The Committee also reviews certain regulatory and compliance matters, policies regarding risk assessment and risk management, and corporate tax strategy. The Audit and Finance Committee receives and investigates any reports made to it concerning possible material violations of law or breaches of fiduciary duty by the Company or any of its officers, directors, employees, or agents. The Committee maintains free and open communication, and meets separately at each regularly scheduled Board meeting with our independent registered public accounting firm, internal auditors, and management.
The Board has determined that Messrs. Fils-Aimé, McClanathan, Singer, and Ms. Wright are “audit committee financial experts” under SEC rules.
The Nominating and Corporate Governance Committee (the Governance Committee) assists the Board in reviewing and overseeing:
| | • |
 | Number of Times this
Committee Met in 2022 — 6 |
| |
The Nominating and Corporate Governance Committee (the Governance Committee) assists the Board in reviewing and overseeing:
• Policies and programs designed to ensure Brunswick’s adherence to high corporate governance and ethical standards and compliance with applicable legal and regulatory requirements; |
| • | The sustainability program and environmental, social, and governance (ESG) strategy; |
| strategy and programming at each regular meeting; • | Potential director nominees, and officer appointments, including identifying, screening, interviewing, and recommending candidates to the Board; |
| • | • Matters related to Board composition, performance, standards, size, and membership, including racial and gender diversity and diversity of perspectives, backgrounds, and experience; and |
| • | Director compensation design recommendations to the Board of Directors for review and action. |
Our Human Resources Department and outside compensation consultants provide the Governance Committee with director compensation data as publicly reported, including data relating to peer group and other similarly-sized companies, as well as data from published surveys.
Our Human Resources Department and outside compensation consultants provide the Governance Committee with director compensation data as publicly reported, including data relating to peer group and other similarly-sized companies, as well as data from published surveys.
 | 2022 PROXY STATEMENT | 22 |
Back to Contents | |
| Members | |
| |
 | David C.
Everitt (C) |
| |
 | Nancy E.
Cooper |
| |
 | Lauren P.
Flaherty |
| |
 | J. Steven
Whisler |
| |
 | Roger
J. Wood |
BOARD COMMITTEES
The Human Resources and Compensation Committee (the Compensation Committee) assists the Board in reviewing and overseeing:
| | • |
 | Number of Times this Committee Met in 2022 — 6 |
| |
The Human Resources and Compensation Committee (the Compensation Committee) assists the Board in reviewing and overseeing:
• Goals and objectives for Brunswick’s senior executives annually, and, together with the CEO, the performance of senior executives; and management development and succession planning; |
| and makes officer appointment recommendations to the Board; • | CEO compensation (including salary, annual incentive, equity-based compensation, and other cash compensation) annually, and makes compensation recommendations to the Board; |
| • | Salary, annual incentive, equity-based compensation, and other incentive compensation for senior executives, and authorizes the CEO to approve awards to employees other than senior executives based on criteria established by the Compensation Committee; |
| • | • A compensation philosophy that is consistent with the Company’s long- termlong-term strategic goals and does not encourage unnecessary risk-taking; and |
| • | The Company’s diversity, equity and inclusion (“DEI”)(DEI) programs and strategy;strategy.
The Compensation Committee continues to engage Frederic W. Cook & Co., Inc. (FW Cook) to provide advice on various aspects of Brunswick’s executive compensation programs. The Committee meets with FW Cook in executive session on a regular basis and FW Cook reports directly to the Compensation Committee. The Compensation Committee has assessed the independence of FW Cook pursuant to applicable SEC rules and NYSE listing standards and has concluded that FW Cook’s work for the Compensation Committee does not raise any conflict of interest. |
| 30 | 2023 Proxy Statement — Corporate Governance |  |
Proposal 2a
Approval of Amendments to Our Restated Certificate of Incorporation to Include Officer Exculpation
| | | | | |
 | Voting
Recommendation: | | What am I voting on?Shareholders are being asked to approve amendments to include exculpation for certain Company officers (the Exculpation Amendment). |
Your Board of Directors recommends a vote FOR approval of the Exculpation Amendment. | | At the Annual Meeting, our shareholders will be asked to approve this Proposal 2a, the Exculpation Amendment to the Restated Certificate of Incorporation of Brunswick Corporation (the Charter), to include exculpation for certain officers of the Company (as defined by Delaware Corporation Law) from certain claims of breach of the fiduciary duty of care, similar to but more limited than the protections currently available to Directors of the Company.
After careful consideration, our Board has determined that it is advisable and in the best interests of the Company to include exculpation for certain Company officers for certain claims. This general description of the proposed Exculpation Amendment is qualified in its entirety by reference to the text of the proposed amendments to Article THIRTEENTH of the Charter included in the proposed Amended and Restated Charter attached as Appendix A.
Background
Brunswick is incorporated in the State of Delaware and therefore subject to the Delaware | | General Corporation Law (DGCL). The DGCL permits Delaware corporations to limit or eliminate Directors’ personal liability for monetary damages resulting from a breach of the fiduciary duty of care, subject to certain limitations such as prohibiting exculpation for intentional misconduct or knowing violations of the law. These provisions are referred to as “exculpatory provisions” or “exculpatory protections.” Similar exculpatory provisions for Directors are currently included in the Charter.
Recently, the Delaware legislature amended the DGCL (Section 102(b)(7)) to permit Delaware corporations to provide similar exculpatory protections for officers. This decision was due in part to the recognition that both officers and directors owe fiduciary duties to corporations, and yet only directors were protected by the exculpatory provisions. In addition, Delaware courts experienced an increase in litigation in which plaintiffs attempted to exploit the absence of protection for officers to prolong litigation and extract settlements from defendant corporations.
|
The Compensation Committee continues to engage Frederic W. Cook & Co., Inc. (FW Cook) to provide advice on various aspects of Brunswick’s executive compensation programs. The Committee meets with FW Cook in executive session on a regular basis and FW Cook reports directly to the Compensation Committee. The Compensation Committee has assessed the independence of FW Cook pursuant to applicable SEC rules and NYSE listing standards and has concluded that FW Cook’s work for the Compensation Committee does not raise any conflict of interest.
| 32 | 2023 Proxy Statement — Proposal 2a | |
In addition to its standing committees, the Board of Directors has an Executive Committee, comprised of the Board Chair, the Chief Executive Officer, and the Chairs of the Audit and Finance, Compensation, and Governance Committees. The Executive Committee meets from time to time at the request of the Board Chair.
Conditions and Limitations to Exculpation under DGCL Section 102(b)(7)
As adopted, amended Section 102(b)(7) of the DGCL protects officers from personal monetary liability under limited circumstances:
• Exculpation is only available for breaches of the fiduciary duty of care. • Exculpation is not available for breaches of the fiduciary duty of loyalty (which requires officers to act in good faith for the benefit of the corporation and its stockholders and not for personal gain). • Exculpation is not available for intentional misconduct or knowing violations of the law. The protections of Section 102(b)(7) are limited to monetary damages only, so that claims against officers for equitable relief are available. • Exculpation is not available in connection with derivative claims on behalf of the corporation by a stockholder.
Reasons for the Exculpation Amendment
The Board believes that eliminating personal monetary liability for officers under certain circumstances is reasonable and appropriate. Claims against corporations for breaches of fiduciary duties are expected to continue increasing. Delaware corporations that fail to adopt officer exculpation provisions may experience a disproportionate amount of nuisance litigation and disproportionately increased costs in the form of increased director and officer liability insurance premiums, as well as diversion of management attention from the business of the corporation.
Further, the Board anticipates that similar exculpation provisions are likely to be adopted by our peers and others with whom we compete for executive talent. As a result, officer exculpation provisions may become necessary for Delaware corporations to attract and retain experienced and qualified corporate officers. | 2022 PROXY STATEMENT | 23 |
A Delaware corporation seeking to extend the benefits of the newly amended Section 102(b) (7) to its corporate officers must amend its certificate of incorporation, as the protections do not apply automatically and must be embedded in the corporation’s certificate of incorporation to be effective. Accordingly, the Board has determined it advisable and in the best interests of the Company and its stockholders to seek shareholder approval for the Exculpation Amendment.
Effect of the Exculpation Amendment if Approved
The Exculpation Amendment would provide for the elimination of personal monetary liability for certain officers only in connection with direct claims brought by stockholders, subject to the limitations described under the heading “Conditions and Limitations to Exculpation under DGCL Section 102(b)(7)” above. As is the case with Directors under the Charter, the Exculpation Amendment would not limit the liability of officers for any breach of the duty of loyalty to the Company or our shareholders, any acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of the law, or any transaction from which the officer derived an improper personal benefit.
The affirmative vote of the holders of a majority of all of the outstanding shares of our Common Stock entitled to vote will be required for the approval of the Exculpation Amendment. If the Exculpation Amendment is approved, it will become effective upon the filing of the Amended and Restated Charter with the Secretary of State of the State of Delaware, which is expected to occur shortly following the Annual Meeting. If our shareholders do not approve this Proposal 2a, the changes described in this section will not be made. The approval of this Proposal 2a is not conditioned upon approval of any of the other Charter Amendment Proposals in these proxy materials.
| |
GOVERNANCE POLICIES & PRACTICES
BRUNSWICK ETHICS PROGRAM
Brunswick has adopted the Integrity Playbook, our code of conduct (the Code), which applies to all employees, officers, directors, vendors, suppliers, and agents, and includes standards and procedures for reporting and addressing potential conflicts of interest as well as a general code of conduct that provides guidelines regarding how to conduct business in an ethical manner. The Board has adopted an additional Code of Ethics for Senior Financial Officers and Managers (the Financial Officer Code of Ethics). The Financial Officer Code of Ethics applies to Brunswick’s Chief Executive Officer, Chief Financial Officer, Vice President—Treasurer, Vice President—Investor Relations, Vice President—Tax, Vice President—Internal Audit, Vice President and Controller, and other designated Brunswick employees, and sets forth standards to which these officers and employees are to adhere in areas such as conflicts of interest, disclosure of information, and compliance with laws, rules, and regulations. The Financial Officer Code of Ethics supplements the Code. The Governance Committee, Audit and Finance Committee, and our Ethics Office oversee and administer these policies. The Code and the Financial Officer Code of Ethics are available at www.brunswick.com/ corporate-responsibility/brunswick-policies-practices-standards and any Brunswick shareholder may obtain them in print upon request. If Brunswick grants a waiver of the policies set forth in the Code or the Financial Officer Code of Ethics, or materially amends either, we will, to the extent required by applicable law, regulation, or NYSE listing standard, disclose that waiver or amendment by making an appropriate statement on our website at www.brunswick.com.
TRANSACTIONS WITH RELATED PERSONS
Pursuant to its charter, the Governance Committee is tasked with the recommendation and review of corporate governance principles, policies, and programs designed to ensure our compliance with high ethical standards and with applicable legal and regulatory requirements, including those relating to conflicts of interest and other business practices that reflect upon our role as a responsible corporate citizen. The Governance Committee oversees the implementation of the Code, which includes our conflicts of interest principles. The Governance Committee reports on these compliance matters to the Board of Directors, which is ultimately responsible for overseeing the Company’s ethical and legal compliance, including transactions with “related persons.”
Our policy regarding related person transactions (the Related Person Transactions Policy) defines “related persons” to include all Directors and Executive Officers of the Company, all beneficial owners of more than 5% of any class of voting securities of the Company, and the immediate family members of any such persons. On a regular basis, we request Directors and Executive Officers to complete a questionnaire including questions designed to identify related persons and any potential related person transactions. Our General Counsel and Controller, or their delegates, review and update a listing of those individuals identified as related persons and provide a copy of this listing to our external auditors on at least an annual basis and more often as warranted. According to the Related Person Transactions Policy, a related person transaction includes certain transactions in which the Company is a participant and in which a related person has or will have a direct or indirect
| 2022Proposal 2a PROXY STATEMENT — 2023 Proxy Statement | 24 33 |
Proposal 2b
material interest, including any financial transaction, arrangement, or relationship, or any series
Approval of similar transactions, arrangements, or relationships. Certain transactions are excluded fromAmendments to Our Restated Certificate of Incorporation (the Charter) to Clarify, Streamline, and Modernize the Related Person Transactions Policy.Charter
If a related person transaction required to be disclosed pursuant to SEC rules is identified, the Related Person Transactions Policy requires that the General Counsel and Controller review the transaction and advise the Chair of the Governance Committee as well as the Chair of the Audit and Finance Committee, if appropriate. The Governance Committee may approve or ratify such transaction or, if it determines that the transaction should be considered by the Board of Directors, submit it for consideration by all disinterested members of the Board (the Reviewing Directors). In determining whether to approve or ratify a related person transaction, the Governance Committee and/or the Reviewing Directors will consider relevant factors, including:
| | • | | | | |
| | Voting
Recommendation: | | What am I voting on?Shareholders are being asked to approve modernization amendments to our Charter (Modernization Amendments). |
| | | |
Your Board of Directors recommends a vote FOR approval of the Modernization Amendments.
| | At the Annual Meeting, our shareholders will be asked to approve the Modernization Amendments to integrate any and all amendments approved at the Annual Meeting and all prior amendments into a single document, and to make various miscellaneous changes to clarify, streamline, and modernize the Charter, as described below.
The Board has determined that it is advisable and in the best interests of Brunswick and our shareholders to modernize the Charter. The Board believes the changes described in this Proposal 2b would streamline and clarify the Charter to make it easier for shareholders and others to read and understand, modernize the document, and align it more closely with relevant Delaware law.
The Proposed Modernization Amendments
Below is a summary of the Modernization Amendments proposed in this Proposal 2b (in addition to the consolidation of all approved Charter Amendments). The full text of the Modernization Amendments is included in the proposed Amended and Restated Charter attached to this Proxy Statement as Appendix A. | | However, the amendments shown in Appendix A to Article THIRTEENTH and Article ELEVENTH of the Charter are not part of this Proposal 2b and are being voted on separately.
This general description of the proposed Modernization Amendments is qualified in its entirety by reference to the proposed amendments attached at Appendix A.
• Article THIRD: Streamlining (and not broadening in any substantive manner) the Company’s corporate purpose. • Article FIFTH: Modernizing by removing the identity and residence of the original subscribers to the Capital Stock. • Additional other immaterial changes to clarify, streamline, and modernize.
Reasons for the Modernization Amendments
The Board carefully considered the advantages and disadvantages of amending the Charter and has determined that it is advisable and in the best interests of the Company and our shareholders to streamline, clarify, and modernize the Charter. |
| 34 | 2023 Proxy Statement — Proposal 2b | |
Effect of the Modernization Amendments if Approved
The affirmative vote of the holders of a majority of all of the outstanding shares of our Common Stock entitled to vote will be required for the approval of the Modernization Amendments. If the Modernization Amendments are approved, the amendments will become effective upon the | | filing of the amendments with the Secretary of State of the State of Delaware, which is expected to occur shortly following the Annual Meeting. If our shareholders do not approve this Proposal 2b, the changes described in this section will not be made. The approval of this Proposal 2b is not conditioned upon approval of any of the other proposals, including the Charter Amendment proposals, in these proxy materials. | |
| Proposal 2b— 2023 Proxy Statement | 35 |
Proposal 2c
Approval of Amendments to Our Charter to Eliminate Outdated Language
| | | | | |
| | Voting
Recommendation: | | What am I voting on?Shareholders are being asked to approve the elimination of outdated language from our Charter (the Outdated Language Amendment). |
| | | |
Your Board of Directors recommends a vote FOR approval of the Outdated Language Amendment.
| | The Proposed Outdated Language Amendment
At the 2018 Annual Meeting, our shareholders approved a proposal to amend the Restated Certificate of Incorporation to declassify the Board of Directors. Declassification of the Board was effected over time. The transition to a fully declassified Board is now complete, but the Charter references Annual Meeting dates from 2018 through 2021 which were relevant to the transition at the time but are now outdated.
The Outdated Language Amendment in this Proposal 2c would amend Article ELEVENTH to remove references to Annual Meetings held between 2018 and 2021. This general description of the proposed amendment is qualified in its entirety by reference to the amendments to Article ELEVENTH of the Charter included in the proposed Amended and Restated Charter attached to this Proxy Statement as Appendix A.
Reasons for the Outdated Language Amendment
The Board has determined that it is advisable and in the best interests of Brunswick and our shareholders to approve the Outdated Language | | Amendment to remove outdated, currently inapplicable language in the Charter.
Effect of the Outdated Language Amendment if Approved
The affirmative vote of the holders of 80% of the outstanding shares entitled to vote in elections of Directors (the “80% Supermajority”) will be required for the approval of the Outdated Language Amendment. Of the Charter Amendment proposals, the 80% Supermajority standard applies only to the Outdated Language Amendment. If the Outdated Language Amendment is approved by the 80% Supermajority, it will become effective upon the filing of the Amended and Restated Charter with the Secretary of State of the State of Delaware, which is expected to occur shortly following the Annual Meeting. If an 80% supermajority of our shareholders do not approve this Proposal 2c, the changes described in this section will not be made. The approval of this Proposal 2c is not conditioned upon approval of any of the other Charter Amendment Proposals in these proxy materials. |
| 36 | 2023 Proxy Statement — Proposal 2c | |
Governance Policies & Practices
| | Brunswick Ethics Program
Brunswick has adopted the Integrity Playbook, our code of conduct (the Code), which applies to all employees, officers, directors, vendors, suppliers, and agents, and includes standards and procedures for reporting and addressing potential conflicts of interest as well as a general code of conduct that provides guidelines regarding how to conduct business in an ethical manner. The Board has adopted an additional Code of Ethics for Senior Financial Officers and Managers (the Financial Officer Code of Ethics). The Financial Officer Code of Ethics applies to Brunswick’s Chief Executive Officer, Chief Financial Officer, Vice President— Treasurer, Vice President—Investor Relations, Vice President—Tax, Vice President—Internal Audit, Vice President and Controller, and other designated Brunswick employees, and sets forth standards to which these officers and employees are to adhere in areas such as conflicts of interest, disclosure of information, and compliance with laws, rules, and regulations. The Financial Officer Code of Ethics supplements the Code. The Governance Committee, Audit and Finance Committee, and our Ethics Office oversee and administer these policies. The Code and the Financial Officer Code of Ethics are available at www.brunswick.com/corporate-responsibility/ brunswick-policies-practices-standards and any Brunswick shareholder may obtain them in print upon request. If Brunswick grants a waiver of the policies set forth in the Code or the Financial Officer Code of Ethics, or materially amends either, we will, to the extent required by applicable law, regulation, or NYSE listing standard, disclose that waiver or amendment by making an appropriate statement on our website at www.brunswick.com. | | Transactions with Related Persons
Pursuant to its charter, the Governance Committee is tasked with the recommendation and review of corporate governance principles, policies, and programs designed to ensure our compliance with high ethical standards and with applicable legal and regulatory requirements, including those relating to conflicts of interest and other business practices that reflect upon our role as a responsible corporate citizen. The Governance Committee oversees the implementation of the Code, which includes our conflicts of interest principles. The Governance Committee reports on these compliance matters to the Board of Directors, which is ultimately responsible for overseeing the Company’s ethical and legal compliance, including transactions with “related persons.”
Our policy regarding related person transactions (the Related Person Transactions Policy) defines “related persons” to include all Directors and Executive Officers of the Company, all beneficial owners of more than 5% of any class of voting securities of the Company, and the immediate family members of any such persons. On a regular basis, we request Directors and Executive Officers to complete a questionnaire including questions designed to identify related persons and any potential related person transactions. Our General Counsel and Controller, or their delegates, review and update a listing of those individuals identified as related persons and provide a copy of this listing to our external auditors on at least an annual basis and more often as warranted. According to the Related Person Transactions Policy, a related person transaction includes certain transactions in |
| 38 | 2023 Proxy Statement — Governance Policies & Practices | |
which the Company is a participant and in which a related person has or will have a direct or indirect material interest, including any financial transaction, arrangement, or relationship, or any series of similar transactions, arrangements, or relationships. Certain transactions are excluded from the Related Person Transactions Policy.
If a related person transaction required to be disclosed pursuant to SEC rules is identified, the Related Person Transactions Policy requires that the General Counsel and Controller review the transaction and advise the Chair of the Governance Committee as well as the Chair of the Audit and Finance Committee, if appropriate. The Governance Committee may approve or ratify such transaction or, if it determines that the transaction should be considered by the Board of Directors, submit it for consideration by all disinterested members of the Board (the Reviewing Directors). In determining whether to approve or ratify a related person transaction, the Governance Committee and/or the Reviewing Directors will consider relevant factors, including:
• The size of the transaction and the amount payable to a related person; |
| • | The nature of the interest of the related person in the transaction; |
| • | • Whether the transaction may involve a conflict of interest; and |
| • | Whether the transaction involves the provision of goods or services to the Company that are also available from unaffiliated third parties and, if so, whether the terms of the transaction are at least as favorable to the Company as would be available in comparable transactions with unaffiliated third parties.
Since January 1, 2022, no transaction has been identified as a related person transaction and, therefore, no transaction was referred to the Board or any Board committee for review in that time period.
Risk Management
Our Board, with the assistance of its committees, has responsibility for overseeing the Company’s overall approach to risk management and is actively engaged in addressing our most significant risks. The Board oversees Brunswick’s long-standing enterprise risk management (ERM) process, which regularly identifies, assesses, and mitigates enterprise and emerging risks. | |
Since January 1, 2021, no transaction has been identified as a related person transaction and, therefore, no transaction was referred to the Board or any Board committee for review in that time period.
RISK MANAGEMENT
The Board of Directors takes an active role in overseeing effective management of our risks and regularly reviews information regarding our credit, liquidity, cash flow, and business operations risks, such as cybersecurity, regulatory risks, and climate change. The Board conducts an annual, in-depth review of our business, including strategic, operational, financial, legal, competitive, compliance, and compensation risk areas. Each Board committee addresses relevant risk topics as part of its responsibilities as well, and periodically provides the full Board with updates. For example, senior leadership briefs the Audit and Finance Committee on cybersecurity issues at each regularly scheduled meeting, where the committee reviews and oversees relevant information security risks, cybsersecurity employee training (occurring at least annually), and related Brunswick programs. Similarly, the Governance Committee reviews Environmental, Social, and Governance risks at each of its regular meetings, overseeing the Company’s ongoing sustainability strategy and risks, and the Compensation Committee regularly reviews DEI programming as well.
To assess whether risks arising from our compensation programs or policies are reasonably likely to have a material adverse effect on the Company, senior management reviews our compensation programs and practices for all employees, the potential risk exposure presented by those programs and practices, and the factors, tools, and processes that mitigate those risks. In 2021, management determined, and the Compensation Committee agreed, that none of our compensation programs or policies creates risks that are reasonably likely to have a material adverse effect on the Company.
Management and the Compensation Committee identified the following risk mitigation tools:
(1) plans are capped at maximum payout levels that, while creating incentives for superior performance, are not so great as to entice undue risk-taking; (2) performance metrics to achieve above-target payouts under the plans are not unduly leveraged (that is, small increments of above-target performance do not result in disproportionate increases in calculated plan bonus amounts); and (3) annual incentive plans contain negative discretion provisions that can be (and have been) exercised to reduce or eliminate calculated payout results, placing final control of plan payouts with our Board of Directors. Other compensation risk mitigants in place include robust stock ownership requirements for executives, an established clawback policy, and no hedging or pledging of shares by employees.
In addition to senior management, members of our Human Resources Department conduct an annual assessment of all executive and non-executive incentive plans to ensure that they are aligned with our strategic business objectives. In 2021, Human Resources considered the potential risks associated with our incentive plans, including:
| Governance Policies & Practices— 2023 Proxy Statement | 39 |
| • | Identifying and assessing metrics governing each incentive-based compensation program to ensure that they are consistent with our short-term and long-term goals;Compensation Risk Assessment |
| | • | Reviewing the potential range of payouts to confirm reasonableness; |
| •Each year, senior management oversees a risk assessment of the Company’s executive compensation program. In 2022, management concluded, and the Compensation Committee agreed, that our compensation plans, program design, policies, and practices created appropriate incentives to increase long-term shareholder value without creating risks that are reasonably likely to have a material adverse effect on the Company. Our executive | Ensuring | compensation program includes several features that themitigate unnecessary risk taking, including an appropriate balance of short-term and long-term performance metrics, plans establishcapped at maximum payout amounts,levels, and negative discretion provisions that can reduce or caps,eliminate payouts, as well as robust stock ownership requirements for the calculation of payments, as appropriate;executives, an established clawback policy, and |
| • | Verifying that our management team and/ a prohibition on hedging or the Board of Directors retain the right to modify, suspend, and/or terminate the plans and corresponding payouts without prior notice.pledging Company shares. |
Our Human Resources representatives did not identify any provisions that might cause employees to act in a manner that would create risks that are reasonably likely to have a material adverse effect on the Company.
| 40 | 2023 Proxy Statement — Governance Policies & Practices | |
Director Compensation
In addition, the Compensation Committee engages in a comprehensive annual review of the Brunswick Performance Plan (BPP), our primary annual incentive plan, and its performance measures. In 2021, the Compensation Committee determined that the BPP plan design would effectively encourage employees to engage in appropriate and responsible behavior without unnecessary risk-taking that could have a negative impact on the Company.
