UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
DC 20549
________________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities
Exchange Act of 1934
Date
of report (Date of earliest event reported): September 18,
2006
BRUNSWICK
CORPORATION
(Exact
Name of Registrant Specified in Charter)
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Delaware
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001-01043
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36-0848180
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||
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(State
or Other
Jurisdiction
of
Incorporation)
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(Commission
File
Number)
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(I.R.S.
Employer
Identification
No.)
|
|
1
N. Field Court
Lake
Forest, Illinois
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60045-4811
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(Address
of Principal Executive Offices)
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(Zip
Code)
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Registrant’s
telephone number, including area code: (847) 735-4700
(Former
Name or Former Address, if Changed Since Last Report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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[
]
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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[
]
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-
12)
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[
]
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR
240, 14d-2(b))
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[
]
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR
240, 13e-4(c))
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Item
1.01 Entry into a Material Definitive Agreement.
Terms
and Conditions of Employment with Dustan E. McCoy
On
September 18, 2006, Brunswick Corporation (the “Company”) entered into new Terms
and Conditions of Employment (the "CEO Terms") with Dustan E. McCoy, Chairman
and Chief Executive Officer. The CEO Terms supersede the Executive Severance
and
Change in Control Agreement dated June 13, 2001 and the Indemnification
Agreement dated September 13, 1999 between Mr. McCoy and the Company.
The
CEO
Terms describe Mr. McCoy’s salary and the benefits for which he is eligible,
which include participation in the Brunswick Performance Plan (“BPP”) and
Strategic Incentive Plan (“SIP”), equity-based awards under the Company’s 2003
Stock Incentive Plan, and other benefits to which executive officers of the
Company are entitled, including financial counseling services, health and
welfare benefits, participation in the Company’s deferred compensation plans and
use of the Company’s aircraft and boats. The CEO Terms also incorporate the
terms of the existing Indemnification Agreement.
Mr.
McCoy
is an “employee at will” until his employment terminates in accordance with the
CEO Terms. He is entitled to receive severance benefits upon termination in
certain circumstances specified in the CEO Terms.
Prior
to
a change in control, he will be entitled to specified severance benefits if
his
employment is terminated by the Company other than for cause or long-term
disability or if he terminates his employment for good reason. The terms
“cause,” “long-term disability” and “good reason” are each defined in the CEO
Terms. If there is a qualifying termination of employment prior to a change
in
control, he will be entitled, among other things, to a severance payment equal
to two times the sum of (i) his annual base salary, (ii) his target annual
bonus
under the BPP for the year in which termination occurs and (iii) the Company’s
profit-sharing and 401(k) match on his behalf during the 12 months prior to
termination.
After
a
change in control, he will be entitled to specified severance benefits if his
employment is terminated by the Company other than for cause or long-term
disability, he terminates his employment at any time for good reason or he
resigns for any reason during the 30-day period commencing on the first
anniversary of the change in control. If there is any such qualifying
termination following a change in control, he will be entitled, among other
things, to a severance payment equal to three times the sum of (i) his annual
base salary, (ii) the larger of his targeted annual bonus under the BPP for
the
year of termination or the year in which the change in control occurs, (iii)
his
most recent full-cycle target percentage under the SIP, and (iv) the Company’s
profit-sharing and 401(k) match on his behalf during the 12 months prior to
termination.
Upon
any
qualifying termination (without regard to whether the termination occurred
prior
to or after a change in control), he will be entitled to certain additional
benefits. These include: payment of any annual bonus earned for the preceding
year that had not yet been paid at the time of termination; disposition of
all
outstanding stock options, stock appreciation rights and restricted stock awards
in accordance with their terms; “gross-ups” relating to certain excise taxes
that he may incur in connection with payments under the CEO Terms, and other
benefits and perquisites for up to two years prior to a change in control,
or
for up to three years following a change in control.
