EXHIBIT 10.2
 
BRUNSWICK CORPORATION
2005 DEFERRED COMPENSATION PLAN
FOR NON-EMPLOYEE DIRECTORS
 
(Effective January 1, 2005)
 
 
    SECTION 1  
 
General
 
1.1.  Purpose. The Brunswick Corporation Deferred Compensation Plan for
Non-Employee Directors (the “Plan”) has been established by Brunswick
Corporation (the “Company”) to provide non-employee directors with an
opportunity to meet stock ownership guidelines and otherwise save in a tax
effective manner and thereby aiding in attracting and retaining non-employee
directors of exceptional ability. The Plan shall apply to amounts deferred after
December 31, 2004; amounts deferred on or prior to that date shall be accounted
for and governed by the Company’s prior deferred compensation program for
non-employee Directors under the 1997 Stock Plan.
 
1.2.  Effective Date. The “Effective Date” of the Plan is January 1, 2005.
 
1.3.  Operation and Administration. The authority to control and manage the
operation and administration of the Plan shall be vested in the Corporate
Governance 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 7. Capitalized terms in the Plan shall be defined as set forth in the
Plan.
 
1.4.  Plan Year. The term “Plan Year” means the calendar year.
 
1.5.  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.
 
1.6.  Number. Where the context admits, words in the singular shall include the
plural and the plural shall include the singular.
 
1.7.  Notices. Any notice or document required to be filed with the Plan
Administrator (as defined in subsection 7.1) or the Committee under the Plan
will be properly filed if delivered or mailed to the Plan Administrator, in care
of the Company, at its principal executive offices. The Plan Administrator 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.
 
1.8.  Form and Time of Elections. Unless otherwise specified herein, each
election required or permitted to be made by any Participant or other person
entitled to benefits under the Plan, and any permitted modification or
revocation thereof, shall be in writing filed with the Plan Administrator at
such times, in such form, and subject to such restrictions and limitations as
the Plan Administrator shall require.
 
1.9.  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.
 
1.10.  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 shares in
Participants’ 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.  Participant. Subject to the terms of the Plan, a director of the Company
who is not an employee of the Company or any of its subsidiaries (a
“Non-Employee Director”) shall be eligible to make deferrals under the Plan.
 
2.2.  Deferral Election. A Non-Employee Director shall become a “Participant” in
the Plan by electing to defer payment of all or a portion of the Non-Employee
Director’s Eligible Compensation pursuant to the terms of a “Deferral Election”.
A Non-Employee Director’s Deferral Election with respect to Eligible
Compensation for services to be performed in a calendar year shall be filed
before the end of the preceding calendar year; provided, however, that the
initial Deferral Election of a new Non-Employee Director may be filed within 30
days after the date on which such individual became a Non-Employee Director, and
shall be applicable only to Eligible Compensation for services to be performed
by the Non-Employee Director after the Deferral Election is filed.
 
2.3.  Eligible Compensation. For purposes of the Plan, a Non-Employee Director’s
“Eligible Compensation” means the sum of (a) the portion of such Non-Employee
Director’s annual retainer payable in common stock of the Company (“Eligible
Stock Compensation”) and (b) the portion of such Non-Employee Director’s annual
retainer payable in cash (“Eligible Cash Compensation”).
 
    SECTION 3  
 
Plan Accounting
 
3.1.  Deferred Compensation Accounts. An Account shall be maintained on behalf
of each Participant, which shall be credited with (a) the number of shares of
Company Stock payable to the Participant as Eligible Stock Compensation with
respect to which the Participant has made a Deferral Election and (b) the number
of “Original” shares equal to the sum of (i) the number of shares of Company
Stock the “Fair Market Value” of which (determined as of the date on which the
Eligible Cash Compensation would have been paid to the Participant if it had not
been deferred) equals the amount of the Eligible Cash Compensation with respect
to which the Participant has made a Deferral Election and (ii) the number of
“Premium” shares equal to 20% of the number of Original shares determined in
(i). Such crediting shall occur as of the date on which the Eligible
Compensation would have been paid to the Participant if it had not been
deferred. A Participant’s Account shall be adjusted 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, and shall be charged the
amount of any distributions under the Plan that have not previously been
charged. “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.
 
3.2.  Statement of Accounts. As soon as practicable after the end of each Plan
Year, and at such other times as determined by the Committee, the Company shall
provide each Participant with a statement of the transactions in the
Participant’s Accounts during that year and the Participant’s Account balance as
of the end of the year.
 

 3.3   Relationship to 2003 Plan. Shares of Company Stock awarded under the Plan
shall be deemed to have been issued under the Company’s 2003 Stock Incentive
Plan, as it shall be amended from time to time (the “2003 Plan”). If there shall
no longer be shares of Company Stock available for issuance under the 2003 Plan,
whether due to termination of such plan or otherwise, shares of Company Stock
awarded under the Plan shall be deemed to be issued under such other plan that
(a) has been approved by the stockholders of the Company and (b) provides for
awards of shares of Company Stock to Non-Employee Directors (an “Alternative
Plan”). If there shall no longer be shares of Company Stock available for
issuance under the 2003 Plan and there is no Alternative Plan, no additional
shares of Company Stock shall be issued to Non-Employee Directors under the
Plan.
 