The majority of our non-executive incentive plans adopt the BPP’s performance metrics, ensuring that the plans encourage and reward appropriate behavior throughout the organization. For those few incentive plans at the division level that do not mirror the BPP, Brunswick management performs a similar analysis of the plans on an annual basis.
| 2022 PROXY STATEMENT | 25 |
DIRECTOR
COMPENSATION2022 Director Compensation Table
2021 DIRECTOR COMPENSATION TABLE
The table below summarizes the compensation that non-employee Directors earned for the fiscal year ended December 31, 2021.2022.
| Director1 | Fees Earned or
Paid in Cash2 | Stock Awards3 | All Other
Compensation4 | Total |
| Nancy E. Cooper | $105,000 | $310,333 | $35,000 | $450,333 |
| David C. Everitt | $105,000 | $163,667 | – | $268,667 |
| Reginald Fils-Aimé | $105,000 | $149,167 | $35,000 | $289,167 |
| Lauren P. Flaherty | $105,000 | $153,667 | $35,000 | $293,667 |
| Joseph W. McClanathan | $105,000 | $170,167 | $35,000 | $310,167 |
| David V. Singer | $105,000 | $182,667 | $35,000 | $332,667 |
| Jane L. Warner5 | $36,141 | $56,386 | $35,000 | $127,527 |
| J. Steven Whisler | $105,000 | $181,667 | $35,000 | $321,667 |
| Roger J. Wood | $105,000 | $174,667 | $35,000 | $314,667 |
| MaryAnn Wright | $105,000 | $149,167 | $4,702 | $258,869 |
| Director(1) | Fees Earned or
Paid in Cash(2) | Stock Awards(3) | All Other
Compensation(4) | Total |
| NANCY E. COOPER | $ 101,667 | $295,500 | $35,000 | $432,167 |
| DAVID C. EVERITT | $101,667 | $154,667 | – | $256,334 |
| REGINALD FILS-AIMÉ | $101,667 | $141,667 | $14,347 | $257,681 |
| LAUREN P. FLAHERTY | $101,667 | $145,500 | $35,000 | $282,167 |
| JOSEPH W. MCCLANATHAN | $103,542 | $162,000 | $27,816 | $293,358 |
| DAVID V. SINGER | $106,167 | $173,667 | $35,000 | $314,834 |
| JANE L. WARNER | $103,542 | $160,417 | $35,000 | $298,959 |
| J. STEVEN WHISLER | $101,667 | $172,833 | $35,000 | $309,500 |
| ROGER J. WOOD | $103,542 | $164,548 | $35,000 | $303,090 |
| MARYANN WRIGHT(5) | $59,443 | $80,673 | – | $140,116 |
(1) | 1 | David M. Foulkes is not included in this table as he was an employee of the Company in 20212022 and received no additional compensation for his service as a Director. The compensation Mr. Foulkes received as a Company employee in 20212022 is shown in the 20212022 Summary Compensation Table on page 42.61. |
(2) | 2 | Amounts in this column reflect the 20212022 annual cash fees earned by each non-employee Director. Mr. McClanathan, Mr. Singer, Ms. Warner, Mr. Whisler, Ms. Warner, and Mr. Wood elected to receive all or a portion of the 20212022 annual cash fees in the form of deferred Common Stock, with a 20% premium. |
(3) | 3 | This column represents the dollar amount recognized for financial statement reporting purposes with respect to the fiscal year ended December 31, 20212022 in accordance with FASB ASC Topic 718. Amounts in this column represent the portion of fees required to be paid to Directors in the form of Common Stock, as well as the 20% premium that is received by those Directors who elected to receive the cash portion of their fees in the form of deferred Common Stock. For assumptions used in the valuation of such awards, see Note 1817 to the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. |
(4) | 4 | The amounts shown in this column include our cost of products provided pursuant to the Brunswick Product Program during our fiscal year ended December 31, 2021.2022. |
(5) | 5 | Ms. Wright joinedWarner retired from the Board in June 2021. |
| at the 2022 PROXY STATEMENT | 26 |
Director Compensation
DIRECTOR COMPENSATION
The grant date fair values of awards in this column is as follows:
| | Grant Date Fair Values of
Shares of
Common Stock | Grant Date Fair Values of Shares
Attributable to 20% Premium
Applied to Deferral of Fees |
| NANCY E. COOPER | $295,500 | – |
| DAVID C. EVERITT | $154,667 | – |
| REGINALD FILS-AIMÉ | $141,667 | – |
| LAUREN P. FLAHERTY | $145,500 | – |
| JOSEPH W. MCCLANATHAN | $141,667 | $20,333 |
| DAVID V. SINGER | $153,334 | $20,333 |
| JANE L. WARNER | $141,667 | $18,750 |
| J. STEVEN WHISLER | $152,500 | $20,333 |
| ROGER J. WOOD | $144,215 | $20,333 |
| MARYANN WRIGHT | $80,673 | |
The following table sets forth the aggregate number of shares subject to outstanding stock awards held by each non-employee Director as of December 31, 2021:
| | Grant Date Fair Values of
Shares of Common Stock | Grant Date Fair Values of Shares
Attributable to 20% Premium
Applied to Deferral of Fees |
| Nancy E. Cooper | $310,333 | — |
| David C. Everitt | $163,667 | — |
| Reginald Fils-Aimé | $149,167 | — |
| Lauren P. Flaherty | $153,667 | — |
| Joseph W. McClanathan | $149,167 | $21,000 |
| David V. Singer | $161,667 | $21,000 |
| Jane L. Warner | $49,158 | $7,228 |
| J. Steven Whisler | $160,667 | $21,000 |
| Roger J. Wood | $153,667 | $21,000 |
| MaryAnn Wright | $149,167 | — |
| The following table sets forth the number of shares subject to RSU awards that were granted to non-employee Directors in prior years and which were still outstanding as of December 31, 2022. |
| Aggregate Number of Shares
Subject to Stock Awards
Outstanding as of
December 31, 20212022 |
NANCYNancy E. COOPERCooper | –— |
DAVIDDavid C. EVERITTEveritt | –— |
REGINALD FILS-AIMÉReginald Fils-Aimé | –— |
LAURENLauren P. FLAHERTYFlaherty | –— |
JOSEPHJoseph W. MCCLANATHANMcClanathan | –— |
DAVIDDavid V. SINGERSinger | –— |
JANEJane L. WARNERWarner | –— |
J. STEVEN WHISLERSteven Whisler | 1,7351,770 |
ROGERRoger J. WOODWood | –— |
MARYANN WRIGHTMaryAnn Wright | –— |
| 2022Director Compensation PROXY STATEMENT — 2023 Proxy Statement | 27 43 |
NARRATIVE TO DIRECTOR COMPENSATION TABLE
ANNUAL FEES AND DEFERRED STOCK AWARDS
Effective May 1, 2021, non-employee Director compensation was increased to an annual retainer of $235,000, with $105,000 payable in cash (increased from the previous $95,000 annual cash payment) and $130,000 payable in Common Stock. The Board Chair receives an additional annual retainer of $150,000 paid in Brunswick stock.
Chairs of committees and members of certain committees receive additional annual retainers paid in Brunswick stock, which were also modestly increased in 2021, as follows:
| •Narrative To Director Compensation Table |
| |
| Annual Fees And Deferred Stock Awards
Effective May 1, 2022, non-employee Director compensation was increased to an annual retainer of $245,000, with $105,000 payable in cash and $140,000 payable in Common Stock (increased from the previous $130,000 annual stock payment). The Board Chair receives an additional annual retainer of $160,000 paid in Brunswick stock (increased from the previous $150,000 annual stock payment).
Chairs of committees and members of certain committees receive additional annual retainers paid in Brunswick stock, as follows:
• Audit and Finance Committee Chair: $25,000 |
| • | Compensation Committee Chair: $20,000 |
| • | Governance Committee Chair: $14,000 |
| • | Audit and Finance Committee members: $12,500 |
| • | Compensation Committee members: $10,000 |
| • | Governance Committee members: $7,000 |
Members of the former Finance Committee received an interim cash retainer of $6,000 for Mr. Singer (as former Finance Committee Chair) and $2,500 for each of Messrs. McClanathan and Wood and Ms. Warner in 2021, due to the consolidation of the committee into the Audit and Finance Committee.
For the portion of each Director’s total annual fee paid in Common Stock, the number of shares is determined by the closing price of Common Stock on the date of the award and is reported in the “Stock Awards” column of the Director Compensation Table.
The receipt of these shares may be deferred until a Director retires from the Board. Each Director may elect to have the cash portion of the annual fee paid as follows:
|
For the portion of each Director’s total annual fee paid in Common Stock, the number of shares is determined by the closing price of Common Stock on the date of the award and is reported in the “Stock Awards” column of the Director Compensation Table.
The receipt of these shares may be deferred until a Director retires from the Board. Each Director may elect to have the cash portion of the annual fee paid as follows:
• | In cash or |
| • | In Common Stock, deferred until the Director leaves the Board, with a 20% premium. |
| | • | For Directors who elect to receive the cash portion in deferred Common Stock, the number of shares to be received upon departure from the Board is determined by multiplying the cash amount by 1.2, then dividing that amount by the closing price of Common Stock on the date of the award.
Share Ownership Requirements
As set forth in the Principles, within five years of appointment or initial election, a Director is required to own Common Stock and deferred stock units of the Company equal to five times the amount of the Director’s annual cash retainer. Once having met this threshold, if a Director falls below the threshold as a result of a decline in our stock price, the Director will have a two-year period within which to once again achieve the threshold. We calculate compliance with these guidelines annually, using the average Brunswick stock price for the prior calendar year. As of December 31, 2022, all Directors were in compliance with the share ownership requirements.
Brunswick Product Program
Directors are encouraged to use Brunswick products to enhance their understanding and appreciation of Brunswick’s business. Directors receive an annual allowance of up to $35,000, which may be applied to purchase Brunswick products and/or fund expenses incurred relating to the ownership of such products. Brunswick reports actual and imputed income associated with the program and does not reimburse Directors for the associated tax liability.
Directors may purchase additional Brunswick products at their own expense, at discounted rates.
|
SHARE OWNERSHIP REQUIREMENTS
As set forth in the Principles, within five years of appointment or initial election, a Director is required to own Common Stock and deferred stock units of the Company equal to five times the amount of the Director’s annual cash retainer. Once having met this threshold, if a Director falls below the threshold as a result of a decline in our stock price, the Director will have a two-year period within which to once again achieve the threshold. We calculate compliance with these guidelines annually, using the average Brunswick stock price for the prior calendar year. As of December 31, 2021, all Directors were in compliance with the share ownership requirements.
BRUNSWICK PRODUCT PROGRAM
Directors are encouraged to use Brunswick products to enhance their understanding and appreciation of Brunswick’s business. Directors receive an annual allowance of up to $35,000 (increased in 2021 from $30,000), which may be applied to purchase Brunswick products and/or fund expenses incurred relating to the ownership of such products. Brunswick reports actual and imputed income associated with the program and does not reimburse Directors for the associated tax liability.
Directors may purchase additional Brunswick products at their own expense, at discounted rates.
| 2022 PROXY STATEMENT | 28 |
Stock Held By Directors, Executive Officers, and Principal Shareholders
STOCK HELD BY DIRECTORS, EXECUTIVE OFFICERS, AND PRINCIPAL SHAREHOLDERS
Each Director, each Executive Officer listed in the 20212022 Summary Compensation Table, and all Directors and Executive Officers as a group owned the number of shares of Common Stock set forth in the following table as of March 10, 2022,6, 2023, with sole voting and investment power except as otherwise noted:
| Director/ Executive Officer | Number
of Shares
Beneficially
Owned | Percent
of
Class |
| Nancy E. Cooper | 19,891 | * |
| David C. Everitt | 27,609
| * |
| Reginald Fils-Aimé | 3,516
| * |
| Lauren P. Flaherty | 9,050
| * |
| Joseph W. McClanathan | 17,985
| * |
| David V. Singer | 41,025
| * |
| J. Steven Whisler | 79,574
| * |
| Roger J. Wood | 52,025
| * |
| MaryAnn Wright | 2,954
| * |
| David M. Foulkes1, 2 | 136,060
| * |
| Ryan M. Gwillim1, 2 | 9,136
| * |
| Christopher D. Drees2, 3 | 29,833 | * |
| Christopher F. Dekker1, 2 | 30,738 | * |
| Brenna D. Preisser2 | 40,088
| * |
| All Directors & Executive Officers as a Group1, 2 | 527,026 | * |
Director/Executive Officer* | Number
of Shares
Beneficially
Owned | Percent
of Class |
NANCY E. COOPER | 16,878 | * |
DAVID C. EVERITT | 24,971 | * |
REGINALD FILS-AIMÉ | 1,578 | * |
LAUREN P. FLAHERTY | 6,902 | * |
JOSEPH W. MCLANATHAN | 14,148 | * |
DAVID V. SINGER | 37,469 | * |
JANE L. WARNER | 27,301 | * |
J. STEVEN WHISLER | 74,491 | * |
ROGER J. WOOD | 47,433 | * |
MARYANN WRIGHT | 982 | * |
DAVID M. FOULKES(1)(2) | 94,507 | * |
RYAN M. GWILLIM(1)(2) | 5,227 | * |
CHRISTOPHER D. DREES(2) | 17,867 | * |
BRENNA D. PREISSER(2) | 30,400 | * |
CHRISTOPHER F. DEKKER (2) | 28,636 | * |
ALL DIRECTORS & EXECUTIVE OFFICERS AS A GROUP(1)(2) | 441,625 | * |
* | Indicates less than 1% ownership of outstanding shares. |
(1)1 | Includes an estimate of the number of shares held by the Savings Plan Trustee as of March 10, 20226, 2023 (Plan uses stock fund unit accounting and the number of shares that a participant is deemed to hold varies with the price of Brunswick stock): Mr. Foulkes, 3,7243,794 shares, Mr. Gwillim, 2,9554,835 shares, Mr. Dekker, 1,3702,611 shares, and all executive officers as a group 11,85415,116 shares. Excludes the following shares of Brunswick Common Stock issuable to officers, receipt of which has been deferred: Mr. Foulkes, 6,508.6,637. Mr. Foulkes will be entitled to receive these deferred shares in predetermined installments which will commence at varying times, in accordance with plan terms, none within 60 days of the Record Date. |
(2)2 | Excludes non-vested Restricted Stock Units (RSUs) and Performance Shares awarded to Executive Officers, and excludes RSUs owned under the “Rule of 70 or Age 62” terms of awards but not distributable for three years from the grant date. |
| 3 | Mr. Drees resigned his position as a Section 16 Officer effective February 7, 2023, and left the Company on March 3, 2023. |
| The shareholders known to us to beneficially own more than 5% of our outstanding Common Stock as of March 6, 2023 are: |
These shareholders known to us to beneficially own more than 5% of our outstanding Common Stock as of March 10, 2022 are:
Name and Address of
Beneficial Owner | Number of
Shares
Beneficially
Owned | Percent
of Class |
THE VANGUARD GROUP, INC.The Vanguard Group, Inc.
100 Vanguard Blvd., Malvern, PA 19355 | 7,512,7917,266,903(1)1 | 9.74%10.02% |
BLACKROCK, INC.BlackRock, Inc.
55 East 52nd Street, New York, NY 10055 | 6,380,0336,317,504(2)2 | 8.3%8.7% |
CANTILLON CAPITAL MANAGEMENTCantillon Capital Management LLC
499 Park Avenue, 9th Floor, New York, NY 10022 | 4,242,9194,212,957(3)3 | 5.5%5.81% |
(1)1 | This information is based solely on a Schedule 13G/A filed by The Vanguard Group, Inc. (Vanguard) with the SEC on February 9, 2022.10, 2023. Vanguard has sole voting power over 0 shares, shared voting power over 42,10432,048 shares, sole dispositive power over 7,402,9077,161,697 shares, and shared dispositive power over 109,884105,206 shares as of DecemberJanuary 31, 2021.2023. |
(2)2 | This information is based solely on a Schedule 13G/A filed by BlackRock, Inc. (BlackRock) with the SEC on January 28, 2022.25, 2023. BlackRock has sole voting power over 6,148,9376,161,499 shares and sole dispositive power over 6,380,0336,317,504 shares as of December 31, 2021.2022. |
(3)3 | This information is based solely on a Schedule 13G13G/A filed by Cantillon Capital Management LLC, Cantillon Management L.P., Cantillon Inc. (collectively, “Cantillon Entities”) and William von Mueffling with the SEC on February 9, 2022.10, 2023. The Cantillon Entities and Mr. von Mueffling have shared voting power over 3,812,9194,212,957 shares and shared dispositive power over 4,242,9194,212,957 shares, and Mr. von Mueffling has sole voting power and dispositive power of 430,000475,000 shares as of December 31, 2021.2022. |
| Director Compensation— 2023 Proxy Statement | 45 |
Executive Compensation
| | Compensation Discussion And Analysis
This Compensation Discussion and Analysis describes our overall executive compensation policies and practices and specifically analyzes the total compensation for the Named Executive Officers (NEOs). The NEOs are: |
| | |
1 Mr. Drees resigned his position as a Section 16 Officer effective February 7, 2023, and left the Company on March 3, 2023. See the Current Report on Form 8-K filed with the SEC on February 7, 2023 for additional information. | |  |
| 2022 PROXY STATEMENT | 29 |
EXECUTIVE
COMPENSATIONBusiness Highlights1
COMPENSATION DISCUSSION AND ANALYSIS
This Compensation Discussion and Analysis describes our overall executive compensation policies and practices and specifically analyzes the total compensation for the Named Executive Officers (NEOs). The NEOs are:
DAVID M. FOULKES
Chief Executive Officer
 | |  | |  | |
| |
RYAN M. GWILLIM
Executive Vice President and
Chief Financial Officer
|
 | | | | |
Net sales increased 16.5% during 2022 compared with 2021. Sales in each segment benefited from steady demand, new product performance, and pricing implemented throughout the year. CHRISTOPHER D. DREES
Executive Vice President and
President – Mercury Marine
| | BRENNA D. PREISSER
Executive Vice President, Strategy and President – Business Acceleration
| | CHRISTOPHER F. DEKKER
Executive Vice President, General Counsel, Secretary, and Chief Compliance Officer
|
| 2022 PROXY STATEMENT | 30 |
BUSINESS HIGHLIGHTS(1)
Our businesses executed extremely well against our operating and strategic priorities in 2021, demonstrating the strength and resilience of our marine-focused portfolio. We delivered record sales and earnings, and, more importantly, set the foundation for growth across all our businesses for the future.
 | REVENUE
GROWTH
|
Net sales increased 35% during 2021 compared with 2020. Sales in each segment benefited from increased volume due to strong global demand for marine products, market share gains, and higher pricing.
| - | • Our Propulsion segment delivered another outstanding year, growing revenue by 33% fueled by achieving 108% of its original production plan for the year. |
| - | 12.7% due to favorable product mix, pricing, and higher sales volume. • The Parts and Accessories segment also grew net sales by 33%15.7% in 2021. Additionally, our Advanced Systems Group added2022 due to the acquisitions of Navico and RELiON Battery, as well as SemahTronix, and Semah Tronix to its portfolio in the second half of the year. |
| - | favorable pricing and product mix. • The Boat segment delivered a 36%24.4% increase in revenue in a very challenging supply chain environment, which still saw 95% production attainment versus the original production plan for the year. Over the past 12 months,due to increased sales volumes to dealers and favorable product mix and pricing. Since its acquisition, Freedom Boat Club added 75 newhas doubled in size, with over 370 locations and over 10,000 memberships network-wide, and now operates a fleet of more than 4,0005,000 boats, with an increasing percentage of Brunswick boats and engines. |
| | |
| EARNINGS
|
| | |
| • | In 2021,2022, we recorded GAAP Earnings Per Share (EPS) of $7.59$9.06 and adjusted EPS of $8.28$10.03 (up 63%nearly 20% over 2020)2021 on a GAAP basis). |
| • | Earnings in each
All of our segments benefited from increased volume duedivisions contributed to continuedour strong global demand for marine products, market share gains,full-year earnings, highlighting the strength of our businesses, leaders, and higher pricing, with earnings also impacted by increased input costs and higher spending on growth initiatives. |
| | |
| CAPITAL STRATEGY
|
| • | We successfully executed our capital strategy in 2021, with strong cash flow generation allowing us2022, returning $559 million to meet or exceed our capital objectives. We generated $321 million of free cash flow during the year. |
| • | We deployed $267 million for capital expenditures on exciting new productsinvestors through dividends and capacity projects across our businesses, which will form the bedrock of our future revenue and earnings growth. |
| • | share repurchases.
We completed 93 acquisitions totaling $1.2 billion during 2021 in our Advanced Systems Group andthe Freedom Boat Club businesses. |
| • | In addition, we completed approximately $120 million of share repurchases and, in February 2022, increased our dividend for the 10th consecutive year. |
| • | business.
Our investment grade credit remains strong, with our year-end cash balances, cash flow generation capabilities, and total liquidity affording continued flexibility. |
| flexibility
| | |
(1) | 1 | Please see the Appendix C for a reconciliation of non-GAAP financial measures. | |
2022 Say-On-Pay Executive Compensation Vote
| At the 2022 Annual Meeting, shareholders overwhelmingly approved our “say-on-pay” proposal (shareholders cast 92.8% of votes for the proposal). We were pleased with this significant vote of confidence in our pay practices and did not make any direct changes to our compensation programs as a result of the vote. Nevertheless, we evaluated and refined our compensation programs in 2022 to further reinforce our pay-for-performance philosophy and align management compensation with shareholder interests. | | 92.8%
of the votes cast on the proposal were voted in support of the compensation of our NEOs | |
| 2022Executive Compensation PROXY STATEMENT — 2023 Proxy Statement | 31 49 |
| 2022 Key Compensation Decisions
Annual Incentive Plan
All NEOs participated in the 2022 annual incentive plan called the Brunswick Performance Plan (BPP). For Corporate NEOs (Messrs. Foulkes, Gwillim, and Dekker and Ms. Preisser), a majority of the award was tied to overall Brunswick Adjusted Earnings Per Share (EPS) with a link to Brunswick Free Cash Flow (FCF). For the Division NEO (Mr. Drees), a significant portion of the award was tied to overall Brunswick EPS and Brunswick FCF and included a divisional EBIT component to reward division performance. On an enterprise basis, actual performance in 2022 was below the performance targets set for the 2022 BPP, and we paid NEOs average awards under the plan at approximately 79.6% of target opportunity. For additional information on the annual incentive plan, see “Achievement of Targeted Results” on page 53.
Long-Term Incentives
We grant performance-based equity in the form of Performance Shares to certain key senior executives, including each of the NEOs. Performance underlying the awards is measured based on Cash Flow Return on Investment (CFROI), Operating Margin and Brunswick’s total shareholder return performance relative to the total shareholder return (TSR) of an established peer group, as measured over a three-year performance period. We believe Performance Shares strengthen our pay-for-performance philosophy and align management’s long-term goals with our key strategic initiatives. Actual performance for the 2020 Performance Shares award exceeded the three-year targets, and awards paid under the plan were at 182.7% of target opportunity. For additional information, see page 56. In addition, the Company continues to provide Restricted Stock Units (RSUs) as part of equity compensation delivered to reinforce key retention initiatives and to align shareholder and NEO interests. |
The granted 2022 Performance Share awards include the same plan design as the Performance Share awards granted in 2021, except the TSR comparison peer group has been revised to the S&P 400 Consumer Discretionary Index, instead of using certain companies in the GICS “Leisure Products” sub-industry. We believe this is a more suitable comparison group for Brunswick as it is a broad, externally set index with companies in similar consumer industries. Please see page 56 for additional information.
2021 SAY-ON-PAY EXECUTIVE COMPENSATION VOTE
At the 20212023 Annual Meeting, the Company will ask shareholders overwhelmingly approved our “say on pay” proposal (shareholders cast 94.2% of votes for the proposal). We were pleased with this significant vote of confidence in our pay practices and did not make any direct changes to our compensation programs asapprove a result of the vote. Nevertheless, we evaluated and refined our compensation programs in 2021 to further reinforce our pay-for-performance philosophy and align management compensation with shareholder interests.
2021 KEY COMPENSATION DECISIONS
ANNUAL INCENTIVE PLAN
All NEOs participated in the 2021 annualnew stock incentive plan called the Brunswick Performance Plan (BPP). For Corporate NEOs (Messrs. Foulkes, Gwillim, and Dekker and Ms. Preisser), a majority of the award was tied to overall Brunswick Earnings Per Share (EPS) with a link to Brunswick Free Cash Flow (FCF). For the Division NEO (Mr. Drees), a significant portion of the award was tied to overall Brunswick EPS and Brunswick FCF and included a divisional EBIT component to reward division performance. On an enterprise basis, actual performance in 2021 was above the performance targets set for the 2021 BPP, and we paid NEOs average awards under the plan at approximately 188.6% of target opportunity. For additional information on the annual incentive plan, see “Achievement of Targeted Results” on page 35.
LONG-TERM INCENTIVES
We grant performance-based equity in the form of Performance Shares to certain key senior executives, including each of the NEOs. Performance underlying the awards is measured based on Cash Flow Return on Investment (CFROI), Operating Margin and Brunswick’s total shareholder return performance relative to the total shareholder return (TSR) of an established peer group, as measured over a three-year performance period. We believe Performance Shares strengthen our pay-for-performance philosophy and align management’s long-term goals with our key strategic initiatives. Actual performance for the 2019 Performance Shares award exceeded the three-year targets, and awards paid under the plan were at 200% of target opportunity.plan. For additional information, see page 37. In addition, the Company continues to provide Restricted Stock Units (RSUs) as partProposal No. 5.