2
The
definition of a change in control includes: (i) the acquisition of 25 percent
or
more of the outstanding voting stock of the Company; (ii) the failure of the
incumbent Board of Directors to constitute a majority of the Company’s Board of
Directors, excluding new directors who (a) are approved by a vote of at least
50
percent of the members of the incumbent Board of Directors and (b) did not
join
the Board following an actual or threatened contested election of directors;
(iii) a merger, reorganization or consolidation of the Company with another
entity, or a sale of substantially all of its assets, unless after such
transaction (a) the Company’s shareholders continue to own at least 60 percent
of the voting stock outstanding, (b) no person owns more than 25 percent of
the
Company’s voting stock, and (c) the members of the incumbent Board of Directors
still constitute a majority of the Board of Directors; or (iv) a complete
liquidation or dissolution of the Company.
The
CEO
Terms require Mr. McCoy to consent to certain confidentiality, non-competition
and non-solicitation provisions, and to sign a general release.
The
CEO
Terms do not alter Mr. McCoy’s existing levels of salary and benefits or the
other elements of his compensation, other than with respect to certain benefits
provided upon qualifying terminations, as described in this Current Report
on
Form 8-K
Terms
and Conditions of Employment with other Officers
On
September 18, 2006, the Company also adopted new standard Terms and Conditions
of Employment (the "Officer Terms") for 14 additional officers of the Company,
including all of its current executive officers. The Human Resources and
Compensation Committee of the Board of Directors approved the form of Officer
Terms in all material respects at its July 2006 meeting. When executed, the
Officer Terms will supersede any existing severance, change in control, and
indemnification agreements with these officers.
The
Officer Terms are identical in all material respects to the CEO Terms, except
that:
| · |
if
there is a qualifying termination of employment prior to a change
in
control, the officer will be entitled to a severance payment equal
to 1.5
times (rather than two times in the case of Mr. McCoy) the sum of
(i)
annual base salary and (ii) the Company’s profit-sharing and 401(k) match
during the 12 months prior to termination, along with an amount at
the
discretion of the Chief Executive Officer based on target annual
bonus
under the BPP (rather than two times target annual bonus in the case
of
Mr. McCoy), and other benefits and perquisites for up to 18 months
(rather
than two years in the case of Mr. McCoy);
and
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| · |
after
a change in control, the officer will be entitled to specified severance
benefits only if employment is terminated by the Company other than
for
cause or long-term disability or the officer terminates employment
for
good reason; unlike Mr. McCoy, the officer is not entitled to such
benefits following resignation during the 30-day period commencing
on the
first anniversary of the change in control.
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The
Officer Terms do not alter existing levels of salary and benefits or the other
elements of compensation for any officers of the Company, other than with
respect to certain benefits provided upon qualifying terminations, as described
in this Current Report on Form 8-K.
3
The
foregoing description of the CEO Terms and the Officer Terms is a summary of
their material terms, does not purport to be complete, and is qualified in
its
entirety by reference to the CEO Terms and the form of Officer Terms filed
as
Exhibits 10.1 and 10.2 to this report and incorporated by reference
herein.
ITEM
9.01 Financial Statements and Exhibits.
(c)
Exhibits:
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Exhibit
No.
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Description
of Exhibit
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|
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10.1
10.2
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Terms
and Conditions of Employment dated September 18, 2006 between Brunswick
Corporation and Dustan E. McCoy.
Form
of Terms and Conditions of Employment for officers of Brunswick
Corporation.
|
4
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| BRUNSWICK CORPORATION | ||
| |
|
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| Date: September 22, 2006 | By: | /s/ MARSCHALL I. SMITH |
| Name: Marschall I. Smith | ||
| Title: Vice President, General Counsel and Secretary | ||
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EXHIBIT
INDEX:
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Exhibit
No.
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Description
of Exhibit
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10.1
10.2
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Terms
and Conditions of Employment dated September 18, 2006 between Brunswick
Corporation and Dustan E. McCoy.
Form
of Terms and Conditions of Employment for officers of Brunswick
Corporation.
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6