<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [_]
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))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
- --------------------------------------------------------------------------------
(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):
[_] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(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:
-------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-------------------------------------------------------------------------
(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):
-------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-------------------------------------------------------------------------
(5) Total fee paid:
-------------------------------------------------------------------------
[_] Fee paid previously with preliminary materials.
[_] 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:
-------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------------------------
(3) Filing Party:
-------------------------------------------------------------------------
(4) Date Filed:
-------------------------------------------------------------------------
Notes:
<PAGE>
LOGO
WHIRLPOOL CORPORATION
Administrative Center
2000 North M63
Benton Harbor, Michigan 49022-2692
To Our Stockholders:
The annual meeting of stockholders will be held on Tuesday, April 18, 1995, at
9:30 A.M., Chicago time, at The Assembly Room (8th floor) of Harris Trust and
Savings Bank, 111 West Monroe Street, Chicago, Illinois. You are cordially
invited to be present at the meeting.
At this meeting, the stockholders will vote on the election of five directors
and will transact any other business that may properly come before the
meeting.
A stockholder may revoke a proxy at any time prior to the voting thereof by
filing with the Secretary of the Company, prior to the stockholder vote, a
written revocation or duly executed form of proxy bearing a later date, or by
voting in person at the meeting.
Whether or not you expect to attend the meeting, please complete and return
the enclosed Proxy. The prompt return of your Proxy will be appreciated as it
will save further mailing expense. Proxies of stockholders who attend the
meeting and vote in person will not be voted.
Your vote is important and much appreciated!
LOGO
DAVID R. WHITWAM
Chairman of the Board
and Chief Executive Officer March 15, 1995
<PAGE>
NOTICE OF 1995 ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of WHIRLPOOL CORPORATION will be held at
The Assembly Room (8th floor) of Harris Trust and Savings Bank, 111 West
Monroe Street, Chicago, Illinois, on Tuesday, April 18, 1995, at 9:30 A.M.,
Chicago time, for the following purposes:
1.to elect five persons to the Company's Board of Directors; and
2.to transact such other business as may properly come before the meeting.
By Order of the Board of Directors
LOGO
DANIEL F. HOPP
Vice President,
General Counsel and Secretary
March 15, 1995
<PAGE>
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Whirlpool Corporation (the "Company") for the annual
meeting of stockholders to be held on April 18, 1995. Only stockholders of
record at the close of business on March 3, 1995 are entitled to notice of, and
to vote at, the meeting. The Company had 74,163,512 outstanding shares of
Common Stock as of the close of business on March 3, 1995. The Company has no
other voting securities. Stockholders are entitled to one vote per share on
each matter. Stockholder votes will be kept confidential pursuant to the policy
of the Company regarding stockholder voting which was adopted by the Board of
Directors on October 20, 1992. Under this policy, all stockholder votes are to
be kept permanently confidential and not disclosed except when disclosure is
required by law, when a stockholder expressly consents to disclosure or when
the proponent filing the opposition statement in a contested election does not
agree to abide by this policy. This proxy statement and the accompanying proxy
form are first being mailed to stockholders on or about March 15, 1995.
If the accompanying proxy form is signed and returned, the shares it represents
will be voted as directed on the proxy form. In the absence of direction, it is
intended that such shares will be voted FOR the nominees named herein.
A stockholder may revoke a proxy at any time prior to the voting thereof by
submitting to the Secretary of the Company a written revocation or duly
executed form of proxy bearing a later date, or by voting in person at the
meeting. The five directors to be elected at the Annual Meeting will be elected
by a plurality of the votes cast by the stockholders present in person or by
proxy and entitled to vote. With regard to the election of directors, votes may
be cast for or withheld for each nominee. Votes that are withheld will have no
effect on the outcome of the election because directors will be elected by a
plurality of votes cast.
DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTORS
The Board of Directors of the Company (the "Board") is presently composed of
one class of three, one class of four and one class of five directors. One
class is elected each year for a term expiring at the annual meeting in the
third year after its election. This year, there are five nominees for the class
of five directors being elected. The nominees for election this year are Robert
A. Burnett, Herman Cain, Allan D. Gilmour, Janice D. Stoney and David R.
Whitwam. Ms. Kathleen J. Hempel was appointed to the Board on June 20, 1994 and
Mr. Didier M. Pineau-Valencienne resigned from the Board on February 21, 1995;
as a result, the size of the Board is currently 12 members.
----------------
NOMINEES FOR A TERM TO EXPIRE IN 1998
ROBERT A. BURNETT, 67, director and former Chairman of
the Board of Meredith Corporation (publishing,
television broadcasting and residential real estate
marketing and franchising) (retired 1992). Director of
the Company since 1980 and director of Dayton-Hudson
Corporation, Midwest Resources Inc. and ITT
Corporation.
----------------
HERMAN CAIN, 49, President and Chief Executive Officer
of Godfather's Pizza, Inc. (food service industry).
Director of the Company since 1992, director of
SUPERVALU, INC. and UtiliCorp United, Inc. and Chairman
of the Federal Reserve Bank of Kansas City.
----------------
<PAGE>
----------------
ALLAN D. GILMOUR, 60, former Vice Chairman of Ford
Motor Company (cars and trucks, related parts and
accessories and financial services) (retired 1995).
Director of the Company since 1990 and director of US
WEST, Inc.
----------------
JANICE D. STONEY, 54, former Executive Vice President,
US WEST Communications Group, Inc. (telecommunications
products and services) (retired 1992). First became a
director of the company in 1987 and served until April
1994 and was then reappointed to the Board on December
12, 1994, following a bid for political office.
