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Summary of

Securities Act (Brunswick Corporation) Exemption Notice 2004

2004/137

Gazetted on 27 May 2004
Expires on 1 June 2006

Effects of the exemption
Brunswick Corporation (Brunswick) and Talon Management Limited (Talon) are able to offer shares in Brunswick to Talon's New Zealand employees, using offer documents that comply with Brunswick's home jurisdiction rather than with New Zealand law.

In particular, Brunswick does not need to:

• prepare a prospectus or investment statement;
• comply with restrictions regarding statements in advertisements by experts;
• comply with certain register, accounting records, audit and certificate requirements;
• disclose certain information to security holders on request or periodically.

Background
Brunswick Corporation is incorporated in the United States. Brunswick indirectly holds 70% of the issued share capital of Navman NZ Limited (Navman), a New Zealand company. Talon holds the remaining 30%, and the 38 Talon shareholders are all employees of Navman. This means that the employees of Navman are effectively employees of a subsidiary of the issuer of the securities.

Talon intends to sell its 30% holding in Navman to Brunswick, with 50% of the payment being in the form of shares in Brunswick. Talon intends to distribute all of the Brunswick shares to its 38 shareholders. This distribution is an "offer to the public" under New Zealand law.

The exemption
Brunswick, Talon and their representatives are exempted from sections 37, 37A, 38A and 51 to 54B of the Securities Act 1978 and the Securities Regulations 1983 (except regulation 8).

Conditions
The exemption is subject to the following conditions:

• the shares are only allotted to the shareholders;
• before subscribing for the shares, the shareholders receive the following information:
  • Brunswick's most recent annual report and most recent published financial statements, and the terms of the offer in New Zealand; or
  • written advice that the above information is available on Brunswick's Internet or intranet site and that a copy is available on request;
• before the shares are allotted, the Registrar of Companies receives a copy of Brunswick's most recent annual report and most recent published financial statements, and the terms of the offer in New Zealand;
• the offer complies with United States legislation, the requirements of the New York Stock Exchange, and any other relevant U.S. codes, rules or other requirements.

Reasons
The present situation is similar to that covered by the Securities Act (Overseas Employee Share Purchase Schemes) Exemption Notice 2002 (OESPS Exemption Notice). That exemption recognises that issuers incorporated under the laws of certain jurisdictions, and whose shares are listed on an exchange in certain jurisdictions, are already subject to an appropriate level of regulation in respect of offers of shares to employees. In addition, the cost of producing a prospectus and investment statement to comply with New Zealand law may preclude offers being made to New Zealand employees by overseas issuers.

Brunswick and Talon are unable to comply with the OESPS Exemption Notice as the offer does not involve a scheme with prescribed rules, as required by that notice, and because the offer may be made to trustees of trusts for employees, rather than only to employees directly. However, the Commission is satisfied that the policy of the OESPS Exemption Notice should apply in this case.

The conditions of exemption are consistent with those in the OESPS Exemption Notice. The conditions require that the Talon shareholders receive, before subscribing for the specified securities, certain relevant information about Brunswick as the issuer and the terms of the offer.