Maytag Corporation
403 West Fourth Street North
Newton, Iowa 50208
March 20, 1996
BY ELECTRONIC SUBMISSION
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: Maytag Corporation
File No. 1-655
Definitive Proxy Materials
Ladies and Gentlemen:
Enclosed for filing by Maytag Corporation (the "Company"), pursuant to Rule
14a-6(b) under the Securities Exchange Act of 1934 (the "Exchange Act"), as
modified by Item 309 of Regulation S-T, are definitive copies of the Company's
proxy statement and proxy card (collectively, the "1996 Proxy Materials").
Pursuant to Rule 14a-6(m) under the Exchange Act, a cover page is included with
the 1996 Proxy Materials. The 1996 Proxy Materials will be released to
shareholders on or about March 20, 1996.
Regarding the proposal to adopt the Maytag Corporation 1996 Employee Stock
Incentive Plan, Maytag will file a registration statement on Form S-8 as soon as
practicable after shareholder approval is obtained.
The filing fee of $125 required by Rule 14a-6(i)(1) has been submitted by
wire transfer to the U.S. Treasury designated lockbox depository at the Mellon
Bank in Pittsburgh, Pennsylvania.
Pursuant to Item 304(d) of Regulation S-T, the performance graph required
by Item 402(1) of Regulation S-K has been described and interpreted in tabular
or chart form within the electronic filing of the 1996 Proxy Materials and the
Company will submit supplementally a paper copy of the performance graph to the
Company's Branch Chief in the Division of Corporation Finance of the Securities
and Exchange Commission ("SEC").
As permitted by Item 101(b) of Regulation S-T, the Company has elected to
file seven copies of Company's 1995 Annual Report with SEC pursuant to Rule 14a-
3(c).
One copy of a conforming paper format copy of the 1996 Proxy Materials will
be submitted to the SEC at the address indicated below in accordance with Item
901 of Regulation S-T. Each such conforming paper format copy will include the
following legend: "This conforming paper document is being submitted pursuant to
Rule 901(d) of Regulation S-T."<PAGE>
Securities and Exchange Commission
Page 2
March 20, 1996
If you have any questions, please contact E. James Bennett at 515/791-8394
or Jim L. Kaput of Sidley & Austin at 312/853-2655.
Very truly yours,
s/s E. James Bennett
E. James Bennett
Enclosures
cc: Mr. Robert Bartelmes
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549 <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 Part other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to
240.14a-11(c) or 240.14a-12
Maytag Corporation
(Name of Registrant as Specified In Its Charter)
E. James Bennett
(Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii),
14a-6(i), or 14-a-6(j)(2).
[ ] $500 per each party to the controversy
pursuant to Exchange Act Rule 14a-
6(i)(3).
[ ] Fee computed on table below per Ex-
Change 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:___/
____________________________________________
(4) Proposed maximum aggregate value of
transaction:
____________________________________________<PAGE>
_/ Set forth the amount on which the
filing fee is calculated and state how it was
determined.
[ ] 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 previ-
ously. 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 State-
ment No.:
____________________________________________
(3) Filing Party:
____________________________________________
(4) Date Filed:
____________________________________________<PAGE>
MAYTAG CORPORATION
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
---------------
MEETING NOTICE
The Annual Meeting of the Shareholders of Maytag Corporation, a Delaware
Corporation, will be held at the Newton Senior High School Center for
Performance, located at East Fourth Street South in Newton, Iowa, on April 30,
1996, at 9:00 a.m., for the purpose of considering and acting upon the
following:
(1) The election of five directors for three-year terms, expiring in 1999.
(2) Selection of Ernst & Young LLP as independent auditors to audit the
financial statements to be included in the Annual Report to
Shareholders for 1996.
(3) The adoption of the Maytag Corporation 1996 Employee Stock Incentive
Plan.
(4) The transaction of any other matters that properly come before the
meeting or any adjournment thereof.
Shareholders entitled to vote are invited to attend the Annual Meeting.
The Board of Directors has fixed the close of business on March 1, 1996, as
the record date for the determination of shareholders entitled to notice of and
to vote at the Annual Meeting.
Dated: March 20, 1996
E. JAMES BENNETT
Secretary<PAGE>
PROXY STATEMENT
---------------
The Board of Directors solicits your proxy for use at the Annual Meeting of
Maytag Corporation to be held April 30, 1996. Proxy statements and proxies will
be mailed to shareholders on March 20, 1996. A shareholder who signs and
returns a proxy may revoke it or give special voting specifications at any time
before the proxy is exercised by writing the Secretary of the Corporation at its
executive offices at 403 West Fourth Street North, Newton, Iowa 50208, by
executing a later-dated proxy which is voted at the meeting or by attending the
1996 Annual Meeting in person and giving written notice to the Secretary of the
Corporation. The proxy will be voted in accordance with such specifications.