Overall Philosophy of equity compensation delivered to reinforce key retention initiatives and to align shareholder and NEO interests.Our Executive Compensation Programs
OVERALL PHILOSOPHY OF OUR EXECUTIVE COMPENSATION PROGRAMS
The overall philosophy of our compensation programs for the NEOs and other senior executives is to encourage and reward the creation of sustainable, long-term shareholder value. Specifically, we identified the following objectives to help realize this goal:
  | ALIGNMENT WITH SHAREHOLDERS’ INTERESTSAlignment with Shareholders’ Interests
Reward performance in a given year and achievements over a sustained period that are aligned with the interests of our shareholders. |
| | |
  | REMAIN COMPETITIVERemain Competitive
Attract, retain, and motivate the talent required to ensure our continued success. |
| | |
  | MOTIVATE ACHIEVEMENT OF FINANCIAL AND STRATEGIC GOALSMotivate Achievement of Financial and Strategic Goals
Ensure that compensation structure reinforces achievement of business objectives and execution of our overall strategy. |
| | |
  | REWARD SUPERIOR PERFORMANCEReward Superior Performance
Reinforce our pay-for-performance culture. |
| 2022 PROXY STATEMENT | 32
|
COMPENSATION DESIGN PRINCIPLES
In support of our objectives, the framework of our executive compensation programs incorporates the following design principles.
FOCUS ON THE CREATION OF LONG-TERM SHAREHOLDER VALUE
Our senior executives are responsible for achieving long-term strategic goals. Accordingly, compensation is weighted more heavily toward rewarding long-term value creation for shareholders as an individual rises within the organization.
Our emphasis on long-term shareholder value creation is best illustrated in the following chart, which shows the portion of total targeted compensation that is attributable to long-term incentive compensation and the portion attributable to other key elements of our compensation programs. As shown in the chart, long-term incentive compensation accounts for the largest percentage of overall compensation when compared to base salary and annual incentives (bonus). In addition, as a result of the compensation structure, a majority of senior executive compensation is deemed performance-based, or “at risk,” with such amounts constituting approximately 87% of Mr. Foulkes’ total compensation and approximately 71% of total compensation for our other NEOs in 2021.
Below is a chart comparing the targeted compensation mix of the CEO and other NEOs:
 | 
WHAT WE DO |
• | Base a highsubstantial percentage of executive pay on performance through annual and long-term incentives |
• | Require executives to achieve performance-based goals tied to relative shareholder return |
• | Target median compensation levels and benchmark market data of our peer group when making executive compensation decisions |
• | Apply strict share ownership requirements to officers and Directors |
• | Require vested shares from our equity compensation programs to be held until share ownership requirements are met |
• | Disclose metrics, weightings, and overall outcomes of annual and long-term incentives for executives |
• | Evaluate and manage risk in our compensation programs |
• | Use an independent compensation consultant |
• | Have an established clawback policy |
• | Maintain double-trigger equity award vesting acceleration upon involuntary termination following a Change in Control (CIC) |
• | Engage in a rigorous and thoughtful executive succession planning process with the Board |
| |
 |
WHAT WE DON’T DO |
• | No excise tax gross-ups |
• | No modified single-trigger or single- triggersingle-trigger CIC severance agreements (we only use double-trigger CIC severance provisions) |
• | Expressly forbid option repricing not in accordance with plans already approved by shareholders |
• | Expressly forbid exchanges of underwater options for cash in all of our active equity plans |
• | No hedging of shares by our Directors or employees |
• | No pledging of shares by our Directors or employees |
• | No dividends or dividend equivalents on unearned Performance Shares |
| 2022 PROXY STATEMENT | 33 |
PROVIDE INCENTIVES FOR ACHIEVEMENT OF OUR GOALS
We charge our senior executives with the responsibility to achieve our strategic, financial, and operational goals which we believe are key drivers to long-term shareholder value creation. As a result, we link executive compensation to business performance by establishing business metrics against which we measure performance, and which the Board has determined are important to our key stakeholders.
We establish variable compensation targets (individual BPP targets and long-term incentive targets) for NEOs and other employees with reference to market median for each separate compensation component and evaluate overall competitiveness of Target Direct Compensation (TDC) (base salary plus annual bonus opportunity plus long-term incentives) for each individual as compared to the market TDC.
We base annual incentive metrics on overall enterprise metrics for corporate participants and a combination of division and overall enterprise results for division participants. Long-term incentives are based on our consolidated results and relative TSR.
COMPETITIVE COMPENSATIONCompetitive Compensation
We recognize that, in order to attract and retain the level of talent essential to achieving our established objectives, we must maintain a competitive executive compensation program. Each year, the Compensation Committee’s independent compensation consultant, FW Cook, provides a detailed peer analysis regarding proposed CEO compensation levels and other plan design elements. We are the largest domestic publicly traded company in the recreational marine industry, with total revenues significantly higher than other publicly traded U.S. recreational boat manufacturers, and as a result, there are no direct competitors in the compensation peer group. Criteria used to identify the peer group include:
Size —
| SIZE
Companies with revenues that generally range from one-half to three times our total annual revenue or market capitalization | |
BUSINESS FOCUSBusiness Focus —
Publicly traded companies in similar industries | |
CONSISTENCYConsistency —
The peer group should be relatively stable. Companies historically have been eliminated if they were acquired or if their revenue or market cap falls outside the referenced range |
| | |
2021 PEER GROUP | | |
| | |
BorgWarner | LCI | Snap-on Tools |
| | |
Crane | Meritor | Tenneco |
| | |
Dana | Navistar | Thor |
Incorporated | | |
| OshKosh | Timken Company |
Flowserve | | |
| Polaris Inc. | Toro Company |
Harley-Davidson | | |
| Regal-Beloit | |
| | |
The 2021 peer group is unchanged from the 2020 peer group. |
|
FW Cook led an analysis to assess the appropriateness of the peer group during 2021, which resulted in changes to the peer group composition to better align with the Company’s Next Wave strategy and marine focus. The result of these peer company changes will taketook effect for 2022 compensation planning purposes. A detailedThe peer group was assessed during 2022 which resulted in no changes to the peer group for 2023. The next formal review of the peer group has historically been conducted biennially; however, due to the company’s growth trajectory, we plan to review the peer group again in 2022 to evaluate and reflect business growth and operating model evolution.is scheduled for 2024.
2022 Peer Group (NYSE Stock Ticker) |
| |
| AGCO (AGCO) | OshKosh (OSK) |
| |
| BorgWarner (BWA) | Polaris Inc. (PII) |
| |
| Crane (CR) | Regal Rexnord (RRX) |
| |
| Dana Incorporated (DAN) | Snap-on (SNA) |
| |
| Dover (DOV) | Tenneco (TEN) |
| |
| Flowserve (FLS) | Thor (THO) |
| |
| Harley-Davidson (HOG) | Timken Company (TKR) |
| |
| LCI Industries (LCII) | Toro Company (TTC) |
| |
For all NEOs other than the CEO, we assess the competitiveness of executive compensation every two years using manufacturing industry survey data purchased from Aon Radford. Each position is benchmarked based on scope of
| 52 | 2023 Proxy Statement — Executive Compensation | |
responsibilities, revenue size of the applicable business unit, and level within the organizational hierarchy. We design our target pay mix and total compensation opportunities to approximate the median of the market.market, taking into consideration the executive tenure, skill set, and precision of the benchmark, among other factors, when determining target opportunity. In 2021, we completed a competitive benchmark assessment which confirmed that, on average, our target total direct compensation (base salary, annual bonus, and long-term incentives) for senior management positions, including the NEOs, approximates the median of competitive practice. We are scheduled to complete the analysis again this year.
The chart below summarizes the CEO’s target total direct compensation as compared to the median of the market data for his role as well as the average NEO target total direct compensation compared to the average applicable market data job matches for each of their respective roles. This chart reinforces that we are generally aligned with our market median pay philosophy.Internal Equity
AVERAGE NEO TARGET DIRECT COMPENSATION
VS. MARKET MEDIAN
INTERNAL EQUITY
We establish compensation ranges for positions with similar characteristics and scope of responsibility, including NEO positions. Balancing competitiveness with internal equity helps support management development and movement of talent throughout our worldwide operations. Differences in actual compensation between employees in similar positions result from individual performance, future potential, and division financial results. This approach also helps promote talented managers to positions with increased responsibilities and provides meaningful developmental opportunities for our employees.
| 2022 PROXY STATEMENT | 34 |
Reward Corporate, Division, and Individual Performance
REWARD CORPORATE, DIVISION, AND INDIVIDUAL PERFORMANCE
Recognizing company and individual performance in compensation helps reinforce the importance of working together and furthers our pay-for-performance philosophy. For 2021,2022, we funded incentives for all participants based on the achievement of company performance goals and allocated incentives based on individual contributions. For the NEO with division responsibility, a portion of the BPP incentive is tied to division financial performance, but a majority is tied to overall enterprise results.
What Is Rewarded?
WHAT IS REWARDED?
We design NEO compensation to reward achievement of budgeted financial results, namely Earnings Per Share (EPS), Free Cash Flow (FCF), Earnings Before Interest and Taxes (EBIT) – for business unit participants only, Cash Flow Return on Investment (CFROI), Operating Margin, Brunswick total shareholder return (both absolute and on a relative basis), and individual performance.
ACHIEVEMENT OF TARGETED RESULTSAchievement of Targeted Results
We established the 20212022 BPP annual incentive formula to recognize and reward outstanding performance by both the overall Company and our divisions. Specifically, the BPP for the NEOs provides that funding is based on the achievement of enterprise EPS and FCF, and division-specific EBIT as shown in the following chart.
| Executive Compensation— 2023 Proxy Statement | 53 |
| | Enterprise | Division |
| | | | |
| Corporate | 75% | 25% | n/a |
| Participants | EPS | FCF |
| | | |
| Division | 50% | 25% | 25% |
| Participants* | EPS | FCF | DIV EBIT |
* | * | For the one division participant, Mr. Drees, the 25% division EBIT metric is allocated as 25% Mercury Business Unit. |
Each NEO also participates in the Performance Share plan, which rewards performance based on the achievement of both CFROI and Operating Margin over a three-year period, subject to a potential modifier at the end of the performance period based on Brunswick’s three-year TSR performance against the TSR of certain companies in the Global Industry Classification Standard (GICS) “Leisure Products” sub-industry.sub-industry for awards granted prior to 2022. For awards granted in 2022 and going forward, the TSR comparison group has been revised to the S&P 400 Consumer Discretionary Index. For more details on this change, please see page 56.
The Compensation Committee believes that EPS, FCF and division EBIT are appropriate measures to use in our annual incentive plan. Earnings figures, specifically EPS, are widely tracked and reported by analysts and used as a measure to evaluate our performance. FCF is a metric that is important to shareholders and key to business operations and capital strategy. Division EBIT is important for Division NEOs as it provides a line of sight and accountability for business unit performance and contributes to overall earnings performance.
Both CFROI and Operating Margin are appropriate within the long-term performance share plan to measure how effectively we manage our cash and business to create long-term sustainable performance for our shareholders.
Our grants of Performance Shares and RSUs inherently reward absolute TSR because the ultimate earned value of each share will depend on our TSR during the performance/vesting period. In addition, the number of Performance Shares actually earned will depend on our relative TSR performance against other leisure productsconsumer discretionary companies. We use absolute and relative TSR metrics because they align the earned compensation
amounts with our market performance and our shareholders’ experience.
INDIVIDUAL PERFORMANCEIndividual performance
Individual performance affects base salary increases, annual incentives, and equity grant decision-making. As part of the compensation planning process, managers have the ability to adjust all elements of compensation based on the individual’s attainment of annual goals and performance against critical competencies.
The Compensation Committee assesses the CEO’s performance with input from all members of the Board of Directors. The CEO assesses performance of other NEOs with review by the Compensation Committee.
| 2022 PROXY STATEMENT | 35 |
Compensation Elements
COMPENSATION ELEMENTS
We structure our compensation to reflect our business objectives and compensation philosophy. The particular elements that comprise our compensation programs for senior executives are summarized below along with an explanation of why we selected each compensation element, how the amount and formula isare determined, and how decisions regarding that compensation element fit into our overall compensation objectives and programs.
BASE SALARYBase Salary
Base salary is fixed compensation for our NEOs. It is designed to provide a minimum level of pay that reflects each executive’s position and scope of responsibility, leadership skills, and individual performance, as demonstrated over time. When establishing an executive’s base salary, we also target the median pay level within the market for positions with similar responsibilities and business size. A competitive base salary is critical to attracting and retaining the executives needed to lead the business.
We review salaries on an annual basis to ensure they are externally competitive, reflect individual performance, and are internally equitable in relation to other Brunswick executives. We make salary adjustments on a periodic basis in response to market practices and to provide merit increases. Additionally, the base salary component serves as the foundation of
| 54 | 2023 Proxy Statement — Executive Compensation | |
executives’ total pay, as incentives and benefits are generally computed as a function of base salary, which allows us to link performance and pay. As illustrated by the following chart, the average merit increase, excluding promotional or market adjustments, of NEO salary from 20192020 to 20212022 was 3.0%3.7%.
| | 2019 | 2020 | 2021 | Avg. |
| FOULKES | 0.0% | 5.0% | 3.5% | 2.8% |
| GWILLIM | 6.7% | 0.0% | 4.0% | 3.6% |
| DREES | 0.0% | 3.1% | 4.0% | 2.4% |
| PREISSER | 0.0% | 3.3% | 4.1% | 2.5% |
| DEKKER | 4.4% | 3.3% | 4.0% | 3.9% |
| | 2022 | 2021 | 2020 | Avg. |
| Foulkes | 4.0% | 3.5% | 5.0% | 4.2% |
| Gwillim | 4.5% | 4.0% | 0.0% | 2.8% |
| Drees | 3.8% | 4.0% | 3.1% | 3.6% |
| Dekker | 4.0% | 4.0% | 3.3% | 3.8% |
| Preisser | 4.5% | 4.1% | 3.3% | 3.9% |
Average Merit Increase: 3.0%3.7%
ANNUAL INCENTIVE PLANAnnual Incentive Plan
Our annual incentive plan, the BPP, is the primary compensation element used to reward accomplishments against established business goals within a given year.
We set the BPP target funding based on budgeted performance for the year, as approved by the Board of Directors. The BPP limits funding to no more than 200% of target funding, with the Compensation Committee approving enterprise and division plan metric amounts within a range from 0% to 200% based on its review of performance against pre-established targets. The threshold payout level for bonus awards is 25% of enterprise-wide performance achievement. Target funding is equal to salary paid in the year multiplied by the target BPP percentage for each participant. For 2021,2022, the percentage of salary targets under the BPP for NEOs ranged from 75% to 125%135%.
We determine individual awards using: overall funding as approved by the Compensation Committee, the individual’s pro-rata portion of approved funding as adjusted for individual performance, and other factors deemed to be relevant. For 2021,2022, the Compensation Committee approved NEO payouts at approximately 188.6%79.6% of target opportunity. The performance measures required to support funding for all NEOs in 20212022 were:
Performance
Metric* | Threshold | Target | Maximum |
| | | | |
EPS – Enterprise | $8.60 | $9.60–
$10.25 | $11.25 |
| | | | |
FCF –
Enterprise | $190M | $350M–
$390M | $550M |
| | | | |
Mercury EBIT | $677M | $793M– $821M | $937M |
| | | | |
| Performance Metric* | Threshold | Target | Maximum |
| EPS – ENTERPRISE | $5.20 | $6.00–
$6.20 | $7.00 |
| FCF – ENTERPRISE | $160M | $300M–
$320M | $460M |
| MERCURY EBIT | $463M | $543M–
$550M | $630M |
* | * | The performance measures required to support funding for all NEOs in 20212022 included adjusted EPS and free cash flow, which were consistent with our external financial reporting, with additional adjustments for certain items, including acquisitions, restructuring, exit, and impairment charges, and other unusual items. |
In 2021,2022, our BPP incentive plan target employed a range of performance to reward target performance with a “flat-spot” approach for 100% payout with linear curves outside the flat spots. This flat-spot approach is consistent with the approach used for setting 2020prior year BPP goals and continues to allow us to address market uncertainty while rewarding continued exceptional operating performance.
Annual incentive targets are set at the beginning of the performance period based on the forecasted plan for the year. The FCF target level for 20212022 was set below our actual FCF achievement for 2020, as 2020 performance represented a tremendously strong year2021, mainly driven by significant capacity expansion projects, spending for free cash flow, fueled by the COVID boomnew product investments, and growth investments for significant acquisitions completed in consumer-discretionary spending in many sectors, from which we benefitted. 2020 saw a significant amount of cash generated from the liquidation of inventories. For 2021, free cash flow was expected to revert to more normal circumstances which was reflected in the target setting, particularly due to working capital utilization from rebuilding inventory levels to more normal levels. Further, we planned to continue increasing funding for capital expenditures to support our growing businesses.2021.
The BPP plays an important role in our overall compensation structure, as it signals “what is important” and “what is expected” for the year from the standpoint of corporate, division, and/or individual results. Additionally, the BPP serves to focus executives on achieving current objectives, which are deemed necessary to attain long-term goals, and it establishes appropriate performance and annual incentives by rewarding divisions and individuals within those units for actual performance.
The BPP terms and conditions include a provision to provide a pro-rata payment for those who meet the Rule of 70 or Age 62 (rule defined under the “Rule of 70 or Age 62” section on page 45)64) and retire during the second half
| Executive Compensation— 2023 Proxy Statement | 55 |
of the plan year, subject to Committee approval for NEOs. Providing a pro-rata bonus
| 2022 PROXY STATEMENT | 36 |
payment (distributed at the same time as active employee bonus awards) provides flexibility for the timing of retirements and enables the Company to effectively transition key successors.
The design of the 20222023 BPP award is similar to that of 2021.2022.
LONG-TERM INCENTIVESLong-Term Incentives
We continually monitor the appropriateness of our long-term incentive plans, taking into consideration both competitive practice and what would drive the most appropriate behavior of the participants. To reinforce the use of performance-based compensation, certain senior executives, including the NEOs, receive their long-term incentive opportunity as:
The use of Performance Shares and RSUs in our long-term incentive mix is designed to align our incentive program with competitive pay practices, reinforce pay for performance, and encourage retention due to the three-year cliff vesting schedule for RSUs.
We base the size of long-term incentive awards for NEOs on a fixed dollar target that is established every one to two years when competitive benchmark compensation information is updated. The market median for
long-term incentives for each NEO’s position determines a reference point for the dollar value of the total equity grant target and is consistent with targeting median pay for consistently solid Company and individual performance. We determine the actual share award amounts for each NEO using a Monte Carlo valuation for Performance Shares and the Company’s stock price on the date of the grant for RSUs.
PERFORMANCE SHARESPerformance Shares
In 2021,2022, we granted all NEOs Performance Share awards. The 20212022 Performance Shares are earned over a three-year performance period based on achievement of two financial metrics, with payout between 0% and 200% of the target opportunity. Seventy-five percent of the award will be earned based on three-year annual average CFROI achievement, and 25% will be earned based on three-year annual average Operating Margin attainment. The level of performance required for target payout is based on three-year strategic plan targets. The Compensation Committee believes these targets are challenging yet reasonably attainable.attainable with strong management performance. The final payout at the end of the three-year period may be increased or decreased by an additional 20% based on Brunswick’s three-year TSR performance against the TSR of certain companies in the GICS “Leisure Products” sub-industry.S&P 400 Consumer Discretionary Index. Performance in the bottom quartile against the GICSTSR comparator group reduces the Performance Share award payout by 20%, and performance in the top quartile increases the Performance Share award payout by 20%, with a maximum payout of 200% of target. Performance between the 25th 25th and 75th 75th percentile of the GICSTSR comparator group results in no modification of the award payout.
The GICS comparator peer group for TSR performance was changed for the 20212022 Performance Share award consists ofawards. The modifier application to increase or decrease payouts by 20% is still consistent with prior design; only the following companies:measurement group itself changed. We believe the S&P 400 Consumer Discretionary Index is a more suitable comparison group for Brunswick as it is a broad, externally set index with companies in similar consumer industries. For awards granted prior to 2022, the TSR comparison group will not change and remains as certain companies in the GICS “Leisure Products” sub-industry.
2021 PERFORMANCE SHARE AWARD COMPARATOR GROUP |
Acushnet Holdings
Ammo
BRP
Callaway Golf
Clarus Corporation
Escalade
Genius Brands International
Hasbro
56 | 2023 Proxy Statement — Executive Compensation | JAKKS Pacific
Johnson Outdoors
Malibu Boats
Marine Products
MasterCraft Boat Holdings
Mattel
Nautilus
Peloton Interactive
| Polaris
Smith & Wesson Brands
Sturm Ruger & Co
Vinco Ventures
Vision Marine Technologies
Vista Outdoor
YETI Holdings
|
Note: We determine the comparator group at the beginning of the award period and evaluate final performance at the end of the three-year period.
The design of the Performance Share award provides multiple benefits, including management focus on the success of key strategic initiatives and their impact on CFROI and Operating Margin metrics, as well as strengthening the alignment of management incentives with long-term shareholder interests through use of the relative TSR modifier at the conclusion of the three-year performance period.
The design of the 20222023 Performance Share award is similar to that of 2021 with the only change made to the2022.
Completed 2020-2022 Performance Share award comparator group. The comparator group for the 2022 Performance Share award will be the companies in the S&P 400 Consumer Discretionary Index at the time of grant. The modifier application to increase or decrease payouts by 20% is still consistent with prior design; only the measurement group itself is changing. The Compensation Committee believes that this is a more suitable comparison group for Brunswick as it is a broad, externally set index with companies in similar consumer industries.Award
| 2022 PROXY STATEMENT | 37 |
COMPLETED 2019-2021 PERFORMANCE SHARE AWARD
NEOs earned the 20192020 Performance Share award over a three year performance period which ended on December 31, 2021.2022. The plan design of these awards is similar to that of the 20212022 Performance Share award described above.above, but since granted prior to 2022, include the previously utilized relative TSR peer group of certain companies within the GICS “Leisure Products” sub-industry. The targets required to support funding for all NEOs for the 2019-20212020-2022 performance period were:
| Performance Metric | Threshold | Target | Maximum |
| CFROI (75%) | 14.0% | 20.0% | 26.0% |
| OPERATING MARGIN (25%) | 8.0% | 13.0% | 18.0% |
Performance
Metric | Threshold | Target | Maximum |
| CFROI (75%) | 14.0% | 20.0% | 26.0% |
Operating
Margin (25%) | 8.3% | 13.3% | 18.3% |
We set targets based on the forecast over a three-year plan period. The CFROI target was set lower thanat the 2018same level as the 2019 plan primarily due to the acquisition of Power Products in 2018, which negatively impacted CFROI due to higher goodwill and intangible amortization, and also due to continued capital spending increases over the projected plan period to support capacity and new product investments at our various businesses.businesses, including recently completed acquisitions.
Based on performance against these targets, the Compensation Committee approved an initial share determination of 179.5%182.7% of target opportunity. TSR performance against the established peer group for the performance
period resulted in Company performance abovebetween the 25th and 75thpercentile of the peer group and applicationgroup. Therefore, this did not result in additional modification of +/- 20 percent of the +20% multiplier; however,award, and the final award payout was capped at 200% per the terms of the plan.182.7%.
RESTRICTED STOCK UNITSRestricted Stock Units
In addition to Performance Shares, we grant RSUs to the NEOs. We believe that RSUs are an important component of our compensation structure because each award increases linkage to shareholder interests by rewarding stock price appreciation and tying wealth accumulation to performance. Additionally, RSUs help reinforce team performance, encourage senior executives to focus on long-term performance, and function as a retention incentive through the vesting period.
SHARE OWNERSHIP REQUIREMENTSShare Ownership Requirements
In order to ensure continual alignment with our shareholders, we maintain share ownership requirements for our officers. This share ownership policy calculates minimum required ownership levels as a multiple of each officer’s base salary.
The current NEO share ownership requirements for our actively serving NEOs are as follows:
TIERTier I |
MANAGEMENT LEVEL:Management Level: Chief Executive Officer |
NEO:NEO: Foulkes |
OWNERSHIP REQUIREMENT:Ownership Requirement: 5.0 Times Base Salary |
|
TIERTier II |
MANAGEMENT LEVEL:Management Level: Chief Financial Officer and Designated Executive Officers |
NEO:NEO: Gwillim, Drees, Preisser |
OWNERSHIP REQUIREMENT:Ownership Requirement: 3.0 Times Base Salary |
|
TIERTier III |
MANAGEMENT LEVEL:Management Level: Other Executive Officers |
NEO:NEO: Dekker |
OWNERSHIP REQUIREMENT:Ownership Requirement: 2.0 Times Base Salary |
| Executive Compensation— 2023 Proxy Statement | 57 |
Officers who do not meet the ownership requirements must retain shares having a value equal to 50% of the after-tax profit from the Common Stock acquired under our equity plans (Retention Ratio). For purposes of calculating compliance with the requirements, “shares owned” include shares directly owned, shares owned by immediate family members residing in the same household, shares held in trust, share equivalents held in our tax-qualified defined contribution plans and deferred compensation plans, and RSUs. Outstanding Performance Shares do not count as “shares owned.” For those officers approaching retirement, ownership requirements are reduced as follows: 80% of target for those age 63; 60% of target for those age 64; and 50% of target for those age 65 and older.
The Compensation Committee reviews compliance with these share ownership requirements on an annual basis effective as of December 31. All NEOs were in compliance with the stated requirements as of December 31, 2021.2022. Please see the Narrative to Director Compensation Table on page 28 44 for information regarding share ownership guidelines for Directors.
CLAWBACKSClawbacks
The Compensation Committee can require the repayment of all or a portion of previous BPP awards as it deems appropriate in the event of certain misconduct, including misconduct that causes a restatement of financial results. In addition, for those who have entered into Terms and Conditions of Employment with
Brunswick, including each of the NEOs, the Compensation Committee has expanded the types of payments the Company can recover in the event of a violation of the restrictive covenants set forth in the Terms and Conditions of Employment to include any severance payments received by the executive and any gain realized as a result of the exercise or vesting of equity awards beginning 12 months prior to termination. The Company will review and modify its clawback and recoupment policies as necessary to reflect the final NYSE listing rules adopted to implement the compensation recovery requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act.