     SECTION 4  
 
Distributions
 
4.1.  General. Subject to this Section 4 and Section 5 (relating to change in
control), the balance of a Participant’s Account shall be distributed on the
first day of the calendar month following the date of the Participant’s
“separation from service” with the Company (as defined under Code section 409A).
Distribution shall be made in either a single lump sum or in annual installments
for up to 15 years, as elected by the Participant in the Participant’s
Distribution Election (defined below). The elected number of installments will
automatically be shortened to the number of years equal to the account value at
time of first scheduled distribution divided by $10,000.
 
4.2.  Distribution Election. A Participant’s initial Deferral Election shall
specify the number of payments in which the Participant’s Account shall be
distributed (“Distribution Election”). A Participant’s Distribution Election may
be changed to increase, but not to decrease, the number of payments in which the
Participant’s Account shall be distributed, subject to the following:
 

(a)   Any such change in a Participant’s Distribution Election will not take
effect until at least 12 months after the change is made; and

 

(b)   Payments under the changed Distribution Election may not begin until at
least 5 years after the date when payments would otherwise have begun.

 
4.3.  Medium of Payment. All distributions from Participants’ Accounts shall be
distributed by the Company in whole shares of Company Stock (plus cash equal to
the Fair Market Value of any fractional share).
 
4.4.  Beneficiary. Subject to the terms of the Plan, any benefits payable to a
Participant under the Plan that have not been paid at the time of the
Participant’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 Participant in writing filed with the Plan Administrator in
such form and at such time as the Plan Administrator shall require. A
beneficiary designation form will be effective only when the signed form is
filed with the Plan Administrator while the Participant is alive and will cancel
all beneficiary designation forms filed earlier. If a deceased Participant
failed to designate a beneficiary, or if the designated beneficiary of a
deceased Participant dies before the Participant or before complete payment of
the Participant’s benefits, the amounts shall be paid to the legal
representative or representatives of the estate of the last to die of the
Participant and the Participant’s designated beneficiary.
 
4.5.  Distributions to Disabled Persons. Notwithstanding the provisions of this
Section 4, if, in the Plan Administrator’s opinion, a Participant or 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 Plan Administrator 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 such Participant or beneficiary.
Thereafter, any benefits under the Plan to which such Participant or beneficiary
is entitled shall be paid to such conservator or other person legally charged
with the care of such individual’s person or estate.
 
4.6.  Benefits May Not be Assigned. Neither the Participant 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, payable hereunder, or any part
hereof, 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, judgements, alimony or
separate maintenance owed by the Participant or any other person, or be
transferred by operation of law in the event of the Participant’s or any other
person’s bankruptcy or insolvency.
 
      SECTION 5  
 
Change in Control
 
To the extent provided by the Secretary of the Treasury under Code section 409A,
each Participant’s then effective Deferral Election and Distribution Election
shall be automatically revoked as of the date on which a "change in control” (as
defined under Code section 409A occurs and the Participant shall receive a lump
sum distribution of the Participant’s Account balance as soon as practicable
after the date of the change in control. Such distribution shall be made to the
Participant regardless of any elections providing for later distribution that
may otherwise be applicable under the Plan.
 
      SECTION 6  
 
Source of Benefit Payments
 
Neither a Participant nor any other person shall, by reason of the Plan, acquire
any right in or title to any assets, funds or property of the Company
whatsoever, including, without limitation, 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 Participant 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.
 
    SECTION 7  
 
Committee
 
7.1.  Powers of Committee. Responsibility for the day-to-day administration of
the Plan shall be vested in the Plan Administrator, which shall be the
Committee. The authority to control and manage all other aspects of the
operation and administration of the Plan shall also 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, to determine the terms
and provisions of any agreements made pursuant 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.
 
7.2.  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. Until the Committee takes action to the contrary, the
powers and responsibilities of the Plan Administrator shall be delegated to the
Vice President - Human Resources (or delegate) of the Company, subject to such
direction as may be provided to the Vice President - Human Resources or delegate
from time to time by the Committee.
 
7.3.  Information to be Furnished to Committee. The Company shall furnish the
Committee with such data and information as may be required for it to discharge
its duties. The records of the Company as to a Participant’s membership on the
Board shall be conclusive on all persons unless determined to be incorrect.
Participants 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.
 
7.4.  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 8  
 
Amendment and Termination
 
The Committee may, at any time, amend or terminate the Plan (including the rules
for administration of the Plan), subject to the following:
 

(a)   Subject to the following provisions of this Section 8, no amendment or
termination may materially adversely affect the rights of any Participant or
beneficiary under the Plan.

 

(b)   The Committee may revoke the right to defer Eligible Compensation under
the Plan; provided, however, that, except as may be approved by the Board, no
such revocation shall apply to the Eligible Compensation of any Participant to
the extent that the revocation is adopted by the Committee after the date the
Eligible Compensation is otherwise required to be credited to the Participant’s
Account under the Plan.

 

(c)   The Plan may not be amended to delay the date on which benefits are
otherwise payable under the Plan without the consent of each affected
Participant.

 

(d)   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 8; provided, however, that, the Board of Directors may, from time
to time, substitute itself, or another committee of the Board, for the Corporate
Governance Committee under this Section 8.