----------------
DAVID R. WHITWAM, 53, Chairman of the Board and Chief
Executive Officer of the Company. Director of the
Company since 1985 and director of PPG Industries, Inc.
----------------
DIRECTORS WHOSE TERM EXPIRES IN 1997
VICTOR A. BONOMO, 65, former Executive Vice President
of PepsiCo, Inc. (soft drinks, snack foods, food
services and restaurants) (retired 1985). Director of
the Company since 1976.
----------------
KATHLEEN J. HEMPEL, 44, Vice Chairman and Chief
Financial Officer of Fort Howard Corporation (paper
products). Director of the Company since 1994.
----------------
ARNOLD G. LANGBO, 58, Chairman of the Board and Chief
Executive Officer of Kellogg Company (cereal products).
Director of the Company since 1994 and director of
Johnson & Johnson.
----------------
2
<PAGE>
----------------
PHILIP L. SMITH, 61, Chairman of the Board of Golden
Cat Corporation (cat litter and related products).
Director of the Company since 1982 and director of ECO
Lab Corporation and U.S. Trust Corporation.
----------------
DIRECTORS WHOSE TERM EXPIRES IN 1996
WILLIAM D. MAROHN, 54, President and Chief Operating
Officer of the Company. Director of the Company since
1992 and director of Rubbermaid, Inc.
----------------
MILES L. MARSH, 47, former Chairman of the Board and
Chief Executive Officer of Pet Incorporated (food
products). Director of the Company since 1990 and
director of Bank of America Illinois and Hartmarx
Corporation.
----------------
PAUL G. STERN, 56, Special Partner, Forstmann Little &
Co. (private investment company). Director of the
Company since 1990 and director of Dow Chemical
Company, General Instrument Corp. and LTV Steel
Corporation.
----------------
The directors have served their respective companies indicated above in various
executive or administrative positions for at least the past five years, except
for Mr. Marsh and Dr. Stern. Mr. Marsh was Chairman and Chief Executive Officer
of Pet Incorporated, a producer of specialty foods until it was acquired by The
Pillsbury Company, a subsidiary of Grand Metropolitan PLC, in February 1995.
Mr. Marsh is currently employed by Pet as a special advisor on the integration
of Pet with Pillsbury. From 1989 to 1991 he served as President, Chief
Operating Officer and a director of Whitman Corporation, a diversified holding
company. Dr. Stern served as a director of and in various other capacities,
including as Chairman, President and Chief Executive Officer beginning in April
1990, with Northern Telecom Limited (telecommunications equipment and
integrated office systems) until July 1994.
3
<PAGE>
BOARD OF DIRECTORS
The Board held eight meetings during 1994. During 1994, each director, except
for Mr. Pineau-Valencienne, attended at least 75% of the total number of
meetings of the Board and the Board committees on which he or she served.
The Audit Committee (Messrs. Marsh (Chair), Cain, Langbo and Dr. Stern)
annually recommends independent public accountants for appointment by the Board
as auditors of the Company and certain of its majority-owned subsidiaries,
makes recommendations to the Board on the auditing process, control systems and
compliance matters, examines and makes recommendations to the Board concerning
the scope of audits and approves audit services. The Audit Committee held three
meetings in 1994.
The Human Resources Committee (Messrs. Burnett (Chair) and Gilmour and Dr.
Stern) determines the terms of employment of the Company's officers, determines
the terms of awards under the Company's 1989 Omnibus Stock and Incentive and
Performance Excellence Plans and makes recommendations to the Board with
respect to the Company's compensation plans and policies. This committee held
two meetings in 1994.
The Corporate Governance Committee (Messrs. Smith (Chair), Burnett, Cain and
Langbo) was formed in early 1995 and replaced the Organization Committee and a
nominating subcommittee. The Committee reviews with the Chairman of the Board
recommendations concerning board committee assignments and, with input from all
Board members, the effectiveness of overall governance practices and
guidelines. This Committee also considers new nominees proposed for the Board
and will consider individuals whose names are sent to the Committee (in care of
the Chairman of the Board) by stockholders in accordance with the provisions
set forth in the Company's By-laws. The former nominating subcommittee held one
meeting in 1994.
The Board also has a standing Finance Committee.
SECURITY OWNERSHIP
The following table presents the beneficial ownership of the only person known
by the Company to beneficially own more than 5% of its Common Stock, based upon
a statement on Schedule 13G filed by such person with the Securities and
Exchange Commission. Such person has reported shared voting and dispositive
power with respect to all such shares.
<TABLE>
<CAPTION>
NAME AND ADDRESS
OF SHARES PERCENT OF
BENEFICIAL OWNER BENEFICIALLY OWNED CLASS
---------------- ------------------ ----------
<S> <C> <C>
INVESCO PLC 6,189,297 8.2%
11 Devonshire Square
London EC2M 4YR
England
</TABLE>
4
<PAGE>
The following table reports beneficial ownership of Common Stock by each
director, the Chief Executive Officer and the four other most highly
compensated executive officers, and all directors and executive officers of the
Company as a group, as of February 22, 1995. Beneficial ownership includes,
unless otherwise indicated, all shares with respect to which each director or
executive officer, directly or indirectly, has or shares the power to vote or
to direct voting of such shares or to dispose or direct the disposition of such
shares.