ANTI-HEDGING AND ANTI-PLEDGING POLICYAnti-Hedging And Anti-Pledging Policy
No Director, NEO, or other employee may engage in hedging or monetization transactions or similar arrangements with respect to Common Stock, including the purchase or sale of puts, calls, or options on Common Stock (other than options granted by Brunswick), or the use of any other derivative instruments to hedge or offset any decrease in the market value of the Common Stock. In addition, no Director, NEO, or other employee may pledge Common Stock as collateral.
| 58 | 2023 Proxy Statement — Executive Compensation | |
Post-Employment Compensation
| Post-employment compensation elements that are not currently offered to salaried employees in general are summarized below. | | |
| 2022 PROXY STATEMENT | 38 |
POST-EMPLOYMENT COMPENSATION
Post-employment compensation elements that are not currently offered to salaried employees in general are summarized below.
Plan/Participant(s) | Description |
BRUNSWICK RESTORATION PLAN
Plan/Participant(s) | Description |
| |
Brunswick
Restoration Plan
All NEOs | The Restoration Plan is a non-qualified plan that provides a retirement benefit consistent with that of employees who are not affected by the IRS compensation and benefit limits.
The Restoration Plan ensures that employees with covered compensation or retirement plan contributions above IRS qualified defined contribution plan limits receive the full amount of their intended retirement benefits. If an employee elects to participate in the Restoration Plan, 401(k) contributions and Brunswick’s match on these contributions above the IRS limit are credited to this plan. In addition, Brunswick’s retirement profit sharing contributions for eligible employees are automatically credited to their Restoration Plan accounts. |
THE 2005 AUTOMATIC DEFERRED COMPENSATION PLAN
Foulkes
| The 2005 Automatic Deferred Compensation (ADC) Plan defers payment of certain compensation that would otherwise be non-tax-deductible to Brunswick by reason of Section 162(m) of the Internal Revenue Code until six months after employment ends. The 2005 Automatic Deferred Compensation Plan preserves our ability to take a tax deduction for senior executives’ compensation. Senior executives are required to defer receipt of non-deductible compensation in excess of $1.5 million in order to limit non-deductible compensation under Section 162(m) of the Internal Revenue Code. For amounts deferred in cash, financial returns on automatic deferrals are based on either: (i) an interest rate equal to the greater of the prime rate at J.P. Morgan Chase plus two percentage points, or Brunswick’s short-term borrowing rate; or (ii) securities selected by the participant. The two percentage point increment is used to recognize that the NEO defers the receipt of earned compensation until sometime in the future, typically upon retirement or other termination of employment. For amounts deferred in stock, the account is credited with the number of share units equal to the number of shares of Company stock as of the date on which the shares would otherwise have been paid.
Due to the passage of the Tax Cuts and Jobs Act in December 2017, Section 162(m) was amended to eliminate the previously available exemptions from the tax deduction limit, including the exemptions for (1) qualified performance-based compensation and (2) compensation paid after the executive’s termination of employment. As a result, the reasons for maintaining the ADC Plan no longer exist (other than for equity awards that were granted prior to November 2, 2017). For this reason, the plan was amended to cease deferrals of compensation earned on or after January 1, 2018, except for incentive awards that were outstanding prior to such date. All grandfathered incentive awards are no longer outstanding and therefore, there will be no future deferrals into the ADC Plan.
|
| 2022 PROXY STATEMENT | 39 | understanding of our products, protect their physical health, and maximize their productivity. |
PERQUISITES AND OTHER BENEFITS
We extend certain benefits to NEOs that we do not offer to salaried employees in general. These programs help NEOs enhance their understanding of our products, protect their physical health, and maximize their productivity.
Perquisites/Benefits | Description |
EXECUTIVE PRODUCT PROGRAM
Perquisites/Benefits | Description |
| |
Executive Product Program
All NEOs | The product program is designed to encourage the use of Brunswick products to enhance understanding and appreciation of our businesses and identify product and business development opportunities. The program provides a product allowance equal to $35,000 for all participants. We do not reimburse the participant for the tax liability associated with the program. The allowance may be applied toward the purchase of Brunswick products at the discounted rates established pursuant to the Brunswick Employee Purchase Program, which is available to all Brunswick employees, as well as any freight costs, parts and accessories, service fees, and other expenses related to the ownership of the Brunswick products purchased. |
EXECUTIVE PHYSICAL PROGRAM
Executive Physical Program
All NEOs | We provide a physical examination program to senior executives that is intended to protect the health of such executives and our investment in our leadership team. The Compensation Committee requires senior executives to have an annual physical examination and, as part of this program, they have immediate access to healthcare providers. |
PERSONAL AIRCRAFT USE
Personal
Aircraft Use
Foulkes Preisser | The CEO may use the Company aircraft for personal use on a limited basis. This benefit allows for the effective use of the CEO’s limited personal time. Other NEOs may occasionally use the Company aircraft for personal use with prior approval from the CEO. Ms. Preisser |
| Executive Compensation— 2023 Proxy Statement | 59 |
| Terms and Conditions of Employment
All NEOs are parties to agreements setting forth their terms and conditions of employment (Agreements). The Agreements memorialize the “at will” nature of the employment relationship, and describe each executive’s duties, compensation, benefits, and perquisites. Additionally, the Agreements consolidate the restrictive covenants that exist during and after employment (e.g., non-competition, confidentiality, non-solicitation). Finally, the Agreements establish and limit the compensation and benefits to which an executive is entitled in the only other NEOevent of termination.
We believe that offering Agreements to make limited personal useour executives helps to ensure the retention of executive experience, skills, knowledge, and background for the benefit of the Company, aircraftand the efficient achievement of our long-term goals and strategy. Additionally, the Agreements reinforce and encourage the executives’ continued attention and dedication to duties without the distraction arising from | | the possibility of a Change in 2021.Control. The Agreements do not provide excise tax gross-ups.
Determining Executive Compensation
Decisions with respect to specific BPP awards, equity awards, and base salary increases for the current year are normally made at the first Compensation Committee and Board meeting of each year. At this meeting, the Compensation Committee and the Board of Directors also make decisions with respect to the prior year’s performance and BPP funding. Base salary increases are generally effective as of the first full pay period in April.
The Compensation Committee reviews and approves equity grant terms and conditions and grant size for NEOs and other senior executives at its first meeting of the year, which is generally held following our public disclosure of our financial results for the prior year. |
| | | |
| Human Resources and Compensation Committee Report |
| | | |
| The Compensation Committee reviewed and discussed this Compensation Discussion and Analysis with management.
Based on that review and discussion, the Compensation Committee recommended to the Board of Directors of Brunswick Corporation | | that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2022, and the Company’s Proxy Statement to be filed in conjunction with the Company’s 2023 Annual Meeting. |
| | | |
|  |  |  |  |  |
| David C. Everitt (C) | Nancy E. Cooper | Lauren P. Flaherty | J. Steven Whisler | Roger J. Wood |
TERMS AND CONDITIONS OF EMPLOYMENT
| 60 | 2023 Proxy Statement — Executive Compensation | |
All NEOs are parties to agreements setting forth their terms and conditions of employment (Agreements). The Agreements memorialize the “at will” nature of the employment relationship, and describe each executive’s duties, compensation, benefits, and perquisites. Additionally, the Agreements consolidate the restrictive covenants that exist during and after employment (e.g., non-competition, confidentiality, non-solicitation). Finally, the Agreements establish and limit the compensation and benefits to which an executive is entitled in the event of termination. We believe that offering Agreements to our executives helps to ensure the retention of executive experience, skills, knowledge, and background for the benefit of the Company, and the efficient achievement of our long-term goals and strategy. Additionally, the Agreements reinforce and encourage the executives’ continued attention and dedication to duties without the distraction arising from the possibility of a Change in Control. The Agreements do not provide excise tax gross-ups.
2022 Summary Compensation Table
| 2022 PROXY STATEMENT | 40 | to the extent required by the SEC’s executive compensation disclosure rules, 2021, and 2020. |
DETERMINING EXECUTIVE COMPENSATION
| Year | Salary1 | Bonus | Stock
Awards2 | Non-Equity
Incentive Plan
Compensation3 | Change in Pension
Value and Non-
Qualified Deferred
Compensation
Earnings | All Other
Compensation4 | Total |
| David M. Foulkes, Chief Executive Officer | | | | |
| 2022 | $1,118,423 | $ - | $6,844,580 | $1,203,000 | $ - | $372,135 | $9,538,138 |
| 2021 | $1,077,038 | | $5,761,310 | $2,539,000 | | $260,058 | $9,637,406 |
| 2020 | $ 1,021,154 | | $ 5,000,158 | $1,596,000 | | $203,551 | $7,820,863 |
| Ryan M. Gwillim, Executive Vice President and Chief Financial Officer |
| 2022 | $586,539 | $ - | $1,350,439 | $350,600 | $ - | $121,322 | $2,408,900 |
| 2021 | $536,539 | | $999,989 | $758,900 | | $78,949 | $2,374,377 |
| 2020 | $417,885 | | $ 570,723 | $ 355,800 | | $ 63,505 | $ 1,407,913 |
| Christopher D. Drees5, Former Executive Vice President and President, Mercury Marine |
| 2022 | $549,231 | $ - | $1,199,972 | $326,700 | $ - | $155,929 | $2,231,832 |
| 2021 | $514,615 | | $899,807 | $727,900 | | $95,801 | $2,238,123 |
| 2020 | $491,346 | | $800,240 | $528,400 | | $83,679 | $1,903,665 |
| Christopher F. Dekker6, Executive Vice President, General Counsel, Secretary and Chief Compliance Officer |
| 2022 | $519,615 | $ - | $799,977 | $310,600 | $ - | $154,451 | $1,784,643 |
| 2021 | $499,750 | | $799,624 | $706,900 | | $121,239 | $2,127,513 |
| Brenna D. Preisser, Executive Vice President, Strategy and President, Business Acceleration | | |
| 2022 | $521,442 | $ - | $799,977 | $311,700 | $ - | $146,530 | $1,779,649 |
| 2021 | $499,615 | | $799,624 | $706,700 | | $123,906 | $2,129,845 |
| 2020 | $442,231 | | $800,240 | $414,600 | | $107,796 | $ 1,764,867 |
Decisions with respect to specific BPP awards, equity awards, and base salary increases for the current year are normally made at the first Compensation Committee and Board meeting of each year. At this meeting, the Compensation Committee and the Board of Directors also make decisions with respect to the prior year’s performance and BPP funding. Base salary increases are generally effective as of the first full pay period in April.
The Compensation Committee reviews and approves equity grant terms and conditions and grant size for NEOs and other senior executives at its first meeting of the year, which is generally held following our public disclosure of our financial results for the prior year.
HUMAN RESOURCES AND COMPENSATION COMMITTEE REPORT
The Compensation Committee reviewed and discussed this Compensation Discussion and Analysis with management.
Based on that review and discussion, the Compensation Committee recommended to the Board of Directors of Brunswick Corporation that the Compensation Discussion and Analysis be included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021, and the Company’s Proxy Statement to be filed in conjunction with the Company’s 2022 Annual Meeting.
| 2022 PROXY STATEMENT | 41 |
2021 SUMMARY COMPENSATION TABLE
The table below summarizes the total compensation earned by each of our NEOs for the years ended December 31, 2021 and to the extent required by the SEC’s executive compensation disclosure rules, 2020, and 2019.
| Year | Salary(1) | Bonus | Stock
Awards(2) | Non-Equity
Incentive Plan
Compensation(3) | Change in Pension
Value and Non-
Qualified Deferred
Compensation
Earnings | All Other
Compensation(4) | Total |
| DAVID M. FOULKES, Chief Executive Officer |
| 2021 | $1,077,038 | – | $5,761,310 | $2,539,000 | – | $260,058 | $9,637,406 |
| 2020 | $1,021,154 | – | $5,000,158 | $1,596,000 | – | $203,551 | $7,820,863 |
| 2019 | $997,981 | – | $3,999,847 | $676,000 | – | $166,947 | $5,840,775 |
| RYAN M. GWILLIM(5), Executive Vice President and Chief Financial Officer |
| 2021 | $536,539 | – | $999,989 | $758,900 | – | $78,949 | $2,374,377 |
| 2020 | $417,885 | – | $570,723 | $355,800 | – | $63,505 | $1,407,913 |
| CHRISTOPHER D. DREES, Executive Vice President and President, Mercury Marine |
| 2021 | $514,615 | – | $899,807 | $727,900 | – | $95,801 | $2,238,123 |
| 2020 | $491,346 | – | $800,240 | $528,400 | – | $83,679 | $1,903,665 |
| 2019 | $425,423 | – | $689,853 | $200,000 | – | $94,101 | $1,409,377 |
| BRENNA D. PREISSER(5), Executive Vice President, Strategy and President, Business Acceleration |
| 2021 | $499,615 | – | $799,624 | $706,700 | – | $123,906 | $2,129,845 |
| 2020 | $442,231 | – | $800,240 | $414,600 | – | $107,796 | $1,764,867 |
| CHRISTOPHER F. DEKKER(6), Executive Vice President, General Counsel, Secretary and Chief Compliance Officer |
| 2021 | $499,750 | – | $799,624 | $706,900 | – | $121,239 | $2,127,513 |
| 2020 | $476,558 | – | $699,873 | $446,800 | – | $117,255 | $1,740,486 |
| 2019 | $464,616 | – | $700,108 | $189,000 | – | $79,488 | $1,433,212 |
| 2022 PROXY STATEMENT | 42 |
(1) | The amounts shown in this column constitute actual base salary paid.
Annual salaries as of December 31, 20212022 were: |
| FOULKES | GWILLIM | DREES | PREISSER | DEKKER |
| $1,087,000 | $550,000 | $520,000 | $505,000 | $505,000 |
| Foulkes | Gwillim | Drees | Dekker | Preisser |
| $1,130,000 | $600,000 | $560,000 | $525,000 | $527,500 |
(2) | 2 | The amounts shown in this column constitute the aggregate grant date fair value of Restricted Stock Units and Performance Shares granted under the Brunswick Corporation 2014 Stock Incentive Plan during the applicable year, computed in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718 – Compensation – Stock Compensation (FASB ASC Topic 718). For assumptions used in the valuation of such awards, see Note 1817 to the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. The amounts reported with respect to Performance Shares are based on the probable outcome of the performance conditions as of the grant date, which is estimated at target. Had the achievement of the highest level of performance been assumed, the aggregate grant date fair value, inclusive of Monte Carlo valuation, of the 20212022 Performance Shares would be as follows: Mr. Foulkes $5,760,720;$6,844,532; Mr. Gwillim $1,000,354;$1,350,745; Mr. Drees $899,770;$1,199,401; Mr. Dekker $800,231; and Ms. Preisser $799,186; and Mr. Dekker $799,186.$800,231. |
(3) | 3 | The amounts shown in this column constitute payments made under the annual Brunswick Performance Plan (BPP). |
(4) | Executive Compensation— 2023 Proxy Statement | 61 |
| 4 | The amounts shown in the All Other Compensation column include the following for fiscal year 2021:2022: |
| | | | | | | |
| Name | Defined Contribution
Plan (Qualified)(a) | Defined Contribution
Plan (Non-Qualified)(a) | Product
Program(b) | Personal Use of
Company Aircraft(c) | Executive
Physical(d) | Total |
| | | | | | | |
| FOULKES | $24,956 | $186,079 | $5,158 | $36,667 | $7,198 | $260,058 |
| GWILLIM | $28,243 | $37,984 | $6,039 | – | $6,683 | $78,949 |
| DREES | $32,352 | $54,501 | $2,241 | – | $6,707 | $95,801 |
| PREISSER | $28,355 | $45,330 | $35,000 | $7,061 | $8,160 | $123,906 |
| DEKKER | $23,619 | $55,124 | $35,000 | – | $7,496 | $121,239 |
| Name | Defined
Contribution Plan
(Qualified)(a) | Defined
Contribution
Plan (Non-
Qualified)(a) | Product
Program(b) | Personal Use
of Company
Aircraft(c) | Executive
Physical(d) | Total |
| Foulkes | $28,895 | $283,813 | $35,000 | $15,099 | $9,328 | $372,135 |
| Gwillim | $30,057 | $77,758 | $6,830 | - | $6,677 | $121,322 |
| Drees | $29,600 | $84,066 | $35,000 | - | $7,263 | $155,929 |
| Dekker | $29,286 | $82,596 | $35,000 | - | $7,569 | $154,451 |
| Preisser | $29,571 | $74,864 | $35,000 | - | $7,095 | $146,530 |
| (a)a | Defined Plan Contributions (Qualified and Non-Qualified): Amounts contributed to the retirement contribution plan include Company match and a Retirement Profit Sharing Contribution of four percent and six percent, respectively, on qualified plan limit earnings. |
| (b)b | Product Program: Represents the utilized allowance of the Executive Product Program. For further details, please see page 40.59. |
| (c)c | Personal Use of Company Aircraft: Mr. Foulkes and Ms. Preisser utilized the Company aircraft for personal use on a limited basis in 2021.2022. This incremental cost to the Company for use of the corporate aircraft is based on the variable operational costs of all flights, including fuel, maintenance, flight crew travel expense, catering, communications, and fees, including flight planning, ground handling, and landing permits. Occasionally, a spouse or other guests may accompany officers on the Company aircraft when the aircraft is already scheduled for use and can accommodate additional passengers. In those cases, there is no aggregate incremental cost to the Company and, as a result, no additional amount is reflected in the 20212022 Summary Compensation Table for such use. |
| (d)d | Executive Physical: Represents the amount paid by Brunswick for the physical examination program available to our senior executives. For further details, please see page 40.59. |
(5) | 5 | Mr. GwillimDrees resigned his position as a Section 16 Officer effective February 7, 2023, and Ms. Preisser wereleft the Company on March 3, 2023. See the Current Report on Form 8-K filed with the SEC on February 7, 2023 for additional information. |
| 6 | Mr. Dekker was not NEOsan NEO in 2019.2020. Therefore, this table does not provide 2019include 2020 data for them. |
(6) | Mr. Dekker was not a NEO in 2020. However, he was an NEO for 2019 and therefore, 2020 compensation was included for him per disclosure rules.him. |
| 2022 PROXY STATEMENT | 43 |
2021 GRANTS OF PLAN-BASED AWARDS
| 62 | 2023 Proxy Statement — Executive Compensation | |
2022 Grants of Plan-Based Awards
| | Estimated Future Payouts Under Non-Equity
Incentive Plan Awards(1) | Estimated Future Payouts Under Equity
Incentive Plan Awards(2) | | |
| | | | | | | | | |
| | | | | | | | | |
Grant
Date | Threshold | Target | Maximum | Threshold | Target | Maximum | All Other Stock
Awards: Number
of Shares of Stock
or Units(3) | Grant Date Fair
Value of Stock
and Options
Awards(4) |
| DAVID M. FOULKES, Chief Executive Officer | | | | | |
| – | $336,575 | $1,346,298 | $2,692,596 | – | – | – | – | – |
| 2/11/21 | – | – | – | 0 | 31,500 | 63,000 | – | $2,880,360 |
| 2/11/21 | – | – | – | – | – | – | 31,760 | $2,880,950 |
| RYAN M. GWILLIM, Executive Vice President and Chief Financial Officer | | | |
| – | $100,601 | $402,404 | $804,808 | – | – | – | – | – |
| 2/11/21 | – | – | – | 0 | 5,470 | 10,940 | – | $500,177 |
| 2/11/21 | – | – | – | – | – | – | 5,510 | $499,812 |
| CHRISTOPHER D. DREES, Executive Vice President and President, Mercury Marine | | |
| – | $96,490 | $385,962 | $771,923 | – | – | – | – | – |
| 2/11/21 | – | – | – | 0 | 4,920 | 9,840 | – | $449,885 |
| 2/11/21 | – | – | – | – | – | – | 4,960 | $449,922 |
| BRENNA D. PREISSER, Executive Vice President, Strategy and President, Business Acceleration |
| – | $93,678 | $374,712 | $749,423 | – | – | – | – | – |
| 2/11/21 | – | – | – | 0 | 4,370 | 8,740 | – | $399,593 |
| 2/11/21 | – | – | – | – | – | – | 4,410 | $400,031 |
| CHRISTOPHER F. DEKKER, Executive Vice President, General Counsel, Secretary and Chief Compliance Officer |
| – | $93,703 | $374,813 | $749,625 | – | – | – | – | – |
| 2/11/21 | – | – | – | 0 | 4,370 | 8,740 | – | $399,593 |
| 2/11/21 | – | – | – | – | – | – | 4,410 | $400,031 |
| | | | | |
| | Estimated Future Payouts Under Non-Equity
Incentive Plan Awards1 | Estimated Future Payouts Under Equity
Incentive Plan Awards2 | | |
| | | | | |
Grant
Date | Threshold | Target | Maximum | Threshold | Target | Maximum | All Other Stock
Awards: Number
of Shares of
Stock or Units3 | Grant Date Fair
Value of Stock
and Options
Awards4 |
| David M. Foulkes, Chief Executive Officer |
| - | $377,468 | $1,509,871 | $3,019,743 | | | | | |
| 2/17/22 | | | | 0 | 36,180 | 72,360 | | $3,422,266 |
| 2/17/22 | | | | | | | 35,690 | $3,422,314 |
| Ryan M. Gwillim, Executive Vice President and Chief Financial Officer |
| - | $109,976 | $439,904 | $879,808 | | | | | |
| 2/17/22 | | | | 0 | 7,140 | 14,280 | | $675,373 |
| 2/17/22 | | | | | | | 7,040 | $675,066 |
| Christopher D. Drees, Former Executive Vice President and President, Mercury Marine |
| - | $102,981 | $411,923 | $823,846 | | | | | |
| 2/17/22 | | | | 0 | 6,340 | 12,680 | | $599,701 |
| 2/17/22 | | | | | | | 6,260 | $600,271 |
| Christopher F. Dekker, Executive Vice President, General Counsel, Secretary and Chief Compliance Officer |
| - | $97,428 | $389,712 | $779,423 | | | | | |
| 2/17/22 | | | | 0 | 4,230 | 8,460 | | $400,116 |
| 2/17/22 | | | | | | | 4,170 | $399,861 |
| Brenna D. Preisser, Executive Vice President, Strategy and President, Business Acceleration |
| - | $97,770 | $391,082 | $782,164 | | | | | |
| 2/17/22 | | | | 0 | 4,230 | 8,460 | | $400,116 |
| 2/17/22 | | | | | | | 4,170 | $399,861 |
(1) | 1 | Consists of threshold, target, and maximum payouts under the 20212022 BPP. |
(2) | 2 | Consists of Performance Shares awarded under the Brunswick Corporation 2014 Stock Incentive Plan. Performance Shares vest and convert to a number of shares of Brunswick Common Stock at the end of the three-year performance period determined based on the final plan performance, generally subject to the NEO’s continued employment through the end of the performance period. |
(3) | 3 | Consists of RSUs awarded under the Brunswick Corporation 2014 Stock Incentive Plan. Awards fully vest on the third anniversary of the grant date, generally subject to the NEO’s continued employment through the vesting date. |
(4) | 4 | The amounts shown in this column constitute the aggregate grant date fair value of equity awards granted under the Brunswick Corporation 2014 Stock Incentive Plan during 2021,2022, computed in accordance with FASB ASC Topic 718. For assumptions used in the valuation of such awards, see Note 1817 to the financial statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021.2022. |
| 2022Executive Compensation PROXY STATEMENT — 2023 Proxy Statement | 44 63 |
EQUITY COMPENSATION PLAN INFORMATION AND AWARDS
Brunswick granted Performance Shares and RSUs to all NEOs in 2021 pursuant to the Brunswick Corporation 2014 Stock Incentive Plan. Performance Shares are generally granted annually and, if earned, typically vest 100% at the end of a three-year performance period. Brunswick generally grants RSUs annually and they typically vest 100% on the third anniversary of the grant date. The terms of the awards reflect the use of the “Rule of 70 or Age 62” (as described below), along with the inclusion of an additional provision that would pro-rate the grant in the event of termination before December 31 in the year the grant is awarded, provided the participant had met the appropriate retirement definition in the terms and conditions of the award. Providing for a “prorated” grant serves to keep the decision about retirement timing independent of the vesting schedule of equity-based compensation. Of the NEOs, Messrs. Foulkes and Drees meet the Rule of 70 or Age 62 provision.
Please see the “Potential Payments Upon Termination or Change in Control” section on page 50 for a description of the treatment of equity awards following a qualifying termination of employment or a Change in Control.
AWARD TREATMENT UPON TERMINATION
The terms and conditions of RSUs and Performance Shares generally provide for forfeiture of the award if an executive terminates employment before the end of the vesting period, except if: the executive meets the Rule of 70 or Age 62, which is defined as either: (i) the sum of the individual’s age plus years of service is equal to or greater than 70 or (ii) the individual is age 62 or above with at least three years of consecutive service from latest hire date (the tenure requirement was new for 2020); or if the executive is involuntarily terminated (not due to Cause) and does not meet the Rule of 70 or Age 62. Details on award treatment is described in the following section.
