<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the registrant /X/
Filed by a party other than the registrant / /
Check the appropriate box:
/ / Preliminary proxy statement / / Confidential, for Use of the
Commission Only (as permitted
by Rule 14a-6(e)(2))
/X/ Definitive proxy statement
/ / Definitive additional materials
/ / Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
Brunswick Corporation
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(Name of Registrant as Specified in Its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of filing fee (Check the appropriate box):
/X/ $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
--------------------------------------------------------------------------------
(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
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/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the form or schedule and the date of its filing.
(1) Amount previously paid:
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(2) Form, schedule or registration statement no.:
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(3) Filing party:
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(4) Date filed:
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<PAGE> 2
[LOGO]
March 27, 1995
Dear Stockholder:
You are cordially invited to attend the 1995 Annual Meeting of Brunswick
Stockholders to be held on Wednesday, April 26, 1995 at 3:00 P.M. at Brunswick's
World Headquarters, 1 N. Field Ct., Lake Forest, Illinois. Brunswick's World
Headquarters is on Route 60, just east of the Tri-State Tollway.
The formal Notice of Annual Meeting and Proxy Statement accompanying this
letter describe the business to be acted on at the meeting.
It is important that your shares be represented at the meeting.
Therefore, I urge that you MARK, SIGN, DATE and RETURN PROMPTLY the
enclosed PROXY in the envelope furnished for that purpose. If you are present at
the meeting, you may, if you wish, revoke your proxy and vote in person. I am
looking forward to seeing you at the meeting.
Sincerely,
[SIG.]
Chairman of the Board
<PAGE> 3
NOTICE OF ANNUAL MEETING
The Annual Meeting of Stockholders of Brunswick Corporation will be held at
Brunswick's World Headquarters, 1 N. Field Ct., Lake Forest, Illinois, on
Wednesday, April 26, 1995 at 3:00 P.M. for the following purposes:
(1) To elect Directors,
(2) To ratify the appointment of Arthur Andersen LLP as auditors, and
(3) To consider such other business as may properly come before the
meeting.
Brunswick stockholders of record at the close of business on February 27,
1995 will be entitled to notice of and to vote at the meeting and any
adjournment thereof.
By order of the Board of Directors,
DIANNE M. YACONETTI
Vice President --
Administration and Secretary
Lake Forest, Illinois
March 27, 1995
<PAGE> 4
[LOGO]
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of Brunswick Corporation (the
"Company") which will be voted at the Annual Meeting of Stockholders to be held
on April 26, 1995 and at any adjournment thereof. This statement and form of
proxy were first mailed to stockholders on or about March 27, 1995. Any
stockholder submitting a proxy may revoke it at any time before it is voted. If
a stockholder is participating in the Company's Dividend Reinvestment Plan or
Employee Stock Investment Plan, any proxy given by such stockholder will also
govern the voting of all shares held for the stockholder's account under those
plans, unless contrary instructions are received.
Only holders of the Company's 95,718,105 shares of Common Stock outstanding
as of the close of business on February 27, 1995, the record date, will be
entitled to vote at the meeting. Each share of Common Stock is entitled to one
vote. The representation in person or by proxy of a majority of the outstanding
shares of Common Stock is necessary to provide a quorum at the Annual Meeting.
Abstentions are counted as present in determining whether the quorum requirement
is satisfied, but they have no other effect on voting for election of directors.
Abstentions are the same as a vote against on other matters. In instances where
brokers are prohibited from exercising discretionary authority for beneficial
owners who have not returned a proxy ("broker nonvotes"), those shares will be
counted for quorum purposes. The broker nonvotes will not be included in the
vote totals for a proposal and therefore will have no effect on the vote for the
proposal.
ELECTION OF DIRECTORS
The Company's Certificate of Incorporation provides that the Board of
Directors shall be divided into three classes, each consisting, as nearly as may
be possible, of one-third of the total number of directors. Directors are
required to retire from the Board of Directors no later than the Annual Meeting
following their seventieth birthday. Since four directors will reach age 70
within the next 15 months, these directors are being nominated for terms which
coincide with their retirement. Four other directors have been nominated for
additional terms which result in each class of directors being as equal as
possible and which result in the retirement dates for most of these directors
being at the end of a three-year term. Accordingly, the Board has nominated (i)
Bernd K. Koken, Jay W. Lorsch and Robert N. Rasmus for election as directors to
serve one-year terms expiring at the 1996 Annual Meeting, (ii) John P. Diesel
and George D. Kennedy for election as directors for terms expiring at the 1997
Annual Meeting, and (iii) Bettye Martin Musham, Jack F. Reichert and Roger W.
Schipke for election as directors for terms expiring at the 1998 Annual Meeting.
Messrs. Diesel and Kennedy and Ms. Martin Musham previously were
1
<PAGE> 5
elected directors for terms expiring at the 1996 Annual Meeting, and Messrs.
Reichert and Schipke previously were elected directors for terms expiring at the
1997 Annual Meeting. Donald E. Guinn has resigned as a director effective April
26, 1995.
It is intended that votes will be cast, pursuant to authority granted by
the enclosed proxy, for the election of the nominees named below as directors of
the Company, except as otherwise specified in the proxy. Directors shall be
elected by a plurality of the votes present in person or represented by proxy at
the Annual Meeting and entitled to vote on the election of directors. In the
event any one or more of such nominees shall be unable to serve, votes will be
cast, pursuant to authority granted by the enclosed proxy, for such person or
persons as may be designated by the Board of Directors. Biographical information
follows for each person nominated and each person whose term of office will
continue after the Annual Meeting. None of the directors and nominees are
affiliated with the Company except for Jack F. Reichert, Chairman of the Board,
President and Chief Executive Officer of the Company.
NOMINEES FOR ELECTION FOR TERMS EXPIRING AT THE 1996 ANNUAL MEETING
BERND K. KOKEN Director since 1988
Chairman of the Board of Abitibi-Price, Inc. ("API"), a producer of newsprint
and uncoated groundwood papers and a distributor of computer supplies and
accessories, since 1987; Chairman of the Board and Chief Executive Officer of
API 1987-1991; President and Chief Executive Officer of API 1985-1989; director
of Danzer North America, Inc., Bradford Forest Products, Inc. and David R. Webb
Co., Inc.; age 68
JAY W. LORSCH Director since 1983
Louis E. Kirstein Professor of Human Relations, Senior Associate Dean and
Chairman of Executive Education Programs, Harvard University Graduate School of
Business Administration; director of Sandy Corp.; age 62
ROBERT N. RASMUS Director since 1981
Retired; Chairman of the Board and Chief Executive Officer of Masonite
Corporation, a developer, manufacturer and marketer of wood composite materials
such as hardboard, particleboard, fiberboard and other wood products, 1982-1986;
age 69
NOMINEES FOR ELECTION FOR TERMS EXPIRING AT THE 1997 ANNUAL MEETING
JOHN P. DIESEL Director since 1990
Retired; President of Tenneco Inc., a multi-industry firm with major operations
and interests in oil, natural gas pipelines, construction and farm equipment,
automotive components, chemicals, shipbuilding, packaging, agriculture and land
management, 1979-1988; director of Aluminum Company of America; age 68
2
<PAGE> 6
GEORGE D. KENNEDY Director since 1979
Retired; Chairman of the Board of Mallinckrodt Group Inc. ("Mallinckrodt"), a
producer of medical products, specialty chemicals, products for animal health
and nutrition, and animal feed supplements, 1986-1994; Chairman of the Board and
Chief Executive Officer of Mallinckrodt 1986-1991; President and Chief Executive
Officer of Mallinckrodt 1983-1986; director of American National Can Co.,
Illinois Tool Works, Inc., Kemper Corporation, Kemper National Insurance Co.,
Scotsman Industries, Inc. and Stone Container Corp.; age 68
NOMINEES FOR ELECTION FOR TERMS EXPIRING AT THE 1998 ANNUAL MEETING
BETTYE MARTIN MUSHAM Director since 1993
President and Chief Executive Officer of Gear Holdings, Inc., a design,
marketing and communications firm, since 1977; age 62
JACK F. REICHERT Director since 1977
Chairman of the Board of Brunswick since 1983; Chief Executive Officer of
Brunswick since 1982; President of Brunswick 1977-1993 and since 1994; director
of The Dial Corp, First Chicago Corporation, and The First National Bank of
Chicago; age 64
ROGER W. SCHIPKE Director since 1993
Chairman of the Board and Chief Executive Officer of Sunbeam-Oster Co., a
consumer products firm, since 1993; Chairman of the Board and Chief Executive
Officer of The Ryland Group, a company engaged in mortgage banking and home
building 1990-1993; Senior Vice President-Appliances, General Electric Company,
a diversified industrial company, 1982-1990; director of Legg-Mason, Inc.,
Mohawk Industries, Inc. and The Rouse Company; age 58
DIRECTOR CONTINUING IN OFFICE UNTIL THE 1997 ANNUAL MEETING
MICHAEL J. CALLAHAN Director since 1991
Executive Vice President and Chief Financial Officer of FMC Corporation, a
producer of chemicals, defense systems, machinery and equipment, since 1994;
Executive Vice President and Chief Financial Officer of Whirlpool Corporation, a
manufacturer of major home appliances, 1992-1994; Executive Vice President --
International Grocery Products of The Quaker Oats Company, an international
manufacturer of foods, beverages and pet foods, 1989-1991; age 56
COMMITTEES AND MEETINGS
The Board of Directors has Executive, Audit, Compensation and Corporate
Governance Committees. None of the members of these committees are affiliated
with the Company except for Mr. Reichert, who is Chairman of the Executive
Committee.