<TABLE>
<CAPTION>
SHARES SHARES UNDER
BENEFICIALLY EXERCISABLE
OWNED(1) OPTIONS(2) TOTAL PERCENTAGE
------------ ------------ ------- ----------
<S> <C> <C> <C> <C>
Victor A. Bonomo 2,600 1,800 4,400 *
Robert A. Burnett 3,862 1,200 5,062 *
Herman Cain 1,035 1,200 2,235 *
Allan D. Gilmour 3,400 1,800 5,200 *
Ralph F. Hake 27,715 9,600 37,315 *
Kathleen J. Hempel 1,200 -0- 1,200 *
Ronald L. Kerber 35,432 15,400 50,832 *
Arnold G. Langbo 1,107 -0- 1,107 *
William D. Marohn 71,873 18,440 90,313 *
Miles L. Marsh 3,244 1,200 4,444 *
James R. Samartini 46,528 44,594 91,122 *
Philip L. Smith 1,816 2,400 4,216 *
Paul G. Stern 2,800 1,200 4,000 *
Janice D. Stoney 1,500 2,400 3,900 *
David R. Whitwam 183,444 44,300 227,744 *
All directors and executive
officers as a group
(18 persons) 481,584 196,674 678,258 *
</TABLE>
- --------
* Represents less than 1% of the outstanding Common Stock.
(1) Does not include shares subject to exercisable options, which information
is set forth separately in the second column. Also, does not include
1,396,816 shares (as of December 31, 1994) held by the Whirlpool Savings
Trust (approximately 2,676 of which are held for the accounts of executive
officers), of which Mr. Samartini and two other individuals serve as
trustees with shared voting and investment powers.
(2) Includes shares subject to options which will become exercisable within 60
days.
SECTION 16(A) COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers, directors, and greater than 10% shareholders to file certain reports
regarding holdings and transactions in the Company's equity securities. Mr.
Jeff M. Fettig, Executive Vice President and President, Whirlpool Europe B.V.,
inadvertently failed to identify all of his holdings in his Form 3 and Form 5
filings for 1994, and made an amended filing to correct this error.
5
<PAGE>
EXECUTIVE COMPENSATION
The table below provides a summary of annual and long-term compensation for the
last three years of the Chief Executive Officer and the four other most highly
compensated executive officers of the Company.
SUMMARY COMPENSATION TABLE (1992-1994)
<TABLE>
<CAPTION>
ANNUAL COMPENSATION(1) LONG-TERM COMPENSATION
--------------------------- ----------------------------------------
AWARDS PAYOUTS
OTHER ----------- -------------- ALL OTHER
ANNUAL LTIP COMPEN-
NAME PRINCIPAL POSITION YEAR SALARY BONUS COMP. OPTIONS (#) PAYOUTS ($)(5) SATION ($)(6)
---- ------------------ ---- -------- ---------- ------- ----------- -------------- -------------
<C> <S> <C> <C> <C> <C> <C> <C> <C>
David R. Whitwam Chairman and Chief 1994 $850,000 $1,500,000 -0- 40,000 $1,072,142 $16,735
Executive Officer
Chairman and Chief 1993 800,000 1,300,000 -0- 35,000 3,480,984 16,542
Executive Officer
Chairman, President and 1992 730,000 1,100,000 154,683(4) 40,000 710,076 15,045
Chief Executive
Officer
William D. Marohn President and Chief 1994 448,750 381,500 -0- 23,000 491,484 876
Operating Officer
President and Chief 1993 410,000 536,300 -0- 20,000 1,662,209 691
Operating Officer
President and Chief 1992 331,042 425,600 -0- 15,000 311,128 587
Operating Officer(2)
Ronald L. Kerber Executive Vice 1994 275,500 275,500 -0- 11,000 253,169 5,437
President and
Chief Technology
Officer
Executive Vice 1993 243,000 359,000 -0- 9,000 1,240,259 4,746
President and
Chief Technology
Officer
Executive Vice 1992 215,000 331,800 -0- 11,000 174,735 2,617
President and
Chief Technology
Officer
Ralph F. Hake Executive Vice 1994 286,667 259,400 -0- 13,000 271,848 3,341
President
North American
Appliance Group
Executive Vice 1993 260,333 320,500 -0- 10,000 907,583 1,265
President
North American
Appliance Group
Vice President and 1992 191,792 175,800 -0- 7,000 140,834 481
President
Bauknecht Appliance
Group(3)
James R. Samartini Executive Vice 1994 296,667 237,400 -0- 9,000 327,881 4,770
President and
Chief Administrative
Officer
Executive Vice 1993 288,333 284,000 -0- 8,000 1,200,789 4,590
President and
Chief Administrative
Officer
Executive Vice 1992 278,333 286,400 -0- 9,000 235,923 4,410
President and
Chief Administrative
Officer
</TABLE>
- -------
(1) Includes amounts earned in fiscal year, whether or not received.
(2) Mr. Marohn was Executive Vice President and President of Whirlpool Europe
B.V. from February 12, 1992 until October 20, 1992 when he was promoted to
his current position.
(3) Mr. Hake was Vice President and President of the Bauknecht Appliance Group
from January 1, 1992 until September 16, 1992 when he was promoted to his
current position.
(4) Reimbursement for tax obligations incurred by Mr. Whitwam upon the exercise
of stock options.
(5) The amounts represent payouts under long-term, equity based compensation
programs based on long-term financial performance and stock price
appreciation as described under the caption Long-Term Incentives on page
12.
(6) Group term life insurance premiums.