RULE OF 70 OR AGE 62
Once an executive meets the Rule of 70 or Age 62, if employment is terminated (other than for cause or due to death or permanent disability), the applicable awards are treated as follows:
| | •Equity Compensation Plan Information and Awards
Brunswick granted Performance Shares and RSUs to all NEOs in 2022 pursuant to the Brunswick Corporation 2014 Stock Incentive Plan. Performance Shares are generally granted annually and, if earned, typically vest 100% at the end of a three-year performance period. Brunswick generally grants RSUs annually and they typically vest 100% on the third anniversary of the grant date. The terms of the awards reflect the use of the “Rule of 70 or Age 62” (as described below), along with the inclusion of an additional provision that would pro-rate the grant in the event of termination before December 31 in the year the grant is awarded, provided the participant had met the appropriate retirement definition in the terms and conditions of the award. Providing for a “prorated” grant serves to keep the decision about retirement timing independent of the vesting schedule of equity-based compensation. Of the NEOs, Messrs. Foulkes and Drees meet the Rule of 70 or Age 62 provision.
Please see the “Potential Payments Upon Termination or Change in Control” section on page 67 for a description of the treatment of equity awards following a qualifying termination of employment or a Change in Control.
Award Treatment Upon Termination
The terms and conditions of RSUs and Performance Shares generally provide for forfeiture of the award if an executive terminates employment before the end of the vesting period, except if: the executive meets the Rule of 70 or Age 62, which is defined as either: (i) the sum of the individual’s age plus years of service is equal to or greater than 70 or (ii) the individual is age 62 or above with at least three years of consecutive service from latest hire date; or if the executive is involuntarily terminated (not due to Cause) and does not meet the Rule of 70 or Age 62. Details on award treatment are described in the following section. | | Rule Of 70 or Age 62
Once an executive meets the Rule of 70 or Age 62, if employment is terminated (other than for cause or due to death or permanent disability), the applicable awards are treated as follows:
• Performance Shares: If termination occurs on or after December 31 of the year the grant is awarded, the grantee will receive the entire award at the end of the performance period, calculated as if the grantee had remained employed throughout the entire performance period and based on actual performance. If termination occurs before December 31 in the year the grant is awarded, the grantee will receive a pro-rata portion of the earned award at the end of the performance period based on actual performance. |
| • | RSUs: If termination occurs on or after December 31 of the year the grant is awarded, the entire award will be distributed three years from grant date. If termination occurs before December 31 in the year the grant is awarded, a pro-rata portion of the award will be distributed three years from grant date.
Involuntary Separation (not due to Cause)
The equity award terms and conditions provide for pro-rata vesting of outstanding equity awards earned by individuals who were involuntarily terminated (not due to Cause) by the organization and do not meet the retirement provision of Rule of 70 or Age 62. The pro-rata vesting calculation is based on the earned amount of the award determined by the length of service from the date of grant to separation date over the length of the three-year performance period and would be released at the normal release date (at the same time as active employees). This applies to both RSUs and Performance Share awards, with the earned Performance Share award released based on actual plan performance. We believe this is a fair and consistent way to treat individuals who may be separated as a result of an organization restructuring and is aligned with broader competitive practice.
Please see the “2022 Grants of Plan-Based Awards” section of this Proxy Statement for a detailed description of awards granted to the NEOs during 2022. |
INVOLUNTARY SEPARATION (not due to Cause)
| 64 | 2023 Proxy Statement — Executive Compensation | |
The equity award terms and conditions provide for pro-rata vesting of outstanding equity awards earned by individuals who were involuntarily terminated (not due to Cause) by the organization and do not meet the retirement provision of Rule of 70 or Age 62. The pro-rata vesting calculation is based on the earned amount of the award determined by the length of service from the date of grant to separation date over the length of the three-year performance period and would be released at the normal release date (at the same time as active employees). This applies to both RSUs and Performance Share awards, with the earned Performance Share award released based on actual plan performance. We believe this is a fair and consistent way to treat individuals who may be separated as a result of an organization restructuring and is aligned with broader competitive practice.
Please see the “2021 Grants of Plan-Based Awards” section of this Proxy Statement for a detailed description of awards granted to the NEOs during 2021.
| 2022 PROXY STATEMENT | 45 | table consist of RSUs and Performance Shares. | | |
2021 OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The table provides information regarding each NEO’s outstanding equity awards as of December 31, 2021. The equity awards in this table consist of Restricted Stock Units and Performance Shares.
| | | Stock Awards(1) | | |
| | | Stock Awards1 |
| | | | |
Grant
Date | Number of Shares or
Units of Stock Held
That Have Not Vested(2) | Market Value of Shares
or Units of Stock Held
That Have Not Vested | Equity Incentive Plan Awards:
Number of Unearned Shares,
Units or Other Rights That
Have Not Vested(3)(4) | Equity Incentive Plan Awards:
Market or Payout Value of Unearned
Shares, Units or Other Rights That
Have Not Vested | Number of Shares
or Units of Stock
Held That Have
Not Vested2 | Market Value of
Shares or Units of
Stock Held That
Have Not Vested | Equity Incentive Plan
Awards: Number of
Unearned Shares, Units
or Other Rights That
Have Not Vested3 4 | Equity Incentive Plan
Awards: Market or
Payout Value of
Unearned Shares, Units
or Other Rights That
Have Not Vested |
| DAVID M. FOULKES, Chief Executive Officer | | |
| 2/13/19 | 42,726 | $4,303,748 | – | |
| David M. Foulkes, Chief Executive Officer | | David M. Foulkes, Chief Executive Officer | |
| 2/13/20 | 39,807 | $4,009,786 | 68,808 | $6,931,030 | 40,596 | $2,926,171 | |
| 2/11/21 | 32,170 | $3,240,463 | 31,500 | $3,172,995 | 32,807 | $2,364,752 | 33,705 | $2,429,456 |
| RYAN M. GWILLIM, Executive Vice President and Chief Financial Officer | | |
| 2/13/19 | 2,137 | $215,293 | – | |
| 6/3/19 | 935 | $94,162 | – | |
| 2/17/22 | | 36,397 | $2,623,517 | 36,180 | $2,607,854 |
| Ryan M. Gwillim, Executive Vice President and Chief Financial Officer | | Ryan M. Gwillim, Executive Vice President and Chief Financial Officer | |
| 2/13/20 | 2,391 | $240,816 | 4,136 | $416,599 | 2,438 | $175,737 | |
| 6/17/20 | 2,265 | $228,153 | 3,953 | $398,166 | 2,310 | $166,496 | |
| 2/11/21 | 5,581 | $562,184 | 5,470 | $550,993 | 5,692 | $410,258 | 5,853 | $421,877 |
| CHRISTOPHER D. DREES, Executive Vice President and President, Mercury Marine | | |
| 2/13/19 | 3,740 | $376,763 | – | |
| 4/4/19 | 3,433 | $345,831 | – | |
| 2/17/22 | | 7,180 | $517,500 | 7,140 | $514,651 |
| Christopher D. Drees, Former Executive Vice President and President, Mercury Marine | | Christopher D. Drees, Former Executive Vice President and President, Mercury Marine | |
| 2/13/20 | 6,368 | $641,483 | 11,017 | $1,109,702 | 6,495 | $468,127 | |
| 2/11/21 | 5,024 | $506,067 | 4,920 | $495,592 | 5,124 | $369,306 | 5,264 | $379,458 |
| BRENNA D. PREISSER, Executive Vice President, Strategy and President, Business Acceleration | |
| 2/13/19 | 7,481 | $753,525 | – | |
| 2/17/22 | | 6,384 | $460,163 | 6,340 | $456,987 |
| Christopher F. Dekker, Executive Vice President, General Counsel, Secretary and Chief Compliance Officer | | Christopher F. Dekker, Executive Vice President, General Counsel, Secretary and Chief Compliance Officer |
| 2/13/20 | 6,368 | $641,483 | 11,017 | $1,109,702 | 5,685 | $409,800 | |
| 2/11/21 | 4,467 | $449,951 | 4,370 | $440,190 | 4,555 | $328,355 | 4,676 | $337,039 |
| CHRISTOPHER F. DEKKER, Executive Vice President, General Counsel, Secretary and Chief Compliance Officer | |
| 2/13/19 | 7,481 | $753,525 | – | |
| 2/17/22 | | 4,253 | $306,530 | 4,230 | $304,898 |
| Brenna D. Preisser, Executive Vice President, Strategy and President, Business Acceleration | | Brenna D. Preisser, Executive Vice President, Strategy and President, Business Acceleration |
| 2/13/20 | 5,575 | $561,557 | 9,626 | $969,607 | 6,495 | $468,127 | |
| 2/11/21 | 4,467 | $449,951 | 4,370 | $440,190 | 4,555 | $328,355 | 4,676 | $337,039 |
| 2/17/22 | | 4,253 | $306,530 | 4,230 | $304,898 |
(1)1 | The market value of shares or units of stock that have not vested reflects a stock price of $100.73,$72.08, the Company’s closing stock price on December 31, 2021.30, 2022. |
(2)2 | RSU grants vest 100% on the third anniversary of the date of grant. Amounts include reinvested dividends. |
(3)3 | 20202021 Performance Share awards are subject to a three-year performance period and may be subject to additional modification of +/- 20% based on TSR performance against the established peer group, as described in the Compensation Discussion & Analysis. The number of shares listed are based on performance through December 31, 2021.2022. |
(4)4 | 20212022 Performance Share awards are subject to a three-year performance period and may be subject to additional modification of +/- 20% based on TSR performance against the established peer group, as described in the Compensation Discussion & Analysis. The number of shares listed are based on target performance. |
| 2022Executive Compensation PROXY STATEMENT — 2023 Proxy Statement | 46 65 |
How can I PARTICIPATE IN THE ANNUAL MEETING?participate in the Annual Meeting? |
To participate in the Annual Meeting, including to vote your shares electronically and submit questions, you will need the 16-digit control number included on your proxy card or on your Notice. If you do not have your control number at the time of the meeting, you will still be able to attend virtually, but you will not be able to vote or ask questions. During the 30 minutes prior to the meeting start time and throughout the meeting, you will be able to vote and submit questions to management through the virtual meeting website. Management will try to respond to questions from shareholders in the same way as it would if we held an in-person meeting. We do not place restrictions on the type or form of questions that may be asked; however, we reserve the right to edit or reject redundant questions or questions that we deem inappropriate. We will generally answer questions as they come in and address those asked in advance as time permits. Shareholders will be limited to one question each, unless time otherwise permits.
WHO WILL COUNT THE VOTES?Who will count the votes? |
Brunswick’s tabulator, Broadridge Financial Solutions, Inc., will count the votes. Representatives of Brunswick’s Law Department will act as inspectors of election.
| 2022 PROXY STATEMENT | 59 |
How do I vote?
FREQUENTLY ASKED QUESTIONS ABOUT THE MEETING
 | |  |
BY INTERNET
www.proxyvote.com
By 11:59 p.m. EDT on May 3, 2022
| | BY PHONE
1-800-690-6903
By 11:59 p.m. EDT on May 3, 2022
|
| | |
 | |  |
BY MAIL
Completing, signing, and
returning your proxy or voting
instruction card
To arrive by May 3, 2022
| | ANNUAL MEETING
www.virtualshareholdermeeting.com/
BC2022
May 4, 2022
beginning at 8:30 a.m. CDT
|
If you hold your shares through a broker, bank, or other nominee, that institution will instruct you as to how your shares may be voted by proxy, including whether telephone or Internet voting options are available.
If you hold any shares in the Brunswick Retirement Savings Plan or the Brunswick Rewards Plan, you must direct the trustee of these plans how to vote these shares by following the instructions on your Notice for voting by telephone at 1-800-690-6903 or via the Internet at www.proxyvote.com, or by signing, dating, and mailing in a proxy card. The deadline for voting shares held in the Brunswick Retirement Savings Plan or the Brunswick Rewards Plan is 11:59 p.m. EDT on April 29, 2022.28, 2023. The trustee will vote these shares as you direct. The trustee will vote allocated shares of Common Stock for which proxies are not received in direct proportion to voting by allocated shares for which proxies are received.
CANCan I CHANGE MY VOTE AFTERchange my vote after I HAVE VOTED?have voted? |
You may revoke your proxy and change your vote at any time before the final vote at the Annual Meeting, including voting via the Internet or by telephone (only your latest Internet or telephone proxy that is timely submitted prior to the meeting will be counted), by signing and returning a new proxy card with a later date, or by participating in and voting at the Annual Meeting. However, your attendance at the Annual Meeting will not automatically revoke your proxy unless you vote again at the meeting or specifically request in writing that your prior proxy be revoked.
HOW WILL MY SHARES BE VOTED IFHow will my shares be voted if I SIGN, DATE, AND RETURN A PROXY CARD?sign, date, and return a proxy card? |
If you sign, date, and return a proxy card and indicate how you would like your shares to be voted, your shares will be voted as you have instructed. If you sign, date, and return a proxy card but do not indicate how you would like your shares to be voted, your proxy will be voted in accordance with the Board’s recommendations. With respect to any other matter that is properly brought before the meeting, the proxy holders will vote the proxies held by them in accordance with their best judgment.
WHAT ARE THE BOARD’S RECOMMENDATIONS? | Frequently Asked Questions— 2023 Proxy Statement | 101 |
| What are the Board’s recommendations? |
PROPOSALProposal 1:
| FOR each
nominee |  |
Election of Directors Named in the Attachedthis Proxy Statement | | |
PROPOSAL 2:
| | |
| Proposals 2a-2c: | | |
| | |
| Approval of Amendments to our Restated Certificate of Incorporation (Charter) to: | | |
| ● 2a Include Officer Exculpation | FOR | |
| ● 2b Clarify, Streamline, and Modernize the Charter | FOR | |
| ● 2c Eliminate Outdated Language | FOR | |
| | |
| Proposal 3: | | |
| | |
| Advisory Vote to Approve the Compensation of our Named Executive Officers | | |
PROPOSAL 3:
| | |
| Proposal 4: | | |
| | |
| Advisory Vote on the Frequency of the Advisory Vote on Executive Compensation | ONE YEAR | |
| | |
| Proposal 5: | | |
| | |
| Approval of the Brunswick Corporation 2023 Stock Incentive Plan | FOR | |
| | |
| Proposal 6: | | |
| | |
Ratification of the Appointment of Independent Registered Public Accounting Firm for the Fiscal Year Ending December 31, 20222023 | | |
WHAT VOTE IS REQUIRED TO APPROVE EACH MATTER TO BE CONSIDERED AT THE ANNUAL MEETING? | | |
ELECTION OF DIRECTORS.
| What vote is required to approve each matter to be considered at the Annual Meeting? |
Election of Directors
Brunswick has adopted a majority voting standard for the uncontested election of Directors and, therefore, the Director nominees shall be elected to the Board of Directors if they each receive a majority of the votes cast via the Internet or by proxy at the Annual Meeting. Abstentions and broker non-votes will have no effect on the voting results. Under Brunswick’s majority voting standard for uncontested elections, if the number of votes cast “For” a Director nominee’s election does not exceed the number of votes cast “Against” election, then the Director nominee must tender his or her resignation from the Board promptly
after certification of the shareholders’ vote. The Board will decide within 120 days of that certification, through a process managed by the Nominating and Corporate Governance Committee and excluding the Director nominee in question, whether to accept the resignation. Because Brunswick has adopted a majority voting standard for the uncontested election of Directors, abstentions will have no effect on the election of Director nominees. If any one or more of the Director nominees is unable to serve, votes will be cast, pursuant to authority granted by the enclosed proxy, for the alternate individual or individuals the Board designates.
ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.Approval of Amendments to Our Charter to Include Officer Exculpation
The affirmative vote of the holders of a majority of all of the outstanding shares of our Common Stock entitled to vote will be required for the approval of the amendment. Because approval of this resolution requires the affirmative vote of a majority of our outstanding shares, abstentions and broker non-votes will have the same effect as votes against approval.
Approval of Amendments to Our Charter to Clarify, Streamline, and Modernize the Charter
The affirmative vote of the holders of a majority of all of the outstanding shares of our Common Stock entitled to vote will be required for the approval of the amendments. Because approval of this resolution requires the affirmative vote of a majority of our outstanding shares, abstentions and broker non-votes will have the same effect as votes against approval.
Approval of Amendments to Our Charter to Eliminate Outdated Language
The affirmative vote of the holders of 80% of the outstanding shares entitled to vote in elections of Directors will be required for the approval of the Amendment. Because approval of this resolution requires a supermajority vote of the shares entitled to vote in the elections of directors, abstentions and broker non-votes will have the same effect as votes against approval.
| 102 | 2023 Proxy Statement — Frequently Asked Questions | |
Advisory Vote to Approve the Compensation of our Named Executive Officers
The affirmative vote of the holders of a majority of the shares having voting power and represented at the Annual Meeting will be required for the approval of the non-binding resolution relating to the compensation of our Named Executive Officers (NEOs). Because approval of this resolution requires a majority of the shares having voting power and represented at the Annual Meeting, abstentions will have the same effect as votes against approval. Broker non-votes will have no impact on the voting results.
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM.Advisory Vote on the Frequency of the Advisory Vote on Executive Compensation
Shareholders will have four choices with respect to this proposal: one year, two years, three years, or you may abstain from voting on the proposal. The frequency receiving the greatest number of votes will be considered the frequency that shareholders approve. Abstentions and broker non-votes will have no impact on the voting results.
Approval of the Brunswick Corporation 2023 Stock Incentive Plan
The affirmative vote of the holders of a majority of the shares having voting power and represented at the Annual Meeting will be required for the approval of the 2023 Stock Incentive Plan. Because approval of this resolution requires a majority of the shares having voting power and represented at the Annual Meeting, abstentions will have the same effect as votes against approval. Broker non-votes will have no impact on the voting results.
Ratification of the Appointment of Independent Registered Public Accounting Firm
The affirmative vote of the holders of a majority of the shares having voting power and represented at the Annual Meeting will be required for the ratification of the Audit and Finance Committee’s
| 2022 PROXY STATEMENT | 60 |
FREQUENTLY ASKED QUESTIONS ABOUT THE MEETING
appointment of Deloitte as Brunswick’s independent registered public accounting firm for the fiscal year ending December 31, 2022.2023. Because the ratification of the independent registered public accounting
firm requires a majority of the shares having voting power and represented at the Annual Meeting, abstentions will have the same effect as votes against ratification. Because we expect that brokers will have discretionary authority to vote on this proposal, we do not expect any broker non-votes.
WHAT CONSTITUTES A QUORUM?What constitutes a quorum? |
The Annual Meeting will be held only if a quorum is present. A quorum will be present if a majority of the shares of Common Stock issued and outstanding on the Record Date are represented, via the Internet or by proxy, at the Annual Meeting. Shares represented by properly completed proxy cards or ballots marked “Abstain” or returned without voting instructions are counted as present for the purpose of determining whether a quorum is present.
HOW WILL BROKER NON-VOTES BE TREATED?What is a broker non-vote? |
Broker non-votes occur when a broker lacks discretionary authority to vote on a proposal and the beneficial owner has not provided instructions about how to vote. Brunswick will treat broker non-votes as present to determine whether or not there is a quorum at the Annual Meeting, but they will not be treated as having voting power on the proposals, if any, for which the broker indicates it does not have discretionary authority. This means that broker non-votes will not have any effect on whether a proposal passes.passes, except for the approval of the amendments to our Charter (Proposals 2a-2c). For these proposals, a broker non-vote will have the same impact as a vote against approval of each such proposal.
We expect that brokers will have discretionary authority with respect to the proposal to ratify the appointment of our independent registered public accounting firm but will lack discretionary authority with respect to the election of Directors and the advisory vote to approve the compensation of our Named Executive Officers.other proposals. Accordingly, broker non-votes may occur as to these twothe other proposals.
WILL MY VOTE BE KEPT CONFIDENTIAL?Will my vote be kept confidential? |
Yes. As a matter of policy, shareholder proxies, ballots, and tabulations that identify individual shareholders are kept confidential and are available only to our tabulator and inspectors of election, who are obligated to keep your vote confidential.
| Frequently Asked Questions— 2023 Proxy Statement | 103 |
WHAT IF OTHER MATTERS COME UP DURING THE ANNUAL MEETING?What if other matters come up during the
Annual Meeting? |
If any matters other than those referred to in the Notice properly come before the meeting, the individuals named in the accompanying form of proxy will vote the proxies held by them in accordance with their best judgment. We are not aware of any business other than the items referred to in the Notice that may be considered at the meeting.
WHO PAYS TO PREPARE, MAIL, AND SOLICIT THE PROXIES?Who pays to prepare, mail, and solicit
the proxies? |
Brunswick pays all of the costs of preparing, mailing, and soliciting proxies. We ask brokers, banks, voting trustees, and other nominees and fiduciaries to forward notices and, when requested, proxy materials to the beneficial owners and to obtain authority to execute proxies. We reimburse the brokers, banks, voting trustees, and other nominees and fiduciaries upon request. In addition to solicitation by mail, telephone, facsimile, Internet, or personal contact by our designated officers and employees (who will not receive additional compensation for their solicitation efforts), we have retained the services of Georgeson Inc. to solicit proxies for a fee of $11,000 plus expenses.
WHY DIDWhy did I RECEIVE A ONE-PAGE NOTICE IN THE MAIL REGARDING THE INTERNET AVAILABILITY OF PROXY MATERIALS INSTEAD OF A FULL SET OF PRINTED PROXY MATERIALS?receive a one-page notice in the
mail regarding the Internet availability of
proxy materials instead of a full set of
printed proxy materials? |
Pursuant to SEC rules, we are providing access to our proxy materials via the Internet and have elected to use the SEC’s Notice and Access Rules for soliciting proxies. Accordingly, we are sending a Notice to all of our shareholders as of the Record Date. All shareholders may access our proxy materials on the website referred to
in the Notice. You may also request to receive a printed set of the proxy materials. You can find instructions regarding how to access our proxy materials via the Internet and how to request a printed copy in the Notice. Additionally, by following the instructions in the Notice, you may request to receive proxy materials in printed form by mail or electronically by email on an ongoing basis. Choosing to receive your future proxy materials by email will save us the cost of printing and mailing documents to you and will reduce the impact of our Annual Meetings on the environment. If you choose to receive future proxy materials by email, you will receive an email next year with instructions containing a link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will remain in effect until you terminate it.
MULTIPLE INDIVIDUALS RESIDING IN MY HOME ARE BENEFICIAL OWNERS OF SHARES OF COMMON STOCK. WHY DID WE RECEIVE ONLY ONE MAILING?Multiple individuals residing in my home are beneficial owners of shares of Common Stock. Why did we receive only one mailing? |
Brunswick is sending only one envelope with multiple Notices to you if you share a single address with another shareholder, unless we have received instructions to the contrary from you. This practice, known as “householding,” is designed to eliminate duplicate mailings, conserve natural resources, and reduce our printing and mailing costs. We will promptly deliver a separate Notice to you upon written or verbal request. If you wish to receive separate mailings in the future, you may contact Brunswick Shareholder Services by telephone at 847-735-4374, by mail at 26125 N. Riverwoods Blvd., Ste 500, Mettawa, Illinois 60045, or by email at services@brunswick.com.shareholders.services@brunswick.com. If you currently receive multiple Notices, you can request householding by contacting Shareholder Services as described above. If you own your shares through a broker, bank, or other nominee, you can request householding by contacting the holder of record.
| 104 | 2023 Proxy Statement — Frequently Asked Questions | |
Appendix A
Amended and Restated Charter
Amended and Restated Certificate
of Incorporation of
BRUNSWICK CORPORATION
Under Section 245 of the Delaware
Corporation Law
We, Frederick J. Florjancic, Jr., Vice President-Finance, and Dianne M. Yaconetti, Secretary, of Brunswick Corporation do hereby certify as follows:
FIRST. That theThe presentname of the Corporationcorporationis Brunswick Corporation and (the name under which the”Corporation”). TheCorporation was originally incorporated is under the name “The Brunswick-Balke-Collender Company.
“ by SECOND. That the the filingof its original Certificate of Incorporation of the Corporation was filed bywiththe Secretary of State, Dover,of the State ofDelaware, on the 31st day of December 31, 1907. This Amended andRestated Certificate of Incorporation of THIRD. That the restatement of theCorporation (this “Restated Certificate”), which restates and integrates and also further amends the provisions of the Corporation’s RestatedCertificate of Incorporation has been, wasduly adopted in accordance with the provisions of SectionSections 242 and245 of the General Corporation Law of the State of Delaware by the Board of Directors of the Corporation.. The RestatedFOURTH. That the text of the Certificate of Incorporation of BrunswicktheCorporation, asis herebyamended, is herebyintegrated andrestated without further amendment by this Certificate, to read in fullits entiretyas follows:
FIRST. The name of this Corporation is BRUNSWICK CORPORATION.
SECOND. The location of its registered office in the State of Delaware is Corporation Trust Center, 1209 Orange Street in theUnited Agent Group, 3411 Silverside Road, Tatnall Building #104,City of Wilmington, County of New Castle. The name of its agent therein and in charge thereof, and upon whom legal process against this Corporation may be served is The Corporation Trust CompanyUnited Agent Group.