Members of the Executive Committee are Messrs. Reichert (Chairman),
Kennedy, Koken, and Lorsch.
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<PAGE> 7
Members of the Audit Committee are Messrs. Kennedy (Chairman), Callahan,
and Guinn, and Ms. Martin Musham.
Members of the Compensation Committee are Messrs. Koken (Chairman), Diesel,
Lorsch, Rasmus and Schipke.
Members of the Corporate Governance Committee are Messrs. Lorsch
(Chairman), Callahan, Guinn, and Rasmus.
The Audit Committee met five times during 1994. The Audit Committee is
responsible for assuring that, in all material respects, management shall cause
the Company's financial statements to comply with applicable laws and
regulations and to make fair and accurate disclosure of the Company's financial
position and its results of operations. The Audit Committee meets from time to
time with the Company's financial officers and employees, internal auditors and
independent public accountants to review the Company's financial statements and
reporting practices, the system of internal accounting controls, and the scope,
results and fees associated with services performed by the independent public
accountants.
The Compensation Committee met eight times during 1994. The Compensation
Committee administers the CEO Incentive Plan, Brunswick Performance Plan,
Strategic Incentive Plan, 1971 Stock Plan, 1991 Stock Plan, 1994 Stock Option
Plan for Non-Employee Directors and Supplemental Pension Plan. The Compensation
Committee, from time to time, also recommends to the Board of Directors
compensation of the officers of the Company, and compensation for members of the
Board of Directors and its committees except the Compensation Committee.
The Corporate Governance Committee was established in 1994 and replaced the
Nominating Committee. The Corporate Governance Committee met three times during
1994 and the Nominating Committee met two times during 1994. The Corporate
Governance Committee recommends to the Board of Directors nominees for directors
of the Company to be elected by the stockholders and evaluates the performance
of the Board of Directors and its members. The Corporate Governance Committee
also recommends to the Board of Directors nominees to fill vacancies on the
Board of Directors as they occur and considers and makes recommendations to the
Board with regard to increases and decreases in the size of the Board. The
Corporate Governance Committee will consider nominees recommended by
stockholders for submission to the Board of Directors. Stockholders wishing to
recommend nominees should send such recommendations to the Secretary of the
Company.
The By-laws provide that nominations for the election of directors may be
made by the Board of Directors or a committee appointed by the Board of
Directors. In addition the By-laws provide a procedure for stockholder
nominations. Stockholders intending to nominate director candidates for election
must deliver written notice thereof to the Secretary of the Company not later
than (i) with respect to an election to be held at an annual meeting of
stockholders, 90 days prior to the anniversary date of the immediately preceding
annual meeting of stockholders, and (ii) with respect to an election to be held
at a special meeting of stockholders, the close of business on the tenth day
following the date on which notice of such meeting is first given to
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<PAGE> 8
stockholders. The notice of nomination shall set forth certain information
concerning such stockholder and the stockholder's nominee(s), including their
names and addresses, a representation that the stockholder is entitled to vote
at such meeting and intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice, a description of all
arrangements or understandings between the stockholder and each nominee, such
other information as would be required to be included in a proxy statement
soliciting proxies for the election of the nominees of such stockholder and the
consent of each nominee to serve as a director of the Company if so elected. The
chairman of the stockholders' meeting may refuse to acknowledge the nomination
of any person not made in compliance with the foregoing procedure.
The Board of Directors met twelve times during 1994.
DIRECTOR COMPENSATION
Directors who are not officers are entitled to an annual fee of $25,000 and
$1,500 for each Board and Committee meeting attended. The Chairmen of the Audit,
Compensation and Corporate Governance Committees each receive an additional
$5,000 per annum. Robert N. Rasmus oversees the investments of the Company's
retirement plans and is paid $1,500 for each meeting he attends of the Company's
Benefits Finance Committee.
Non-employee directors at the time of each Annual Meeting of Stockholders
of the Company will receive options to purchase a number of shares of Common
Stock such that the options will have a value of $25,000 using the Black-Scholes
pricing model with specified assumptions. The exercise price of the options is
100% of the fair market value of the Common Stock on the date of the award. The
options become fully exercisable six months after the date of the award and may
be exercised at any time thereafter until the tenth anniversary of the date of
the award.
Any non-employee director with five years or more of service who retires
from the Board will be entitled, depending on age and length of service, to
receive for the rest of the director's life a retirement benefit equivalent to
up to 100% of the annual retainer payable to the director at the time of
retirement and to participate in all insurance and benefit programs in effect
for incumbent directors from time to time. A director may elect to receive a
reduced amount upon retirement and to have a reduced benefit payable to the
director's spouse for life after the director's death. These benefits would be
the actuarial equivalent of the benefit payable only to the director for life.
If a director dies while serving as a director, the director's spouse will be
entitled to 50% of the benefit payable to the director at retirement for up to
10 years, depending on age and length of service. In the event of a change in
control of the Company (as defined on page 20) each director, subject to
obtaining the consent of the Board of Directors, may elect to have the Company
pay in a lump sum the present value of the director's retirement benefits, and
the Company will be obligated to continue to provide to retired directors
insurance and benefit programs equivalent to those provided at the time of the
change in control of the Company.
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<PAGE> 9
STOCKHOLDERS
As of February 28, 1995, each director, each executive officer listed in
the summary compensation table, and all directors and executive officers as a
group owned the number of shares of Brunswick Common Stock set forth in the
following table:
<TABLE>
<CAPTION>
Number of Shares Percent
Name of Individual Beneficially Owned of
or Persons in Group as of February 28, 1995 Class
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Michael J. Callahan 4,941(1) *
John P. Diesel 5,214(1) *
Donald E. Guinn 6,214(1) *
George D. Kennedy 8,879(1) *
Bernd K. Koken 6,437(1) *
Jay W. Lorsch 7,681(1) *
Bettye Martin Musham 3,500(1) *
Robert N. Rasmus 14,568(1) *
Jack F. Reichert 668,158(2)(3) *
Roger W. Schipke 6,000(1) *
John M. Charvat 143,947(2) *
David D. Jones 66,760(2) *
William J. Barrington 57,292(2) *
Frederick J. Florjancic, Jr. 74,207(2) *
All directors and executive officers as a group 1,526,852(1)(2)(3) 1.6 %
</TABLE>
* Less than 1%
(1) Includes 2,500 shares of common stock for each of these directors issuable
pursuant to currently exercisable stock options.