The Corporation had 105,092,081 outstanding shares of common stock as of
the close of business on March 1, 1996, not including 12,058,512 shares of
treasury stock. The Corporation has no other voting securities outstanding.
Shareholders are entitled to one vote per share on each matter. If the
accompanying form of proxy 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 each of the nominees named herein,
for the selection of Ernst & Young LLP as independent auditors and for the
adoption of the Maytag Corporation 1996 Employee Stock Incentive Plan.
A shareholder may, with respect to the election of directors (i) vote for
the election of all five nominees named herein as directors, (ii) withhold
authority to vote for all such director nominees or (iii) vote for the election
of all such director nominees other than any nominee with respect to whom the
shareholder withholds authority to vote by so indicating in the appropriate
space on the proxy. Withholding authority to vote for a director nominee will
not prevent such director nominee from being elected. A shareholder may, with
respect to each other matter specified in the notice of the meeting (i) vote
"FOR" the matter, (ii) vote "AGAINST" the matter or (iii) "ABSTAIN" from voting
on the matter. A vote to abstain from voting on a matter has the legal effect
of a vote against such matter.
A proxy submitted by a shareholder may indicate that all or a portion of
the shares represented by such proxy are not being voted by such shareholder
with respect to a particular matter. This could occur, for example, when a
broker is not permitted to vote stock held in street name on certain matters in
the absence of instructions from the beneficial owner of the stock. The shares
subject to any such proxy which are not being voted with respect to a particular
matter (the "non-voted shares") will be considered shares not present and
entitled to vote on such matter, although such shares may be considered present
and entitled to vote for other purposes and will count for purposes of
determining the presence of a quorum. (Shares voted to abstain as to a
particular matter will not be considered non-voted shares.) Approval of each
matter specified in the notice of the meeting requires the affirmative vote of a
majority, or in the case of the election of directors a plurality, of the shares
of common stock present in person or by proxy at the Annual Meeting and entitled
to vote on such matter. Accordingly, non-voted shares with respect to such
matters will not affect the determination of whether such matters are approved
or the outcome of the election of directors.
2<PAGE>
(1) DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTORS
Under the authority of the Corporation's Bylaws, the Board is to consist of
fourteen directors divided into three groups. The term of each group expires
in different years. The five nominees for election to the Board of Directors
this year to hold office until the 1999 Annual Meeting of Shareholders and until
their successors have been duly elected and qualified are: Barbara R. Allen,
Howard L. Clark, Jr., Leonard A. Hadley, Robert D. Ray and Peter S. Willmott.
Proxies will be voted for each of the nominees unless, for reasons not now
known, any nominee is unable to serve or other directions are given in the
proxy. Should any of the nominees not be able to accept the office of director
when the election occurs, it is intended that such proxies will be voted for the
election of the remaining nominees and for any substitute nominees recommended
by the Board of Directors or the Board of Directors may elect not to fill the
vacancy and to reduce the number of directors.
The affirmative vote of the holders of a plurality of the shares of common
stock present in person or represented by proxy at the Annual Meeting and
entitled to vote on the election of directors is required to elect the nominees.
The following sets forth certain information regarding each nominee and
each director whose term continues after the 1996 Annual Meeting based on
information received from each such nominee and continuing director.
NOMINEES FOR A TERM TO EXPIRE IN 1999
Barbara R. Allen, 43, Executive Vice President,
International Food Products, The Quaker Oats Company, a food
products company. Director since 1995.
Picture of
Barbara R. Ms. Allen was elected to the Board on August 10, 1995 to
Allen fill a vacancy. She joined Quaker Oats in 1975, holding
various marketing positions until becoming a Vice President
in 1987, Corporate Vice President and President of the Frozen
Foods Division in 1990 and Vice President, Corporate Planning in
1992. She assumed her current position in 1995.
Howard L. Clark, Jr., 52, Vice Chairman, Lehman Brothers
Inc., an investment banking and brokerage firm. Director since
1986.
