Exhibit 10.18
 
BRUNSWICK CORPORATION
 
2005 AUTOMATIC DEFERRED COMPENSATION PLAN
 
As Amended and Restated (Effective January 1, 2009)
 
SECTION 1 
 
General
 
1.1. Purpose.  The Brunswick Corporation 2005 Automatic Deferred Compensation
Plan (the “Plan”) was previously established by Brunswick Corporation (the
“Company”) to provide for the deferral of compensation payable to Covered
Executives by the Company and Related Companies that would otherwise be
non-deductible by reason of section 162(m) of the Code, and thereby avoid the
loss of such deduction, and to compensate the Covered Executives for such
deferral.  The Plan applies to the deferral of amounts that are earned or become
vested after December 31, 2004.  The Brunswick Corporation Automatic Deferred
Compensation Plan (the “Prior Plan”) shall apply to the deferral of amounts that
are earned or become vested on or before December 31, 2004. The following
provisions constitute an amendment and restatement of the Plan, effective as of
January 1, 2009.
 
1.2. Code.  For purposes of the Plan, the term “Code” means the Internal Revenue
Code of 1986, as amended.  References to sections of the Code also refer to any
successor provisions thereof.  If, after the Effective Date, there is a change
in the provisions or interpretation of Code sections 162(m) or 409A which would
have a material effect on the benefits of the Plan to a Covered Executive or the
Company, the Company shall revise the Plan in good faith to preserve the
benefits of the Plan for the Company, the Related Companies, and the Covered
Executives; provided, however, that if any change to the Plan pursuant to this
sentence is adverse to a Covered Executive, the Covered Executive shall be
provided with reasonable compensation therefore.
 
1.3. Effective Date.  The “Effective Date” of this amendment and restatement of
the Plan is January 1, 2009.
 
1.4. Related Companies.  The term “Related Companies” means any company during
any period in which compensation paid to a Covered Executive by such company
would be required to be aggregated with compensation paid to the Covered
Executive by the Company, in accordance with the affiliated group rules
applicable to Code section 162(m).  The Company shall enter into such
arrangements with the Related Companies as it shall deem appropriate to
implement the terms of the Plan, and shall inform the Covered Executive of any
material failure to provide for such implementation.
 
1.5. Operation and Administration.  The authority to control and manage the
operation and administration of the Plan shall be vested in the Human Resources
and Compensation Committee (the “Committee”) of the Board of Directors of the
Company (the “Board”).  In controlling and managing the operation and
administration of the Plan, the Committee shall have the rights, powers and
duties set forth in Section 6.  Capitalized terms in the Plan shall be defined
as set forth in the Plan.
 
1.6. Applicable Law.   The Plan shall be construed and administered in
accordance with the laws of the State of Illinois to the extent that such laws
are not preempted by the laws of the United States of America.
 
1.7. Number.  Where the context admits words in the singular shall include the
plural and the plural shall include the singular.
 
1.8. Notices.  Any notice or document required to be filed with the Committee
under the Plan will be properly filed if delivered or mailed to the Human
Resources and Compensation Committee, in care of the Company, at its principal
executive offices.  The Committee may, by advance written notice to affected
persons, revise such notice procedure from time to time.  Any notice required
under the Plan may be waived by the person entitled to notice.
 
1.9. Benefits Under Qualified Plans.  Compensation of any Covered Executive that
is deferred under the Plan, and benefits payable under the Plan, shall be
disregarded for purposes of determining the benefits under any plan that is
intended to be qualified under section 401(a) of the Code.
 
1.10. Other Costs and Benefits.  The Plan is intended to defer, but not to
eliminate, payment of compensation to a Covered Executive.  Accordingly, if any
compensation or benefits that would otherwise be provided to a Covered Executive
in the absence of the Plan are reduced or eliminated by reason of deferral under
the Plan, the Company shall equitably compensate the Covered Executive for such
reduction or elimination, and the Company shall reimburse the Covered Executive
for any increased or additional penalty taxes which the Covered Executive may
incur by reason of deferral under the Plan which would not have been incurred in
the absence of such deferral.  In the event a Covered Executive is entitled to
reimbursement pursuant to the preceding sentence, such reimbursement shall be
made no later than the last day of the taxable year following the taxable year
in which the penalty taxes are paid.  Notwithstanding the foregoing provisions,
no reimbursement will be made for taxes resulting from an increase or decrease
in individual income tax rates, or resulting from an increase in the amount of
compensation payable to the Covered Executive by reason of the accrual of
earnings or any other provision of the Plan.
 