(2) Includes the following shares of restricted stock: Messrs. Reichert 82,770
shares, Charvat 44,245 shares, Jones 19,250 shares, Barrington 15,625
shares, Florjancic 18,750 shares, and all executive officers as a group
290,340 shares. Also includes the following shares of common stock issuable
pursuant to currently exercisable stock options: Messrs. Reichert 64,570
shares, Charvat 31,505 shares, Jones 18,900 shares, Barrington 17,200
shares, Florjancic 18,000 shares, and all executive officers as a group
271,105 shares.
(3) Includes 30,600 shares held by the Jack F. Reichert Foundation for which Mr.
Reichert has shared dispositive power and shared voting power.
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<PAGE> 10
The only stockholders known to the Company to own beneficially more than 5%
of the outstanding voting securities of the Company are:
<TABLE>
<CAPTION>
Shares
Beneficially
Owned as of
December Percent
Name and Address of 31, of
Title of Class Beneficial Owner 1994 Class
------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common Stock Barrow, Hanley, Mewhinney & Strauss 7,870,900 (1) 8.2%
280 Crescent Court Street
Dallas, TX 75201
Common Stock FMR Corp. 10,419,326 (2) 10.8%
82 Devonshire Street
Boston, MA 02109
Common Stock Sanford C. Bernstein & Co., Inc. 6,984,438 (3) 7.3%
One State Street Plaza
New York, NY 10004
</TABLE>
--------------------------------------------------------------------------------
(1) Barrow, Hanley, Mewhinney & Strauss has sole voting power for 2,577,300 of
these shares, shared voting power for 5,293,600 of these shares and sole
dispositive power for all of these shares.
(2) FMR Corp. has sole voting power for 20,193 of these shares and sole
dispositive power for all of these shares. Fidelity Management & Research
Company also is the beneficial owner of 10,382,233 of these shares. Fidelity
Magellan Fund also is the beneficial owner of 9,051,700 of these shares.
Edward C. Johnson 3d has sole power to dispose of 10,382,233 of these
shares.
(3) Sanford C. Bernstein & Co., Inc. has sole voting power for 3,908,337 of
these shares and sole dispositive power for all of these shares.
In addition, Bankmont Financial Corp., 111 West Monroe Street, Chicago, IL
60690, has reported beneficial ownership as of December 31, 1994 of 5,703,948
shares of Common Stock of the Company, representing 6.0% of the outstanding
shares, with sole voting power as to all of these shares, sole dispositive power
as to 5,703,148 shares, and shared dispositive power as to 800 shares. Bankmont
Financial Corp. is the parent holding company of Harris Bankcorp, Inc. These
shares include 5,686,044 shares held by Harris Trust and Savings Bank as Trustee
of the Brunswick Employee Stock Ownership Plan, of which 2,569,969 shares have
been allocated to participants' accounts. The Trustee votes these allocated and
unallocated shares in accordance with instructions received from the
participants.
REPORT OF THE COMPENSATION COMMITTEE
The Compensation Committee of the Board of Directors (the "Committee") is
comprised entirely of independent, non-employee Directors who are responsible
for administering all compensation plans in which the Chairman, President and
Chief Executive Officer, and the Senior Executives of the Company participate.
"Senior Executives" include the Executive Vice President, all Division
Presidents and the five most Senior Corporate Executives in the Company.
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<PAGE> 11
EXECUTIVE COMPENSATION PLANS
We welcome the opportunity to share with our stockholders the details of
our executive compensation plans and the philosophy which has been followed in
developing these plans.
The purpose of the plans is to attract and retain outstanding key
employees, to encourage an ownership commitment by those employees through
grants of stock and/or options, to recognize past performance and to motivate
employees by providing incentives for the successful implementation of the
Company's strategic thrusts.
The plans have been designed to place a significant amount of compensation
at risk by first setting annual base salaries at levels generally in the middle
range of the marketplace for similar positions. Available information on the
compensation practices of manufacturing companies with revenues similar to the
total Company or the appropriate business unit is used for the purpose of
reviewing and establishing salary levels. In addition, similar survey data
regarding manufacturers of durable goods and other products is reviewed and
compared to data developed internally. Because of their smaller size, the
companies included in the peer group index on page 17 are not included in the
list of comparable companies for the determination of salary ranges for the
Senior Corporate Executives. The total compensation package of each Senior
Executive is then developed by including an annual award of stock and stock
options as well as opportunities for annual and three-year cash incentives.
Many of the Company's businesses are extremely sensitive to economic
cycles; however, we feel it is important to motivate our Senior Executives and
other management employees during all phases of the business cycle. Therefore,
the Company challenges its Senior Executives by providing opportunities for
annual and three-year cash incentives which may be earned based upon the
performance of the Company and/or its businesses. Various performance goals,
assigned to maintain an atmosphere of continuous improvement and growth for the
future, may be defined in terms of financial results of the Company or the
individual business unit, improvements in quality, achievements of targets to
improve service to our customers, management development efforts, market share
increases or other assigned measurements.
Participation in the plans varies based upon the levels of responsibility
of the Senior Executive and management employees of the Company and its business
units. In this way, a greater opportunity for incentive compensation is provided
for those employees whose responsibilities are deemed to have the largest impact
on the long-term success of the Company. In its administration of the plans the
Committee may, from time to time, use judgment and discretion.
The Company feels strongly that annual grants of stock and/or stock options
are an integral part of a Senior Executive's total annual compensation package.
It has long been the belief of the Company that Senior Executives who own
significant amounts of Company stock are more inclined to focus on its long-term
growth, make decisions which are in the best interests of all shareholders and
contribute to higher levels of shareholder value.
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<PAGE> 12
Accordingly, during 1993 the Company adopted a formal policy regarding
Executive Stock Ownership. Under the guidelines, as approved by the Compensation
Committee, Senior Executives of the Company are expected to own specific minimum
amounts of Company stock depending upon their position, calculated as a multiple
of their base salaries, and ranging from 5 times annual salary for the Chairman
and Chief Executive Officer to 1.5 times for the Company's Treasurer. In the
case of a new hire or promotion to a Senior Executive level, the individual will
be expected to reach the targeted amount required under the policy within five
years.
The executive compensation plans include incentives for short and long-term
performance, as described below:
The Brunswick Performance Plan is an annual bonus plan which provides
opportunities for cash bonuses to be earned by Senior Executives and other
employees of the Company. Under the Plan, bonus pools are generated based upon
the achievement of specified annual financial targets and written objectives
which are reviewed by the Committee. In 1994, 75% of the bonus was based on
pre-tax earnings goals, 10% was based on cash flow targets and the remaining 15%
was based on written objectives. Except for extraordinary performance, awards
under this Plan to the Executive Vice President range from zero to 80%, and to
other Senior Executives range from zero to 60%, of their base salaries in effect
at the beginning of the Plan year. Bonuses earned by Senior Executives under the
Plan for 1994 were reviewed and approved by the Committee based upon an
assessment of performance against assigned goals.
