of
Compaq Computer Corporation, Click Commerce, Inc. and CIGNA Corporation; Chair-
man of the Listed Stock Advisory Committee of the New York Stock Exchange; age
60
Jay W. Lorsch Director since 1983
Louis E. Kirstein Professor of Human Relations since 1978, Chairman of Doctoral
Programs, 1995-1999, and Senior Associate Dean and Chairman of Executive Educa-
tion Programs, 1990-1995, Harvard University Graduate School of Business Admin-
istration; age 67
Bettye Martin Musham Director since 1993
Chairwoman of the Board and Chief Executive Officer of Gear Holdings, Inc., a
design, marketing and communications firm, since 1999; President and Chief Ex-
ecutive Officer of Gear Holdings, Inc., 1977-1999; director of Footstar, Inc.
and Wallace Computer Co.; age 67
Directors Continuing in Office Until the 2001 Annual Meeting
Nolan D. Archibald Director since 1995
Chairman of the Board, President and Chief Executive Officer of The Black &
Decker Corporation, a consumer and commercial products company, since 1986; age
56
3
<PAGE>
Jeffrey L. Bleustein Director since 1997
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 Operating Officer of the Motorcycle Division of
Harley-Davidson, Inc., 1993-1997; age 60
Kenneth Roman Director since 1995
Former Chairman and Chief Executive Officer of The Ogilvy Group, a global ad-
vertising and communications company, 1988-1989 (and of Ogilvy and Mather
Worldwide, 1985-1989); Executive Vice President, American Express Company, a
financial services company, 1989-1991; director of Compaq Computer Corporation
and Gartner Group, Inc.; age 69
Robert L. Ryan Director since 1998
Senior Vice President and Chief Financial Officer of Medtronic, Inc., a medical
technology company, since 1993; director of Dain Rauscher Corporation and
United Healthcare Corporation; age 56
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.
Members of the Executive Committee are Messrs. Larson (Chairman), Callahan,
Fernandez, Lorsch and Schipke.
Members of the Audit and Finance Committee are Messrs. Callahan (Chairman),
Bleustein, Harf and Ryan.
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 1999. 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 ac-
tion taken by the committee will be reported as soon as possible to, and rati-
fied by, the full Board at its next regular meeting.
4
<PAGE>
The Audit and Finance Committee met five times during 1999. The Audit and
Finance Committee provides assistance to the Board in fulfilling the Board's
responsibility to Brunswick shareholders and the investment community with re-
spect to Brunswick's accounting and reporting 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 financial management. The committee's responsibilities include
reviewing the performance of the independent 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 as-
suring the independence of the independent auditors; reviewing Brunswick's in-
ternal audit function; reviewing significant risks and exposures, audit activ-
ities, significant audit findings and recommendations of the independent and
internal auditors, together with management's responses; reviewing the ade-
quacy and effectiveness of Brunswick's internal controls; reviewing the au-
dited annual financial statements and the independent auditors' opinion ren-
dered with respect to the financial statements; reviewing legal, environmental
or regulatory matters that may have a material financial or disclosure impact;
considering other matters in relation to Brunswick's financial affairs; con-
ducting or authorizing investigations into any matters within the committee's
scope of responsibilities; meeting with the independent auditors and internal
auditors without members of management present; reporting to the Board period-
ically on its activities; and reviewing and updating the committee's charter
annually.
The Human Resource and Compensation Committee met eight times during 1999.
The Human Resource and Compensation Committee is responsible for determining
the compensation to be paid to Brunswick's senior executives and for develop-
ing policies for and administering all compensation and benefit plans in which
other senior managers participate. The committee also reviews all executive
compensation plans to satisfy the Board that these plans will motivate
achievement of corporate objectives. The committee also reports on the compen-
sation paid to executives under these plans and its relationship to
Brunswick's performance, as required by the Securities and Exchange Commis-
sion, and approves the performance criteria 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 five times during 1999. 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 performance 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, communicates the re-
sults of this review to the nominee on behalf of the Board. The committee co-
ordinates an annual review of the Board's functioning and recommends any
needed changes. The committee is also responsible for
5
<PAGE>
determining the Chairs and membership of Board committees, upon recommendation
from the Chairman of the Board. The committee also monitors, on the Board's be-
half, changes in Brunswick's organizational structure and in corporate gover-
nance.
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 10th 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 12 times during 1999. All directors attended 75
percent or more of the board meetings and meetings of committees of which they
were members during 1999.
Director Compensation
Directors who are not employees and who are not committee chairpersons are
entitled to an annual fee of $50,000, and the directors who are chairpersons of
the Audit and Finance, Human Resource and Compensation, and Corporate Gover-
nance Committees each receive an annual fee of $57,500. One-half of such annual
fees is paid in Brunswick Common Stock, and each director may elect to have the
remaining one-half of these fees paid in cash or Common Stock. Receipt of this
Common Stock may be deferred until after retirement from the Board. In addi-
tion, non-employee directors received $1,000 for each special meeting of the
Board of Directors attended between January 1 and June 30, 1999. This compensa-
tion was paid in cash or Common Stock, depending upon each director's election
for the receipt of annual fees. New non-employee directors receive an award of
Common Stock that has a value of $25,000 at the time they are first elected to
the Board, and receipt of this Common Stock is deferred until after retirement
from the Board.
6
<PAGE>
Non-employee directors at the time of Brunswick's 1999 annual meeting of
shareholders received options to purchase 3,000 shares of Common Stock each at
a price of $22.875 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 on the date of the award. Options for one-half of
these shares become fully exercisable one year after the date of the award, and
options for the other one-half become exercisable two years after the date of
the award. In addition, the options become exercisable upon a change in control
of Brunswick. The options may be exercised at any time after becoming exercis-
able until the 10th anniversary of the date of the award.
Directors are encouraged to use Brunswick products to enhance their under-
standing and appreciation of the business. Directors may receive up to $4,500
of Brunswick products annually. The value of the products is included in the
directors' taxable income, and Brunswick reimburses the directors for any taxes
due. Directors may lease boats from Brunswick at no charge except for the pay-
ment of applicable taxes. In addition, directors may purchase Brunswick prod-
ucts at Brunswick's wholesale price or dealers' cost.
