Business Context and Reporting Period
Company: Brunswick Corporation
Filing Type: Form 8-K (Current Report)
Date of Report: December 6, 2004
Reporting Period: Immediate event reporting regarding corporate governance and compensation plans.
Financial Metrics
This filing does not contain financial performance data. There are no reported values for revenue, profit, cash flow, margins, debt, or liquidity.
Material Changes
The filing reports the entry into two material definitive agreements regarding executive and director compensation, designed to comply with the American Jobs Creation Act of 2004:
- 2005 Automatic Deferred Compensation Plan (Officer Plan): Approved December 6, 2004; effective January 1, 2005. Replaces the existing plan to defer compensation that would otherwise be non-deductible under Section 162(m) of the Internal Revenue Code.
- 2005 Deferred Compensation Plan for Non-Employee Directors (Director Plan): Approved December 7, 2004; effective January 1, 2005. Continues the deferral program for non-employee directors, allowing deferral of stock retainers and cash retainers converted to stock.
Guidance, Outlook, and Risks
Management Commentary: The primary objective of these plans is regulatory compliance with the American Jobs Creation Act of 2004 and Internal Revenue Code Section 409A.
Key Terms:
- Officer Plan: Cash deferrals earn interest at the greater of the prime rate plus 4% or the Company's short-term borrowing rate. Distributions occur upon a "change in control" or six months after employment cessation.
- Director Plan: Directors may defer stock and cash retainers. Cash retainers deferred are converted to stock at fair market value plus a 20% bonus in shares. Distributions occur upon "separation from service" or a "change in control."
Key Facts for Investor Verification
- Verify the effective date of the new compensation plans (January 1, 2005).
- Confirm the impact of the new plans on the Company's tax deductibility of executive compensation under Section 162(m).
- Review the specific interest rate benchmarks (Prime + 4% vs. Short-term borrowing rate) for the Officer Plan cash deferrals.
- Note the 20% share bonus provision for non-employee directors deferring cash retainers under the Director Plan.