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1. O'Brien (O'Brien) served as Brunswick's treasurer; and
Judith P. Zelisko (Zelisko), an attorney, served as Brunswick's
assistant vice president, Director of Taxes.
In June 1988, Reichert informed Brunswick's Board of
Directors that the company's sales of marine products, then
approximately 75 percent of Brunswick's overall net sales,
appeared to be slowing. In fact, between 1988 and 1989,
Brunswick's net marine sales dropped from $2,449,000,000 to
$2,000,000,000, or by approximately 18 percent. In response to
these developments, Brunswick immediately reduced capital
expenditures in marine-related manufacturing facilities and
equipment, permanently closed two boat manufacturing plants,
idled 5 other plants, and laid off 5,000 employees.
On October 24, 1989, Standard and Poor's Corporation
(Standard & Poor's) downgraded Brunswick's long-term debt rating
from A- to BBB+. Standard and Poor's did not change Brunswick's
commercial paper rating. During this period, Reichert and
McManaman determined that it would be in Brunswick's best
interests to maximize the company's cash-flow and reduce debt.
B. Takeover Concerns/Defenses
In 1981, Brunswick's stock was selling at a discount to book
value. In January 1982, Whittaker Corporation (Whittaker) made
an unsolicited tender offer in an effort to acquire 49 percent of
the total voting power of Brunswick's outstanding securities. It
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