7
<PAGE>
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:
<TABLE>
<CAPTION>
Number of Shares Percent
Name of Individual Beneficially Owned of
or Persons in Group as of February 1, 2000 Class
- -------------------------------------------------------------------------------
<S> <C> <C>
Nolan D. Archibald 27,705(1) *
Jeffrey L. Bleustein 15,425(1) *
Michael J. Callahan 48,560(1) *
Manuel A. Fernandez 12,335(1) *
Peter Harf 41,358(1) *
Peter N. Larson 1,428,018(2) 1.6%
Jay W. Lorsch 39,849(1) *
Bettye Martin Musham 28,106(1) *
Kenneth Roman 37,546(1) *
Robert L. Ryan 4,424(1) *
Roger W. Schipke 36,616(1) *
George W. Buckley 65,246(2) *
William J. Barrington 165,509(2) *
Peter B. Hamilton 205,825(2) *
Dudley E. Lyons 30,825(2) *
All directors and executive officers as a group 2,570,654(1)(2) 2.8%
</TABLE>
* Less than 1 percent
(1) Includes the following shares of Common Stock issuable to the directors,
receipt of which has been deferred: Messrs. Archibald 5,705 shares,
Bleustein 5,925 shares, Callahan 18,919 shares, Fernandez 7,835 shares,
Harf 9,358 shares, Lorsch 21,470 shares, Roman 7,343 shares, Ryan 2,924
shares and Schipke 19,516 shares, Ms. Martin Musham 8,080 shares and all
non-employee directors as a group 107,075 shares. Also includes the follow-
ing shares of Common Stock issuable pursuant to stock options exercisable
within 60 days: 7,000 shares for each of Messrs. Archibald, Harf and Roman;
12,600 shares for each of Messrs. Callahan, Lorsch and Schipke and Ms. Mar-
tin Musham; 4,500 shares for each of Messrs. Bleustein and Fernandez; and
1,500 shares for Mr. Ryan.
(2) Includes 504,982 shares for Mr. Larson, receipt of which has been deferred
and of which 50,000 shares were restricted. Includes the following shares
of Common Stock issuable pursuant to stock options exercisable within 60
days: Messrs. Larson 919,755 shares, Buckley 27,000 shares, Barrington
125,500 shares, Hamilton 161,000 shares, Lyons 21,000 shares and all direc-
tors and executive officers as a group 1,616,935 shares. Includes the fol-
lowing shares of Common Stock held by the
8
<PAGE>
Brunswick Employee Stock Ownership Plan trustee and the Brunswick Savings
Plan trustee; Messrs. Larson 2,281 shares, Buckley 311 shares, Barrington
7,493 shares, Hamilton 575 shares, Lyons 305 shares and all directors and
executive officers as a group 19,823 shares. Also includes the following
shares of Common Stock held for the benefit of family and family partner-
ships: Messrs. Larson 1,000 shares, Hamilton 43,250 shares and all directors
and executive officers as a group 44,290 shares.
The only shareholders known to Brunswick to own beneficially more than 5
percent of Brunswick's outstanding Common Stock are:
<TABLE>
<CAPTION>
Shares
Beneficially
Name and Address of Owned as of Percent
Beneficial Owner December 31, 1999 of Class
- ------------------------------------------------------------
<S> <C> <C>
Harris Associates, Inc. 7,698,300(1) 8.37%
Two North LaSalle Street
Chicago, IL 60602
Barclays Global Investors, N.A. 5,889,005(2) 6.41%
45 Fremont Street
San Francisco, CA 94105
Morgan Stanley Dean Witter & Co. 5,363,296(3) 5.84%
1585 Broadway
New York, NY 10036
</TABLE>
(1) Harris Associates LP is also considered the beneficial owner of all of
these shares. Harris Associates Investment Trust, series designated The
Oakmark Fund, owns 7,280,800 shares and has shared voting power and shared
dispositive power for such shares. Harris Associates, Inc. and Harris Asso-
ciates LP reported shared voting power for 7,698,300 shares, sole disposi-
tive power for 417,500 shares and shared dispositive power for 7,280,000 of
these shares (8.3 percent) in a Schedule 13G dated January 19, 2000.
(2) Barclays Global Investors, N.A.; Barclays Global Fund Advisors; Barclays
Bank PLC; Barclays Funds Limited; Barclays Global Investors, LTD.; and
Barclays Trust and Banking Company (Japan) Ltd. jointly reported sole vot-
ing power for 5,279,036 shares and sole dispositive power for 5,889,005
shares, of which Barclays Global Investors N.A., reported sole voting power
for 4,567,357 shares and sole dispositive power for 5,160,520 shares (5.62
percent) in a Schedule 13G dated February 10, 2000.
(3) Morgan Stanley Dean Witter & Co. reported shared voting power as to
5,296,786 shares and shared dispositive power for 5,363,296 shares, and its
wholly owned subsidiary, Morgan Stanley Dean Witter Advisers Inc., Two
World Trade Center, New York, NY 10048, reported shared voting power for
5,018,029 shares and shared dispositive power for 5,072,779 shares (5.52
percent) in a Schedule 13G dated February 4, 2000.
9
<PAGE>
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
and is responsible for overseeing all compensation plans in which the Chairman
and Chief Executive Officer and the Senior Executives participate. For 1999,
"Senior Executives" include all Group Presidents and all Senior Corporate Ex-
ecutives in Brunswick.
Executive Compensation Plans
We welcome the opportunity to share with our shareholders the details of
our executive compensation plans and the philosophy that has been followed in
developing these plans. At the root of our compensation system is a belief
that the corporation with the best employee talent will be the market leader.
The purposes of the plans are to attract and retain outstanding key employees
and to encourage an ownership commitment through Stock Ownership Guidelines
facilitated by our incentive compensation programs. Brunswick recognizes past
performance and expected future contributions through a combination of compet-
itive base salaries, the annual Brunswick Performance Plan, the Strategic In-
centive Plan and the 1991 Stock Plan. These plans motivate our executives by
providing incentives for the successful implementation of Brunswick's tactical
and strategic initiatives.
Independent consultants provide extensive information regarding the compen-
sation practices of comparable companies with revenues similar to Brunswick's
and/or the competitors of our business units for the purpose of reviewing and
establishing salary levels. Because of their smaller size, some of the compa-
nies included in our industry peer group on page 14 are not included in the
list of comparable companies for the determination of salary ranges for the
Senior Executives. Our competition for executive talent includes a broad array
of corporations providing manufactured consumer products and related services.