1.11. Evidence.  Evidence required of anyone under the Plan may be by
certificate, affidavit, document or other information which the person acting on
it considers pertinent and reliable, and signed, made or presented by the proper
party or parties.
 
1.12. Action by Company.  Any action required or permitted to be taken by the
Company or any Related Company shall be by resolution of its board of directors,
or by a duly authorized officer of the Company or Related Company, as the case
may be.
 
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1.13. Withholding.   Except as otherwise provided by the Committee, (i) the
deduction of withholding and any other taxes required by law will be made from
all amounts paid in cash and (ii) in the case of payments in shares of common
stock of the Company (“Company Stock”), the Participant shall be required to pay
in cash the amount of any taxes required to be withheld prior to receipt of such
Company Stock, or alternatively, a number of shares of Company Stock the Fair
Market Value (defined below) of which equals the amount required to be withheld
may be deducted from the payment; provided, however, that the number of shares
of Company Stock so deducted may not have an aggregate Fair Market Value in
excess of the amount determined by applying the minimum statutory withholding
rate.  “Fair Market Value” means the closing price on the New York Stock
Exchange - Composite Transactions Tape on the relevant date or on the next
preceding date on which a closing price was quoted; provided, however, that the
Committee may specify some other definition of Fair Market Value.
 
1.14. Adjustments.  In the event of any increase or decrease in the number of
issued shares of Company 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 distributable under this Plan and the number of share units in
Participants’ Automatic Stock Deferral Accounts shall be appropriately adjusted
by the Committee; provided, however, that any fractional shares resulting from
any such adjustment shall be eliminated.  The decision of the Committee
regarding any such adjustment shall be final, binding and conclusive.
SECTION 2

Participation
 
2.1. Covered Executives.  Subject to the terms of the Plan, an individual shall
be a “Covered Executive” subject to the deferral requirements of the Plan for
any year, if, for that year, the individual is a “covered employee” with respect
to the Company, as that term is used in Code section 162(m)(3) and Treas. Reg.
section 1.162-27(c)(2).  The provisions of the Plan shall not apply to any
employee to the extent that the employee is subject to an individual agreement
with the Company providing for automatic deferral of compensation to avoid
non-deductibility of compensation by reason of Code section 162(m).
 
2.2. Plan Not Contract of Employment.  The Plan does not constitute a contract
of employment, and participation in the Plan will not give any employee the
right to be retained in the employ of the Company nor any right or claim to any
benefit under the Plan, unless such right or claim has specifically accrued
under the terms of the Plan.
 
SECTION 3

Automatic Deferral
 
3.1. Deferred Amount.  If a Covered Executive’s total compensation from the
Company or a Related Company that is not exempt from Code Section 162(m) exceeds
$1,500,000 for a calendar year, then the amount in excess of $1,500,000 shall
not be paid to the Covered Executive when otherwise due, but shall instead be
credited to the Covered Executive’s Automatic Cash Deferral Account or Automatic
Stock Deferral Account in accordance with this Section 3.  In determining the
amounts subject to deferral under this subsection 3.1, the following shall
apply:
 
(a)  
To the extent that the compensation is otherwise payable in cash to a Covered
Executive, payment of such cash shall be deferred under the Automatic Cash
Deferral Account, in accordance with this Section 3.

 
(b)  
To the extent that the compensation is otherwise payable in Company Stock,
delivery of those shares shall be deferred under the Automatic Stock Deferral
Account, in accordance with this Section 3.

 
(c)  
Nothing in the Plan shall be construed to require a deferral of the salary of a
Covered Executive.

 
3.2. Automatic Cash Deferral Account.  The Automatic Cash Deferral Account
balance shall be credited with the amount determined in accordance with
subsection 3.1(a), as of the date on which such amount would otherwise have been
paid to the Covered Executive were it not for deferral under the Plan.  The
Automatic Cash Deferral Account shall be adjusted from time to time in
accordance with the following:
 
(a)  
Unless a Covered Executive makes an election at such time and in such form as
may be determined by the Committee from time to time to have paragraph (b) next
below apply, the Automatic Cash Deferral Account shall be credited as of the
last day of each calendar month with interest for that month at a rate equal to
the greater of: (a) the prime rate in effect at JPMorgan Chase on the first day
of the month plus two percentage points, or (b) the Company’s short-term
borrowing rate.