6
<PAGE>
STOCK OPTION GRANTS AND RELATED INFORMATION
The table below provides information on grants of stock options during 1994 for
the Chief Executive Officer and the four other most highly compensated
executive officers of the Company.
OPTION GRANTS IN 1994
ASSUMED STOCK PRICE APPRECIATION
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
ASSUMED ANNUAL RATES OF STOCK
PRICE APPRECIATION FOR 10-YEAR
INDIVIDUAL GRANTS IN 1994 OPTION TERM(4)
------------------------------------------------- ----------------------------------
NUMBER OF
SECURITIES % OF TOTAL
UNDERLYING OPTIONS
OPTIONS GRANTED TO EXERCISE EXPIRATION
NAME GRANTED EMPLOYEES(1) PRICE(2) DATE(3) 0% 5%(5) 10%(6)
---- ---------- ------------ -------- ---------- --- -------------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
David R. Whitwam 40,000 7.25 $ 55.38 6/21/2004 0 $ 1,393,127 $ 3,530,458
William D. Marohn 23,000 4.16 55.38 6/21/2004 0 801,048 2,030,014
Ronald L. Kerber 11,000 1.99 55.38 6/21/2004 0 383,110 970,876
Ralph F. Hake 13,000 2.35 55.38 6/21/2004 0 452,766 1,147,399
James R. Samartini 9,000 1.63 55.38 6/21/2004 0 313,454 794,353
All Optionees(7) *551,700 -0- *53.63(Avg.) *2004 0 19,224,702 48,702,364
All Stockholders N/A N/A N/A N/A 0 2,371,324,794 6,009,188,317
All Optionee Gain as a %
of 0
All Stockholder Gain 0.8% 0.8%
</TABLE>
- --------
(1) Based on 551,700 options granted to all employees in 1994.
(2) Fair market value on the date of grant.
(3) Options generally become exercisable in installments of 40% one year after
date of the grant, 40% after two years and 20% after three years, with all
installments becoming exercisable upon a Change in Control as defined in
the 1989 Omnibus Stock and Incentive Plan. A Change in Control is defined
to include the acquisition by any person or group of 25% or more of the
Company's voting securities, a change in the composition of the Board such
that persons who constituted the Board on January 1, 1992 or persons who
were approved by a majority of such Board members cease to constitute a
majority of the Board and approval by the stockholders of an acquisition or
liquidation of the Company.
(4) Potential pre-tax realizable value is based on the assumption that the
stock price appreciates from the exercise price at the annual rates of
appreciation shown in the table over the option term (10 years). This is a
theoretical value. The actual realized value depends on the market value of
the Company's stock at the exercise date. All calculations are based on
shares outstanding as of December 31, 1994.
(5) Per share price of Common Stock would be $90.18 assuming no stock splits or
stock dividends.
(6) Per share price of Common Stock would be $143.59 assuming no stock splits
or stock dividends.
(7) No gain to the optionees is possible without an increase in the Common
Stock price. No gain in the Common Stock price will result in no gain for
the optionee.
*548,300 shares granted 6-21-94 @ $55.38--expiration date 6-21-04
* 1,500 shares granted 6-27-94 @ $54.94--expiration date 6-27-04
* 1,900 shares granted 8-16-94 @ $50.56--expiration date 8-16-04
7
<PAGE>
STOCK OPTION EXERCISES AND HOLDINGS
The table below provides information on securities underlying options
exercisable at the end of 1994 and options exercised during 1994 for the Chief
Executive Officer and the four other most highly compensated executive officers
of the Company.
AGGREGATED OPTION EXERCISES AND YEAR-END VALUE FOR 1994
<TABLE>
<CAPTION>
SECURITIES UNDERLYING VALUE OF UNEXERCISED
UNEXERCISED OPTIONS HELD IN-THE-MONEY OPTIONS HELD AT
SHARES AT FISCAL YEAR END FISCAL YEAR END
ACQUIRED VALUE ------------------------- -------------------------------
NAME ON EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE(1) UNEXERCISABLE(1)
---- ----------- -------- ----------- ------------- -------------- ----------------
<S> <C> <C> <C> <C> <C> <C>
David R. Whitwam -0- $ -0- 44,300 69,000 $624,760 $126,480
William D. Marohn -0- -0- 18,440 38,000 210,300 47,430
Ronald L. Kerber -0- -0- 15,400 18,600 213,378 34,782
Ralph F. Hake 14,500 351,587 9,600 20,400 88,536 22,134
James R. Samartini 6,206 89,506 44,594 15,600 851,942 28,458
</TABLE>
- --------
(1) Values are stated on a pre-tax basis.
LONG-TERM INCENTIVE AWARDS
The table below provides information regarding grants of long-term incentive
compensation awards in 1994 for the Chief Executive Officer and the four other
most highly compensated executive officers of the Company.
LONG-TERM INCENTIVE PLAN AWARDS IN 1994
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATE FUTURE PAYOUTS
PERIOD FROM UNDER NON-STOCK PRICE BASED
GRANT UNTIL PLANS(2)
NUMBER MATURATION ---------------------------
NAME OF SHARES(1) OR PAYOUT THRESHOLD(#) TARGET(#) MAXIMUM(#)
---- ------------ ----------- ------------ --------- ----------
<S> <C> <C> <C> <C> <C>
David R. Whitwam 7,297 3 years 3,649 7,297 14,594
Performance shares
William D. Marohn 3,434 3 years 1,717 3,434 6,868
Performance shares
Ronald L. Kerber 1,742 3 years 871 1,742 3,484
Performance shares
Ralph F. Hake 1,946 3 years 973 1,946 3,892
Performance shares
James R. Samartini 2,037 3 years 1,019 2,037 4,074
Performance shares
</TABLE>
- --------
(1) Performance share target awards are for a number of "contingent shares" and
are based on a participant's base salary and the market price of the Common
Stock. Final awards are determined by multiplying the number of contingent
shares by 0% to 200%, based on the return on equity during the performance
cycle. At the time of payout the value of contingent shares is based on the
market price of Common Stock. All awards identified in this table are made
pursuant to the Company's 1989 Plan (the "1989 Plan").