During 1999, Brunswick's executive compensation plans included competitive
base salaries plus incentives for short-term, mid-term and long-term perfor-
mance. Our mix of base and incentive pay plans has been designed to place a
substantial amount of compensation at risk, more than the average corporation
in our compensation survey. The size of the individual awards in the plans in-
creases based upon the level of responsibility of the Senior Executive. In
this way, a greater opportunity for incentive compensation is provided for
those executives whose responsibilities are deemed to have the largest impact
on Brunswick's long-term success. In its administration of the plans the Com-
mittee has in the past, and may in the future, use judgment and discretion.
Annual base salaries, including the Chief Executive Officer's, have been
targeted at levels generally in the third quartile of the marketplace for sim-
ilar positions for defensive and retention reasons. For salary administration,
"salary range bands" have been developed to establish internal equity for like
positions, while also supporting a broad cross-organizational career develop-
ment process. Survey data provided by our independent consultants provides an
external assessment of the market pricing for our positions. We believe that
this combination of internal and external comparisons provides the best over-
all
10
<PAGE>
measure for salary administration. Our consultants' studies are updated every
other year; it was completed most recently in September 1998. Generally, execu-
tive salaries are reviewed every 12 to 24 months.
The Brunswick Performance Plan is an annual bonus plan that in 1999 provided
opportunities for bonuses to be earned by Senior Executives and other manage-
ment employees. Under the Plan, bonus pools were generated based upon the
achievement of specified annual financial targets and written objectives that
were reviewed by the Committee. For 1999, 80 percent of the bonus for group ex-
ecutives was based on their Brunswick Value Added ("BVA") which is defined as
division contribution less a working capital charge and the remaining 20 per-
cent was based on clearly established organizational development objectives
central to the continued strength of their business. For corporate executives,
80 percent of the bonus was based on an earnings per share goal and 20 percent
on specific organizational development objectives. Bonuses earned by Senior Ex-
ecutives under the Plan for 1999 were reviewed and approved by the Committee
based upon an assessment of performance against assigned goals. In addition,
for certain of the Senior Executives, the bonus earned was paid up to 50 per-
cent in Brunswick's stock and 50 percent in cash if they had not met the Stock
Ownership Guidelines, as described below. If the guidelines have been met, the
payment form is at the election of the Senior Executive. Any cash or stock pay-
ment may be deferred at the Senior Executive's election.
The purpose of the Strategic Incentive Plan is to provide a mid-term incen-
tive for the successful implementation of Brunswick's strategic plans by defin-
ing the contribution necessary from each business unit to achieve Brunswick's
overall plan. The performance periods for the Strategic Incentive Plan begin-
ning January 1, 1998, and January 1, 1999, were two years. The goals for the
1998 through 1999 performance period were specified financial targets; 100 per-
cent for division contribution for the business units and earnings per share
for corporate participants. Bonuses for Senior Executives under the Plan were
based upon a combination of business unit performance and overall Company per-
formance. For this cycle, Senior Executives may earn up to 125 percent of base
salary in effect at the beginning of the performance period depending upon
their position. Target awards were denominated in stock units at the beginning
of the performance period using the January 2, 1998, closing price of Brunswick
Common Stock. The payout value of these units was based upon the closing stock
price on December 31, 1999. Similar to the annual bonus plan, a portion of the
final payout was made in Common Stock for those Senior Executives who had not
reached the Stock Ownership Guidelines. Any payments may be deferred. The goals
for the 1999 through 2000 performance period are based on specified strategic
goals, corporate performance and Group BVA for the group executives and corpo-
rate performance and strategic goals for corporate executives.
The 1991 Stock Plan, Brunswick's long-term incentive plan, provides the op-
portunity to grant stock options. Brunswick believes strongly that stock and
stock options are an integral part of a Senior Executive's total annual compen-
sation package. It has long been Brunswick's belief that Senior Executives who
own significant amounts of Brunswick's stock are more oriented to focus on its
long-term growth, make decisions that are in the best interests of all share-
holders and contribute to higher levels of shareholder value.
11
<PAGE>
Brunswick has formal Stock Ownership Guidelines. Under the Guidelines as ap-
proved by the Committee, Senior Executives are expected to own specific minimum
amounts of Brunswick's stock, calculated as a multiple of their base salaries,
and ranging from five times annual salary for the Chairman and Chief Executive
Officer to one to three times base salary for Senior Executives. In the case of
a new hire or promotion to a Senior Executive position, the individual will be
expected to reach the targeted amount required under the policy within five
years.
In 1999, the Committee approved the annual award of options. The exercise
price was set at 100 percent of the fair market value on the date of grant. The
awards were approximately the same numbers of options granted in July 1998.
These values were up to 100 percent of the base salary of the Senior Execu-
tives. Options will vest in three years; however; vesting may be accelerated
based upon the achievement of specific thresholds for earnings per share or
stock price. The size of the previous option grant was taken into consideration
when determining the amount and number of the 1999 option grants.
Compensation of the Chief Executive Officer
In 1998, a three-year contract extension of Mr. Larson's Employment Agree-
ment was completed. As part of this agreement, Mr. Larson was awarded 50,000
shares of restricted Common Stock in 1999 that vested at the end of the year
and were deferred until his termination of employment. He will be awarded
50,000 additional shares of restricted Common Stock in 2000 and 2001, which
will vest at the end of each year and will also be deferred until his termina-
tion of employment. His performance will continue to be reviewed annually by
the Board, taking into account such financial and non-financial factors as the
Board determines to be pertinent. Also, approximately six months through each
annual performance cycle, the Board reviews Mr. Larson's performance, with the
interim review focusing primarily on non-financial factors that are believed to
be essential for his successful leadership of Brunswick. On October 21, 1998,
the Board increased Mr. Larson's base salary to $900,000 effective December 1,
1998. His base salary has been unchanged since that time.
Mr. Larson participates in an annual bonus plan that provides for a maximum
of 200 percent of his annual salary based upon the achievement of specific fi-
nancial goals established by the Board. Mr. Larson's goal for 1999 was achieve-
ment of a specified earnings per share target. The financial objective was not
achieved and the Committee recommended, and the Board of Directors approved, no
bonus for 1999.
Mr. Larson participates in the Strategic Incentive Plan under which he may
earn a maximum of 100 percent of base salary per year in each cycle depending
on the achievement of performance goals which have been approved by the Board.
