Exhibit 10.18
2002-2003 STRATEGIC INCENTIVE PLAN (SIP)
Purpose Reward achievement of two year goals
Eligibility Key managers and above identified on an individual
basis.
Participation Level Pro rata participation for cycle ending in first year
of eligibility.
Full participation for subsequent cycles.
Must be employed at year-end to receive an award
(except in the event of death or disability).
Target Incentives Sum of target incentive opportunity as a
percent of salary times salary for all eligible
participants.
Performance Measures Funding to be based on performance versus the
following measures:
> 60% Brunswick Value Added (BVA). BVA defined as
profits after-tax; reduced for cost of capital
charge (capital to include working, fixed and
other assets; cost of capital will include debt
and equity)
o For Division employees 60% BVA will be split
evenly between Division BVA and overall
Brunswick Corporation BVA.
o For Corporate headquarters employees BVA will
be based entirely on overall Brunswick
Corporation BVA.
> 40% performance against Strategic Factors.
o For Division employees based on Division's
strategic factor performance
o For Corporate headquarters employees based
on average of all Division strategic
factor performance results
o For cycles beginning in 2001 factors include:
o Customer satisfaction
o Growth in market share
o Product innovation (percent of sales from
new products)
o Employee satisfaction
Performance Levels:
> Threshold > Minimum performance level supporting the funding
of any variable incentive pay. Threshold to be
determined for each Division and Brunswick
Corporation individually.
> Target > Agreed upon performance level, typically tied to
business plans for performance period.
> Stretch > Performance necessary to support funding at twice
target level.
SIP summary 3
STRATEGIC INCENTIVE PLAN...
Performance Period Generally two-year performance periods will be used.
> For BVA: overlapping cycles beginning each year.
To phase into the program, two performance
periods began in 2001.
o 2001: One year cycle with 50% of normal
target incentives for those transitioning
from 2000 - 2001 SIP. (Current 2000 - 2001
SIP cycle shortened to one year. Pay out
accrued, but will not be paid until regularly
scheduled date - February, 2002.)
o 2001 - 2002: Two year cycle
Beginning in 2002 and in each year thereafter a
new two-year cycle will begin.
> For Strategic Factors: two-year, end-to-end
cycles. Partial pay outs before the end of a
performance cycle may be considered.
Overall Funding Overall funding will be the sum of BVA funding and
strategic factor funding.
Funding Review and The following steps will be taken to review and
Approval approve funding:
> CFO will review actual results quarterly to
evaluate established accruals.
> CEO will review performance at end of performance
period and approve funding or recommend funding
to Human Resource and Compensation Committee as
appropriate.
> Committee will review and approve funding as
deemed appropriate.
Maximum Funding None
Individual Awards Individual awards will be determined on a
discretionary basis using evaluation of individual
performance for the performance period, target
incentives as a percent of salary and covered salary
(actual received for final year or performance
period).
Individuals must be employed at time of payment to
receive an award, except those terminating due to
death or permanent and total disability will be
eligible to receive individual awards.
Timing of Award As soon as practical after financial results are
Payments confirmed and appropriate approvals obtained.
Nothing contained in these materials constitutes or is intended to create a
promise of an individual incentive award or a contract of continued employment.
Employment is at-will and may be terminated by either the employee or
Corporation for any reason at any time.
SIP summary 3
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