THIRD. The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.
| 106 | 2023 Proxy Statement — Appendix A | |
THIRD. The objects and purposes for which and for any of which this Corporation is formed, are, to do any or all of the things herein set forth, to the same extent as natural persons might or could do, namely, to carry on any business as manufacturers, dealers, importers, exporters, both wholesale and retail, in the manufacture, construction, purchase and sale of billiard and pool tables, bowling alleys, refrigerators; bank, office, saloon and store fixtures; equipments and appliances and all articles or things connected with or incidental to the manufacture, sale or use of any or all of the foregoing articles or products, or kinds of business; the manufacture, construction, purchase and sale of furniture and fixtures for schools, churches, lodges and club rooms, opera houses, concert halls, private or public halls or places, theatres and the like; the manufacture, construction, purchase and sale of cabinet work of all descriptions and materials incident to the same; the manufacture, construction, purchase and sale of furniture and fixtures of every nature, character and description; the manufacture, construction, purchase and sale of ivory, ivory balls, marble, mirrors, slate and the operation and ownership of slate quarries, cues, rubber goods, cloths and supplies and material of every description incident to, or used and employed in connection with each and every article or product above named, or the business connected therewith; and also the acquiring and disposing of rights to make and use any or all such goods and materials and products, and the doing and transacting of all acts, businesses and things incident to, relating to or convenient in carrying out the purposes and businesses and dealings aforesaid; the carrying on in any capacity of the business of manufacturing and dealing in and with phonographs, phonograph supplies, records, radios, radio supplies, and combination phonographs and radios, pianos and musical instruments, electrical instruments and appliances of all kinds, and any and all articles of every kind, nature and description used in the manufacture of or in connection with any of the above referred to articles, and generally to engage in manufacturing or merchandising business of every kind, nature and description, and to do any and all acts necessary or required or deemed expedient or advisable in connection with any manufacturing or merchandising business; and for any or all of the above named purposes or businesses to acquire by purchase, lease or otherwise and hold such land, slate quarries, buildings, tools, implements, machinery or other property in any of the States or Territories of the United States, the District of Columbia, the Colonies of the United States, or in any and all foreign countries subject to the laws of such States, Districts, Territories, Colonies or Foreign countries, as may be necessary or proper to carry on any or all of the various kinds of business above set forth; and, if necessary or proper for the carrying on of any or all of the said various kinds of manufacture, dealings and business, to sell, mortgage or lease or otherwise dispose of or encumber, any of the lands, buildings, tools, implements, machinery or other property owned or acquired by this Company;
To apply for, obtain, register, purchase, lease or otherwise to acquire and to hold, use, own, operate and introduce and to sell, assign or otherwise dispose of any trademarks, trade names, patents, inventions, improvements and processes used in connection with or held under Letters Patent of the United States, or elsewhere, which may be used in connection with or appertaining to any kind of business hereinbefore set forth and described; and to use, exercise, develop, grant licenses in respect of, or otherwise to turn to account any such trademarks, trade names, patents, licenses, processes and the like, or any such property or rights;
To acquire by purchase or otherwise, and hold and own, all or any part of the assets, rights, franchises, goodwill or property of any kind, of any person, firm, association or corporation engaged in a business similar to any of the various kinds of business above set forth;
To guarantee, purchase, hold, own, sell, assign, transfer, mortgage, pledge, or otherwise dispose of shares of the capital stock or any bonds, securities or evidence of indebtedness created by any other corporation or corporations of this state or of any other state, country, nation or government as the laws of the State of Delaware may permit, and while owner of said stock to exercise all the rights, powers and privileges of ownership, including the right to vote thereon;
| Appendix A— 2023 Proxy Statement | 107 |
To enter into, make, perform and carry out contracts of every kind for any lawful purpose, without limit as to amount, with any person, firm, association or corporation;
To draw, make, accept, endorse, discount, execute and issue promissory notes, bills of exchange, warrants and other negotiable or transferable instruments;
To issue bonds, debentures, or obligations of this Corporation from time to time, for any of the objects or purposes of the Corporation, and to secure the same by mortgage, pledge, deed of trust, or otherwise;
To purchase, hold and re-issue the shares of itsCapital Stock;
To have one or more offices to carry on all or any of its operations and business, and without restriction or limit as to amount; and to conduct and carry on any or all of its said kinds of business within any of the states or territories of the United States of America and the District of Columbia, within the Dominion of Canada or any of its Provinces, within the Republic of Mexico and the Republic of Cuba, or in any other foreign country, always subject, however, to the laws of the states, territories, provinces or countries in which said business is conducted;
The foregoing clauses shall be construed both as objects and powers, and it is hereby expressly provided that the foregoing enumeration of specific powers shall not be held to limit or restrict in any manner the powers of this Corporation;
In general, to carry on any other business in connection with the foregoing and with the aforesaid kinds of business, whether manufacturing, or otherwise, and to have and exercise all the powers conferred by the laws of Delaware upon corporations formed under the act of the State of Delaware, herein referred to.
FOURTH. The total number of shares of Capital Stock that may be issued by the Corporation is Two Hundred Twelve Million Five Hundred Thousand (212,500,000) shares of which Two Hundred Million (200,000,000) shares shall be Common Stock with a par value of $.75 per share and Twelve Million Five Hundred Thousand (12,500,000) shares shall be Preferred Stock with a par value of $.75 per share. All the Common Stock and Preferred Stock heretofore authorized shall be converted from no par value to a par value of $.75 per share..
No holder of stock of any class, now or hereafter authorized, shall have any preemptive right to subscribe for or purchase, or to have offered to him for subscription or purchase, stock of any class, securities convertible into stock of any class, or warrants or other evidences of optional rights to purchase stock of any class, whether issued for cash or other consideration.
The designations and the powers, preferences and rights, and the qualifications, limitations or restrictions thereof shall be as follows:
A.
COMMON STOCK
1.
Dividend Rights
Subject to the prior rights of the holders of all classes of stock at the time outstanding having prior rights as to dividends, the holders of the Common Stock shall be entitled to receive, when and as declared by the Board of Directors, out of the assets of the Corporation legally available therefor, such dividends as may be declared from time to time by the Board of Directors.
2.
Liquidation Rights
Upon the voluntary or involuntary dissolution, liquidation or winding-up of the Corporation, after the payment in full of all preferential amounts to which the holders of all classes of stock at the time outstanding having prior rights thereto shall be entitled, the remainder of the assets of the Corporation shall be distributed equally among the shares of Common Stock at the time outstanding.
3.
Voting Rights
At all meetings of the stockholders, each holder of record of Common Stock shall be entitled to vote and shall have one vote for each share held by him of record.
B.
PREFERRED STOCK
The Board of Directors of the Corporation shall have authority to fix by resolution or resolutions in accordance with the laws of the State of Delaware, the designations and the powers, preferences and rights, and the qualifications, limitations or restrictions of the Preferred Stock, including (without limitation) the authority to issue from time to time one or more series of the Preferred Stock and to fix any dividend, liquidation, redemption, voting or conversion characteristics of the Preferred Stock and of any series thereof.
| 108 | 2023 Proxy Statement — Appendix A | |
FIFTH. [Reserved.]
FIFTH. The names and places of residence of each of the original subscribers to the Capital Stock, and the number of shares subscribed for by each, are as follows:
| Name | Residence | Number of Shares |
| B. E. Bensinger | Chicago, Illinois | Three(3) |
| Julius Balke | Chicago, Illinois | Three(3) |
| A. F. Troescher | New York, New York | Three(3) |
| R. F. Balke | Cincinnati, Ohio | Three(3) |
| B. H. Brunswick | Cincinnati, Ohio | Three(3) |
| H. W. Davis | Wilmington, Delaware | Three(3) |
| Joseph Wilby | Cincinnati, Ohio | Three(3) |
SIXTH. This Corporation is to have perpetual existence.
SEVENTH. The private property of the stockholders shall not be subject to the payment of corporation debts to any extent whatever.
EIGHTH. In addition to any approval of the Board of Directors or any stockholder vote or consent required by the laws of the State of Delaware or any other provision of this Certificate of Incorporation in effect at the time of the adoption or authorization of a Business Combination, there shall be required for the adoption or authorization of a Business Combination with an Interested Person the affirmative vote or consent of the holders of two-thirds of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Eighth, which are not beneficially owned, directly or indirectly, by such Interested Person.
For purposes of this Article Eighth:
A “person” is any individual, corporation or other entity.
An “Interested Person” is any person which, as of the record date for the determination of stockholders entitled to notice of a proposed Business Combination and to vote thereon or consent thereto, or as of the date of any such vote or consent, or immediately prior to the consummation of the Business Combination, beneficially owns, directly or indirectly, five per cent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Eighth.
“Shares of stock of the Corporation entitled to vote in elections of directors” are shares of stock that (1) are generally entitled to vote in elections of directors and not only under special circumstances such as, for example, the default in the payment of dividends on Preferred Stock and (2) if a vote is taken at any stockholders’ meeting at which directors are not being elected, such shares as would have been entitled to vote in the election of directors at such meeting, if directors were being elected.
A “Business Combination” is any merger or consolidation of the Corporation or any subsidiary of the Corporation with or into any other corporation, or the sale or lease of all or any substantial part of the assets of the Corporation or any subsidiary of the Corporation to any other person, or any sale or lease to the Corporation, or any subsidiary of the Corporation, in exchange for securities of the Corporation, of any assets (except assets having an aggregate fair market value of less than $5 million) of any other person.
A person shall be deemed to be the “beneficial owner” of shares of stock of the Corporation (other than shares of the Corporation’s stock held in its treasury) (1) which such person and its affiliates and associates beneficially own, directly or indirectly, whether of record or not, (2) which such person or any of its affiliates or associates has the right to acquire pursuant to any agreement, upon the exercise of conversion rights, warrants or options, or otherwise, (3) which such person or any of its affiliates or associates has the right to sell or vote pursuant to any agreement or (4) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its affiliates or associates has any agreement, arrangement or understanding for the purposes of acquiring, holding, voting or disposing of securities of the Corporation.
An “affiliate” of a specified person is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person.
| Appendix A— 2023 Proxy Statement | 109 |
An “associate” of a specified person is (1) any person of which such specified person is an officer or partner or is, directly or indirectly, the beneficial owner of ten per cent (10%) or more of any class of equity securities, (2) any trust or other estate in which such specified person owns ten per cent (10%) or more of the total beneficial interest or as to which such specified person serves as trustee or in a similar fiduciary capacity, (3) any relative or spouse of such specified person, or any relative of such spouse, who has the same home as such specified person, (4) any person who is a director or officer of such specified person or any corporation which controls or is controlled by such specified person or (5) any other member or partner in a partnership, limited partnership, syndicate or other group, formal or informal, of which such specified person is a member or partner and which is acting together for the purpose of acquiring, holding or disposing of securities of the Corporation.
A “subsidiary” of the Corporation is any corporation fifty per cent (50%) or more of the voting securities of which are beneficially owned, directly or indirectly, by the Corporation.
For the purpose of determining whether a person is the beneficial owner of five percent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, the outstanding stock of the Corporation shall include shares deemed owned pursuant to the provisions of clause (2) of the definition of “beneficial owner” but shall not include any other shares which may be issuable pursuant to any agreement or upon the exercise of any conversion rights, warrants or options, or otherwise, or shares owned by the Corporation or any subsidiary of the Corporation.
The provisions of this Article Eighth shall not apply: (1) to any Business Combination with an Interested Person if the Board of Directors of the Corporation shall by resolution have approved a memorandum of understanding with such person of the substantive terms of such Business Combination, which terms are in substance consistent with such Business Combination, prior to the time such other person becomes the beneficial owner, directly or indirectly, of five per cent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Eighth, or (2) to any Business Combination with an Interested Person at any time when the number of holders of record of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Eighth, is less than three hundred persons.
A Business Combination not with an Interested Person shall be governed by the other relevant provisions of this Certificate of Incorporation and the laws of the State of Delaware in effect at the time of such Business Combination.
No amendment to this Certificate of Incorporation shall amend, alter, change or repeal any of the provisions of this Article Eighth unless such amendment, in addition to receiving any stockholder vote or consent required by the laws of the State of Delaware in effect at the time, shall receive the affirmative vote or consent of the holders of two-thirds of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Eighth, which are not beneficially owned, directly or indirectly, by any person which, as of the record date for the determination of stockholders entitled to notice of a proposed amendment or as of the date of any such vote or consent, beneficially owns, directly or indirectly, five per cent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Eighth.
NINTH. In addition to any approval of the Board of Directors or any stockholder vote or consent required by the laws of the State of Delaware or any other provision of this Certificate of Incorporation in effect at the time of the adoption or authorization of a Business Combination, there shall be required for the adoption or authorization of a Business Combination with an Interested Person that the following two conditions shall be fulfilled:
A.
A majority of the Board of Directors shall consist of Disinterested Directors and a majority of such Disinterested Directors shall select two independent experts which experts shall conclude that the terms of the Business Combination are fair to the holders of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Ninth, which are not beneficially owned, directly or indirectly, by such Interested Person, including as one of the factors that such experts shall take into account that such stockholders receive thereby their proportionate share of the economic benefits which reasonably can be foreseen from the Business Combination. The Corporation shall pay the reasonable fees and expenses associated with the retention of such experts.
B.
A proxy statement responsive to the requirements of the Securities Exchange Act of 1934 shall be mailed to the stockholders of the Corporation for the purpose of soliciting stockholder approval of such Business Combination which shall contain, as exhibits or otherwise, the entire opinions (rendered in accordance with the requirements of paragraph A of this Article Ninth) of such two independent experts as to the fairness of the terms of the Business Combination to the holders of the outstanding shares of stock entitled to vote in elections of directors, considered separately for purposes of this Article Ninth, which are not beneficially owned, directly or indirectly, by such Interested Person.
| 110 | 2023 Proxy Statement — Appendix A | |
For purposes of this Article Ninth:
A “person” is any individual, corporation or other entity.
An “Interested Person” is any person which, as of the record date for the determination of stockholders entitled to notice of a proposed Business Combination and to vote thereon or consent thereto, or as of the date of any such vote or consent, or immediately prior to the consummation of the Business Combination, beneficially owns, directly or indirectly, five per cent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Ninth.
“Shares of stock of the Corporation entitled to vote in elections of directors” are shares of stock that (1) are generally entitled to vote in elections of directors and not only under special circumstances such as, for example, the default in the payment of dividends on Preferred Stock and (2) if a vote is taken at any stockholders’ meeting at which directors are not being elected, such shares as would have been entitled to vote in the election of directors at such meeting if directors were being elected.
A “Business Combination” is any merger or consolidation of the Corporation or any subsidiary of the Corporation with or into any other corporation, or the sale or lease of all or any substantial part of the assets of the Corporation or any subsidiary of the Corporation to any other person, or any sale or lease to the Corporation, or any subsidiary of the Corporation, in exchange for securities of the Corporation, of any assets (except assets having an aggregate fair market value of less than $5 million) of any other person.
A person shall be deemed to be the “beneficial owner” of shares of stock of the Corporation (other than shares of the Corporation’s stock held in its treasury) (1) which such person and its affiliates and associates beneficially own, directly or indirectly, whether of record or not, (2) which such person or any of its affiliates or associates has the right to acquire pursuant to any agreement, upon the exercise of conversion rights, warrants or options, or otherwise, (3) which such person or any of its affiliates or associates has the right to sell or vote pursuant to any agreement or (4) which are beneficially owned, directly or indirectly, by any other person with which such first mentioned person or any of its affiliates or associates has any agreement, arrangement or understanding for the purposes of acquiring, holding, voting or disposing of securities of the Corporation.
An “affiliate” of a specified person is a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such specified person.
An “associate” of a specified person is (1) any person of which such specified person is an officer or partner or is, directly or indirectly, the beneficial owner of ten per cent (10%) or more of any class of equity securities, (2) any trust or other estate in which such specified person owns ten per cent (10%) or more of the total beneficial interest or as to which such specified person serves as trustee or in a similar fiduciary capacity, (3) any relative or spouse of such specified person, or any relative of such spouse, who has the same home as such specified person, (4) any person who is a director or officer of such specified person or any corporation which controls or is controlled by such specified person or (5) any other member or partner in a partnership, limited partnership, syndicate or other group, formal or informal, of which such specified person is a member or partner and which is acting together for the purpose of acquiring, holding or disposing of securities of the Corporation.
A “subsidiary” of the Corporation is any corporation fifty per cent (50%) or more of the voting securities of which are beneficially owned, directly or indirectly, by the Corporation.
A “Disinterested Director” is a Director of the Corporation who (1) is not and never has been an officer or director of an Interested Person or any affiliate or associate of such Interested Person and is not and has not been for the past five years an employee of an Interested Person or any affiliate or associate of such Interested Person; (2) does not beneficially own, directly or indirectly, the lesser of one per cent (1%) or 10,000 shares of any class of equity securities of an Interested Person or any affiliate or associate of such Interested Person; (3) is not the settlor of any trust, and does not serve as the trustee, executor or in a similar capacity for any trust or estate, which beneficially owns, directly or indirectly, the lesser of one per cent (1%) or 10,000 shares of any class of equity securities of an Interested Person or any affiliate or associate of such Interested Person; (4) has not and does not provide services, and is not a partner, officer or stockholder of any firm or business which has or does provide services, for an Interested Person or any affiliate or associate of such Interested Person for which compensation was received in an aggregate amount greater than $10,000 in any of the past three years; (5) is not the relative of any person or of the spouse of such person who could not be a Disinterested Director because of any of the provisions of clauses (1), (2), (3) or (4) above who has the same home as such person; (6) is not the spouse, brother, sister, son, daughter, father or mother of any person who could not be a Disinterested Director because of any of the provisions of clauses (1), (2), (3) or (4) above; and (7) is not otherwise by reason of past, present or anticipated circumstances unable to act solely in the interests of the Corporation with respect to the Business Combination, provided that no officer or employee of the Corporation shall be disqualified from being a Disinterested Director solely by reason of being an officer or employee of the Corporation.
| Appendix A— 2023 Proxy Statement | 111 |
For the purpose of determining whether a person is the beneficial owner of five per cent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, the outstanding stock of the Corporation shall include shares deemed owned pursuant to the provisions of clause (2) of the definition of “beneficial owner” but shall not include any other shares which may be issuable pursuant to any agreement or upon the exercise of any conversion rights, warrants or options, or otherwise, or shares owned by the Corporation or any subsidiary of the Corporation.
The provisions of this Article Ninth shall not apply to any Business Combination with an Interested Person if the Board of Directors of the Corporation shall by resolution have approved a memorandum of understanding with such person of the substantive terms of such Business Combination, which terms are in substance consistent with such Business Combination, prior to the time such other person becomes the beneficial owner, directly or indirectly, of five per cent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Ninth.
A Business Combination not with an Interested Person shall be governed by the other relevant provisions of this Certificate of Incorporation and the laws of the State of Delaware in effect at the time of such Business Combination.
No amendment to this Certificate of Incorporation shall amend, alter, change or repeal any of the provisions of this Article Ninth unless such amendment, in addition to receiving any stockholder vote or consent required by the laws of the State of Delaware in effect at the time, shall receive the affirmative vote or consent of the holders of two-thirds of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Ninth, which are not beneficially owned, directly or indirectly, by any person which, as of the record date for the determination of stockholders entitled to notice of a proposed amendment or as of the date of any such vote or consent, beneficially owns, directly or indirectly, five per cent (5%) or more of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Ninth.
TENTH. In furtherance, and not in limitation of, the powers conferred by statute, the Board of Directors of this Company are expressly authorized:
to make, alter, amend and rescind the By-laws of this Corporation;
to authorize and cause to be executed mortgages and liens upon the real and personal property of this Corporation; with the consent, in writing, and pursuant also to the affirmative vote of the holders of Three-fourths (¾) of the stock issued and outstanding, to sell, assign, transfer or otherwise dispose of the whole property of this Corporation as an entirety;
if the By-laws so provide, to designate two or more of their number to constitute an Executive Committee, with power to manage the usual business affairs of the Corporation, subject to the approval of the Board of Directors; and said Executive Committee shall also have power to authorize the seal of this Corporation to be affixed to all papers which may require it;
both stockholders and Directors shall have power, if the By-laws so provide, to hold their meetings either within or without the State of Delaware;
to have one or more offices outside the State of Delaware, in addition to the principal office in the State of Delaware, and to keep the books of the Corporation (subject to the provisions of the statute) outside of the State of Delaware, as may be from time to time designated by the Board of Directors;
this Corporation may in its By-laws confer powers additional to the foregoing upon the Directors, in addition to the powers and authorities expressly conferred upon them by the statute;
this Corporation reserves the right to amend, alter, change, or repeal any of the provisions contained in this Certificate of Incorporation, in the manner now or hereafter prescribed by statute, and all rights conferred on stockholders herein are granted subject to this reservation.
| 112 | 2023 Proxy Statement — Appendix A | |
ELEVENTH. (a) The number of directors shall not be less than 6 and more than 15. The exact number of directors shall be set forth in the By-laws of the Corporation. No decrease in the number of directors shall shorten the term of any incumbent director. Notwithstanding the foregoing provisions, whenever the holders of any class or series of Preferred Stock shall elect directors, the then authorized number of directors of the Corporation shall be increased by the number of the additional directors so to be elected, and the holders of such Preferred Stock shall be entitled, as a class or series or otherwise, to elect such additional directors. Any directors so elected shall hold office until their rights to hold such office terminate pursuant to the provisions of such Preferred Stock. These provisions shall apply notwithstanding the maximum number of directors hereinabove set forth.
(b)
The Board of Directors may, by the vote of a majority of the entire Board, prescribe qualifications of candidates for the office of director of the Corporation, but no director then in office shall be disqualified from office as a result of the adoption of such qualifications.
(c)
Effective as of the annual meeting of stockholders of the Corporation to be held in 2018, the successors of the directors whose terms expire at such meeting shall be elected for a term expiring at the annual meeting of stockholders of the Corporation to be held in 2021; at the annual meeting of stockholders of the Corporation to be held in 2019, the successors of the directors whose terms expire at such meeting shall be elected for a term expiring at the annual meeting of stockholders of the Corporation to be held in 2020; at the annual meeting of stockholders of the Corporation to be held in 2020, the successors of the directors whose terms expire at such meeting shall be elected for a term expiring at the annual meeting of stockholders of the Corporation to be held in 2021; and atAteach annual meeting of stockholders of the Corporation thereafter, the directors shall be elected for terms expiring at the next succeeding annual meeting of stockholders of the Corporation, with each director to hold office until his or her successor shall have been duly elected and qualified or until the earlier of such director’s earlier resignation, removal or death. Commencing with the annual meeting of stockholdersof the Corporation to be held in 2021, the Board of Directors will no longer be classified under Section 141(d) ofthe General Corporation Law of the State of Delaware and directors shall no longer be divided into classes.
(d)
Advance notice of nominations for the election of directors, other than by the Board of Directors or a Committee thereof, shall be given in the manner provided in the By-laws.
(e)
[Reserved].
(f)
Vacancies and newly created directorships resulting from any increase in the number of directors may be filled by a majority of the directors then in office though less than a quorum, and each director so chosen shall hold office until his successor is elected and qualified or until his earlier resignation or removal. If there are no directors in office, then an election of directors may be held in the manner provided by law.
No amendment to this Certificate of Incorporation shall amend, alter, change or repeal any of the provisions of this Article Eleventh unless such amendment, in addition to receiving any stockholder vote or consent required by the laws of the State of Delaware in effect at the time, shall receive the affirmative vote or consent of the holders of 80% of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Eleventh.
Notwithstanding any provision of Delaware law, Article Tenth of this Certificate of Incorporation or any other provision of this Certificate of Incorporation, no amendment to the By-laws of the Corporation shall amend, alter, change or repeal Section 1 or Section 2 of Article III of the By-laws unless such amendment receives the affirmative vote of 80% of all directors or the holders of 80% of the outstanding shares of stock of the Corporation entitled to vote generally in elections of directors, voting together as a single class.
| Appendix A— 2023 Proxy Statement | 113 |
TWELFTH. Notwithstanding any provision of Delaware law, Article Tenth of this Certificate of Incorporation or any other provision of this Certificate of Incorporation, any action required or permitted to be taken by the stockholders of the Corporation, whether voting as a class or otherwise, must be taken at a duly called annual or special meeting of the stockholders of the Corporation and may not be taken by consent in writing of such stockholders, except that the Board of Directors at any time may by resolution provide that the holders of Preferred Stock may take any action required or permitted to be taken by such holders by consent in writing without a meeting. Elections of directors need not be by written ballot.
No amendment to this Certificate of Incorporation shall amend, alter, change or repeal any of the provisions of this Article Twelfth unless such amendment, in addition to receiving any stockholder vote or consent required by the laws of the State of Delaware in effect at the time, shall receive the affirmative vote or consent of the holders of 80% of the outstanding shares of stock of the Corporation entitled to vote in elections of directors, considered separately for purposes of this Article Twelfth.
THIRTEENTH. (a) Directors of To the fullest extent permittedby the General Corporation Lawof the State of Delaware as the same exists or may hereafter be amended, directors and officers of the Corporation shall have no personal liability to the Corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, except (i) for any breach of a director’s duty of loyalty to the Corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) under section 174 or officer. For purposes of thisArticle Thirteenth, “officer” shall have the meaning provided in Section 102(b)(7) of the General Corporation Law of Delaware, or (iv) for any transaction from which a director derived an improper personal benefitthe State of Delaware as the same exists or may hereafter be amended.
(b) The Board of Directors shall have the power to indemnify to the fullest extent that is lawful, any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding, whether civil, criminal, administrative or investigative (including an action by or in the right of the Corporation) by reason of the fact that he is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, against expenses (including attorneys’ fees), judgments, fines, taxes, penalties, and amounts paid in settlement actually and reasonably incurred by him in connection with suchaction, suit or proceeding. Any indemnity may be made upon terms and conditions, by contract or otherwise, that the Board of directors deems appropriate. “Other enterprise” shall include employee benefit plans; references to “fines” shall include any excise taxes assessed on a person with respect to an employee benefit plan; and references to “serving at the request of the Corporation” shall include any service as a director, officer, employee or agent of the Corporation which imposes duties on, or involves services by, such director, officer, employee, or agent with respect to an employee benefit plan, its participants, or beneficiaries.