One hundred percent of the award is denominated in stock units at the beginning
of the performance period using the closing price of Brunswick Common Stock on
the first day of the performance period. The payout value of these units was
based upon the closing stock price on December 31, 1999. Mr. Larson's goals for
this cycle related to acquisition strategy, talent enhancement, creation and
execution of key strategic initiatives, including information technology. In
recognition of the extent of Mr. Larson's achievement of these strategic goals,
the Committee recommended and the Board approved an award of 75.8 percent of
his maximum number of stock units for this
12
<PAGE>
performance period, which he has deferred. These stock units were valued at
$900,000 based on the December 31, 1999 closing stock price.
In April, 1999, at the time the other Senior Executives were awarded op-
tions, Mr. Larson was awarded options to purchase 175,000 shares of Brunswick
Common Stock at its then current market value with the vesting provisions sim-
ilar to those options awarded all other Senior Executives.
Omnibus Budget Reconciliation Act of 1993
Brunswick has reviewed its executive compensation plans in response to the
Omnibus Budget Reconciliation Act of 1993 (the "Act"), which established a
$1.0 million tax deduction limitation in August 1993 for the taxable years be-
ginning on or after January 1, 1994. The limitation applies to compensation in
excess of $1.0 million paid to any executive who is employed by Brunswick on
December 31 and named in the summary compensation table, with certain excep-
tions. Mr. Larson and all other Senior Executives will defer receipt of com-
pensation, to the extent it 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
13
<PAGE>
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN AMONG
BRUNSWICK, S&P 500 INDEX AND PEER GROUP
Brunswick Peer Group S&P 500 Index
--------- ---------- -------------
1994 100.0 100.0 100.0
1995 130.1 91.9 137.6
1996 132.8 101.2 169.4
1997 170.9 107.8 225.8
1998 142.0 89.7 290.5
1999 130.4 88.8 347.3
[LINE GRAPH]
The basis of comparison is a $100 investment at December 31, 1994, in each
of Brunswick, the S&P 500 Index and a peer group of six recreation manufactur-
ing companies (Coleman Company, Inc., Cybex International, Inc., Huffy Corpora-
tion, Johnson Worldwide Associates, Inc., K2, Inc., and Polaris Industries,
Inc.) weighted by the beginning of the year market value of each company. All
dividends are reinvested. Coleman Company, Inc. was acquired by the Sunbeam
Corporation and was de-listed in February 2000.
14
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation of the Chief Executive Offi-
cer and each of the four other most highly compensated executive officers for
each of the last three years.
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
----------------------------------- --------------------------------
Awards Payouts
--------------------- ----------
Other Restricted Securities Long-Term
Annual Stock Underlying Incentive All Other
Name/Position Year Salary Bonus(3) Compensation(4) Award(5) Options(#) Payouts Compensation(6)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Peter N. Larson 1999 $900,000 $ 0 $301,819 $1,181,250 175,000 $ 900,000 $224,003
Chairman and 1998 808,493 2,397,800 221,379 0 150,000 1,110,483 229,287
Chief Executive Officer 1997 800,000 843,200 63,036 0 200,000 1,949,742 229,716
- -------------------------------------------------------------------------------------------------------------------
George W. Buckley 1999 $442,548 $ 595,600 $ 24,536 $ 0 40,000 $ 338,222 $ 33,321
ExecutiveVice 1998 403,397 628,800 14,959 0 35,000 356,190 33,706
President (1) 1997 186,301 185,600 133,114 0 50,000 100,000 471,875
- -------------------------------------------------------------------------------------------------------------------
William J. Barrington 1999 $421,699 $ 604,000 $ 56,732 $ 0 35,000 $ 311,255 $ 96,960
Vice President and 1998 387,973 431,200 17,628 0 30,000 342,833 76,925
President--Sea Ray Group 1997 385,000 331,639 0 0 30,000 665,769 74,569
- -------------------------------------------------------------------------------------------------------------------
Peter B. Hamilton 1999 $442,548 $ 473,280 $ 24,687 $ 0 40,000 $ 252,181 $ 79,495
ExecutiveVice President 1998 403,397 391,200 15,861 0 30,000 209,534 81,448
1997 400,000 374,080 479 0 30,000 587,531 84,224
- -------------------------------------------------------------------------------------------------------------------
Dudley E. Lyons 1999 $391,699 $ 454,350 $ 0 $ 0 30,000 $ 210,479 $ 34,117
Senior Vice President 1998 353,397 263,600 0 0 25,000 135,946 34,786
- --Strategic Business 1997 140,959 170,000 26,946 0 40,000 100,000 159,375
Development and
Chairman--US Marine (2)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Mr. Buckley joined Brunswick as Vice President and President--Mercury Ma-
rine Group in August 1997.
(2) Mr. Lyons joined Brunswick as Vice President--Strategic Business Develop-
ment in August 1997.
(3) The annual bonus amount in 1998 for Mr. Larson includes $1,725,000 repre-
senting the value of 50,000 shares of Common Stock awarded on April 1,
1998. Receipt of these shares has been deferred until his termination of
employment.
(4) 1997 amounts for Mr. Buckley include $26,940 for use of Brunswick's air-
craft for authorized non-corporate purposes; amounts reimbursed for payment
of taxes; and $35,898 for relocation allowances, which were in addition to
amounts generally paid.
(5) The amount shown in this column is the value of the restricted shares as of
the date of grant. On January 4, 1999, Mr. Larson was awarded 50,000 shares
of Common Stock pursuant to his employment agreement. These shares vested
on December 31, 1999. Receipt of Mr. Larson's shares is deferred until his
retirement. As of December 31, 1999, Mr. Barrington held 5,000 restricted
shares with a value of $111,250. Dividends are paid quarterly on all shares
of restricted stock.
15
<PAGE>
(6) All Other Compensation for 1999 for the named officers is comprised of the
following: (i) Brunswick contributions to the Brunswick Retirement Savings
Plan for Messrs. Larson $3,500, Buckley $3,000, Hamilton $3,350 and Lyons
$3,000; (ii) Brunswick contributions to the Brunswick Employee Stock Owner-
ship Plan for Messrs. Larson $294, Buckley $334, Barrington $334, Hamilton
$294 and Lyons $294; (iii) Brunswick contributions to the Brunswick Rewards
Plan for Mr. Barrington of $65,944; and (iv) the value of split dollar life
insurance premiums paid by Brunswick on behalf of the named executive offi-
cers. This value represents the cost of term life insurance provided during
the year as well as the present value of the potential cash surrender value
attributable to this year's premium payment. This present value is deter-
mined by assuming an interest free loan to the named executives until
Brunswick is reimbursed for its portion of the premiums. These amounts are:
Messrs. Larson $220,209, Buckley $29,987, Barrington $25,335, Hamilton
$75,851 and Lyons $30,823.