Picture of
Howard L. Mr. Clark became Vice Chairman of Lehman Brothers Inc. in
Clark, Jr. 1993. He was Chairman, President and Chief Executive Officer of
Shearson Lehman Brothers Holdings, Inc. from 1990 until he
assumed his current position. Prior thereto, Mr. Clark was
Executive Vice President and Chief Financial Officer of American
Express Company having held various positions with that firm
since 1981. From 1968 to that time he was Managing Director of
Blyth Eastman Paine Webber Incorporated or predecessor firms. He
is also a director of Lehman Brothers Inc., Fund American
Enterprises Holdings Inc., Walter Industries, Inc. and
Plasti-Line Inc. Lehman Brothers Inc. provides certain
investment banking services to the Corporation.
3<PAGE>
Leonard A. Hadley, 61, Chairman and Chief Executive Officer,
Maytag Corporation. Director since 1985.
Picture of
Leonard A. Mr. Hadley joined the Corporation in 1959 in the Accounting
Hadley Department. He held a number of management positions before he
was named Vice President in 1979. He was named President of
Maytag Company in 1986, elected an Executive Vice President of
the Corporation in 1989, named Chief Operating Officer in 1990
and President in 1991. He was named Chief Executive Officer in
1992 and elected Chairman in 1993. He also serves as a director
of Deere & Company and Norwest Bank Iowa.
Robert D. Ray, 67, President and Chief Executive Officer of
IASD Health Services Corporation. Director since 1984.
Picture of
Robert D. Ray Mr. Ray served as Governor of Iowa from 1969 to 1983 when he
became President and Chief Executive Officer of Life Investors,
Inc. In 1988 he became President and Chief Executive Officer of
IASD Health Services Corporation, formerly Blue Cross and Blue
Shield of Iowa. Prior to 1969 he practiced law in Des Moines.
He is also a director of IASD Health Services Corporation, IES
Industries, Inc. and Norwest Bank Iowa.
Peter S. Willmott, 58, is Chairman and Chief Executive
Officer of Willmott Services, Inc., a speciality retailing firm.
Director since 1985.
Picture of
Peter S. Mr. Willmott served as Senior Vice President of Federal
Willmott Express Corporation commencing in 1974 and became President of
that company in 1980. Before assuming his current position in
1989 he was Chairman and Chief Executive Officer of Carson Pirie
Scott & Co. from 1983 to 1989. He also serves as a director of
Browning-Ferris Industries, Federal Express Corporation,
International Multifoods Corporation, Mac Frugal's Bargains &
Close-Outs Inc., Morgan Keegan & Co., Inc., Willmott Services,
Inc. and Zenith Electronics Corporation.
DIRECTORS WHOSE TERMS CONTINUE AFTER THE ANNUAL MEETING
Edward C. Cazier, Jr., 71, Counsel to the international law firm Morgan,
Lewis & Bockius, Los Angeles. Director since 1987. Term expires in 1997.
Mr. Cazier practiced law with Hahn & Cazier in California for over 30
years. In 1987 the Hahn & Cazier firm combined its practice with Morgan, Lewis
& Bockius. Morgan, Lewis & Bockius provides certain legal services to the
Corporation.
Lester Crown, 70, Chairman of the Board, Material Service Corporation.
Director since 1989. Term expires in 1997.
Mr. Crown was elected Chairman of the Board of Material Service
Corporation, a manufacturing company, in 1983, having served as its President
since 1970. He is a director and Chairman of the Executive Committee of General
Dynamics Corporation and Chairman of the Board of CC Industries, Inc.
4<PAGE>
Wayland R. Hicks, 53, President and Chief Executive Officer, Indigo, Inc.
N.V., a producer of digital offset color printing products. Director since
1994. Term expires in 1998.
Mr. Hicks assumed his current position with Indigo, Inc. N.V. in February,
1996. He served as Chief Executive and Vice Chairman of Nextel Communications,
Inc. from September, 1994 until October, 1995. Prior to joining Nextel, Mr.
Hicks served in various management positions with Xerox Corporation, becoming a
Vice President in 1983 and an Executive Vice President in 1987. Mr. Hicks is
also a director of Indigo, N.V., Katun Corporation, Techtronix and Perdue Farms.
Bernard G. Rethore, 54, President and Chief Executive Officer of BW/IP,
Inc., a manufacturer of fluid transfer and control equipment and systems.
Director since 1994. Term expires in 1997.
Mr. Rethore became President and Chief Executive Officer of BW/IP, Inc., in
October, 1995. He served as Senior Vice President of Phelps Dodge Corporation,
and President, Phelps Dodge Industries, its diversified international industrial
group, from 1989 until 1995. From 1984 to 1989, he was President, then Chief
Executive Officer of Microdot Industries, the diversified manufacturing division
of Microdot Inc. Mr. Rethore is also a director of BW/IP, Inc.
