Document:

BC 2013.03.30 EX 10.5 - PS TSR

Exhibit 10.5
2013 Performance Share Grant Terms and Conditions
Pursuant to the Brunswick Corporation 2003 Stock Incentive Plan (the “Plan”)

	
		
	Purpose
	To provide incentives to (i) support the execution of Brunswick Corporation’s business strategies and (ii) more closely align the interests of the award recipient with those of Brunswick Corporation’s stockholders.

	Grant Date
	February 4, 2013

	Performance Shares
	Shares of Brunswick Corporation common stock (“Common Stock”) where the number of shares of Common Stock delivered is based on attainment of Performance Criteria set forth herein.  Shares of Common Stock subject to this Grant shall be referred to herein as “Performance Shares.”

	Target Award

	____________ Performance Shares is the target against which Performance Criteria shall apply.

	Performance Period
	•      Cash Flow Return on Investment (“CFROI”) Performance Criteria:  one-year performance period, commencing January 1, 2013, and ending December 31, 2013 (the “CFROI Performance Period”).
•      Total Stockholder Return (“TSR”) Modifier:  three-year performance period, commencing January 1, 2013 and ending December 31, 2015.
•      For purposes of these Terms and Conditions, “Award Performance Period” shall mean the three-year performance period, commencing January 1, 2013, and ending December 31, 2015.

	Performance Criteria
	•      CFROI:  payout of 50% to 150% of the target Performance Shares based solely on performance against CFROI Performance Criteria over the CFROI Performance Period, as set forth in Appendix A attached hereto. 
•      TSR Modifier:  Performance Shares calculated based on CFROI performance (“CFROI Earned Award”) shall be subject to a +/- 20% modifier for Brunswick Corporation’s TSR Performance against TSR Comparator Group.   
o    If Brunswick Corporation’s TSR Performance is equal to or below the 25th percentile of the TSR Performance of the TSR Comparator Group over the Award Performance Period, then the CFROI Earned Award shall be reduced by 20%. 
o    If Brunswick Corporation’s TSR Performance is equal to or greater than the 75th percentile of the TSR Performance of the TSR Comparator Group over the Award Performance Period, then the CFROI Earned Award shall be increased by 20%. 
o    The CFROI Earned Award shall not be modified for Brunswick Corporation’s TSR Performance between the 25th and 75th percentile of the TSR Performance of the TSR Comparator Group over the Award Performance Period. 
o    See Appendix A attached hereto for the definitions of “TSR Performance” and “TSR Comparator Group.”
o    Notwithstanding the level of performance achieved, the number of shares of Common Stock delivered pursuant to the “Timing of Distribution” discussed below shall not exceed the number of shares having a Fair Market Value, as of the date of distribution, equal to 400% of the target dollar value of the award as of the grant date, as set forth in the award notice given to the Grantee in connection with the award. 

	
		
	Termination of employment
	•    Forfeiture of Performance Shares in the event employment terminates prior to the end of the Award Performance Period, except if the Grantee terminates due to death or permanent disability (as defined below) or the Grantee’s age and years of service equals 70 or more or age is 62 or more.
•    In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties)) on or after the first anniversary of the beginning of the Award Performance Period (i) due to death or permanent disability (as defined below) or (ii) on or after the date on which age plus years of service equal 70 or more or age is 62 or more, the Grantee or his or her estate or personal representative shall receive the award, calculated as if the Grantee had remained employed throughout the entire Award Performance Period and based on actual CFROI and TSR Performance.  The Performance Shares shall be distributed to the Grantee in accordance with the terms of this award under “Timing of Distribution.”
•    In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties)) prior to the first anniversary of the beginning of the Award Performance Period (i) due to death or permanent disability (as defined below) or  (ii) on or after the date on which age plus years of service equal 70 or more or age is 62 or more, a pro-rata portion of the award will be distributed to the Grantee or his or her estate or personal representative in accordance with the terms of this award under “Timing of Distribution.”  For purposes of the foregoing sentence, a “pro-rata portion” will mean the product of (x) the number of Performance Shares that would otherwise be paid out at the end of the Award Performance Period based on actual CFROI and TSR Performance and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the CFROI Performance Period through the date of termination of the Grantee’s employment, and the denominator of which is the number of days in the CFROI Performance Period.  All remaining Performance Shares shall be forfeited.  Fractional shares shall be rounded down to the nearest whole share.

	Change in Control
	•    On a Change in Control (as defined in the Plan), a pro-rata portion of the award shall vest and the remainder of the award shall be forfeited. For purposes of the foregoing sentence, a “pro-rata portion” shall mean the product of (x) the number of Performance Shares equal to 100% of the target award (or, if the Change in Control occurs after the CFROI Performance Period, the number of Performance Shares actually earned based on CFROI performance) and (y) a fraction, the numerator of which is the number of days that have elapsed since the beginning of the CFROI Performance Period through the Change in Control (not to exceed the number of days in the CFROI Performance Period), and the denominator of which is the number of days in the CFROI Performance Period. 
•    Any vested Performance Shares shall be delivered to the Grantee within thirty (30) days of such Change in Control; provided, however, for those whose age and years of service could equal 70 or more or age will be 62 or more, in either case prior to January 1, 2015, all of the award will be distributed in accordance with  the terms of this award under “Timing of Distribution;” provided, further, that if the Change in Control is a “change in control event” within the meaning of Internal Revenue Code Section 409A and applicable regulations issued thereunder (except that 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 at least all or substantially all of the Company’s assets), then the vested performance share award shall be delivered to the Grantee within thirty (30) days of such Change in Control.