OPTION GRANTS IN 1999
<TABLE>
<CAPTION>
Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Individual Grants(1) Appreciation for Option Term(5)
---------------------------------------- ----------------------------------
% of
Total
Number of Options
Securities Granted
Underlying to
Options Employees Exercise Expiration
Executive Granted in 1999 Price Date 0% 5% 10%
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Peter N. Larson(2)...... 175,000 11.70% $ 22.875 04/21/09 0 $ 2,517,544 $ 6,379,950
George W. Buckley(3).... 40,000 2.67% 22.875 04/21/09 0 575,439 1,458,274
William J.
Barrington(3).......... 35,000 2.34% 22.875 04/21/09 0 503,509 1,275,990
Peter B. Hamilton(3).... 40,000 2.67% 22.875 04/21/09 0 575,439 1,458,274
Dudley E. Lyons(3)...... 30,000 2.01% 22.875 04/21/09 0 431,579 1,093,706
All Optionees........... 1,496,100 100% $23.0657 Various 0 $ 21,702,269 $ 54,997,811
All Shareholders(4)..... N/A N/A N/A N/A 0 $1,331,789,900 $3,375,017,087
Optionee's Gain as % of
All Shareholders'
Gains.................. N/A N/A N/A N/A 0 1.63% 1.63%
</TABLE>
(1) Non-qualified stock options awarded during 1999 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 previously acquired shares
of Common Stock or may request that shares be withheld to satisfy the re-
quired withholding taxes.
(2) Vesting provisions are as follows: 30 percent of the options vested on July
16, 1999, when Brunswick's stock price reached $30.00 per share; 30 percent
of the options vest on the earliest of (i) the second anniversary of the
grant date, (ii) when Brunswick's stock price attains $35.00 per share, or
(iii) when annual net earnings of Brunswick exceed $3.00 per share; and 40
percent of the options vest on the earliest of (i) the third anniversary of
the grant date, (ii) when Brunswick's stock price attains $40.00 per share,
or (iii) when annual net earnings of Brunswick exceed $3.50 per share.
16
<PAGE>
Options 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.
(3) Vesting provisions are as follows: 30 percent of the options vested on
July 16, 1999, when Brunswick's stock price reached $30.00 per share; 30
percent of the options vest when Brunswick's stock price attains $35.00
per share or when annual net earnings of Brunswick exceed $3.00 per share;
and 40 percent of the options vest when Brunswick's stock price attains
$40.00 per share or when annual net earnings of Brunswick exceed $3.50 per
share. Any options not vested prior to the third anniversary of the grant
date become exercisable on that date. Options vest earlier if there is a
change in control of Brunswick and are transferable only to immediate fam-
ily members, estate planning vehicles or others approved by the Human Re-
source and Compensation Committee.
(4) The potential realizable values for all shareholders were calculated using
the weighted average exercise price of option shares awarded during 1999
and the total outstanding shares of Common Stock on December 31, 1999. At
5 percent and 10 percent annual appreciation the value of the Common Stock
would be approximately $37.26 per share and $59.33 per share, respective-
ly, at the end of the 10-year period.
(5) 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
<TABLE>
<CAPTION>
Number of Securities
Underlying the Value of Unexercised, In-
Number of Unexercised Options at the-Money Options Held at
Shares 12/31/99 12/31/99(1)
Acquired on Value ------------------------- -------------------------
Executive Exercise Realized Exercisable Unexercisable Exercisable Unexercisable
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Peter N. Larson 0 $ 0 919,755 267,500 $1,515,312 $242,813
George W. Buckley 0 $ 0 27,000 98,000 $ 0 $ 80,937
William J. Barrington 18,400 $233,937 125,500 75,500 $ 221,750 $ 69,375
Peter B. Hamilton 0 $ 0 161,000 79,000 $ 173,750 $ 69,375
Dudley E. Lyons 0 $ 0 21,000 74,000 $ 0 $ 57,813
</TABLE>
(1) Represents the difference between the option exercise price and the fair
market value of Brunswick Common Stock on December 31, 1999.
17
<PAGE>
LONG-TERM INCENTIVE PLAN -- AWARDS DURING 1999
<TABLE>
<CAPTION>
Number Performance or
of Shares, Other
Units or Period Until Estimated Future Payouts Under
Other Rights Maturation or Non-Stock Price-Based Plans
Executive (#)(1) Payout Threshold(#) Target(#) Maximum(#)
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Peter N. Larson 57,143 01/04/99-12/31/00 19,048 57,143 76,190
George W. Buckley 18,624 01/04/99-12/31/00 9,312 18,624 23,280
William J. Barrington 17,778 01/04/99-12/31/00 8,889 17,778 22,223
Peter B. Hamilton 18,624 01/04/99-12/31/00 9,312 18,624 23,280
Dudley E. Lyons 16,508 01/04/99-12/31/00 8,254 16,508 20,635
</TABLE>
(1) These are awards under Brunswick's Strategic Incentive Plan. The value and
the number of stock units were determined as a percentage of the executive
officer's salary on January 4, 1999, based on the price of Brunswick Common
Stock at that time. The number of the stock units to which each officer be-
comes entitled will depend upon the achievement of specified strategic
goals, corporate performance and Group BVA for the group executives and
corporate performance and strategic goals for corporate executives. Each
executive officer may elect to have stock units paid in Common Stock or in
cash based on the price of the Common Stock at the time of the payout if
they have met their Stock Ownership Guidelines.
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.
<TABLE>
<CAPTION>
Average of
the
Three
Highest
Consecutive
Years' Retirement Income for
Earnings as Years of Participating Service
a -----------------------------------------
Participant 15 20 25 30
- ------------------------------------------------------
<S> <C> <C> <C> <C>
$ 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
1,600,000 528,000 704,000 880,000 1,056,000
2,300,000 759,000 1,012,000 1,265,000 1,518,000
</TABLE>
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
18
<PAGE>
under the Strategic Incentive Plan), and age. The 1999 earnings used to calcu-
late Mr. Larson's benefits under the salaried pension plans are $1,580,123,
which include his 1999 salary and the bonus paid in 1999 for 1998 performance
(excluding the value of 50,000 shares of Common Stock awarded on April 1,
1998). The 1999 award of 50,000 shares of restricted stock valued at $1,181,250
is not included in calculating his pension.