(2) Estimated future payouts are predicated upon the achievement of corporate
return on equity goals over the period from January 1, 1994 to December 31,
1996. The achievement of approximately 73% of the goal will result in
payment of the threshold amount, achieving 100% of the goal will result in
payment of the target amount, and achieving or exceeding approximately 105%
of the goal will result in payment of the maximum amount. Future payouts,
if any, will be made in Company stock, cash or a combination of both, as
determined by the Human Resources Committee of the Board of Directors. If
all or any portion of the award is paid in cash, the amount will be
determined by multiplying the final number of shares earned by the
percentage of the award to be paid in cash and multiplying this calculation
by the market price of the Common Stock at the end of the performance
period. Payments may be deferred with the Committee's consent.
The Company has agreements with its executive officers which provide severance
benefits if, within two years following a Change in Control, the executive
officer's employment is terminated (other than
8
<PAGE>
by reason of death or retirement) either by the Company, other than for cause
(as defined) or disability, or by the officer for good reason (as defined).
Benefits include continuation of salary for at least 90 days after notification
of termination of employment, severance pay equal to 2.90 times includible
compensation (generally, average annual gross income from the Company for the
five years preceding the Change in Control) and under certain circumstances,
continued participation for up to three years in the 401(k) Plan and in
retirement, insurance and other employee benefit plans. The agreements may be
terminated at the end of any year upon 90 days notice, but not for 24 months
after a Change in Control. A Change in Control is defined to include the
acquisition by any person or group of 25% or more of the Company's voting
securities, a change in the composition of the Board such that persons who
constituted the Board on January 1, 1992 or persons who were approved by a
majority of such Board members cease to constitute a majority of the Board and
approval by the stockholders of an acquisition or liquidation of the Company.
The Company's non-contributory defined benefit retirement plan (the "Retirement
Plan") covers substantially all of its salaried employees. Upon reaching the
normal retirement age of 65, each vested participant is eligible to receive
monthly installments for life equal to 2% of annual base salary, averaged over
the 60 consecutive calendar months during which pay was highest out of the last
120 months completed before age 65, for each year of credited service (up to a
maximum of 30 years). For participants with five or more years of service
reduced benefits are payable upon early retirement or termination of employment
after 55. For five years following a Change in Control, the Company may not
terminate the plan or amend or merge it with another plan in a manner which
would reduce benefits. If the Retirement Plan is terminated (including a
termination by operation of law) during this five-year period, any assets held
under the plan in excess of the amount needed to fund accrued benefits would be
used to provide additional benefits to plan participants. The Company also has
supplemental retirement plans which (i) provide to certain employees, including
executive officers, additional benefits generally similar to those under the
Retirement Plan but based upon an average of the five highest total amounts of
bonuses paid from the Company's bonus plans during the ten years prior to
retirement and (ii) maintain benefits at the levels set forth in the table
below which are otherwise limited under the Retirement Plan by the Employment
Retirement Income Security Act of 1974.
RETIREMENT BENEFITS
The following table sets forth the estimated annual pension benefits payable
under the Retirement Plan and supplemental plans (as described above) upon
retirement at age 65 after selected periods of service.
<TABLE>
<CAPTION>
ESTIMATED ANNUAL PENSION BENEFITS AT AGE 65*
--------------------------------------------
COVERED 5 YEARS 10 YEARS 15 YEARS 20 YEARS 25 YEARS 30 YEARS
COMPENSATION SERVICE SERVICE SERVICE SERVICE SERVICE SERVICE
- ------------ -------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 600,000 $ 60,000 $120,000 $180,000 $ 240,000 $ 300,000 $ 360,000
800,000 80,000 160,000 240,000 320,000 400,000 480,000
1,000,000 100,000 200,000 300,000 400,000 500,000 600,000
1,200,000 120,000 240,000 360,000 480,000 600,000 720,000
1,400,000 140,000 280,000 420,000 560,000 700,000 840,000
1,600,000 160,000 320,000 480,000 640,000 800,000 960,000
1,800,000 180,000 360,000 540,000 720,000 900,000 1,080,000
2,000,000 200,000 400,000 600,000 800,000 1,000,000 1,200,000
2,200,000 220,000 440,000 660,000 880,000 1,100,000 1,320,000
2,400,000 240,000 480,000 720,000 960,000 1,200,000 1,440,000
2,600,000 260,000 520,000 780,000 1,040,000 1,300,000 1,560,000
2,800,000 280,000 560,000 840,000 1,120,000 1,400,000 1,680,000
3,000,000 300,000 600,000 900,000 1,200,000 1,500,000 1,800,000
</TABLE>
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* The amounts set forth in the table are on the basis of a straight life
annuity and are not subject to reduction for Social Security benefits or
other payments. The maximum number of years of service for which pension
benefits accrue is 30. Messrs. Whitwam, Marohn, Kerber, Hake and Samartini
had approximately 27, 31, 4, 6 and 9 years, respectively, of eligible
service at December 31, 1994, and their covered compensation under the
plans for 1994 was equal to the base salary and bonus set forth in the
Summary Compensation Table.