IN WITNESS WHEREOF, we have signed this certificate this 22nd day of July, 1987the Corporation has caused this Amended and Restated Certificate of Incorporation to be executed by its duly authorized officer on this day of , 202.
| /s/ F. J. Florjancic, Jr.[• ] |
| Name: Christopher F. Dekker
Vice President-FinanceTitle: Executive Vice President, General Counsel, Secretary and Chief Compliance Officer |
| 114 | 2023 Proxy Statement — Appendix A | |
Appendix B
Brunswick Corporation 2023
Stock Incentive Plan
I. INTRODUCTION
1.1 Purposes
The purposes of the Brunswick Corporation 2023 Stock Incentive Plan (this “Plan”) are to provide incentives and rewards to (i) support the execution of the Company’s business and human resource strategies; (ii) provide for the compensation of officers, other Employees, Non-Employee Directors and persons expected to become officers, other Employees and Non-Employee Directors and (iii) more closely align the interests of participants with those of the Company’s stockholders.
1.2 Certain Definitions
“2014 Plan” means the Brunswick Corporation 2014 Stock Incentive Plan.
“Agreement” means the written or electronic agreement evidencing an award hereunder between the Company and the recipient of such award and setting forth the terms and conditions thereof.
“Automatic Exercise Date” means, with respect to a Stock Option or a SAR, the last business day of the applicable term of the Stock Option pursuant to Section 2.1(b) or the SAR pursuant to Section 2.2(b).
“Board” means the Board of Directors of the Company.
“Change in Control” has the meaning set forth in Section 6.8(b).
“Code” means the Internal Revenue Code of 1986, as amended.
“Committee” means the Human Resources and Compensation Committee of the Board, in the case of awards to Employees, or the Nominating and Corporate Governance Committee of the Board, in the case of awards to Non-Employee Directors, or such other committee designated by the Board, in each case, consisting of two or more members of the Board, each of whom is intended to be (i) “a Non-Employee Director” within the meaning of Rule 16b-3 under the Exchange Act and (ii) “independent” within the meaning of the New York Stock Exchange or any other stock exchange on which shares of Common Stock are then traded; provided, however, that the Nominating and Corporate Governance Committee or such other committee designated by the Board to administer awards to Non-Employee Directors shall be comprised solely of Non-Employee Directors.
“Common Stock” means the common stock, par value $0.75 per share, of the Company, and all rights appurtenant thereto.
| 2022 PROXY STATEMENT | 61 |
“Company” means Brunswick Corporation, a Delaware corporation, or any successor thereto.
“Determination Period” shall mean, with respect to any Performance Period, a period commencing on or before the date the Performance Measures would no longer be substantially uncertain with respect to the relevant Performance Period. Any action required to be taken within a Determination Period may be taken at a later date, if so determined by the Committee.
“Employee” means an employee of the Company or a Subsidiary.
“Exchange Act” means the Securities Exchange Act of 1934, as amended.
“Fair Market Value” means the closing price on the New York Stock Exchange Composite Transactions Tape on the relevant valuation date or on the next preceding date on which a closing price was quoted or, if the Common Stock is not listed on the New York Stock Exchange, the closing transaction price of a share of Common Stock on the principal national stock exchange on which the Common Stock is traded on the date as of which such value is being determined or, if there shall be no reported transactions for such date, on the next preceding date for which transactions were reported; provided, however, that if the Common Stock is not listed on a national stock exchange or if Fair Market Value for any date cannot be so determined, Fair Market Value shall be determined by the Committee by whatever means or method as the Committee, in the good faith exercise of its discretion, shall at such time deem appropriate and in compliance with Section 409A of the Code.
“Incumbent Board” shall have the meaning set forth in Section 6.8(b)(ii).
“Non-Employee Director” shall mean any director of the Company who is not an Employee.
“Other Cash-Based Award” means a cash award granted to a Participant under Section 5 of the Plan, including cash awarded as a bonus or upon the attainment of Performance Measures or otherwise as permitted under the Plan.
“Other Share-Based Award” means a right or other interest granted to a Participant under the Plan that may be denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Common Stock, including, but not limited to, unrestricted shares of Common Stock or dividend equivalents, each of which may be subject to the attainment of Performance Measures or a period of continued employment or other terms or conditions as permitted under the Plan; provided, that, any Other Share-Based Award that is a dividend equivalent relating to another form of award under this Plan shall be subject to the same restrictions as such award.
“Performance Award” shall mean a right to receive an amount of cash, Common Stock, or a combination of both, contingent upon the attainment of specified Performance Measures within a specified Performance Period.
“Performance Measures” shall mean the criteria and objectives, established by the Committee, which shall be satisfied or met (i) as a condition to the grant or exercisability of all or a portion of a Stock Option or SAR or (ii) during the applicable Restriction Period or Performance Period as a condition to the vesting of a Restricted Stock Award, of the shares of Common Stock subject to such award, or, in the case of a Restricted Stock Unit Award or Performance Award, to the holder’s receipt of the shares of Common Stock subject to such award or of payment with respect to such award. The criteria and objectives established by the Committee may include, but are not limited to, any of the following measures: the attainment by a share of Common Stock of a specified Fair Market Value for a specified period of time, earnings per share (determined on a fully diluted basis or otherwise), total stockholder return, return on assets, return on equity, earnings of the Company before or after taxes and/or interest, sales, revenue, market share, free cash flow, cash flow return on investment, cash on hand, expense reduction, interest expense before or after taxes, return on investment, return on invested capital, economic value added, operating margin, net income before or after taxes, earnings before interest, taxes, depreciation and amortization, pretax operating earnings after interest expense
| Executive Compensation— 2023 Proxy Statement | 117 |
and before incentives, and/or extraordinary or special items, operating income, net cash provided by operations, total liquidity, net debt, gross margin, operating leverage, operating working capital and related metrics and strategic business criteria consisting of one or more objectives based on meeting specified goals relating to market penetration, geographic business expansion, cost targets, customer satisfaction, reductions in errors and omissions, reductions in lost business, management of employment practices and employee benefits, supervision of litigation and information technology, quality and quality audit scores, productivity, efficiency, safety and acquisitions or divestitures, rate of new product introduction or any combination of the foregoing. Performance goals established for the Performance Period may consist of any objective corporate-wide or subsidiary, division, operating unit or individual measures, whether or not listed herein. Performance goals shall be subject to such other special rules and conditions as the Committee may establish at any time within the Determination Period. The applicable Performance Measures may be applied on a pre- or post-tax basis and may be adjusted to include or exclude objectively determinable components of any Performance Measure, including, without limitation, special charges such as restructuring or impairment charges, debt refinancing costs, extraordinary or noncash items, unusual, nonrecurring or one-time events affecting the Company or its financial statements or changes in law or accounting principles.
“Performance Period” shall mean any period designated by the Committee during which (i) the Performance Measures applicable to an award shall be measured and (ii) the conditions to vesting applicable to an award shall remain in effect.
“Restricted Stock” shall mean shares of Common Stock which are subject to a Restriction Period and which may, in addition thereto, be subject to the attainment of specified Performance Measures within a specified Performance Period.
“Restricted Stock Award” shall mean an award of Restricted Stock under this Plan.
“Restricted Stock Unit” shall mean a right to receive one share of Common Stock or, in lieu thereof and to the extent provided in the applicable Agreement, the Fair Market Value of such share of Common Stock in cash, which shall be contingent upon the expiration of a specified Restriction Period and which may, in addition thereto, be contingent upon the attainment of specified Performance Measures within a specified Performance Period.
“Restricted Stock Unit Award” shall mean an award of Restricted Stock Units under this Plan.
“Restriction Period” shall mean any period designated by the Committee during which (i) the Common Stock subject to a Restricted Stock Award may not be sold, transferred, assigned, pledged, hypothecated or otherwise encumbered or disposed of, except as provided in this Plan or the Agreement relating to such award, or (ii) the conditions to vesting applicable to a Restricted Stock Unit Award shall remain in effect.
“SAR” shall mean a stock appreciation right which entitles the holder thereof to receive, upon exercise, shares of Common Stock (which may be Restricted Stock) or, to the extent provided in the applicable Agreement, cash or a combination thereof, with an aggregate value equal to the excess of the Fair Market Value of one share of Common Stock on the date of exercise over the base price of such SAR, multiplied by the number of such SARs which are exercised.
“Stock Award” shall mean a Restricted Stock Award, Restricted Stock Unit Award or Unrestricted Stock Award.
“Stock Option” shall mean an option to purchase shares of Common Stock.
“Subsidiary” shall mean any corporation, limited liability company, partnership, joint venture or similar entity in which the Company owns, directly or indirectly, an equity interest possessing more than 50% of the combined voting power of the total outstanding equity interests of such entity.
| 118 | 2023 Proxy Statement — Appendix B | |
“Substitute Awards” shall have the meaning set forth in Section 1.7.
“Tax Date” shall have the meaning set forth in Section 6.6.
“Unrestricted Stock” shall mean shares of Common Stock which are not subject to a Restriction Period or Performance Measures.
“Unrestricted Stock Award” shall mean an award of Unrestricted Stock under this Plan.
1.3 Administration
This Plan shall be administered by the Committee. Any one or a combination of the following awards may be made under this Plan to eligible persons: (i) Stock Options, (ii) SARs; (iii) Stock Awards in the form of Restricted Stock, Restricted Stock Units or Unrestricted Stock; (iv) Performance Awards and (v) Other Share-Based Awards or Other Cash-Based Awards. The Committee shall, subject to the terms of this Plan, select eligible persons for participation in this Plan and determine the form, amount and timing of each award to such persons and, if applicable, the number of shares of Common Stock subject to an award, the number of SARs, the number of Restricted Stock Units, the dollar value or share amount subject to a Performance Award, the purchase price or base price associated with the award, the time and conditions of exercise or settlement of the award and all other terms and conditions of the award, including, without limitation, the form of the Agreement evidencing the award. The Committee may, in its sole discretion and for any reason at any time, take action such that (i) any or all outstanding Stock Options and SARs shall become exercisable in part or in full, (ii) all or a portion of the Restriction Period applicable to any outstanding Restricted Stock or Restricted Stock Units shall lapse, (iii) all or a portion of the Performance Period applicable to any outstanding Restricted Stock, Restricted Stock Units or Performance Awards shall lapse and (iv) the Performance Measures (if any) applicable to any outstanding award shall be deemed to be satisfied at the target or any other level specified by the Committee. The Committee shall, subject to the terms of this Plan, interpret this Plan and the application thereof, establish rules and regulations it deems necessary or desirable for the administration of this Plan and may impose, incidental to the grant of an award, conditions with respect to the award, such as limiting competitive employment or other activities. All such interpretations, rules, regulations and conditions shall be conclusive and binding on all parties.
The Committee may delegate some or all of its power and authority hereunder to the Board or, subject to applicable law, to the Chief Executive Officer or such other executive officer of the Company as the Committee deems appropriate; provided, however, that the Committee may not delegate its power and authority to the Chief Executive Officer or other executive officer of the Company with regard to the selection for participation in this Plan of an officer, director or other person subject to Section 16 of the Exchange Act or decisions concerning the timing, pricing or amount of an award to such an officer, director or other person. No member of the Board or Committee, and neither the Chief Executive Officer nor any other executive officer to whom the Committee delegates any of its power and authority hereunder, shall be liable for any act, omission, interpretation, construction or determination made in connection with this Plan in good faith, and the members of the Board and the Committee and the Chief Executive Officer or other executive officer shall be entitled to indemnification and reimbursement by the Company in respect of any claim, loss, damage or expense (including attorneys’ fees) arising therefrom to the full extent permitted by law (except as otherwise may be provided in the Company’s Certificate of Incorporation and/or By-laws) and under any directors’ and officers’ liability insurance that may be in effect from time to time.
1.4 Eligibility
Participants in this Plan shall consist of such officers, other Employees, Non-Employee Directors, and persons expected to become officers, other Employees and Non-Employee Directors of the Company and its Subsidiaries as the Committee in its sole discretion may select from time to time. The Committee’s selection of a person to participate in this Plan at any time shall not require the
| Executive Compensation— 2023 Proxy Statement | 119 |
Committee to select such person to participate in this Plan at any other time. Except as provided otherwise in an Agreement, for purposes of this Plan, references to employment by the Company shall also mean employment by a Subsidiary, and references to employment shall include service as a Non-Employee Director. The Committee shall determine, in its sole discretion, the extent to which a participant shall be considered employed during any periods during which such participant is on a leave of absence.
1.5 Shares Available
Subject to adjustment as provided in Section 6.7, the share counting provisions below, and to all other limits set forth in this Section 1.5, as of the effective date of this Plan, the number of shares of Common Stock that shall be authorized for grant under the Plan shall equal a total of 3,600,000 shares; provided, that, such amount shall be reduced on a share-for-share basis for every share of Common Stock that was subject to an award granted under the 2014 Plan after February 20, 2023 and prior to the effective date of the Plan. Upon the effectiveness of this Plan, no more shares of Common Stock shall be available for future grants of awards under the 2014 Plan.
The following shares of Common Stock shall again be (or shall newly be, as applicable) available for grant under this Plan (including, after February 20, 2023, with respect to any such shares previously granted under the 2014 Plan): (i) shares subject to an outstanding award that are not issued or delivered by reason of (a) expiration, termination, cancellation or forfeiture of such award or (b) the settlement of such award in cash and (ii) shares that are delivered (either actually or by attestation) to or withheld by the Company to pay the withholding taxes related to an outstanding award (other than a Stock Option or SAR awarded under the Plan or 2014 Plan).
Notwithstanding anything to the contrary contained herein, the following shares of Common Stock shall not be available again (or newly, as applicable) for grant under this Plan (including with respect to any such shares previously granted under the 2014 Plan): (i) shares tendered by the holder of a Stock Option, or withheld by the Company, in payment of the purchase price thereof, or to satisfy any tax withholding obligation with respect to a Stock Option or SAR, (ii) shares subject to a SAR that are not issued in connection with the stock settlement on the exercise thereof and (iii) shares reacquired by the Company on the open market or otherwise using cash proceeds from the exercise of Stock Options.
Shares of Common Stock to be delivered under this Plan shall be made available from authorized and unissued shares of Common Stock, or authorized and issued shares of Common Stock reacquired and held as treasury shares or otherwise or a combination thereof. No shares of Common Stock shall be issued pursuant to any award unless consideration at least equal to the par value of such shares of Common Stock has been received by the Company in the form of cash, services rendered or property.
1.6 Non-Employee Director Compensation Limit
Notwithstanding anything herein to the contrary, the aggregate value of all cash compensation or other compensation and the grant date fair value of any equity awards (as determined for financial reporting purposes) granted to any individual for service as a Non-Employee Director with respect to any calendar year (whether or not such compensation or equity awards are settled or paid in such calendar year or later) shall not exceed $750,000 in value. The Board (or its delegate) may make exceptions to such limit for individual Non-Employee Directors in extraordinary circumstances, such as where any such individual Non-Employee Directors are serving on a special litigation or transactions committee of the Board, as the Board (or its delegate) may determine in its sole discretion, provided that the Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation.
1.7 Substitute Awards
The Committee may grant awards under this Plan upon the assumption of, or in substitution or exchange for, outstanding equity awards previously granted by a company or other entity in
| 120 | 2023 Proxy Statement — Appendix B | |
connection with any change in corporate or capital structure of the Company or any Subsidiary, including, without limitation, a Change in Control, a merger, consolidation, reorganization, combination or acquisition. In the event that a company acquired by the Company or any Subsidiary or with which the Company or any Subsidiary combines has shares available under a pre-existing plan approved by stockholders which is not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for awards under the Plan; provided that awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not Employees or Non-Employee Directors prior to such acquisition or combination. Awards granted pursuant to this Section 1.7 shall be referred to herein as “Substitute Awards.” Substitute Awards shall not reduce the shares authorized and available for awards under the Plan, nor shall shares subject to a Substitute Award be added to the shares available for awards under the Plan under the share counting provisions in Section 1.5.
II. Stock Options and Stock Appreciation Rights
2.1 Stock Options
The Committee may, in its discretion, grant Stock Options to purchase shares of Common Stock to such eligible persons as may be selected by the Committee. Stock Options shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:
| (a) | Number of Shares and Purchase Price. The number of shares of Common Stock subject to a Stock Option and the purchase price per share purchasable upon exercise of the Stock Option shall be determined by the Committee; provided, however, that, except with respect to Substitute Awards, the purchase price per share purchasable upon exercise of a Stock Option shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such Stock Option. |
| (b) | Option Period and Exercisability. The period during which a Stock Option may be exercised shall be determined by the Committee; provided, however, that no Stock Option shall be exercised later than ten (10) years after its date of grant. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of a Stock Option or to the exercisability of all or a portion of a Stock Option. The Committee shall determine whether a Stock Option shall become exercisable in cumulative or non-cumulative installments and in part or in full at any time. An exercisable Stock Option, or portion thereof, may be exercised only with respect to whole shares of Common Stock. Notwithstanding any contrary provision herein, if, on the date an outstanding Stock Option would expire, the exercise of the Stock Option, including by a “net exercise” or “cashless” exercise, would violate applicable securities laws or any insider trading policy maintained by the Company from time to time, the expiration date applicable to the Stock Option will be extended, except to the extent such extension would violate Section 409A of the Code, to a date that is thirty (30) calendar days after the date the exercise of the Stock Option would no longer violate applicable securities laws or any such insider trading policy. Prior to the exercise of a Stock Option, the holder of such Stock Option shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such Stock Option, including no rights to any dividends or dividend equivalents. |
Back | Appendix B— 2023 Proxy Statement | 121 |
| (c) | Method of Exercise. A Stock Option may be exercised by (i) giving notice to Contentsthe Company (in any form acceptable to the Company) specifying the number of whole shares of Common Stock to be purchased and accompanying such notice with payment therefor in full (or arrangement made for such payment to the Company’s satisfaction) either (A) in cash, (B) by delivery (either actual delivery or by attestation procedures established by the Company) of shares of Common Stock having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the date of exercise, equal to the amount necessary to satisfy such obligation, (D) in cash by a broker-dealer acceptable to the Company or (E) a combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the Stock Option, and (ii) by executing such documents as the Company may reasonably request. No shares of Common Stock shall be issued and no certificate representing shares of Common Stock shall be delivered until the full purchase price therefor and any withholding taxes thereon, as described in Section 6.5, have been paid (or arrangement made for such payment to the Company’s satisfaction). |
| (d) | Automatic Exercise. Unless otherwise provided by the Committee in an Agreement or otherwise, or as otherwise directed by the Participant in writing to the Company, each vested and exercisable Stock Option outstanding on the Automatic Exercise Date with a purchase price per share of Common Stock that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by the Participant or the Company be exercised on the Automatic Exercise Date. In the sole discretion of the Committee, payment of the purchase price of any such Stock Option shall be made pursuant to Section 2.1(c)(i)(B), (C) or (D) and the Company or any affiliate of the Company shall deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 6.6. Unless otherwise determined by the Committee, this Section 2.1(d) shall not apply to a Stock Option if the Participant’s employment or service has terminated on or before the Automatic Exercise Date. For the avoidance of doubt, no Stock Option with a purchase price per share of Common Stock that is equal to or greater than the Fair Market Value per share of Common Stock on the Automatic Exercise Date shall be exercised pursuant to this Section 2.1(d). |
2.2 Stock Appreciation Rights
The Committee may, in its discretion, grant SARs to such eligible persons as may be selected by the Committee. SARs shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable:
| (a) | Number of SARs and Base Price. The number of SARs subject to an award shall be determined by the Committee. The base price of a SAR shall be determined by the Committee; provided, however, that, except with respect to Substitute Awards, such base price shall not be less than 100% of the Fair Market Value of a share of Common Stock on the date of grant of such SAR. |
| (b) | Exercise Period and Exercisability. The period for the exercise of a SAR shall be determined by the Committee; provided, however, that no SAR shall be exercised later than ten (10) years after its date of grant. The Committee may, in its discretion, establish Performance Measures which shall be satisfied or met as a condition to the grant of a SAR or to the exercisability of all or a portion of a SAR. The Committee shall determine whether a SAR may be exercised in cumulative or non-cumulative installments and in part or in full at any time. An exercisable SAR, or portion thereof, may be exercised only with respect to a whole number of SARs. Notwithstanding any contrary provision herein, if, on the date an outstanding SAR would expire, the exercise of the SAR |
APPENDIX*
| | | |
| FREE CASH FLOW | Year Ended December 31, 2021 | Year Ended December 31, 2020 |
| | | |
| NET CASH PROVIDED BY OPERATING ACTIVITIES | $586.2 | $800.0 |
| NET CASH PROVIDED BY (USED FOR): | | |
| Capital expenditures | (267.1) | (182.4) |
| Proceeds from the sale of property, plant and equipment | 7.2 | 2.9 |
| Effect of exchange rate changes | (5.5) | 8.8 |
| FREE CASH FLOW | $320.8 | $629.3 |
| | Operating Earnings | Diluted Earnings per Share |
| | | |
| EARNINGS PER SHARE AND OPERATING EARNINGS | | | | |
| | | | | |
| (In millions, except per share data) | FY 2021 | FY 2020 | FY 2021 | FY 2020 |
| | | | | |
| GAAP | $812.9 | $539.3 | $7.59 | $4.70 |
| Restructuring, exit and impairment charges | 0.8 | 4.1 | 0.01 | 0.04 |
| Purchase accounting amortization | 45.7 | 30.1 | 0.46 | 0.29 |
| Sport Yacht & Yachts | 3.8 | – | 0.04 | – |
| Acquisition, Integration, and IT related costs | 24.3 | 5.4 | 0.27 | 0.05 |
| Palm Coast reclassified from held-for-sale | 0.8 | – | 0.01 | – |
| Gain on sales of assets | (1.5) | – | (0.01) | – |
| Special tax items | – | – | (0.13) | – |
| Loss on early extinguishment of debt | – | – | 0.04 | – |
| Pension settlement benefit | – | – | – | (0.01) |
| AS ADJUSTED | $886.8 | $578.9 | $8.28 | $5.07 |
| |
| GAAP operating margin | 13.9% | 12.4% | | |
| ADJUSTED OPERATING MARGIN | 15.2% | 13.3% | | |
*122 | 2023 Proxy Statement — Appendix B | |
would violate applicable securities laws or any insider trading policy maintained by the Company from time to time, the expiration date applicable to the SAR will be extended, except to the extent such extension would violate Section 409A of the Code, to a date that is thirty (30) calendar days after the date the exercise of the SAR would no longer violate applicable securities laws or any such insider trading policy. If a SAR is exercised for shares of Restricted Stock, a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.3(c), or such shares shall be transferred to the holder in book entry form with restrictions on the shares duly noted, and the holder of such Restricted Stock shall have such rights of a stockholder of the Company as determined pursuant to Section 3.3(d). Prior to the exercise of a SAR, the holder of such SAR shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such SAR, including no rights to any dividends or dividend equivalents.
| (c) | Method of Exercise. A SAR may be exercised (A) by giving notice to the Company (in any form acceptable to the Company) specifying the whole number of SARs which are being exercised and (B) by executing such documents as the Company may reasonably request. No shares of Common Stock shall be issued and no certificate representing shares of Common Stock shall be delivered until any withholding taxes thereon, as described in Section 6.5, have been paid (or arrangement made for such payment to the Company’s satisfaction). |
| (d) | Automatic Exercise. Unless otherwise provided by the Committee in an Agreement or otherwise, or as otherwise directed by the Participant in writing to the Company, each vested and exercisable SAR outstanding on the Automatic Exercise Date with a purchase price per share of Common Stock that is less than the Fair Market Value per share of Common Stock as of such date shall automatically and without further action by the Participant or the Company be exercised on the Automatic Exercise Date. The Company or any affiliate of the Company shall deduct or withhold an amount sufficient to satisfy all taxes associated with such exercise in accordance with Section 6.6. Unless otherwise determined by the Committee, this Section 2.2(d) shall not apply to a SAR if the Participant’s employment or service has terminated on or before the Automatic Exercise Date. For the avoidance of doubt, no SAR with a purchase price per share of Common Stock that is equal to or greater than the Fair Market Value per share of Common Stock on the Automatic Exercise Date shall be exercised pursuant to this Section 2.2(d). |
2.3 Termination of Employment or Service
All of the terms relating to the exercise, cancellation or other disposition of a Stock Option or SAR (i) upon a termination of employment with or service to the Company of the holder of such Stock Option or SAR, as the case may be, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement.
2.4 No Repricing
The Committee shall not, without the approval of the stockholders of the Company, (i) reduce the purchase price or base price of any previously granted Stock Option or SAR, (ii) cancel any previously granted Stock Option or SAR in exchange for cash or another award if the purchase price of such Stock Option or the base price of such SAR exceeds the Fair Market Value of a share of Common Stock on the date of such cancellation, or (iii) take any other action with respect to a Stock Option or SAR that would be treated as a repricing under the rules and regulations of the principal U.S. national securities exchange on which the shares of Common Stock are then listed, in each case, other than in connection with a Change in Control or the adjustment provisions set forth in Section 6.7.
| Appendix B— 2023 Proxy Statement | 123 |
III. Stock Awards
3.1 Stock Awards
The Committee may, in its discretion, grant Stock Awards to such eligible persons as may be selected by the Committee. The Agreement relating to a Stock Award shall specify whether the Stock Award is a Restricted Stock Award, Restricted Stock Unit Award or Unrestricted Stock Award.