The years of service of the officers named in the summary compensation table
are: Messrs. Larson 20 years, Buckley 2 years, Hamilton 16 years and Lyons 2
years. Mr. Barrington does not participate in any salaried pension plan. Mr.
Larson's 20 years include 15 years when he was employed by Johnson & Johnson
since his employment agreement provides that Brunswick will pay him a pension
as if he had been employed by Brunswick for these 15 years, reduced by the pen-
sion he receives from Johnson & Johnson and reduced by his Social Security ben-
efit. Brunswick has agreed to award Mr. Buckley 5 additional years of service
after he has been employed by Brunswick for 3 years. Mr. Hamilton's 16 years
include 12.5 years when he was employed by Cummins Engine Company, Inc., since
Brunswick has agreed to provide Mr. Hamilton with a pension from Brunswick as
if he had been employed by Brunswick for these 12.5 years, reduced by the pen-
sion he receives from Cummins Engine Company, Inc.
If there is a change in control of Brunswick on or before March 1, 2001, 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 of Brunswick, bene-
fits 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 participant in the salaried pension plans during the five years following
such change in control of Brunswick, the participant's pension would not be re-
duced as a result of early retirement. A change in control of Brunswick is the
same as the definition in Mr. Larson's employment agreement, which is described
on page 21, except that prior to the occurrence of a transaction Brunswick's
Board of Directors may decide that the transaction does not constitute a change
in control for purposes of the pension plan.
EMPLOYMENT AGREEMENTS
Brunswick has an employment agreement with Mr. Larson that provides for his
employment through April 1, 2002, at an annual salary of $900,000 per year. The
agreement will be extended for successive additional one-year terms unless
Brunswick or Mr. Larson elects not to extend the term at least six months be-
fore the new term otherwise would begin. The agreement provides for an annual
bonus of up to 200 percent of salary based on the accomplishment of specified
goals, which will be paid one-half in cash and one-half in Common Stock of
Brunswick. Mr. Larson may elect to have the entire bonus paid in cash if he has
satisfied Brunswick's stock ownership guidelines.
The agreement provides that he will participate in Brunswick's Strategic In-
centive Plan and that his maximum award opportunity under the Strategic Incen-
tive Plan shall not be less than 100 percent of his salary, with a minimum
value not less than 75 percent of his salary, for each performance period if
target goals for the performance period are achieved. Awards under this plan
are denominated in stock units
19
<PAGE>
based on the market value of Brunswick Common Stock at the beginning of the
performance period. Under the plan Mr. Larson may elect to receive stock or the
cash value of the stock units at the time the award is paid, depending in part
on whether he has satisfied Brunswick's stock ownership guidelines.
Mr. Larson is also entitled under the agreement to an annual award of op-
tions to purchase Common Stock which are to have a value of $750,000 using the
Black-Scholes pricing model. In 1996, Mr. Larson was granted an option to pur-
chase 90,000 shares of Brunswick Common Stock, which was in addition to the
normal annual award for that year and in lieu of the award for 2002. The agree-
ment provides that with some exceptions Mr. Larson shall participate in all
benefit plans offered to Brunswick's Senior Executives during the term of the
agreement and for two years following termination of the agreement for any rea-
son other than death, incapacity or cause, or for three years if following a
change of control of Brunswick (as defined below). In addition, the agreement
provides that he shall be entitled for six years following the termination of
the agreement to coverage under any directors and officers liability insurance
policy, indemnification by-law and indemnification agreement then maintained or
offered by Brunswick.
The agreement provides that Mr. Larson be awarded 50,000 shares of re-
stricted Common Stock on January 4, 1999, which vested on December 31, 1999,
and 50,000 shares of restricted Common Stock on the first business day of each
of 2000 and 2001, which will vest on December 31 of each such year. Mr. Larson
has deferred receipt of these shares until he terminates employment.
Mr. Larson has agreed to defer receipt of cash or Common Stock compensation
under his agreement to the extent the current payment of the cash or Common
Stock would result in the payment not being deductible by Brunswick because it
exceeds the $1.0 million deduction limitation in Section 162(m) of the Internal
Revenue Code. He also may elect to defer receipt of additional cash or Common
Stock compensation under his agreement. Cash amounts deferred either will be
invested or will accrue interest at the prime rate in effect at Bank One (plus
5 percent per annum for amounts that are deferred by reason of the $1.0 million
deduction limitation) or, if greater, at Brunswick's short term borrowing rate.
Dividends on Common Stock that is deferred will be reinvested in additional
shares of Common Stock unless Mr. Larson elects to receive the dividends on a
current basis. Life insurance of three-and-one-half times Mr. Larson's base
salary is to be maintained for him during the term of the agreement and for two
years following termination of the agreement for any reason other than death,
incapacity or cause. Mr. Larson may elect to reduce the amount of life insur-
ance provided to him and to receive the premiums which otherwise would have
been paid for the insurance.
The agreement provides that Mr. Larson will receive a pension from Brunswick
as if he had been employed by Brunswick for an additional 15 years, reduced by
the pension he receives from Johnson & Johnson, his former employer, and re-
duced by the amount of his Social Security benefit. Mr. Larson may elect to be
paid his pension benefits under Brunswick's supplemental pension plan in a lump
sum.
If, other than following a change in control of Brunswick, Mr. Larson's em-
ployment is terminated before completion of the term of his agreement for any
reason other than death, incapacity or cause, or Mr. Larson resigns following a
significant change in the nature or scope of his duties, a reduction in his
20
<PAGE>
compensation, a reasonable determination by Mr. Larson that, as a result of a
change in the circumstances regarding his duties, he is unable to exercise his
authorities or duties, or breach by Brunswick of the agreement, the agreement
provides that he shall receive a lump sum payment equal to (i) his salary for
two years following termination at the rate in effect as of the date of termi-
nation and (ii) annual bonus and strategic incentive awards for the two year
period following termination based on performance to date extrapolated through
the termination date. If his employment continues through April 1, 2002, all
stock options granted after December 31, 1998, shall become exercisable on
termination of employment. In addition, on termination of Mr. Larson's employ-
ment non-performance restrictions on stock options shall lapse, performance
restrictions on options shall lapse to the extent authorized by the Board of
Directors, and options which are then exercisable or become exercisable be-
cause of the lapse of restrictions shall remain exercisable until the earlier
of (i) their expiration or (ii) five years following termination of employ-
ment. The agreement prohibits competition with Brunswick by Mr. Larson during
the term of the agreement and for two years thereafter and requires confiden-
tiality on the part of Mr. Larson during and after the term of the agreement.