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<PAGE>
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company are paid an annual fee of
$24,000 and $1,000 for each Board and committee meeting attended ($1,500 if
chairperson). A nonemployee director may elect to defer any portion of director
compensation until he or she ceases to be a director, at which time payment is
made in a lump sum or in monthly or quarterly installments. Interest on
deferred amounts accrues quarterly at a rate equal to the prime rate in effect
from time to time. Each director may elect to relinquish all or a portion of
the annual fee, in which case the Company may at its sole discretion then make
an award of up to $1 million to a charitable organization upon the director's
death. Under the program, the election to relinquish compensation is
irrevocable and the Company may choose to make contributions in the director's
name to as many as three charities. Each director may also elect to have a
portion of the annual fee used to purchase term life insurance in excess of
that described in the next paragraph.
Each nonemployee director, following retirement from the Board at age 70, or
earlier if approved by the Board, receives a monthly retirement benefit of one-
tenth of the annual director's fee in effect at the time of such retirement,
for a period of months equal to such director's months of service (not to
exceed 120). This benefit is paid in a lump sum or on a monthly or quarterly
basis at the election of the director. The Company provides each nonemployee
director who elects to participate with term life insurance while a director in
an amount equal to one-tenth of the annual director's fee times the same number
of months and a related income tax reimbursement payment. The Company also
provides each nonemployee director with travel accident insurance of $1 million
with the premiums paid by the Company and directors are reimbursed for the
related income tax. For evaluation purposes, appliances sold by the Company,
are made available to each nonemployee director for use at home, and the
director receives an income tax reimbursement payment to compensate for any
additional tax obligation. The cost to the Company of this arrangement in 1994
(based on distributor price of products and delivery, installation, and service
charges) did not exceed $4,487 for any one nonemployee director or $8,311 for
all nonemployee directors as a group.
The Company also has a Nonemployee Director Stock Ownership Plan. This plan
provides, effective on the date of each annual stockholders meeting, for an
automatic grant to each nonemployee director of 400 shares of Common Stock and
an option to purchase 600 shares of Common Stock if the Company's earnings from
continuing operations for the immediately preceding year increased by at least
10% over such earnings for the prior year. The exercise price under each option
is the average fair market value (as defined) of the Common Stock for the third
through fifth trading days after the public release of the Company's earnings
for such prior year. Such options may be exercised for 20 years after issuance
(except that they must be exercised within two years after ceasing to be a
director and within one year after the death of the director). The exercise
price may be paid in cash or Common Stock.
HUMAN RESOURCES COMMITTEE REPORT ON COMPENSATION AWARDS
The Human Resources Committee of the Board of Directors has furnished the
following report on executive compensation for 1994:
Whirlpool Corporation is dedicated to achieving global leadership and to
delivering superior stockholder value. The Company has established an overall
objective to drive high total stockholder returns by performing consistently in
the top 25 percent of large publicly-held corporations and by achieving and
sustaining high levels of return on equity. The Company believes attaining
these objectives will result in significant stockholder value creation during
the 1990s and beyond.
Whirlpool's executive compensation philosophy is designed to support the
attainment of these objectives by attracting and retaining the best possible
management talent and by motivating these employees to achieve business and
financial goals which create value for stockholders. The philosophy is centered
around the following three points:
. Compensation should be incentive driven with both short- and long-term
focus;
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<PAGE>
. More pay should be at risk than with the average company (i.e., lower
base salaries with higher incentive rewards for outstanding performance);
and
. Components of compensation should be tied to increasing stockholder
value.
The Committee is responsible for the design, administration and effectiveness
of the compensation plans for management employees, including senior
executives.
SALARY
Salary levels and salary increase guidelines are based on competitive market
reviews conducted with the assistance of outside consultants. Comparison
companies are blue chip companies that are similar to the Company in a variety
of respects, such as companies that compete with the Company, tend to have
national and international business operations, or are similar in sales
volumes, market capitalizations, employment levels, lines of business, and
business organization and structure. This group ("peer group") of companies is
used to define the market for each component of pay as well as total
compensation. The peer companies chosen for the competitive market review are
not entirely the same as those that comprise the S&P Household Furniture and
Appliance Group shown in the Performance Graph. The Committee believes that the
Company's most direct competitors for executive talent are not necessarily
limited to the companies included in the published industry index used for
comparing stockholder returns. Base salary for Mr. Whitwam and other executive
officers is targeted such that the midpoint of the salary range is
approximately 90% of the base salaries of officers in the comparison companies.
Base salary increases for the year ranged between 2.8% and 13.3% for the named
executive officers. Mr. Whitwam received a 6.3% salary increase in 1994. The
increases reflected both moves in market salaries as well as the executives'
individual performance (as discussed below) against specific objectives. With
respect to Mr. Whitwam's individual performance objectives during 1994, the
Committee assessed his performance in the areas of leadership, managerial and
organizational effectiveness, value creation, the Corporation's overall
financial performance and executive talent development. The Committee
determined that Mr. Whitwam's overall performance in these areas was superior.
No specific weight was attributed to any specific objectives in determining the
base salary increases for Mr. Whitwam and the other executives.
ANNUAL INCENTIVE COMPENSATION
In 1994, the Company's stockholders approved modifications to the Performance
Excellence Plan ("PEP"). PEP provides all regular full-time exempt employees
with an annual incentive designed to focus their attention on stockholder value
creation, drive performance in support of this goal and other business goals,
and reflect individual performance (except for designated executive officers).
