Share-Based Compensation

9 Months Ended

Oct. 01, 2011

Share-based Compensation [Abstract]

Share-Based Compensation

Note 5 – Share-Based Compensation

Under the 2003 Stock Incentive Plan (Plan), the Company may grant stock options, stock appreciation rights (SARs), nonvested stock and other types of share-based awards to executives and other management employees.  Under the Plan, the Company may issue up to 13.1 million shares, consisting of treasury shares and authorized, but unissued shares of common stock.  As of October 1, 2011, 2.5 million shares were available for grant.

SARs

Since the beginning of 2005, the Company has issued stock-settled SARs and has not issued any stock options.  During the three months and nine months ended October 1, 2011, the Company granted 0.2 million and 1.1 million SARs, respectively.  During the three months and nine months ended October 2, 2010, the Company granted 0.0 million and 1.9 million SARs, respectively.  In the three months and nine months ended October 1, 2011, there was $2.9 million and $9.0 million, respectively, of total expense after adjusting for forfeitures, due to amortization of SARs granted.  In the three months and nine months ended October 2, 2010, there was $3.2 million and $9.8 million, respectively, of total expense after adjusting for forfeitures, due to amortization of SARs granted.

The weighted average fair values of individual SARs granted were $10.60 and $5.65 during the nine months ending October 1, 2011 and October 2, 2010, respectively.  The Company estimated the fair value of each grant on the date of grant using the Black-Scholes-Merton pricing model, utilizing the following weighted average assumptions for 2011 and 2010:

	2011	2010
Risk-free interest rate	2.5%	2.8%
Dividend yield	0.2%	0.7%
Volatility factor	53.7%	53.0%
Weighted average expected life	5.2 – 6.7 years	5.8 – 6.6 years

Non-vested Stock Awards

During the three months and nine months ended October 1, 2011, the Company granted 0.0 million and 0.2 million stock awards, respectively.  The Company granted 0.0 million and 0.2 million stock awards during the three months and nine months ended October 2, 2010, respectively.  The Company recognizes the cost of non-vested stock awards on a straight-line basis over the requisite service period.  During the three months and nine months ended October 1, 2011, $0.8 million and $2.6 million, respectively, was charged to compensation expense from the amortization of previous grants.  During the three months and nine months ended October 2, 2010, $0.7 million and $1.8 million, respectively, was charged to compensation expense from the amortization of previous grants.

As of October 1, 2011, there was $3.5million of total unrecognized compensation cost related to nonvested share-based compensation arrangements granted under the Plan.  That cost is expected to be recognized over a weighted average period of 1.3 years.

Director Awards

The Company issues stock awards to directors in accordance with the terms and conditions determined by the Nominating and Corporate Governance Committee of the Board of Directors.  One-half of each director's annual fee is paid in Brunswick common stock, the receipt of which may be deferred until a director retires from the Board of Directors.  Each director may elect to have the remaining one-half paid either in cash, in Brunswick common stock distributed at the time of the award, or in deferred Brunswick common stock units with a 20 percent premium.  Prior to May 2009, each non-employee director also received an annual grant of restricted stock units, which is deferred until the director retires from the Board.