If Mr. Larson resigns during the 60 days following a change in control of
Brunswick, or if during the term of the agreement Mr. Larson's employment is
terminated following a change in control for any reason other than for death,
incapacity or cause, or if during the term of the agreement following a change
in control Mr. Larson resigns following a significant change in the nature or
scope of his duties, a reduction in compensation, a reasonable determination
by Mr. Larson that, as a result of change in the circumstances regarding his
duties, he is unable to exercise his authorities or duties, then Mr. Larson
shall receive a lump sum payment equal to (i) his salary for three years and
(ii) a bonus of 200 percent of salary for each of the three years. He will
also receive incentive compensation, split dollar life insurance and other em-
ployee benefits for the three years, except that he shall not receive these
benefits for periods after his 65th birthday. In addition, Brunswick is re-
quired under the agreement to pay Mr. Larson any amount then held for him in a
deferred compensation account and to pay a lump sum pension payment equal to
the present value of benefits accrued under Brunswick's supplemental pension
plan, and these benefits shall be adjusted to add three years to his age and
years of service (or, if less than three years, the period from Mr. Larson's
termination until his 65th birthday) at his annual salary at the time of ter-
mination with an annual bonus of 200 percent of his salary. He shall be fully
vested in all stock options and restricted stock awards, and stock options may
be exercised until the earlier of (i) their expiration or (ii) five years fol-
lowing his termination. If Mr. Larson is required to pay any excise tax on
payments from Brunswick by reason of Section 4999 of the Internal Revenue Code
of 1986, Brunswick will reimburse him for such excise tax plus any other taxes
owed as a result of such reimbursement.
The definition of a change in control includes (i) the ownership of 30 per-
cent or more of the outstanding voting stock of Brunswick by any person other
than an employee benefit plan of Brunswick, (ii) a tender offer which has not
been negotiated and approved by Brunswick's Board of Directors for stock of
Brunswick if (a) the offeror owns or has accepted for payment 25 percent or
more of the outstanding voting stock of Brunswick or (b) the offer remains
open three days before its stated termination date and if the offeror could
own 50 percent or more of the outstanding voting stock of Brunswick as a re-
sult of
21
<PAGE>
the offer, (iii) the failure of the Board of Directors' nominees to constitute
a majority of Brunswick's Board of Directors following a contested election of
directors, (iv) a merger of Brunswick with another corporation unless
Brunswick's stockholders receive 75 percent of the voting stock outstanding af-
ter the merger and except for 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 dissolution of Brunswick or sale
of substantially all of Brunswick's assets.
Brunswick has an employment agreement with Mr. Lyons that provides for his
employment through August 4, 2000, at an annual salary of not less than
$390,000 per year. The agreement provides for an annual bonus and that he will
participate in Brunswick's Strategic Incentive Plan, with a maximum award under
the Strategic Incentive Plan of 100 percent of his annual salary at the begin-
ning of the performance period. Under this plan all of the awards are denomi-
nated in stock units based on the market value of Brunswick Common Stock at the
beginning of the performance period. Under the plan Mr. Lyons may elect to re-
ceive stock or the cash value of the stock units at the time the award is paid,
depending in part on whether he has satisfied Brunswick's stock ownership
guidelines.
The agreement provides that Mr. Lyons shall receive annual stock options
having a value based on the Black-Scholes valuation method of up to 50 percent
of his salary and that he will receive life insurance under Brunswick's split
dollar life insurance plan equal to 3.5 times his annual salary. The agreement
also provides that Mr. Lyons shall participate in all benefit plans offered to
Brunswick's Senior Executives during the term of the agreement and for one year
following termination of the agreement for any reason other than death, inca-
pacity or cause. In addition, the agreement provides that he shall be entitled
for six years following the termination of the agreement to coverage under any
directors and officers liability insurance policy, indemnification by-law and
indemnification agreement then maintained or offered by Brunswick.
If Mr. Lyons' employment is terminated before completion of the term of his
agreement for any reason other than death, incapacity or cause, or if Mr. Lyons
resigns following a significant change in the nature or scope of his duties, a
reduction in his compensation, a reasonable determination by Mr. Lyons that, as
a result of a change in the circumstances regarding his duties, he is unable to
exercise his authorities or duties, or breach by Brunswick of the agreement,
the agreement provides that he shall receive a lump sum payment equal to (i) to
his salary for one year following termination at the rate in effect as of the
date of termination and (ii) annual bonus and strategic incentive awards for
the one year period following termination based on performance to date extrapo-
lated through the termination date. The agreement prohibits competition with
Brunswick by Mr. Lyons during the term of the agreement and for one year there-
after and requires confidentiality on the part of Mr. Lyons during and after
the term of the agreement.
Brunswick also has agreements with Messrs. Hamilton, Buckley, Barrington and
Lyons that provide that after a change in control of Brunswick each executive
will be employed for three years (but not beyond the executive's 65th birthday)
during which the executive will be entitled to a salary not less than the exec-
utive's annual salary immediately prior to the change in control, with the op-
portunity for regular
22
<PAGE>
increases, incentive compensation, employee benefits and perquisites equiva-
lent to those provided by Brunswick to executives with comparable duties, but
at least as great as those to which the executive was entitled immediately
prior to the change in control. The definition of a change in control in these
agreements is the same as the definition in Mr. Larson's agreement described
above.
If employment is terminated under any of these agreements before completion
of the term of employment for any reason other than death, incapacity or
cause, or if an executive resigns following a significant change in the nature
or scope of the executive's duties, a reduction in total compensation, a rea-
sonable determination by the executive that as a result of a change in the
circumstances affecting the executive's position the executive is unable to
exercise the authorities and duties attached to the executive's position, or
for any reason during the 30 days after the first anniversary of the change in
control, the executive would be paid a lump sum payment equal to (i) his sal-
ary for three years at the rate in effect as of the date of termination, and
(ii) a bonus of 100 percent of salary for each of the three years. The execu-
tive will be entitled to receive a lump sum payment for supplemental pension
plan benefits, stock options and other employee benefits for the three years.