The Strategic Incentive Plan is a long-term cash bonus plan. Participation
includes all Senior Executives and various key management employees who may have
a significant impact on the achievement of the Company's strategic goals. The
purpose of the Plan is to provide an incentive for the successful implementation
of the Company's strategic plan by defining the contribution necessary from each
business unit to achieve the plan. Specific written goals to be completed during
the three-year performance period of the Plan are submitted to the Compensation
Committee. These include, among others, goals related to sales volume,
profitability levels, opportunities for growth, global expansion, employee
development, improvements in quality and customer satisfaction, market share
gains, the generation of cash and cost reduction measures. The goals are
specific to each operating unit and in some cases to a specific market, such as
international, serviced by the operating unit. Amounts earned under the Plan are
based upon the percentage of assigned strategic goals achieved multiplied by the
maximum bonus which may be paid to each participant as determined at the
beginning of the performance period. Bonuses for Division Presidents are
determined by the Compensation Committee by measuring the achievement of goals
assigned to their individual business units. Corporate participants will earn
bonuses based upon the weighted percentage of the total of all assigned goals
achieved multiplied by their maximum potential bonus as determined at the
beginning of the performance period. Bonuses for Senior Corporate Executives are
approved by the Compensation Committee. Actual bonuses paid under this Plan to a
Senior Executive at the end of the three-year performance period will range from
zero to 75% of the individual Senior Executive's base salary in effect at the
beginning of the performance period. Approximately 135 employees have been
designated as participants in the Plan for the 1994-96 performance period.
Bonuses earned by Senior Executives under the Plan for
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<PAGE> 13
the 1992-1994 Performance Period were reviewed and approved by the Compensation
Committee.
Under the terms of the 1991 Stock Plan, shares of restricted stock and/or
stock options are granted to Senior Executives and certain management employees.
In determining awards of restricted stock and stock options for an individual
Senior Executive, the Committee begins with a dollar amount equal to a range of
40% to 60% of the Senior Executives' annual salary. At the time of this
calculation, restricted shares are valued at their then fair market value and,
for purposes of this calculation, stock options are valued at one-third of the
then fair market value of the shares. An assessment of the performance of each
individual Senior Executive is completed, after which a final award, expressed
as a percentage of salary, is determined. The size of previous awards of stock
or stock options made to a Senior Executive is not considered in the final
determination. The number of shares of restricted stock and options to be
granted is then determined (using a ratio of approximately one-third in
restricted stock and two-thirds in options). All awards of restricted stock and
stock options granted to Senior Executives are approved by the Compensation
Committee.
For the shares of restricted stock granted in 1994, restrictions will lapse
in five years or earlier in the case of normal retirement. Options granted in
1994 have an exercise price equal to the market value of the stock on the date
of grant, will vest over three years and are exercisable for a ten-year period.
The value to the participant of each stock option depends upon the extent to
which the market value of the stock increases over the exercise price. Grants of
restricted stock are limited to Senior Executives. In 1994, 364 employees
received options under the Plan.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The compensation of the Chief Executive Officer in 1994 consisted of two
components: cash, which included his base salary and a bonus earned under the
terms of the CEO Incentive Plan, and stock through grants of restricted stock
and stock options awarded under the 1991 Stock Plan.
Mr. Reichert's total compensation package contains both fixed and variable
components. The fixed portion of his compensation is comprised of his base
salary and the value of restricted stock awarded. This portion represented
approximately 51% of his total compensation in 1994. The balance is variable and
includes any payments earned under the CEO Incentive Plan, any appreciation in
the value of restricted stock during the restricted period, and the value of the
stock options granted to him during the year.
The Board of Directors has adopted a policy to review Mr. Reichert's
performance on a semi-annual basis. Each performance evaluation includes a
review of the status of his achievement of assigned goals under the CEO
Incentive Plan (described below) and an assessment of the state of the Company
and its performance.
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<PAGE> 14
The Committee reviews Mr. Reichert's compensation annually and establishes
recommendations regarding any changes to his base salary. These recommendations
are made to the Board of Directors after considering a number of factors,
including available market data and the Committee's assessment of Company
performance as compared with its competitors, economic conditions and industry
environment. In July, 1994, the Committee discussed the history of Mr.
Reichert's compensation including his annual base salary, bonuses paid, and
restricted stock and stock options granted. In addition, they considered data
presented by an outside consultant to the Committee in formulating their
recommendation that Mr. Reichert's annual base salary remain at $735,000.
The CEO Incentive Plan, a cash bonus plan, provides a format for the
assignment of specific goals for the Chief Executive Officer which are designed
to create and enhance shareholder value. The Compensation Committee, in
conjunction with Mr. Reichert, develops these goals which include various
strategic initiatives to be achieved at specified times and which reflect the
vision of the Chief Executive Officer as regularly reviewed and approved by the
full Board of Directors. These goals may include the continuing identification
of new growth opportunities for the Company, succession planning, expansion of
the global presence of the Company's product lines and the strengthening of the
Company's balance sheet to ensure the future health and well-being of the
Company. Mr. Reichert does not participate in either the Brunswick Performance
Plan or the Strategic Incentive Plan. Instead, he may earn from zero to 200% of
his salary annually under the CEO Incentive Plan, based upon the Committee's
assessment of his performance against the goals assigned and other factors.
For 1994, the Committee recommended, and the Board of Directors approved,
based upon its assessment of the level of Mr. Reichert's achievement of his
assigned goals, a bonus of $1,000,000 under the Plan, which he elected to defer.
In its deliberations, the Committee considered all of the goals which had been
assigned to him for 1994 together with the significant improvement in the
results of the Company. The most significant of the goals achieved were:
(i) A goal to reach a Cash Flow Return on Investment ("CFROI") of 11.8%
which would have equated to earnings per share of $.95 and a return
on equity of 9-10%.
This goal was far exceeded with earnings per share of $1.35 and CFROI
of 14%.
(ii) A goal to improve the Company's financial rating with Moody's.
This goal was accomplished by a change from a rating of P-3 to P-2.
(iii) A goal to profitably grow the Company internally and/or through
acquisition with a focus on the leisure/recreation markets.
A number of small core acquisitions were made during the year,
predominantly to fill niches in various markets not previously
served.
(iv) Other goals which were achieved in 1994 included the design and
implementation of a new structure for strategic and business unit
reviews by the Board and the completion of a plan to further globalize
the Company.
11
<PAGE> 15
Under the 1991 Stock Plan, Mr. Reichert may receive grants of restricted
stock and/or stock options. The terms of his Employment Agreement with the
Company entitle Mr. Reichert independent of the Company's performance to an
annual grant of restricted stock with a minimum value equivalent to 75% of his
salary. In accordance with the terms of his Agreement in January, 1994, a grant
of restricted shares was made to Mr. Reichert which had a value equal to 75% of
his salary. In addition, in February, 1994, in recognition of the significant
increase in operating earnings from 1992 to 1993, the Compensation Committee
also awarded Mr. Reichert an option to purchase 25,000 shares at their then fair
market value.
OMNIBUS BUDGET RECONCILIATION ACT OF 1993
The Company has reviewed its executive compensation plans in response to
the Omnibus Budget Reconciliation Act of 1993 ("the Act"), which established a
million dollar tax deduction limitation in August, 1993 for the taxable year
beginning January 1, 1994. The limitation applies to compensation in excess of
$1 million paid to any executive who is employed by the Company on December 31
and named in the summary compensation table, with certain exceptions including
an exception for compensation based upon objective performance measurements
which are administered by a committee of outside directors and approved by
stockholders.