 
(b)  
If a Covered Executive elects application of this paragraph (b), the Company,
after consultation with the Covered Executive, may invest amounts credited to
the Covered Executive’s Automatic Cash Deferral Account in securities and other
assets as the Company may determine.  The Company and its agents shall not incur
any liability by reason of purchasing, or failing to purchase, any security or
other asset in good faith.  A Covered Executive’s Automatic Cash Deferral
Account shall be charged or credited as of the last day of each fiscal year of
the Company, and at such other times as the balance in the Automatic Cash
Deferral Account shall be determined, to reflect (i) dividends, interest or
other earnings on any such investments, reduced by the cost of funds (for the
period of deferral) for the amount of any taxes incurred by the Company with
respect thereto; (ii) any gains or losses (whether or not realized) on such
investment; (iii) the cost of funds  (for the period of deferral) for the amount
of any taxes incurred with respect to net gains realized on any such
investments, taking into account any applicable capital loss carryovers and
carrybacks, provided that in computing such taxes, capital gains and losses on
assets of the Company other than such investments shall be disregarded; and (iv)
any direct expenses incurred by the Company in such fiscal year or other
applicable period which would not have been incurred but for the investment of
amounts pursuant to the provisions of this paragraph (b) (provided that this
clause (iv) shall not be construed to permit a reduction for the cost of taxes).

 
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3.3. Automatic Stock Deferral Account.  The Automatic Stock Deferral Account
balance shall be credited with the number of share units equal to number of
shares of Company Stock as of the date on which such shares would otherwise have
been paid to a Covered Executive were it not for deferral under the Plan.  The
Automatic Stock Deferral Account shall be adjusted from time to time to reflect
the deemed reinvestment of dividends in accordance with the terms of the
Company’s dividend reinvestment program, as in effect from time to time.
 
3.4. Statements.  On a quarterly basis, the Committee shall provide the Covered
Executive with statements of the Covered Executive’s Automatic Cash Deferral
Account and Automatic Stock Deferral Account.  Upon request of a Covered
Executive, the Committee shall provide the computations of amounts under
Sections 3 and 4.
 
SECTION 4

Distributions
 
4.1. Time of Payment of Deferred Amount.  Amounts credited to a Covered
Executive’s Automatic Cash Deferral Account and Automatic Stock Deferral Account
shall be paid or distributed upon the earliest of the following:
 
(a)  
To the extent provided by the Secretary of the Treasury under Code section 409A,
as soon as practicable (within 90 days) after a “change in control” (as defined
under Code section 409A; provided, however, in no event shall an acquisition of
assets under Treasury Regulation 1.409A-3(i)(5)(vii) constitute a change in
control event, unless such event is also a sale or disposition of all or
substantially all of the Company’s assets).

 
(b)  
six months after the date the Covered Executive ceases to be employed by the
Company and all Related Companies.

 
4.2. Form of Payment of Deferred Amount.  To the extent that an amount is
payable to or on behalf of a Covered Executive with respect to the Automatic
Cash Deferral Account in accordance with subsection 3.2, it shall be paid by the
Company in a cash lump sum.  To the extent that an amount is payable to or on
behalf of a Covered Executive with respect to the Automatic Stock Deferral
Account in accordance with subsection 3.3, it shall be distributed by the
Company in shares of Company Stock in a lump sum.
 
4.3. Beneficiary.  Subject to the terms of the Plan, any benefits payable to a
Covered Executive under the Plan that have not been paid at the time of the
Covered Executive’s death shall be paid at the time and in the form determined
in accordance with the foregoing provisions of the Plan to the beneficiary
designated by the Covered Executive in writing filed with the Committee in such
form and at such time as the Committee shall require.  A beneficiary designation
form will be effective only when the signed form is filed with the Committee
while the Participant is alive and will cancel all beneficiary designation forms
filed earlier.  If a Covered Executive fails to designate a beneficiary, or if
the designated beneficiary of the deceased Covered Executive dies before the
Covered Executive or before complete payment of the Covered Executive’s
benefits, the amounts shall be paid to the legal representative or
representatives of the estate of the last to die of the Covered Executive and
histhe Covered Executive’s designated beneficiary.
 
4.4. Distributions to Disabled Persons.  Notwithstanding the provisions of this
Section 4, if, in the Committee’s opinion, a Covered Executive or a beneficiary
is under a legal disability or is in any way incapacitated so as to be unable to
manage such individual’s financial affairs, the Committee may direct that
payment be made to a relative or friend of such individual for such individual’s
benefit until claim is made by a conservator or other person legally charged
with the care of such individual’s person or estate, and such payment shall be
in lieu of any such payment to the Covered Executive or the
beneficiary.  Thereafter, any benefits under the Plan to which the Covered
Executive or the beneficiary is entitled shall be paid to such conservator or
other person legally charged with the care of such individual’s person or
estate.
 