3.2 Terms of Restricted Stock Awards
Restricted Stock Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.
| (a) | Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Award shall be determined by the Committee. |
| (b) | Vesting and Forfeiture. The Agreement relating to a Restricted Stock Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of the shares of Common Stock subject to such award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. |
| (c) | Stock Issuance. During the Restriction Period, the shares of Restricted Stock shall be held by a custodian in book entry form with restrictions on such shares duly noted or, alternatively, a certificate or certificates representing a Restricted Stock Award shall be registered in the holder’s name and may bear a legend, in addition to any legend which may be required pursuant to Section 6.6, indicating that the ownership of the shares of Common Stock represented by such certificate is subject to the restrictions, terms and conditions of this Plan and the Agreement relating to the Restricted Stock Award. All such certificates shall be deposited with the Company, together with stock powers or other instruments of assignment (including a power of attorney), each endorsed in blank with a guarantee of signature if deemed necessary or appropriate, which would permit transfer to the Company of all or a portion of the shares of Common Stock subject to the Restricted Stock Award in the event such award is forfeited in whole or in part. Upon termination of any applicable Restriction Period (and the satisfaction or attainment of applicable Performance Measures), subject to the Company’s right to require payment of any taxes in accordance with Section 6.5, the restrictions shall be removed from the requisite number of any shares of Common Stock that are held in book entry form, and all certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award. |
| (d) | Rights with Respect to Restricted Stock Awards. Unless otherwise set forth in the Agreement relating to a Restricted Stock Award, and subject to the terms and conditions of a Restricted Stock Award, the holder of such award shall have all rights as a stockholder of the Company, including, but not limited to, voting rights, the right to receive dividends and the right to participate in any capital adjustment applicable to all holders of Common Stock; provided, however, that any stockholder distributions, dividends or dividend equivalents shall be subject to deferral and payment on a contingent basis based on the Participant earning the Restricted Stock with respect to which such stockholder distributions, dividends or dividend equivalents are paid. |
| 124 | 2023 Proxy Statement — Appendix B | |
3.3 Terms of Restricted Stock Unit Awards
Restricted Stock Unit Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.
| (a) | Number of Shares and Other Terms. The number of shares of Common Stock subject to a Restricted Stock Unit Award and the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to a Restricted Stock Unit Award shall be determined by the Committee. |
| (b) | Vesting and Forfeiture. The Agreement relating to a Restricted Stock Unit Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Restricted Stock Unit Award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. |
| (c) | Settlement of Vested Restricted Stock Unit Awards. The Agreement relating to a Restricted Stock Unit Award shall specify (i) whether such award may be settled in shares of Common Stock or cash or a combination thereof and (ii) whether the holder thereof shall be entitled to receive dividend equivalents, and, if determined by the Committee, interest on, or the deemed reinvestment of, any deferred dividend equivalents, with respect to the number of shares of Common Stock subject to such award; provided, however, that such dividend equivalents shall be subject to deferral and payment on a contingent basis based on the Participant earning the Restricted Stock Units with respect to which such dividend equivalents are paid. No dividends shall be payable with respect to Restricted Stock Units. Prior to the settlement of a Restricted Stock Unit Award, the holder of such award shall have no rights as a stockholder of the Company with respect to the shares of Common Stock subject to such award. |
3.4 Termination of Employment or Service
All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to a Stock Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement.
3.5 Terms of Unrestricted Stock Awards
The number of shares of Common Stock subject to an Unrestricted Stock Award shall be determined by the Committee. Unrestricted Stock Awards shall not be subject to any Restriction Periods or Performance Measures; provided, however, Unrestricted Stock Awards shall be limited to (i) awards to Non-Employee Directors, (ii) awards to newly hired Employees, (iii) awards made in lieu of a cash bonus or (iv) awards granted under this Plan with respect to the number of shares of Common Stock which, in the aggregate, does not exceed ten percent (10%) of the total number of shares available for awards under this Plan. Upon the grant of an Unrestricted Stock Award, subject to the Company’s right to require payment of any taxes in accordance with Section 6.5, a certificate or certificates evidencing ownership of the requisite number of shares of Common Stock shall be delivered to the holder of such award or such shares shall be transferred to the holder in book entry form.
| Appendix B— 2023 Proxy Statement | 125 |
IV. Performance Awards
4.1 Performance Awards
The Committee may, in its discretion, grant Performance Awards to such eligible persons as may be selected by the Committee.
4.2 Terms of Performance Awards
Performance Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.
| (a) | Value of Performance Awards and Performance Measures. The method of determining the value of the Performance Award and the Performance Measures and Performance Period applicable to a Performance Award shall be determined by the Committee. |
| (b) | Vesting and Forfeiture. The Agreement relating to a Performance Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such Performance Award if the specified Performance Measures are satisfied or met during the specified Performance Period and for the forfeiture of such award if the specified Performance Measures are not satisfied or met during the specified Performance Period. |
| (c) | Settlement of Vested Performance Awards. The Agreement relating to a Performance Award shall specify whether such award may be settled in shares of Common Stock (including shares of Restricted Stock) or cash or a combination thereof. If a Performance Award is settled in shares of Restricted Stock, such shares of Restricted Stock shall be issued to the holder in book entry form or a certificate or certificates representing such Restricted Stock shall be issued in accordance with Section 3.3(c) and the holder of such Restricted Stock shall have such rights as a stockholder of the Company as determined pursuant to Section 3.3(d). Any dividends or dividend equivalents with respect to a Performance Award shall be subject to the same restrictions as such Performance Award. Prior to the settlement of a Performance Award in shares of Common Stock, including Restricted Stock, the holder of such award shall have no rights as a stockholder of the Company. |
4.3 Termination of Employment or Service
All of the terms relating to the satisfaction of Performance Measures and the termination of the Performance Period relating to a Performance Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement.
V. Other Share-Based or Cash-Based Awards
5.1 Other Share-Based or Cash-Based Awards
The Committee may, in its discretion, grant awards to such eligible persons as may be selected by the Committee, in the form of Other Share-Based Awards or Other Cash-Based Awards, as deemed by the Committee to be consistent with the purposes of the Plan and as evidenced by an Agreement.
| 126 | 2023 Proxy Statement — Appendix B | |
5.2 Terms of Other Share-Based or Cash-Based Awards
Other Share-Based Awards and Other Cash-Based Awards shall be subject to the following terms and conditions and shall contain such additional terms and conditions, not inconsistent with the terms of this Plan, as the Committee shall deem advisable.
| (a) | Number of Shares or Valuation of Award and Other Terms. The number of shares of Common Stock subject to an Other Share-Based Award, or the value of any Other Cash-Based Award, as well as the Restriction Period, Performance Period (if any) and Performance Measures (if any) applicable to such awards shall be determined by the Committee. |
| (b) | Vesting and Forfeiture. The Agreement relating to an Other Share-Based Award or an Other Cash-Based Award shall provide, in the manner determined by the Committee, in its discretion, and subject to the provisions of this Plan, for the vesting of such award (i) if the holder of such award remains continuously in the employment of the Company during the specified Restriction Period and (ii) if specified Performance Measures (if any) are satisfied or met during a specified Performance Period, and for the forfeiture of the shares of Common Stock subject to such award (x) if the holder of such award does not remain continuously in the employment of the Company during the specified Restriction Period or (y) if specified Performance Measures (if any) are not satisfied or met during a specified Performance Period. |
| (c) | Settlement of Vested Other Share-Based Awards or Other Cash-Based Awards. The Agreement relating to an Other Share-Based Award or an Other Cash-Based Award shall specify whether such award may be settled in shares of Common Stock or cash or a combination thereof. Any dividends or dividend equivalents with respect to an Other Share-Based Award or an Other Cash-Based Award shall be subject to the same restrictions as such award. Prior to the settlement of an Other Share-Based Award in shares of Common Stock, and at all times with respect to an Other Cash-Based Award, the holder of such award shall have no rights as a stockholder of the Company. |
| (d) | Additional Terms. The prospective recipient of an Other Share-Based Award or Other Cash-Based Award shall not have any rights with respect to such award, unless and until such recipient has received an Agreement and, if required by the Committee in the Agreement, executed and delivered a fully executed copy thereof to the Company, within a period of sixty (60) days (or such other period as the Committee may specify) after the award date. |
5.3 Termination of Employment or Service
All of the terms relating to the satisfaction of Performance Measures and the termination of the Restriction Period or Performance Period relating to an Other Share-Based Award or Other Cash-Based Award, or any forfeiture and cancellation of such award (i) upon a termination of employment with or service to the Company of the holder of such award, whether by reason of disability, retirement, death or any other reason, or (ii) during a paid or unpaid leave of absence, shall be determined by the Committee and set forth in the applicable award Agreement.
VI. General
6.1 Effective Date and Term of Plan
This Plan shall be submitted to the stockholders of the Company for approval and, if approved, shall become effective as of the date of such stockholder approval. This Plan shall terminate on the tenth anniversary of such effective date, unless terminated earlier by the Board. Termination of this Plan shall not affect the terms or conditions of any award granted prior to termination. Awards hereunder may be made at any time prior to the termination of this Plan.
| Appendix B— 2023 Proxy Statement | 127 |
6.2 Amendments
The Board may amend this Plan as it shall deem advisable; provided, however, that no amendment to the Plan shall be effective without the approval of the Company’s stockholders if (i) stockholder approval is required by applicable law, rule or regulation, including any rule of the New York Stock Exchange, or any other stock exchange on which the Common Stock is then traded, or (ii) such amendment seeks to modify Section 2.4 hereof; and provided further, that no amendment may materially impair the rights of a holder of an outstanding award without the consent of such holder.
6.3 Agreement
Each award under this Plan shall be evidenced by an Agreement setting forth the terms and conditions applicable to such award. No award shall be valid until an Agreement is executed by the Company and, to the extent required by the Company, either executed, accepted or acknowledged by the recipient by such means approved by the Company within the time period specified by the Company. Upon such execution or execution and electronic acceptance, and delivery of the Agreement to the Company, such award shall be effective as of the effective date set forth in the Agreement.
6.4 Non-Transferability
No award shall be transferable other than by will, the laws of descent and distribution or pursuant to a qualified domestic relations order as defined by the Code or beneficiary designation procedures approved by the Company or, to the extent expressly permitted in the Agreement relating to such award, to the holder’s family members, a trust or entity established by the holder for estate planning purposes or a charitable organization designated by the holder, in each case, without consideration. Except to the extent permitted by the foregoing sentence or the Agreement relating to an award, each award may be exercised or settled during the holder’s lifetime only by the holder or the holder’s legal representative or similar person. Except as permitted by the second preceding sentence, no award may be sold, transferred, assigned, pledged, hypothecated, encumbered or otherwise disposed of (whether by operation of law or otherwise) or be subject to execution, attachment or similar process. Upon any attempt to so sell, transfer, assign, pledge, hypothecate, encumber or otherwise dispose of any award, such award and all rights thereunder shall immediately become null and void.
6.5 Tax Withholding
The Company shall have the right to require, prior to the issuance or delivery of any shares of Common Stock or the payment of any cash pursuant to an award made hereunder, payment by the holder of such award of any federal, state, local or other taxes which may be required to be withheld or paid in connection with such award. An Agreement may provide that (i) the Company shall withhold whole shares of Common Stock which would otherwise be delivered to a holder, having an aggregate Fair Market Value determined as of the date the obligation to withhold or pay taxes arises in connection with an award (the “Tax Date”), or withhold an amount of cash which would otherwise be payable to a holder, in the amount necessary to satisfy any such obligation or (ii) the holder may satisfy any such obligation by any of the following means: (A) a cash payment to the Company; (B) delivery (either actual delivery or by attestation procedures established by the Company) to the Company of previously owned whole shares of Common Stock having an aggregate Fair Market Value, determined as of the Tax Date, equal to the amount necessary to satisfy any such obligation; (C) authorizing the Company to withhold whole shares of Common Stock which would otherwise be delivered having an aggregate Fair Market Value, determined as of the Tax Date, or withhold an amount of cash which would otherwise be payable to a holder, equal to the amount necessary to satisfy any such obligation; (D) in the case of the exercise of a Stock Option or SAR, a cash payment by a broker-dealer acceptable to the Company or (E) any combination of (A), (B) and (C), in each case to the extent set forth in the Agreement relating to the award. Shares of Common Stock to be delivered or withheld may not have an aggregate Fair Market Value in excess of the amount determined by applying the maximum statutory withholding rate; provided, however, that if a fraction of a share of Common Stock would be required to satisfy the maximum statutory withholding taxes, then the number of shares of Common Stock to be delivered or withheld may be rounded up to the next nearest whole share of Common Stock.
| 128 | 2023 Proxy Statement — Appendix B | |
6.6 Restrictions on Shares
Each award made hereunder shall be subject to the requirement that if at any time the Company determines that the listing, registration or qualification of the shares of Common Stock subject to such award upon any securities exchange or under any law, or the consent or approval of any governmental body, or the taking of any other action is necessary or desirable as a condition of, or in connection with, the delivery of shares thereunder, such shares shall not be delivered unless such listing, registration, qualification, consent, approval or other action shall have been effected or obtained, free of any conditions not acceptable to the Company. The Company may require that certificates evidencing shares of Common Stock delivered pursuant to any award made hereunder bear a legend indicating that the sale, transfer or other disposition thereof by the holder is prohibited except in compliance with the Securities Act of 1933, as amended, and the rules and regulations thereunder.
6.7 Adjustment
In the event of any increase or decrease in the number of issued shares of Common Stock resulting from a subdivision or consolidation of shares or other capital adjustment, or the payment of a stock dividend or other increase or decrease in shares, effected without receipt of consideration by the Company, or other change in corporate or capital structure, the number and class of securities available under this Plan, the maximum number of securities available for awards under this Plan, the terms of each outstanding Stock Option and SAR (including the number and class of securities subject to each outstanding Stock Option or SAR and the purchase price or base price per share), the terms of each outstanding Stock Award (including the number and class of securities subject thereto), the terms of each outstanding Performance Award (including the number and class of securities subject thereto), the maximum number of securities with respect to which Stock Options or SARs may be granted during any calendar year of the Company to any one grantee shall be appropriately adjusted by the Committee, such adjustments to be made in the case of outstanding options and stock appreciation rights without an increase in the aggregate purchase price and in accordance with Section 409A of the Code; provided, however, that any fractional shares resulting from any such adjustment shall be eliminated. In furtherance of this authorization, with respect to outstanding awards, upon the occurrence of an event constituting an “equity restructuring” (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation—Stock Compensation), each Participant shall have a legal right to the equitable adjustment of the Participant’s outstanding awards, with the manner of such adjustment to be determined by the Committee as provided in this Section 6.7. In the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, including a Change in Control, the adjustments described in this Section 6.7 may be made as determined to be appropriate or desirable by the Committee in its discretion. The decision of the Committee regarding any adjustment pursuant to this Section 6.7 shall be final, binding and conclusive.
6.8 Change in Control
| (a) | Subject to the terms of the applicable award Agreement, in the event of any other change in corporate capitalization, including a merger, consolidation, reorganization, or partial or complete liquidation of the Company, including a Change in Control, then in addition to the adjustments described in Section 6.7 determined to be appropriate or desirable by the Committee, the Board (as constituted prior to such Change in Control) may, in its discretion: |
| (i) | provide that (A) some or all outstanding Stock Options and SARs shall become exercisable in full or in part, either immediately or upon a subsequent termination of employment, (B) the Restriction Period applicable to some or all outstanding Restricted Stock Awards and Restricted Stock Unit Awards shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (C) the Performance Period applicable to some or all outstanding awards shall lapse in full or in part, and (D) the Performance Measures applicable to some or all outstanding awards shall be deemed to be satisfied at the target or any other level; |
| Appendix B— 2023 Proxy Statement | 129 |
| (ii) | require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted for some or all of the shares of Common Stock subject to an outstanding award, with an appropriate and equitable adjustment to such award as shall be determined by the Board or the Committee in accordance with Section 6.7; and/or |
| (iii) | require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (1) in the case of a Stock Option or an SAR, the aggregate number of shares of Common Stock then subject to the portion of such Stock Option or SAR surrendered multiplied by the excess, if any, of the Fair Market Value of a share of Common Stock as of the date of the Change in Control, over the purchase price or base price per share of Common Stock subject to such Stock Option or SAR (including no payment or consideration in the case of a Stock Option or SAR having a purchase price or base price per share of Common Stock equal to, or in excess of, the Fair Market Value of a share of Common Stock subject to such Stock Option or SAR), (2) in the case of a Stock Award or a Performance Award denominated in shares of Common Stock, the aggregate number of shares of Common Stock then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 6.8(a)(i), multiplied by the Fair Market Value of a share of Common Stock as of the date of the Change in Control, and (3) in the case of a Performance Award denominated in cash, the value of the Performance Award then subject to the portion of such award surrendered to the extent the Performance Measures applicable to such award have been satisfied or are deemed satisfied pursuant to Section 6.8(a)(i); (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above. |
| (b) | For purposes of this Plan, unless otherwise provided in an Agreement, “Change in Control” shall mean the happening of any of the following events: |
| (i) | any individual, entity, or group (within the meaning of Sections 13(d)(3) or 14(d)(2) of the Exchange Act) (an “Entity”) becomes the beneficial owner (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 25% or more of either (A) the outstanding shares of common stock of the Company (the “Outstanding Company Common Stock”), or (B) the combined voting power of the outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Outstanding Company Voting Securities”); excluding, however, the following: (1) any acquisition by the Company or any subsidiary, (2) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by, or under common control with, the Company, (3) any acquisition by an underwriter temporarily holding such Outstanding Company Common Stock or Outstanding Company Voting Securities pursuant to an offering of such securities or (4) any acquisition by any corporation pursuant to a transaction which complies with clauses (A), (B), and (C) of paragraph (c) of this definition; |
| (ii) | individuals who, as of the date hereof, constitute the Board (the “Incumbent Board”) cease for any reason to constitute a majority thereof; provided, however, that any individual becoming a director whose election, or nomination for election by the Company’s stockholders, was approved by a vote of at least 50% of the directors 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 |
| 130 | 2023 Proxy Statement — Appendix B | |
| | to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of an Entity other than the Board; |
| (iii) | consummation of a transaction involving (i) a merger, reorganization or consolidation of the Company or any direct or indirect subsidiary of the Company, or (ii) a sale or other disposition of all or substantially all of the assets of the Company (each, a “Corporate Transaction”); excluding, however, such a Corporate Transaction pursuant to which (A) all or substantially all of the individuals and entities who are the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Corporate Transaction will beneficially own, directly or indirectly, more than sixty percent (60%) of, respectively, the outstanding shares of common stock, and the combined voting power of the then-outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Corporate Transaction (including, without limitation, a corporation or other person which as a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries) (each, a “Continuing Company”) in substantially the same proportions as their ownership, immediately prior to such Corporate Transaction, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be (excluding any outstanding voting securities of the Continuing Company that such beneficial owners hold immediately following the consummation of the Corporate Transaction as a result of their ownership prior to such consummation of voting securities of any corporation or other entity involved in or forming part of the Continuing Company, other than the Company or one of its subsidiaries), (B) no Entity (other than the Company, any employee benefit plan (or related trust) of the Company, or the Continuing Company will beneficially own, directly or indirectly, twenty-five percent (25%) or more of, respectively, the outstanding shares of common stock of the Continuing Company or the combined voting power of the outstanding voting securities of the Continuing Company entitled to vote generally in the election of directors, unless such ownership resulted solely from ownership of securities of the Company prior to the Corporate Transaction, and (C) individuals who were members of the Incumbent Board will, immediately after the consummation of the Corporate Transaction, constitute at least a majority of the members of the board of directors of the Continuing Company; or |
| (iv) | the approval by the stockholders of the Company of a complete liquidation or dissolution of the Company |
| (c) | The decision of the Board or Committee regarding any adjustment, action or cancellation pursuant to this Section 6.8 shall be final, binding and conclusive. |
6.9 Deferrals
The Committee may determine that the delivery of shares of Common Stock or the payment of cash, or a combination thereof, upon the exercise or settlement of all or a portion of any award (other than awards of Stock Options and SARs) made hereunder shall be deferred, or the Committee may, in its sole discretion, approve deferral elections made by holders of awards. Deferrals shall be for such periods and upon such terms as the Committee may determine in its sole discretion, subject to the requirements of Section 409A of the Code.
6.10 No Right of Participation, Employment or Service
Unless otherwise set forth in an employment agreement, no person shall have any right to participate in this Plan. Neither this Plan nor any award made hereunder shall confer upon any person any right to continued employment by or service with the Company, any Subsidiary or any affiliate of the Company or affect in any manner the right of the Company, any Subsidiary or any affiliate
| Appendix B— 2023 Proxy Statement | 131 |
of the Company to terminate the employment or service of any person at any time without liability hereunder.
6.11 Rights as Stockholder
No person shall have any right as a stockholder of the Company with respect to any shares of Common Stock or other equity security of the Company which is subject to an award hereunder unless and until such person becomes a stockholder of record with respect to such shares of Common Stock or equity security.
6.12 Designation of Beneficiary
To the extent permitted by the Company, a holder of an award may file with the Company a written designation of one or more persons as such holder’s beneficiary or beneficiaries (both primary and contingent) in the event of the holder’s death or incapacity. To the extent an outstanding Stock Option or SAR granted hereunder is exercisable, such beneficiary or beneficiaries shall be entitled to exercise such Stock Option or SAR pursuant to procedures prescribed by the Company. Each beneficiary designation shall become effective only when filed in writing with the Company during the holder’s lifetime on a form prescribed by the Company. The spouse of a married holder domiciled in a community property jurisdiction shall join in any designation of a beneficiary other than such spouse. The filing with the Company of a new beneficiary designation shall cancel all previously filed beneficiary designations. If a holder fails to designate a beneficiary, or if all designated beneficiaries of a holder predecease the holder, then each outstanding award held by such holder, to the extent vested or exercisable, shall be payable to or may be exercised by such holder’s executor, administrator, legal representative or similar person.
6.13 Governing Law
This Plan, each award hereunder and the related Agreement, and all determinations made and actions taken pursuant thereto, to the extent not otherwise governed by the Code or the laws of the United States, shall be governed by the laws of the State of Illinois and construed in accordance therewith without giving effect to principles of conflicts of laws.
6.14 Foreign Employees
Without amending this Plan, the Committee may grant awards to eligible persons who are foreign nationals and/or reside outside the U.S. on such terms and conditions different from those specified in this Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of this Plan and, in furtherance of such purposes the Committee may make such modifications, amendments, procedures, subplans and the like as may be necessary or advisable to comply with provisions of laws in other countries or jurisdictions in which the Company or its Subsidiaries operates or has Employees.
6.15 Awards Subject to Clawback
The awards granted under this Plan and any cash payment or shares of Common Stock delivered pursuant to an award are subject to forfeiture, recovery by the Company or other action pursuant to the applicable Agreement or any clawback or recoupment policy which the Company may adopt from time to time, including without limitation any such policy which the Company may be required to adopt under the Dodd-Frank Wall Street Reform and Consumer Protection Act and implementing rules and regulations thereunder, or as otherwise required by law.
6.16 Unfunded Status of Plan
The Plan is intended to constitute an “unfunded” plan for incentive compensation. With respect to any payments not yet made or shares of Common Stock not yet transferred to a Participant by the Company, nothing contained herein shall give any such Participant any rights that are greater than those of a general creditor of the Company.
| 132 | 2023 Proxy Statement — Appendix B | |
Appendix C
Non–GAAP Reconciliations*
| Free Cash Flow (in millions) | FY 2022 | FY 2021 |
| Net Cash Provided by Operating Activities | $580.4 | $586.2 |
| Net Cash Provided by (Used for): | | |
| Capital expenditures | (388.3) | (267.1) |
| Proceeds from the sale of property, plant and equipment | 11.3 | 7.2 |
| Effect of exchange rate changes | (11.9) | (5.5) |
| Free Cash Flow | $191.5 | $320.8 |
Earnings Per Share and
Operating Earnings
(In millions, except per share data) | Operating Earnings | Diluted Earnings per Share |
| | | | | |
| FY 2022 | FY 2021 | FY 2022 | FY 2021 | FY 2020 |
| GAAP | $947.8 | $812.9 | $9.06 | $7.59 | $4.70 |
| Restructuring, exit and impairment charges | 25.1 | 0.8 | 0.25 | 0.01 | 0.04 |
| Purchase accounting amortization | 65.0 | 45.7 | 0.65 | 0.46 | 0.29 |
| Acquisition, Integration, and IT related costs | 10.8 | 24.3 | 0.11
| 0.27 | 0.05
|
| Sport Yacht & Yachts | — | 3.8 | — | 0.04 | — |
| Palm Coast reclassified from held-for-sale | — | 0.8 | — | 0.01 | — |
| Gain on sales of assets | — | (1.5) | — | (0.01) | — |
| Special tax items | — | — | (0.04) | (0.13) | — |
| Loss on early extinguishment of debt | — | — | — | 0.04 | — |
| Pension settlement benefit | | | | | (0.01) |
| As Adjusted | $1,048.7 | $886.8 | $10.03 | $8.28 | $5.07 |
| | | | | | |
| GAAP operating margin | 13.9% | 13.9% | | | |
| Adjusted operating margin | 15.4% | 15.2% | | | |
| * | All figures are in millions and reflect continuing operations only. In order to better align Brunswick’s reported results with the internal metrics used by Brunswick’s management to evaluate business performance as well as to provide better comparisons to prior periods and peer data, non-GAAP measures exclude the impact of purchase accounting amortization related to acquisitions, among other adjustments. |
| Brunswick does not provide forward-looking guidance for certain financial measures on a GAAP basis because it is unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include restructuring, exit, and impairment costs, special tax items, acquisition-related costs, and certain other unusual adjustments. |
Brunswick does not provide forward-looking guidance for certain financial measures on a GAAP basis because it is unable to predict certain items contained in the GAAP measures without unreasonable efforts. These items may include restructuring, exit, and impairment costs, special tax items, acquisition-related costs, and certain other unusual adjustments.
| 2022Appendix C PROXY STATEMENT — 2023 Proxy Statement | 62 133 |
Committee Chair