After a detailed review of the provisions of the Act as they pertain to the
Plans currently in effect in the Company, the Committee has determined the
following:
(i) Because of the restrictive provisions with respect to discretion in
determining Mr. Reichert's bonus under the CEO Incentive Plan, the
Company will not submit the Plan to shareholders for approval. The
Committee feels that due to the broad scope of his duties and assigned
goals, the assessment of the performance of the Chairman and Chief
Executive Officer may be in part judgmental and cannot necessarily be
measured in finite terms. In addition, Mr. Reichert has the right,
under the terms of his Employment Agreement, to elect to defer payment
of any portion of a bonus earned under this Plan until after his
retirement from the Company when payment of such deferred compensation
would not be subject to the tax deduction limitation;
(ii) As specified in the proposed regulations, in order for compensation
attributable to the exercise of stock options to remain deductible,
prior to April, 1997, the 1991 Stock Plan will be amended to include a
limitation on the number of options which may be granted to any one
participant;
(iii) The provisions in the 1991 Stock Plan which allow the awarding of
restricted stock, however, will not be amended. Awards of restricted
shares are an integral part of a Senior Executive's compensation
package. The Company feels strongly that these grants further align the
Senior Executives' interests with those of the shareholders. Therefore,
the Company will not attempt to qualify for an exception to the
deduction limitation any compensation related to the transfer of
restricted stock awarded under the Plan. Further, grants of restricted
stock to the Chairman, President and Chief Executive Officer and to the
Executive Vice President are, under the provisions of the
12
<PAGE> 16
Act, grandfathered and excluded from the limitation because their
respective Employment Agreements were in effect prior to February 17,
1993;
(iv) Because the likelihood of the Company losing a tax deduction due to
payments under the Brunswick Performance Plan to covered executives
exceeding the million dollar limit appears unlikely at this time, the
Company does not currently intend to qualify for an exception to the
deduction limitation such compensation resulting from payments made
under the Plan. The Chairman, President and Chief Executive Officer
does not participate in this Plan; and
(v) The Company does not intend to submit the Strategic Incentive Plan to
shareholders for approval in order to qualify the payments as
performance-based compensation. Bonus payments under the Plan are
earned by the accomplishment of strategic goals, the assessment of
which are partly judgmental rather than being solely formula driven.
The Company feels the integrity of this Plan would be compromised by
attempting to satisfy the requirements for an exception to the
deduction limitation. The Chairman, President and Chief Executive
Officer of the Company does not participate in the Strategic Incentive
Plan.
The Company and the Committee will continue to monitor the impact of these
Plans with respect to the deduction limitation.
Submitted by Members of the Compensation Committee of the Board of
Directors,
B. K. Koken, Chairman
J. P. Diesel
J. W. Lorsch
R. N. Rasmus
R. W. Schipke
13
<PAGE> 17
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term
Compensation
-----------------------------------
Awards Payouts
----------------------- ---------
Annual Compensation Restricted Securities Long-Term All Other
------------------------------- Stock Underlying Incentive Compen-
Name/Position Year Salary Bonus Other Award(1) Options Payouts sation(2)
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Jack F. Reichert/Chairman 1994 $735,000 $1,000,000 $ 7,281 $551,254 25,000 $ 0 $69,787
of the Board, President and 1993 717,644 700,000 62,964 268,494 48,450 0 71,247
Chief Executive Officer 1992 700,000 500,000 78,208 194,250 28,000 0 81,597
---------------------------------------------------------------------------------------------------------------------
John M. Charvat/ 1994 $484,197 $ 200,000 $ 1,197 $283,203 0 $250,000 $48,138
Executive Vice President 1993 472,000 100,000 705 145,053 26,175 0 47,646
1992 464,907 150,000 436 111,000 15,800 0 45,996
---------------------------------------------------------------------------------------------------------------------
David D. Jones/President, 1994 $338,384 $ 250,000 $ 1,195 $ 90,625 10,000 $200,000 $21,445
Mercury Marine Division 1993 316,041 80,000 1,089 83,125 10,000 0 20,330
1992 310,164 135,000 436 62,438 9,900 0 17,510
---------------------------------------------------------------------------------------------------------------------
William J. Barrington/ 1994 $313,699 $ 180,000 $ 901 $ 72,500 8,000 $185,000 $32,182
President, 1993 300,000 45,000 530 74,812 9,000 0 27,670
Sea Ray Division 1992 287,705 60,000 436 58,969 9,400 0 21,585
---------------------------------------------------------------------------------------------------------------------
Frederick J. Florjancic, Jr./ 1994 $316,301 $ 160,000 $ 1,392 $117,812 13,000 $183,000 $11,986
President, 1993 286,562 200,000 640 70,656 8,500 0 10,961
Brunswick Division 1992 270,615 80,000 436 55,500 9,000 0 11,188
---------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The amounts shown in this column are the value of the restricted shares as
of the date of grant. The total number and value of restricted stock
holdings as of December 31, 1994 for the named officers are as follows:
Messrs. Reichert 60,564 shares, $1,143,145; Charvat 32,350 shares, $610,606;
Jones 14,500 shares, $273,687; Barrington 12,750 shares, $240,656 and
Florjancic 14,750 shares, $278,406. Dividends are paid quarterly on all
shares of restricted stock.
(2) All Other Compensation for 1994 for the named officers is comprised of the
following: (i) Company contributions to the Brunswick Retirement Savings
Plan for Messrs. Reichert $2,772; Charvat $2,772; Jones $2,772; Barrington
$1,880; and Florjancic $2,772; (ii) Company contributions to the Brunswick
Employee Stock Ownership Plan for Messrs. Reichert $432; Charvat $432; Jones
$432; Barrington $549 and Florjancic $432; (iii) Company contributions to
the Sea Ray Employees' Stock Ownership and Profit Sharing Plan for Mr.
Barrington of $16,397; and (iv) the term life portion of the premiums plus
the present value of the remaining premiums paid for the benefit of the
named executives under the Company's split dollar life insurance
arrangements, measuring such value by assuming an interest free loan to the
named executives until the Company is reimbursed for such remaining
premiums: Messrs. Reichert $66,583, Charvat $44,934, Jones $18,241,
Barrington $13,356 and Florjancic $8,782.
14
<PAGE> 18
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
Individual Grants(1)
----------------------------------------------- Potential Realizable
Number of % of Total Value at Assumed Annual
Securities Options Rates of Stock Price
Underlying Granted to Appreciation for Option Term
Options Employees Exercise Expiration -------------------------------------
Name Granted in 1994(2) Price Date 0% 5% 10%
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Jack F. Reichert......... 25,000 3.48% $20.000 02/08/04 0 $314,447 $796,871
John M. Charvat.......... 0 N/A N/A N/A N/A N/A N/A
David D. Jones........... 10,000 1.39% 18.125 01/03/04 0 113,987 288,866
William J. Barrington.... 8,000 1.11% 18.125 01/03/04 0 91,190 231,093
Frederick J. Florjancic,
Jr..................... 13,000 1.81% 18.125 01/03/04 0 148,183 375,526
All Shareholders(3)...... N/A N/A N/A N/A 0 $1,093,548,950 $2,771,267,745
</TABLE>
(1) Non-qualified stock options were granted at 100% of the closing fair market
value on the date of grant with a ten year option term. The options vest in
increments of 30%, 30% and 40% on the first three anniversaries of the
grant date, or earlier if there is a change in control of the Company. When
exercising options, an option holder may deliver previously acquired shares
of Common Stock or may request that shares be withheld to satisfy the
required withholding taxes.
(2) Based on 719,150 options granted to 364 employees during 1994.
(3) The potential realizable values for all shareholders were calculated using
the weighted average exercise price of option shares awarded during 1994
and the total outstanding shares of Common Stock on December 31, 1994. At
5% and 10% annual appreciation the value of the Common Stock would be
approximately $29.67 per share and $47.25 per share, respectively, at the
end of the 10-year period.
OPTION EXERCISES AND YEAR-END VALUE TABLE
<TABLE>
<CAPTION>
Number of Securities Value of
Number of Underlying the Unexercised Unexercised, In-the-Money
Shares Options at 12/31/94 Options Held at 12/31/94(1)
Acquired on ------------------------------- -------------------------------
Executive Exercise Exercisable Unexercisable Exercisable Unexercisable
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Jack F. Reichert 0 31,335 70,115 $ 116,704 $ 132,309
John M. Charvat 0 17,333 24,642 65,069 72,824
David D. Jones 0 8,940 20,960 36,450 43,050
William J. Barrington 0 8,340 18,060 34,275 38,975
Frederick J. Florjancic,
Jr. 0 7,950 22,550 32,737 41,137
</TABLE>
(1) Represents the difference between the option exercise price and the fair
market value of the Company's Common Stock on December 31, 1994.