Target awards ranging from 10% to 100% of base salary are established by the
Committee.
The current primary financial performance measures are return on equity and
return on net assets based on the Committee's belief that improving such
measures correlates to increasing value to stockholders. The Committee has the
discretion to adopt performance goals in place of or in addition to those
disclosed above.
Except for designated executive officers, achievement of individual performance
goals is a factor in determining PEP payouts. Financial performance and
individual performance are utilized in calculating final awards. If either
financial performance or individual performance does not meet the threshold, no
bonus award will be paid. Bonuses under PEP for designated executive officers
may range from 0 to 1.5 times incentive target. For employees who are not
executive officers, the maximum bonus using this formula is 2.25 times
incentive target.
Unlike other employees, individual performance cannot be recognized under PEP
for designated executive officers because of Section 162(m) of the Internal
Revenue Code (discussed further at the end of this Report). Because the
Committee strongly believes that individual performance assessment has been and
will continue to play a critical role in driving the Company's successful
performance, the
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<PAGE>
Committee adopted in 1994 the Executive Officer Bonus Plan ("EOBP") which
provides the Committee with discretion to grant bonus payouts to designated
executive officers in recognition of strong individual performance. In 1994,
only Messrs. Whitwam and Marohn were designated as executive officers for
purposes of PEP and eligible to participate in EOBP.
The PEP plan is designed to provide total direct compensation that is 10% above
the median of the peer group when the target level of stretch performance is
achieved. The plans utilized for designated executive officers are designed to
achieve the same compensation objective.
PEP payouts for Messrs. Whitwam and Marohn in 1994 were based entirely on the
achievement of corporate ROE results which approximated the target set at the
beginning of the year. In addition, Mr. Whitwam received a payout from EOBP
based on the Committee's assessment that Mr. Whitwam's individual performance
in the areas of leadership, managerial and organizational effectiveness, value
creation, the Corporation's overall financial performance and executive talent
development was superior. The financial performance measure used to determine
PEP payouts for Messrs. Marohn, Kerber and Samartini was based 100% on
Corporate ROE. Mr. Hake's PEP payout was based 25% on Corporate ROE and 75% on
business unit results of the North American Appliance Group. Corporate ROE was
at target and business unit results for Mr. Hake exceeded target.
LONG-TERM INCENTIVES
Our long-term incentive programs are comprised of stock options and the
Executive Stock Appreciation and Performance Program, pursuant to the Company's
1989 Omnibus Stock and Incentive Plan. Grants under both programs are typically
made each year. The long-term incentive programs are intended to provide
rewards to executives only if significant additional value is created for
stockholders over time. Further, these stock-based plans are designed to
encourage a significant ownership interest in the Company to help assure that
the interests of the executives are closely aligned to those of other
stockholders.
STOCK OPTIONS--Option grants in 1994 were made based on our analysis of
competitive award sizes, along with adjustments reflecting individual
performance as evaluated by the Committee with respect to the Chief Executive
Officer, and by the Chief Executive Officer as approved by the Committee with
respect to the other four named executive officers. In making final awards, the
Committee considered the optionee's scope of responsibility and opportunity to
affect the Company's future success, strategic and operational goals,
individual contributions and the number of options previously awarded and
currently held.
Mr. Whitwam's 1994 option grant, as noted in the Summary Compensation Table,
was made separately and at the sole discretion of the Committee primarily based
on its competitiveness with the marketplace but also taking into account the
Committee's assessment of his individual performance. Grants were calculated
based on the fair market value of stock at the time of grant.
EXECUTIVE STOCK APPRECIATION AND PERFORMANCE PROGRAM ("ESAP")--ESAP provides
senior management with incentives to significantly improve the long-term
performance of Whirlpool and increase stockholder value over time. The
compensation opportunities under the Program are tied directly to the financial
performance of Whirlpool over a preset period, normally three-year periods
beginning each January 1. In combination with other elements of compensation,
award sizes are designed to provide competitive total compensation that exceeds
the market by approximately 10% when stretch target performance is met. Payouts
are based on achieving certain return on equity targets over the performance
period.
The contingent shares granted to Mr. Whitwam in 1994 as disclosed in the Long-
Term Incentive Plan Awards Table were calculated based on the competitive
objective for ESAP target award sizes and will result in a payout after
December 31, 1996 if pre-established return on equity goals are achieved. For
the cycle that began 1992 and ended in 1994, Whirlpool performance, using
return on equity,
12
<PAGE>
significantly exceeded the target established at the beginning of the
performance cycle. As a result, payouts disclosed in the Summary Compensation
Table are above target.
TAX CODE LIMITATION ON EXECUTIVE COMPENSATION DEDUCTIONS
In 1993, Congress amended the Internal Revenue Code to impose a $1 million
deduction limit on compensation paid to executives named in the compensation
section of the proxy statements of public companies, subject to certain
transition rules and exceptions for non-discretionary performance based plans
approved by stockholders.
The Committee intends to preserve the tax deductibility of executive
compensation to the extent practicable while focusing on consistency with its
compensation policies, the needs of the Company and stockholder interests.
To that end, the Company sought and received stockholder approval of PEP last
year which ensured that all PEP payouts to named executive officers are tax
deductible by the Company. In addition, the Company's Stock Option Program and
ESAP qualify for the performance-based exemption.