	
		
	Timing of Distribution
	•    Except as otherwise provided for herein, shares of Common Stock shall be delivered to the Grantee in settlement of the award as soon as administratively practicable after the end of the Award Performance Period, subject to certification in writing of the Company’s attainment of the Performance Criteria.  In no event shall the award be settled later than 2 1⁄2 months following the end of the year in which the third anniversary of the Grant Date occurs.
•    Notwithstanding the foregoing provisions, in the event that (i) the Grantee is a “Covered Employee” (as defined under Internal Revenue Code Section 162(m), as amended) with respect to the taxable year in which the Performance Shares would otherwise be delivered, and (ii) the sum of the value of the Performance Shares deliverable to the Grantee under the award and other compensation payable by Brunswick to the Grantee with respect to such taxable year exceeds $1.5 million, the portion of the Performance Shares that, when added to such other compensation would result in the Grantee receiving total compensation in excess of $1.5 million shall be converted into deferred stock units and be automatically deferred pursuant to Brunswick's Automatic Deferred Compensation Plan.  Performance Shares converted into deferred stock units shall be payable to the Grantee in accordance with the terms of the Automatic Deferred Compensation Plan.

	Tax Withholding

	Tax withholding liability (to meet required FICA, federal, state, and local withholding) must be paid via share reduction upon distribution.

	Form of Distribution
	Shares will be deposited to your existing Dividend Reinvestment Plan account or, if one is not currently on record, deposited into a newly created account.  Stock certificates will be issued on request.

	Additional Terms and Conditions
	Grants are subject to the terms of the Plan.  To the extent any provision herein conflicts with the Plan, the Plan shall govern.  The Human Resources and Compensation Committee of the Board administers the Plan.  The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate.  Committee determinations are binding. 

Permanent disability means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days.

This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick 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.

The Plan may be amended, suspended or terminated at any time.  The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction.

2013 Performance Share Grant
Appendix A – Performance Criteria

	
				
	Cash Flow Return on Investment (CFROI)

CFROI defined as free cash flow divided by operating capital employed (including adjustments noted below).  

Free cash flow is consistent with the external reporting definition, adjusted by the items noted below.

Operating capital employed defined as total assets less total liabilities excluding cash, debt and tax balances, adjusted by the items noted below.  Operating capital employed will be calculated on a five point basis.

Free cash flow and operating capital employed will be adjusted for the following:
•   Acquisition/sale of “strategic” assets;
•   Impact of pension cash contributions and tax payments or refunds;
•   Impact of any changes in financings; and,
•   Any differences between cash restructuring activities versus budget. 

	 
	Payout as a % of Target (1)
	2013 Goal

	Threshold

	50%
	X%

	Target

	100%
	Y%

	Maximum

	150%
	Z%

(1) If performance is between the threshold and maximum levels set forth above, then the payout as a percentage of target shall be interpolated appropriately.  No payout below threshold.

The following definitions shall apply for purpose of applying the TSR modifier:

“Average Stock Price” means the average of the closing transaction prices of a share of common stock of a company, as reported on the principal national stock exchange on which such common stock is traded, for the 20 business days immediately preceding the date for which the Average Stock Price is being determined. 

“TSR Comparator Group” means the “Leisure Products” sub-industry group within the Global Industry Classification Standard Consumer Durables and Apparel Global Industry Group.  For purposes of determining TSR Performance with respect to the Award Performance Period, the companies included in the Leisure Products sub-industry group shall be determined at the beginning of the 3-year period, excluding those entities that are bankrupt, listed on the pink sheets or not listed at all.  Should a company within the TSR Comparator Group become bankrupt after the start of the Award Performance Period, they shall be assigned a TSR of -100%.  Companies emerging from bankruptcy shall not be tracked for purposes of the current performance period.  If two companies within the TSR Comparator Group merge, only the surviving entity shall be counted.  Should a company within the TSR Comparator Group merge with a company outside of the TSR Comparator Group, then that entity shall be excluded from the final calculation.

“TSR Performance” means a company’s cumulative total shareholder return as measured by dividing (A) the sum of (i) the cumulative amount of dividends for the Award Performance Period, assuming dividend reinvestment, and (ii) the increase or decrease in the Average Stock Price from the first day of the Award Performance Period to the last day of the Award Performance Period, by (B) the Average Stock Price determined as of the first day of the Award Performance Period.BC 2013.03.30 EX 10.6 - SS SAR

Exhibit 10.6
2013 Stock-Settled Stock Appreciation Right Grant Terms and Conditions
Pursuant to the Brunswick Corporation 2003 Stock Incentive Plan (the “Plan”)

	
		
	Purpose
	To promote Brunswick’s long term financial interests and growth.