15
<PAGE> 19
LONG-TERM INCENTIVE PLAN -- AWARDS DURING 1994
<TABLE>
<CAPTION>
Estimated
Future Payouts
Under Non-Stock
Price-Based
Plans
Name Performance Period Maximum(1)
------------------------------------------------------------------------------------------------------------
<S> <C> <C>
John M. Charvat 01/03/94 - 12/31/96 $ 354,000
David D. Jones 01/03/94 - 12/31/96 251,250
William J. Barrington 01/03/94 - 12/31/96 234,000
Frederick J. Florjancic, Jr. 01/03/94 - 12/31/96 236,250
</TABLE>
(1) These amounts are the maximum payments which may be paid if all goals are
achieved under the Strategic Incentive Plan, a three-year cash bonus plan
in which certain officers and key executives of the Company and its
divisions participate.
16
<PAGE> 20
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
AMONG BRUNSWICK, S&P 500 INDEX AND PEER GROUP
<TABLE>
<CAPTION>
MEASUREMENT PERIOD S&P 500
(FISCAL YEAR COVERED) BRUNSWICK PEER GROUP INDEX
<S> <C> <C> <C>
1989 100.0 100.0 100.0
1990 66.1 62.1 96.9
1991 105.9 86.3 126.4
1992 127.6 88.2 136.0
1993 145.0 107.0 149.8
1994 155.7 96.1 151.7
</TABLE>
Basis of comparison is a $100 investment at December 31, 1989 in each of
Brunswick, the S&P 500 Index and a peer group of three recreation manufacturing
companies (Outboard Marine Corporation, Anthony Industries, Inc. and Johnson
Worldwide Associates, Inc.) weighted by the beginning of the year market value
of each company. All dividends are reinvested.
17
<PAGE> 21
PENSION PLANS
The following table shows the maximum retirement income which may be
payable as a straight life annuity pursuant to the Company's salaried pension
plans at age 65 under various assumed conditions prior to reduction for Social
Security benefits.
<TABLE>
<CAPTION>
Average of the
Three Highest Retirement Income for
Consecutive Years' Years of Participating Service
Earnings as a ---------------------------------------------------------------------
Participant 15 20 25 30
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
$ 300,000 $ 99,000 $132,000 $165,000 $ 198,000
600,000 198,000 264,000 330,000 396,000
900,000 297,000 396,000 495,000 594,000
1,300,000 429,000 572,000 715,000 858,000
1,700,000 561,000 748,000 935,000 1,122,000
</TABLE>
The salaried pension plans are non-contributory plans providing for
benefits following retirement under a formula based upon years of participation
in the plans up to 30 years, the average of the three highest consecutive years'
earnings (salaries, annual bonuses and commissions but excluding bonuses earned
under the Strategic Incentive Plan), and age.
The 1994 earnings used to calculate benefits under the salaried pension
plans and the years of service of the officers named in the summary compensation
table are: Messrs. Reichert $1,435,020, 30 years; Charvat $583,851, 30 years;
Jones $419,827, 13 years; and Florjancic $516,458, 9 years. The foregoing
amounts include the annual bonuses paid in 1994 for 1993 performance and differ
from the amounts listed in the summary compensation table, which include the
annual bonuses paid in 1995 for 1994 performance. Mr. Barrington does not
participate in any salaried pension plan.
If there is a change in control of the Company on or before March 1, 1996
and if there is a termination, merger or transfer of assets of the salaried
pension plans during the five years following the change in control of the
Company, benefits would be increased so that there would be no excess net
assets. Also, in the event of the involuntary termination of employment (other
than for cause) of a participant in the salaried pension plans during the five
years following such change in control of the Company, the participant's pension
would not be reduced as a result of early retirement.
EMPLOYMENT AGREEMENTS
The Company has employment agreements with Messrs. Reichert and Charvat
which provide for their employment through September 30, 1995 and August 1,
1995, respectively. The agreements provide for an annual salary of not less than
$545,000 for Mr. Reichert and $325,000 for Mr. Charvat, and an annual bonus for
Mr. Reichert under the CEO Incentive Plan from zero to 200% of salary based on
the accomplishment of specified strategic goals and the Company's overall
performance and an annual bonus for Mr. Charvat under the Brunswick Performance
Plan
18
<PAGE> 22
from zero to 80% of salary based on the achievement of specified goals. The
agreements also provide for an annual award of restricted stock of not less than
75% of salary for Mr. Reichert and 60% of salary for Mr. Charvat. These
restricted stock awards are not tied to the Company's performance. The
agreements further provide that with some exceptions they shall participate in
all benefit plans offered to the Company's Senior Executives, and Mr. Reichert's
agreement provides that he shall be entitled for six years following the
termination of the agreement to coverage under any directors and officers
liability insurance policy, indemnification by-law and indemnification agreement
then maintained or offered by the Company.
Mr. Reichert may elect to defer receipt of cash compensation under his
agreement. Amounts deferred either will be invested or will accrue interest at
the prime rate in effect at the First National Bank of Chicago, and such amounts
will be paid to him or his beneficiary in five annual installments following his
retirement. Mr. Reichert may also elect to receive the amounts deferred in a
lump sum, subject to obtaining the consent of the Compensation Committee. Life
insurance of three and one-half times Messrs. Reichert's and Charvat's base
salary (less the face amount of any policy released to Mr. Reichert under the
Company's Split Dollar Life Insurance Plan) is to be maintained for them while
they are employed, and this insurance is to be maintained for Mr. Reichert for
15 years thereafter and for Mr. Charvat until the release date in the policies,
which obligations are currently being fulfilled partly through the Split Dollar
Life Insurance Plan. If Mr. Reichert's employment terminates at age 65 or later,
the Company will provide him with office space and secretarial assistance for
five years following his retirement as long as he is a director or a consultant
to the Company. Upon termination of employment, Mr. Reichert may elect to
receive a lump sum payment of his benefits under the Company's supplemental
pension plan, subject to obtaining the consent of the Compensation Committee.
If Messrs. Reichert's or Charvat's employment is terminated before
completion of the term of his agreement for any reason other than death,
incapacity or cause, or if Messrs. Reichert or Charvat resigns following a
significant change in the nature or scope of his duties, a reduction in his
compensation, a reasonable determination by Messrs. Reichert or Charvat that as
a result of a change in the circumstances regarding his duties, he is unable to
exercise his authorities or duties, or breach by the Company of the agreement,
Mr. Reichert's agreement provides that he may elect to receive, and Mr.
Charvat's agreement provides that he shall receive, a lump sum payment equal to
(i) his salary for the remainder of the term of the agreement at the rate in
effect as of the date of termination, (ii) a bonus of 100% of salary for Mr.
Reichert and 44% of salary for Mr. Charvat for each year or portion thereof for
the remainder of the term of the agreement and (iii) a restricted stock award of
75% of salary for Mr. Reichert and 60% of salary for Mr. Charvat for each year
or portion thereof for the remainder of the term of the agreement. If the lump
sum payments are paid to Messrs. Reichert and Charvat, each shall be treated as
though he had continued to participate in the Company's incentive compensation
and employee benefit plans for the remainder of the term of the agreement, and
each will receive a lump sum payment equal to the then present value of the
additional pension benefit he would have accrued for the remainder of the term
of the agreement. The agreements prohibit competition with the Company by
Messrs. Reichert and Charvat during the term of the agreements and for five
years
19
<PAGE> 23
thereafter and require confidentiality on the part of Messrs. Reichert and
Charvat during and after the term of the agreements.