As discussed previously, the objective of the EOBP is to provide the Committee
with the discretion to reward strong individual performance of designated
executive officers. The Committee believes this ability to exercise discretion
is in the best interest of the Company and its stockholders and outweighs the
need to qualify the EOBP so that income paid from this plan is exempt from the
deductibility limits of Section 162(m). Since pay for individual performance
does not qualify under Section 162(m), EOBP payouts may not be fully
deductible.
SUMMARY
We, the Human Resources Committee of Whirlpool, believe a strong link exists
between executive pay and performance at Whirlpool.
Mr. Robert A. Burnett (Chairman)
Mr. Allan D. Gilmour
Dr. Paul G. Stern
13
<PAGE>
PERFORMANCE GRAPH
The graph below compares the yearly percentage change in the cumulative total
stockholder return on the Company's Common Stock with the cumulative total
return of Standard & Poor's (S&P) Composite 500 Stock Index and the cumulative
total return of the S&P Household Furniture & Appliance Group Index for the
years 1990 through 1994.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
WHIRLPOOL CORPORATION, S&P 500 INDEX AND
S&P HOUSEHOLD FURNITURE & APPLIANCE GROUP
LOGO
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Whirlpool 100.00 74.41 127.10 149.87 227.90 176.18
S&P 500 100.00 96.89 126.28 135.88 149.52 151.55
S&P Household 100.00 67.29 99.17 111.66 160.70 131.31
</TABLE>
Assumes $100 invested on December 31, 1989 in Whirlpool Common Stock, S&P 500
and S&P Household Furniture & Appliance Group.
- --------
*Cumulative total return is measured by dividing (1) the sum of (a) the
cumulative amount of the dividends for the measurement period, assuming
dividend reinvestment, and (b) the difference between share price at the end
and the beginning of the measurement period.
MISCELLANEOUS
The expenses of the solicitation will be paid by the Company. The Company
expects to pay fees of approximately $9,000, plus certain expenses, for
assistance by Georgeson & Company Inc. in the solicitation of proxies. Proxies
may be solicited by directors, officers and employees of the Company and by
Georgeson & Company Inc. personally and by mail, telegraph and telephone.
If any nominee named herein for election as a director is not available to
serve, the accompanying proxy may be voted for a substitute person. The Company
expects all nominees to be available and knows of
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<PAGE>
no matter to be brought before the meeting other than those referred to in the
accompanying notice of meeting. If, however, any other matter properly comes
before the meeting, it is intended that the accompanying proxy will be voted
thereon in accordance with the judgment of the persons voting such proxy.
Representatives of Ernst & Young LLP, the Company's auditors, are expected to
be present at the annual meeting to respond to questions and may make a
statement if they so desire.
STOCKHOLDERS PROPOSAL
Any proposal which a stockholder intends to present at the annual meeting of
stockholders in 1996 must be received by the Company by November 16, 1995 in
order to be eligible for inclusion in the proxy statement and proxy form
relating to such meeting.
15
<PAGE>
(THIS PAGE IS SUPPOSED TO BE BLANK)
16
<PAGE>
It is important that your stock be represented so that the presence of a
quorum at the meeting may be assured. Accordingly, whether or not you expect
to attend in person, please sign and date the enclosed proxy and mail it
PROMPTLY in the enclosed envelope. Your postage is prepaid if mailed in the
United States.
<PAGE>
- -
- -
PROXY PROXY
WHIRLPOOL CORPORATION
ADMINISTRATIVE CENTER
2000 NORTH M63
BENTON HARBOR, MICHIGAN 49022-2692
The undersigned hereby appoints David R. Whitwam, William D. Marohn and Daniel
F. Hopp, and each of them, proxies, with full power of substitution and
revocation, acting by a majority of those present and voting or if only one is
present and voting then that one, to vote the stock of Whirlpool Corporation
which the undersigned is entitled to vote, at the annual meeting of
stockholders to be held on April 18, 1995 and at any adjournment thereof, with
all the powers the undersigned would possess if present, with respect to the
election of directors and such other business as may properly come before the
meeting.
THIS PROXY SHALL BE VOTED IN ACCORDANCE WITH SUCH INSTRUCTIONS AS MAY BE GIVEN
ON THE REVERSE SIDE OF THIS PROXY CARD. IF NO INSTRUCTIONS ARE GIVEN, THIS
PROXY WILL BE VOTED FOR THE ELECTION OF DIRECTORS. PLEASE VOTE, SIGN THIS PROXY
AS INDICATED BELOW AND RETURN PROMPTLY IN THE ENCLOSED ENVELOPE. THIS PROXY IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY CARD PROMPTLY USING THE ENCLOSED
ENVELOPE.
(Continued and to be signed on reverse side.)
<PAGE>
- WHIRLPOOL CORPORATION -
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. [x]
[ ]
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" ITEM 1.
1. Election of Directors
Nominees: Robert A. Burnett, Herman Cain, Allan D. Gilmour, Janice D. Stoney
and David R. Whitwam
For All
For Withheld Except
[_] [_] [_]
----------------------
Nominee Exception(s)
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before this meeting.
For Against Abstain
[_] [_] [_]
Dated: _______________________________________________________ , 1995
- --------------------------------------------------------------------------------
Signature(s)
- --------------------------------------------------------------------------------
Signature(s)
PLEASE SIGN EXACTLY AS YOUR NAME APPEARS. JOINT OWNERS SHOULD EACH SIGN
PERSONALLY. WHERE APPLICABLE, INDICATE YOUR OFFICIAL POSITION OR REPRESENTATION
CAPACITY.
- -