	Stock-Settled Stock Appreciation Right

	The right to receive a payment in Brunswick Stock (as defined in the Plan) equal to the excess of the Stock’s Fair Market Value (as defined in the Plan) at exercise over the exercise price as established on the Grant Date attributable to the number of underlying Stock-Settled Stock Appreciation Rights (“Stock-Settled SARs”) granted.

By exercising Stock-Settled SARs, you agree to the terms and conditions of the grant.

	Exercise Price
	$ Closing price as reported on the New York Stock Exchange Composite Transactions Tape on the Grant Date.

	Grant Date
	___________, 2013

	Award
	____________ Stock-Settled SARs

	Vesting
	Stock-Settled SARs vest and become exercisable as follows:
§    One-fourth of the Stock-Settled SARs granted on each of the first, second, third, and fourth anniversaries of the Grant Date, so long as employment by Brunswick or its designated affiliates continues on each such anniversary date;
§    In the case of a termination of employment (other than for “cause” (willful misconduct in the performance of duties) or due to death or permanent disability (as defined below)) on or after (i) the first anniversary of the Grant Date and (ii) the date on which age plus years of service equals 70 or more or age is 62 or more, vesting will continue on the normal vesting schedule described immediately above;
§    In the case of a termination of employment (other than for cause or due to death or permanent disability) (i) prior to the first anniversary of the Grant Date and (ii) on or after the date on which age plus years of service equals 70 or more or age is 62 or more, a pro-rata portion of the award will vest on each anniversary of the Grant Date pursuant to the normal vesting schedule described above.  For purposes of the foregoing sentence, a “pro-rata portion” will mean the product of (x) the number of shares underlying the Stock-Settled SAR award that would have vested on the applicable anniversary of the Grant Date pursuant to the normal vesting schedule and (y) a fraction, the numerator of which is the number of days that have elapsed since the Grant Date through the date of termination of the recipient’s employment, and the denominator of which is 365.  All remaining shares will be forfeited;
§    Termination due to death or permanent disability; or
§    A Change in Control (as defined in the Plan).

	Grant Term
	Vested Stock-Settled SARs will remain exercisable as follows:
§    Until the termination of employment, if involuntarily terminated for cause, or
§    Based on eligibility as of the last day employed, the latest of the following:
•    30 days after voluntary termination;
•    One year after involuntary termination without cause (for example, reductions-in-force or reorganization), or if your employer ceases to be a Subsidiary (as defined in the Plan) of Brunswick, unless the Committee (as defined in the Plan) provides otherwise;
•    Two years after termination following a Change in Control (as defined in the Plan);
•    Five years after termination due to death or permanent disability (as defined below); or
•    Five years after termination of employment  (other than for cause or due to death or permanent disability), provided that such termination occurs on or after the date on which your age plus years of service equals 70 or more or your age is 62 or more.
§    But, in no event may your Stock-Settled SAR be exercised later than ten years from the Grant Date.

	
		
	Exercise Settlement-Payment / Tax Withholding
	On exercise, the number of shares of Brunswick Stock delivered will be determined as follows:

§    The difference between the Fair Market Value on date of exercise and the per share exercise price will be determined.
§    This difference will be multiplied by the number of Stock-Settled SARs being exercised to determine the total dollar gain.
§    The total dollar gain will be divided by the Fair Market Value on date of exercise.

If, upon exercise, you would be entitled to a fractional security, such fractional security shall be disregarded and the cash equivalent of such fractional security shall be applied to your tax withholding liability.  Should you elect to have the required tax withholding satisfied by delivery of shares, then the ultimate Stock delivered will be reduced by an amount necessary to accommodate the required tax withholding.
 
Tax withholding liability (to meet required FICA, federal, state, and local withholding) can be paid in any combination of the following:

§    Reduction in shares delivered to accommodate the required minimum tax withholding, or
§    Cash or check.

	Additional Terms and Conditions
	Grants are subject to the terms of the Plan.  To the extent any provision herein conflicts with the Plan, the Plan will govern.  The Committee administers the Plan.  The Committee may interpret the Plan and adopt, amend and rescind administrative guidelines and other rules as deemed appropriate.  Committee determinations are binding. 

The rule of 70/age 62 provisions do not apply for grants made to residents of the European Union.

Permanent disability means the inability, by reason of a medically determinable physical or mental impairment, to engage in any substantial gainful activity, which condition, in the opinion of a physician selected by the Committee, is expected to have a duration of not less than 120 days.

This award and any shares delivered pursuant to this award are subject to forfeiture, recovery by Brunswick or other action pursuant to any clawback or recoupment policy which Brunswick may adopt from time to time, including without limitation any such policy which Brunswick 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.

The Plan may be amended, suspended or terminated at any time.  The Plan will be governed by the laws of the State of Illinois, without regard to the conflict of law provisions of any jurisdiction.

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