Within sixty days after there has been a change in control of the Company,
the Company is required under the agreement to pay Mr. Reichert any amount then
held for him in a deferred compensation account. Upon Messrs. Reichert's and
Charvat's requests after a change in control of the Company, the Company is
required under the agreements to pay a lump sum pension payment equal to the
present value of benefits accrued under the Company's supplemental pension plan
as of the end of the prior year. The definition of a change in control includes
(i) the ownership of 30% or more of the outstanding voting stock of the Company
by any person other than an employee benefit plan of the Company, (ii) a tender
offer which has not been negotiated and approved by the Board of Directors of
the Company for stock of the Company if (a) the offeror owns or has accepted for
payment 25% or more of the outstanding voting stock of the Company or (b) the
offer remains open three days before its stated termination date and if the
offeror could own 50% or more of the outstanding voting stock of the Company as
a result of the offer, or (iii) the failure of the Board of Directors' nominees
to constitute a majority of the Board of Directors of the Company following a
contested election of directors. Messrs. Reichert's and Charvat's agreements
also provide that if either is required to pay any excise tax on payments from
the Company by reason of Section 4999 of the Internal Revenue Code of 1986, the
Company will reimburse him for such excise tax plus any other taxes owed as a
result of such reimbursement.
Messrs. Reichert's and Charvat's agreements provide that either may resign
during the six months following a change in control of the Company and elect to
receive a lump sum payment equal to (i) his salary for the lesser of two years
or the remainder of the term of the agreement at the rate in effect as of the
date of termination, (ii) a bonus of 100% of salary for Mr. Reichert and 44% of
salary for Mr. Charvat for the lesser of two years or the remainder of the term
of the agreement, and (iii) a restricted stock award for the lesser of two years
or the remainder of the term of the agreement of 75% of salary for Mr. Reichert
and 60% of salary for Mr. Charvat. Also, each would be treated as though he had
continued to participate in the Company's incentive compensation and employee
benefit plans for such period, and each will receive a lump sum payment equal to
the then present value of the additional pension benefit accrued for such
period.
The Company also has employment agreements with Messrs. Jones, Barrington
and Florjancic, and certain other officers which provide that after a change in
control of the Company each executive will be employed for three years (but not
beyond the executive's 65th birthday) during which the executive will be
entitled to a salary not less than the executive's annual salary immediately
prior to the change in control, with the opportunity for regular increases, and
incentive compensation, employee benefits and perquisites equivalent to those
provided by the Company to executives with comparable duties, but at least as
great as those to which the executive was entitled immediately prior to the
change in control. The definition of a change in control in these agreements is
the same as the definition in Messrs. Reichert's and
20
<PAGE> 24
Charvat's agreements described above. Within 60 days after a change in control,
the Company is required to pay the executive a lump sum pension payment equal to
the present value of benefits accrued under the Company's supplemental pension
plan as of the end of the prior year.
If employment is terminated under any of these agreements before completion
of the term of employment for any reason other than death, incapacity or cause,
or if an executive resigns following a significant change in the nature or scope
of the executive's duties, a reduction in total compensation, a reasonable
determination by the executive that as a result of a change in the circumstances
affecting the executive's position the executive is unable to exercise the
authorities and duties attached to the executive's position, or breach by the
Company of the agreement, the executive would be paid a lump sum payment equal
to (i) his or her salary for three years at the rate in effect as of the date of
termination, (ii) a bonus of 30% of salary for each of the three years, (iii) an
additional bonus under the Brunswick Strategic Incentive Plan equal to 37.5% of
salary for each of the three years, and (iv) a restricted stock award for each
of the three years comparable to the executive's most recent restricted stock
award. If the executive attains age 65 during such three-year period, all of the
foregoing payments will be reduced proportionally. If the lump sum payments are
paid, the executive shall be treated as though he or she had continued to
participate in the Company's incentive compensation and employee benefit plans
for the three years, and the executive will receive a lump sum payment equal to
the then present value of the additional pension benefit accrued for the three
years. The agreements prohibit competition with the Company by the executive for
one year after termination of employment and require confidentiality on the part
of the executive during and after the term of the agreements. The agreements
also provide that if any executive is required to pay any excise tax on payments
from the Company by reason of Section 4999 of the Internal Revenue Code of 1986,
the Company will reimburse the executive for such excise tax plus any other
taxes owed as a result of such reimbursement.
The agreements provide that each executive may resign during the six months
following a change in control of the Company and elect to receive a lump sum
payment equal to (i) his or her salary for two years at the rate in effect as of
the date of termination, (ii) a bonus of 30% of salary for the two years, (iii)
an additional bonus under the Brunswick Strategic Incentive Plan equal to 37.5%
of salary for the two years, and (iv) a restricted stock award for each of the
two years comparable to the executive's most recent restricted stock award.
Also, the executive would be treated as though he or she had continued to
participate in the Company's incentive compensation and employee benefit plans
for the two years, and the executive will receive a lump sum payment equal to
the then present value of the additional pension benefit that would have accrued
for the two years. If the executive attains age 65 during such two-year period,
all of the foregoing payments will be reduced proportionally.
21
<PAGE> 25
APPOINTMENT OF INDEPENDENT PUBLIC ACCOUNTANTS
Upon the recommendation of its Audit Committee, the Board of Directors has
appointed Arthur Andersen LLP ("Andersen"), independent public accountants,
auditors for the Company and its subsidiaries for the year 1995. The Board of
Directors recommends to the stockholders that the appointment of Andersen as
auditors for the Company and its subsidiaries be ratified. If the stockholders
do not ratify the appointment of Andersen, the selection of auditors will be
reconsidered by the Audit Committee and the Board of Directors. Representatives
of Andersen are expected to be present at the Annual Meeting of Stockholders
with the opportunity to make a statement if they desire to do so and to be
available to respond to appropriate questions from stockholders.
The Board of Directors recommends a vote FOR the proposal.
OTHER MATTERS
If any matters other than those referred to in the Notice of Annual Meeting
should properly come before the Meeting, it is the intention of the persons
named in the accompanying form of proxy to vote the proxies held by them in
accordance with their best judgment. Management does not know of any business
other than that referred to in the Notice which may be considered at the
Meeting.
The entire expense of proxy solicitation will be borne by the Company. In
addition to solicitation by mail, telephone, facsimile, telegraph and personal
contact by its officers and employees, the Company has retained the firm of
Georgeson & Co. to assist in the solicitation of proxies. Reasonable
out-of-pocket expenses of forwarding the proxy material will be paid by the
Company. For its services, Georgeson & Co. will be paid a fee of approximately
$9,900.
STOCKHOLDER PROPOSALS
Under the rules of the Securities and Exchange Commission proposals of
stockholders to be considered for inclusion in the proxy statement and form of
proxy for the 1996 Annual Meeting must be received by the Company at its offices
at 1 N. Field Ct., Lake Forest, Illinois 60045-4811, Attention: Secretary, no
later than November 28, 1995 and must otherwise meet the requirements of those
rules.
CONFIDENTIAL VOTING POLICY
The Board of Directors has a Confidential Voting Policy that all
stockholder proxies, ballots and voting materials that identify the votes of
specific stockholders shall be kept permanently confidential and shall not be
disclosed to the Company, its affiliates, directors, officers and employees or
to any third parties except in certain limited circumstances.
22
<PAGE> 26
In order to assure the presence of the necessary quorum and to vote on the
matters to come before the Annual Meeting, please indicate your choices on the
enclosed proxy, and date, sign and return it promptly in the envelope provided.
By order of the Board of Directors,
[SIG]
DIANNE M. YACONETTI
Vice President --
Administration and Secretary
Lake Forest, Illinois
March 27, 1995
23
<PAGE> 27
--------------------------------------------------------------------------------
PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF BRUNSWICK
CORPORATION
The undersigned hereby appoints J. F. Reichert, W. R. McManaman,
and D. M. Yaconetti, and each of them, as proxies with power of
substitution, and hereby authorizes them to represent and to vote, as
designated below, all the shares of common stock of Brunswick
Corporation which the undersigned may be entitled to vote at the
Annual Meeting of Stockholders to be held on April 26, 1995 or any
adjournment thereof.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
<TABLE>
<CAPTION>
<S> <C> <C>
1. ELECTION OF DIRECTORS / / FOR the following nominees: J. P. / / WITHHOLD AUTHORITY to vote for
Diesel, G. D. Kennedy, B. K. Koken, J. W. all nominees or their alternates
Lorsch, B. Martin Musham, R. N. Rasmus,
J. F. Reichert and R. W. Schipke
(except as marked to the contrary) or
for alternate(s) designated by the
Board of Directors
</TABLE>
(Instruction: To withhold authority to vote for any individual nominee, write
the name of such nominee(s) in the space provided below.)