The executive shall continue to participate in Brunswick's split dollar life
insurance plan until the executive's policy is released to the executive in
accordance with the plan's provisions and shall be fully vested in all stock
options and restricted stock awards. The executive will be able to exercise
all stock options until the earlier of (i) their expiration or (ii) two years
following termination of employment. If the executive attains age 65 during
such three-year period, all of the foregoing payments will be reduced propor-
tionally. If the lump sum payments are paid, the executive shall be treated as
though he had continued to participate in Brunswick's incentive compensation
and employee benefit plans for the three years, and the executive will receive
a lump sum payment equal to the then present value of the additional pension
benefit accrued for the three years with his salary and bonus specified above.
The agreements prohibit competition with Brunswick by the executive for one
year after termination of employment and require confidentiality on the part
of the executive during and after the term of the agreements. The agreements
also provide that if any executive is required to pay any excise tax on pay-
ments from Brunswick by reason of Section 4999 of the Internal Revenue Code of
1986, Brunswick will reimburse the executive for such excise tax plus any
other taxes owed as a result of such reimbursement. Payments to Mr. Lyons will
be reduced by the amount of any payment to him under his employment agreement
described above in the event of termination of employment.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING REQUIREMENTS
Section 16(a) of the Securities Exchange Act of 1934 requires reporting by
directors and officers of Brunswick concerning their holdings and transactions
in Brunswick Common Stock. A review of Brunswick's records indicates that dur-
ing 1999, all filing requirements pursuant to Section 16(a) were met.
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 2000. The Board of
Directors recommends the appointment of Arthur Andersen LLP as
23
<PAGE>
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 Ar-
thur Andersen LLP will be present at the annual meeting of shareholders with
the opportunity to make a statement, if they desire to do so, and will be
available to respond to appropriate questions from shareholders.
The Board of Directors recommends a vote FOR this proposal.
SHAREHOLDER PROPOSALS
If a shareholder wants a proposal to be included in Brunswick's proxy state-
ment for the 2001 annual meeting, it must be received by Brunswick no later
than November 22, 2000. 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 under the Securities Exchange Act of 1934 is
considered untimely for the 2001 annual meeting is February 5, 2001, 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.
By order of the Board of
Directors,
[Logo of DUSTAN E. MCCOY]
Dustan E. McCoy
Secretary
Lake Forest, Illinois
March 22, 2000
24
<PAGE>
BRUNSWICK CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [X]
[ ]
1.Election of Directors-Nominees:
01-Dorrit J. Bern, 02-George W. Buckley,
03-Michael J. Callahan, 04-Manuel A. Fernandez,
05-Peter B. Hamilton and 06-Roger W. Schipke
For Withheld Except
[_] [_] [_]
Nominee(s) Written Below
- -------------------------------------------------------------------------------
2. Ratification of Arthur Andersen LLP as Auditors.
For Against Abstain
[_] [_] [_]
3. In their discretion on such other business as may properly come before the
meeting.
- -------------------------------------------------------------------------------
Signature
Dated: __________________________________________________________________, 2000
NOTE: Please sign exactly as your name appears on this proxy, date and mail
this proxy promptly in the enclosed return envelope so that it is received
prior to the meeting. These confidential voting instructions will be seen only
by authorized personnel of the Trustee and its tabulator.
A vote FOR Items 1 and 2 is recommended by the Board of Directors.
---
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
PLEASE COMPLETE, DATE, SIGN AND MAIL THIS PROXY PROMPTLY IN THE ENCLOSED
POSTAGE-PAID ENVELOPE.
<PAGE>
[LOGO]
PROXY
Solicited on behalf of The Board of Directors of BRUNSWICK CORPORATION
The undersigned hereby appoints P.N. Larson, 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 the shares of Common Stock of Brunswick Corporation which
the undersigned may be entitled to vote at the Annual Meeting of Shareholders
to be held on April 26, 2000, or any adjournment thereof.
By signing and returning this form, you will be instructing Mellon Bank N.A.,
the trustee for the Brunswick Employee Stock Ownership Plan, and Vanguard
Fiduciary Trust Company, the trustee for the Rewards Plan and the Brunswick
Retirement Savings Plan, to vote the shares allocated to your account in these
plans. The trustees will vote your shares as you direct. If you sign and
return this form without making any direction, your shares will be voted for
proposals 1 and 2. If you do not return this form by April 24, 2000, the
trustee will vote your shares (except for shares acquired with tax credit
contributions) in the same proportion as it votes shares for which it receives
instructions.
IMPORTANT -- This Proxy must be signed and dated on the reverse side.
- --------------------------------------------------------------------------------
. FOLD AND DETACH HERE .
<PAGE>
PROXY
Solicited on behalf of the Board of Directors of BRUNSWICK CORPORATION
The undersigned hereby appoints P. N. Larson, 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, as designated below, all the 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 April 26, 2000, or any
adjournment thereof.
The Board of Directors Recommends a Vote FOR Proposals 1 and 2.
1. ELECTION OF DIRECTORS
[_] FOR the following [_] WITHHOLD AUTHORITY to
nominees: Dorrit J. vote for all nominees or
Bern, George W. Buckley, their alternates
Michael J. Callahan,
Manuel A. Fernandez,
Peter B. Hamilton and
Roger W. Schipke (except
as marked to the
contrary) or for
alternate(s) designated
by the Board of
Directors
(Instruction: To withhold authority to vote for any individual nominee, write
the name of such nominee(s) in the space provided below.)
- --------------------------------------------------------------------------------
2. Ratification of Arthur Andersen LLP as auditors
FOR [_] AGAINST [_] ABSTAIN [_]
3. 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 and 2.
PLEASE MARK, SIGN ON REVERSE SIDE, DATE AND RETURN PROMPTLY IN ENCLOSED
ENVELOPE.
Dated , 2000
(Signature of (Signature of
Shareholder) Shareholder)
Please sign exactly as your name or names
appear above, date and mail this proxy promptly
in the enclosed return envelope so that it is
received prior to the meeting. If your stock is
held in joint tenancy, both joint tenants must
sign. Executors, administrators, trustees, etc.
should give full title as such. If executed by
a corporation, a duly authorized officer should
sign.