4.5. Benefit May Not be Assigned.  Neither a Covered Executive nor any other
person shall have any voluntary or involuntary right to commute, sell, assign,
pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate or
convey in advance of actual receipt of the amounts, if any, or any part thereof,
payable hereunder, which are expressly declared to be unassignable and
non-transferable.  No part of the amounts payable shall be, prior to actual
payment, subject to seizure or sequestration for payment of any debts,
judgments, alimony or separate maintenance owed by the Covered Executive or any
other person, or be transferred by operation of law in the event of the Covered
Executive’s or any other person’s bankruptcy or insolvency.  Payments to or on
behalf of a Covered Executive under the Plan are not subject to reduction or
offset for amounts due or alleged to be due from the Covered Employee to the
Company or any Related Company.
 
SECTION 5
 
Source of Benefit Payments
 
The amount of any benefit payable under the Plan shall be paid from the general
assets of the Company.  Neither a Covered Executive nor any other person shall
acquire by reason of the Plan any right in or title to any assets, funds or
property of the Company whatsoever, including, without limiting the generality
of the foregoing, any specific funds, assets, or other property which the
Company, in its sole discretion, may set aside in anticipation of a liability
under the Plan.  A Covered Executive shall have only a contractual right to the
amounts, if any, payable under the Plan, unsecured by any assets of the
Company.  Nothing contained in the Plan shall constitute a guarantee by the
Company that the assets of the Company shall be sufficient to pay any benefits
to any person.
 
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SECTION 6

Committee
 
6.1. Powers of Committee.  The authority to control and manage all aspects of
the operation and administration of the Plan shall be vested in the
Committee.  The Committee is authorized to interpret the Plan, to establish,
amend, and rescind any rules and regulations relating to the Plan, and to make
all other determinations that may be necessary or advisable for the
administration of the Plan.  Except as otherwise specifically provided by the
Plan, any determinations to be made by the Committee under the Plan shall be
decided by the Committee in its sole discretion.  Any interpretation of the Plan
by the Committee and any decision made by it under the Plan is final and binding
on all persons.  The amount to be deferred under Section 3 shall be based on
such estimates as the Committee determines in good faith to be appropriate.
 
6.2. Delegation by Committee.  The Committee may allocate all or any portion of
its responsibilities and powers to any one or more of its members and may
delegate all or any part of its responsibilities and powers to any person or
persons selected by it.  Any such allocation or delegation may be revoked by the
Committee at any time.
 
6.3. Information to be Furnished to Committee.  The Company and the Related
Companies shall furnish the Committee with such data and information as may be
required for it to discharge its duties.  The records of the Company and the
Related Companies as to a Covered Executive’s employment, termination of
employment, leave of absence, reemployment and compensation shall be conclusive
on all persons unless determined to be incorrect.  Covered Executives and other
persons entitled to benefits under the Plan must furnish the Committee such
evidence, data or information as the Committee considers desirable to carry out
the Plan.
 
6.4. Liability and Indemnification of Committee.  No member or authorized
delegate of the Committee shall be liable to any person for any action taken or
omitted in connection with the administration of the Plan unless attributable to
such individual’s own fraud or willful misconduct; nor shall the Company be
liable to any person for any such action unless attributable to fraud or willful
misconduct on the part of a director or employee of the Company.  The Committee,
the individual members thereof, and persons acting as the authorized delegates
of the Committee under the Plan, shall be indemnified by the Company against any
and all liabilities, losses, costs and expenses (including legal fees and
expenses) of whatsoever kind and nature which may be imposed on, incurred by or
asserted against the Committee or its members or authorized delegates by reason
of the performance of a Committee function if the Committee or its members or
authorized delegates did not act dishonestly or in willful violation of the law
or regulation under which such liability, loss, cost or expense arises.  This
indemnification shall not duplicate but may supplement any coverage available
under any applicable insurance.
 
SECTION 7 

Amendment and Termination
 
The Committee may, at any time, amend or terminate the Plan, subject to the
following:
 
(a)  
Subject to the provisions of subsection 1.2 (relating to changes in the Code),
no amendment or termination may materially adversely affect the rights of any
Covered Executive or beneficiary under the Plan.

 

 

(b)  
Notwithstanding any other provision of the Plan to the contrary, neither the
Committee nor the Board may delegate its rights and responsibilities under this
Section 7; provided, however, that the Board may, from time to time, substitute
itself, or another committee of the Board, for the Human Resources and
Compensation Committee under this Section 7.

 
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