---------------------------------------------------------------------
2. Ratification of Auditors FOR / / AGAINST / / ABSTAIN / /
3. In their discretion on such other business as may properly come
before the meeting.
THIS PROXY WILL BE VOTED AS DIRECTED BY THE STOCKHOLDER. IF NO
DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2.
PLEASE MARK, SIGN ON REVERSE SIDE, DATE AND RETURN PROMPTLY IN
ENCLOSED ENVELOPE.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Continued from other side)
Dated , 1995
------------------------ ------------------------
(Signature of Stockholder) (Signature of Stockholder)
Please sign as your name or names appear
above, date and mail this proxy promptly in
the enclosed return envelope. If your stock is
held in joint tenancy, both joint tenants must
sign. Executors, administrators, trustees,
etc. should give full title as such. If
executed by a corporation, a duly authorized
officer should sign.
--------------------------------------------------------------------------------
<PAGE> 28
PROXY PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BRUNSWICK CORPORATION
The undersigned hereby appoints J. F. Reichert, W. R. McManaman, and
D. M. Yaconetti, and each of them, as proxies, with power of substitution, and
hereby authorizes them to represent and to vote, in accordance with the
instructions on the reverse side, all the shares of common stock of Brunswick
Corporation which the undersigned may be entitled to vote at the Annual Meeting
of Stockholders to be held on April 26, 1995 or any adjournment thereof.
BY SIGNING AND RETURNING THIS FORM, YOU WILL BE INSTRUCTING HARRIS
TRUST AND SAVINGS BANK (THE "TRUSTEE") TO VOTE THE SHARES ALLOCATED TO YOUR
ACCOUNT IN THE BRUNSWICK EMPLOYEE STOCK OWNERSHIP PLAN. THE TRUSTEE WILL VOTE
YOUR SHARES AS YOU DIRECT. IF YOU SIGN AND RETURN THIS FORM WITHOUT MAKING ANY
DIRECTION, YOUR SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2. IF YOU DO NOT
RETURN THIS FORM BY APRIL 24, 1995, THE TRUSTEE WILL VOTE YOUR SHARES IN THE
SAME PROPORTION AS IT VOTES SHARES FOR WHICH IT RECEIVES INSTRUCTIONS.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
BRUNSWICK CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
<TABLE>
<S> <C>
1. Election of Directors-- For All,
Nominees: J.P. Diesel, G.D. Kennedy, B.K. Koken, For Withheld Except Vote Withheld for the Nominee(s) Written Below
J.W. Lorsch, B. Martin Musham, R.N. Rasmus,
J.F. Reichert and R.W. Schipke. / / / / / / _________________________________________________
2. Ratification of Auditors. For Against Abstain 3. In their discretion on such other
/ / / / / / business as may properly come
before the meeting.
A VOTE FOR ITEMS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS.
Dated: _____________________________, 1995
__________________________________________
Signature
NOTE: Please sign exactly as name appears
on this proxy, date and mail this proxy
promptly in the enclosed return envelope
so that it is received prior to the
meeting. These confidential voting
instructions will be seen only by
authorized personnel of the Trustee and
its tabulator.
</TABLE>
<PAGE> 29
PROXY PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BRUNSWICK CORPORATION
The undersigned hereby appoints J. F. Reichert, W. R. McManaman, and
D. M. Yaconetti, and each of them, as proxies, with power of substitution, and
hereby authorizes them to represent and to vote, in accordance with the
instructions on the reverse side, all the shares of common stock of Brunswick
Corporation which the undersigned may be entitled to vote at the Annual Meeting
of Stockholders to be held on April 26, 1995 or any adjournment thereof.
BY SIGNING AND RETURNING THIS FORM, YOU WILL BE INSTRUCTING MELLON
BANK N.A. (THE "TRUSTEE") TO VOTE THE SHARES ALLOCATED TO YOUR ACCOUNT IN
THE BRUNSWICK RETIREMENT SAVINGS PLANS. THE TRUSTEE WILL VOTE YOUR SHARES AS
YOU DIRECT. IF YOU SIGN AND RETURN THIS FORM WITHOUT MAKING ANY DIRECTION,
YOUR SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2. IF YOU DO NOT RETURN THIS
FORM BY APRIL 24, 1995, THE TRUSTEE WILL VOTE YOUR SHARES IN THE SAME
PROPORTION AS IT VOTES SHARES FOR WHICH IT RECEIVES INSTRUCTIONS.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
BRUNSWICK CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
<TABLE>
<S> <C>
1. Election of Directors-- For All,
Nominees: J.P. Diesel, G.D. Kennedy, B.K. Koken, For Withheld Except Vote Withheld for the Nominee(s) Written Below
J.W. Lorsch, B. Martin Musham, R.N. Rasmus,
J.F. Reichert and R.W. Schipke. / / / / / / _________________________________________________
2. Ratification of Auditors. For Against Abstain 3. In their discretion on such other
/ / / / / / business as may properly come
before the meeting.
A VOTE FOR ITEMS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS.
Dated: _____________________________, 1995
__________________________________________
Signature
NOTE: Please sign exactly as name appears
on this proxy, date and mail this proxy
promptly in the enclosed return envelope
so that it is received prior to the
meeting. These confidential voting
instructions will be seen only by
authorized personnel of the Trustee and
its tabulator.
</TABLE>
<PAGE> 30
PROXY PROXY
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
BRUNSWICK CORPORATION
The undersigned hereby appoints J. F. Reichert, W. R. McManaman, and
D. M. Yaconetti, and each of them, as proxies, with power of substitution, and
hereby authorizes them to represent and to vote, in accordance with the
instructions on the reverse side, all the shares of common stock of Brunswick
Corporation which the undersigned may be entitled to vote at the Annual Meeting
of Stockholders to be held on April 26, 1995 or any adjournment thereof.
BY SIGNING AND RETURNING THIS FORM, YOU WILL BE INSTRUCTING MELLON
BANK N.A. (THE "TRUSTEE") TO VOTE THE SHARES ALLOCATED TO YOUR ACCOUNT IN
THE SEA RAY EMPLOYEES' STOCK OWNERSHIP AND PROFIT SHARING PLAN. THE TRUSTEE
WILL VOTE YOUR SHARES AS YOU DIRECT. IF YOU SIGN AND RETURN THIS FORM WITHOUT
MAKING ANY DIRECTION, YOUR SHARES WILL BE VOTED FOR PROPOSALS 1 AND 2. IF YOU
DO NOT RETURN THIS FORM BY APRIL 24, 1995, THE TRUSTEE WILL VOTE YOUR SHARES
IN THE SAME PROPORTION AS IT VOTES SHARES FOR WHICH IT RECEIVES INSTRUCTIONS.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
BRUNSWICK CORPORATION
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
<TABLE>
<S> <C>
1. Election of Directors-- For All,
Nominees: J.P. Diesel, G.D. Kennedy, B.K. Koken, For Withheld Except Vote Withheld for the Nominee(s) Written Below
J.W. Lorsch, B. Martin Musham, R.N. Rasmus,
J.F. Reichert and R.W. Schipke. / / / / / / _________________________________________________
2. Ratification of Auditors. For Against Abstain 3. In their discretion on such other
/ / / / / / business as may properly come
before the meeting.
A VOTE FOR ITEMS 1 AND 2 IS RECOMMENDED BY THE BOARD OF DIRECTORS.
Dated: _____________________________, 1995
__________________________________________
Signature
NOTE: Please sign exactly as name appears
on this proxy, date and mail this proxy
promptly in the enclosed return envelope
so that it is received prior to the
meeting. These confidential voting
instructions will be seen only by
authorized personnel of the Trustee and
its tabulator.
</TABLE>