W. Ann Reynolds, 58, Chancellor of The City University of New York.
Director since 1988. Term expires in 1998.
Ms. Reynolds has served as Chancellor of The City University of New York
since 1990. From 1982 to 1990 she served as Chancellor of The California State
University. From 1979 to 1982 she served as Provost and as a professor at Ohio
State University. Prior to that time she held a variety of administrative,
research and teaching positions at the University of Illinois Medical Center.
She is also a director of Abbott Laboratories, Humana, Inc. and Owens-Corning
Fiberglas Corporation.
John A. Sivright, 67, Senior Consultant, Harris Bankcorp, Inc. Director
since 1976. Term expires in 1998.
Mr. Sivright held a number of positions with Harris Bankcorp, Inc. and was
named a Vice President in 1965, an Executive Vice President in 1980, Senior
Relationship Executive in 1991 and to his current position in 1994. He is also
a director of Harris Bank Winnetka, N.A.
Neele E. Stearns, Jr., 60, former President and Chief Executive Officer, CC
Industries, Inc., a diversified holding company. Director since 1989. Term
expires in 1997.
Mr. Stearns served as Executive Vice President and Chief Operating Officer
of Henry Crown and Company, the predecessor operation to CC Industries, Inc.
from 1979 until 1986. From 1986 until his retirement in 1994 he served as
President and Chief Executive Officer of CC Industries, Inc.
5<PAGE>
Fred G. Steingraber, 57, Chairman and Chief Executive Officer of A. T.
Kearney, Inc., a management consulting firm. Director since 1989. Term expires
in 1998.
Mr. Steingraber held various positions with A. T. Kearney beginning in 1964
and became Chief Executive Officer in 1984. He was elected to his current
position in 1986. Mr. Steingraber is also a director of A. T. Kearney, Inc.,
Southeastern Thrift Bank Fund, Inc., Lawter International and Mercury Finance
Corporation.
Carole J. Uhrich, 52, Executive Vice President, Global Supply, Polaroid
Corporation, a photographic imaging and equipment company. Director since
1995. Term expires in 1997.
Ms. Uhrich was elected to the Board on August 10, 1995 to fill a vacancy.
She joined Polaroid in 1966, holding various positions in the engineering
division until becoming a plant manager in 1983. She was named Director of
Manufacturing in 1984, Vice President of Corporate Quality in 1987, Vice
President of Product Delivery in 1988, Vice President of Quality, New Product
Delivery in 1990 and Group Vice President, Manufacturing and Product Development
in 1992 before assuming her current position in 1996. She also serves as a
director of Ceridian Corporation.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS, DIRECTORS AND MANAGEMENT
The following table shows those persons or groups known to Maytag to be the
beneficial owners of more than five percent (5%) of Maytag common stock as of
February 16, 1996.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
_______________________________________________________________________________
Amount and Nature
Name and Address of Beneficial Ownership Percent of Class
_______________________________________________________________________________
FMR Corp. (1) 11,616,573 11.01%
82 Devonshire St.
Boston, Massachusetts 02109-3614
Delaware Management (2) 6,279,800 5.95%
Holdings, Inc.
2005 Market Street
Philadelphia, Pennsylvania 19103
Crown Group c/o (3) 5,340,061 5.06%
Gerald A. Weber
222 North LaSalle Street
Chicago, Illinois 60601
______________________________________________________________________________
(1) A form 13G has been filed with the Securities and Exchange Commission
by FMR Corp. as of January 31, 1996 showing it beneficially owns 11,616,573
shares of the Corporation. This number included: 11,049,929 shares
beneficially owned by Fidelity Management and Research Company, as a result of
its serving as investment adviser to various registered investment companies and
as investment advisor to certain other funds; 5,761,300 shares beneficially
6<PAGE>
owned by Fidelity Magellen Fund, one of the registered investment companies
mentioned above; 550,644 shares beneficially owned by Fidelity Management Trust
Company, as a result of its serving as an investment manager of institutional
accounts; 19,000 shares beneficially owned by Fidelity International Limited, as
a result of its serving as an investment advisor to various non-U.S. investment
companies; 11,616,573 shares beneficially owned by Edward C. Johnson, 3d and
Abigail P. Johnson and members of the Edward C. Johnson 3d family as members of
a group which may be deemed a control group with respect to FMR Corp. Edward C.
Johnson 3d and FMR Corp. have the sole voting power with respect to 345,644
shares and the sole dispositive power with respect to 11,616,573 shares.
Fidelity International Limited has sole voting and disposition power with
respect to 16,000 shares and, along with FMR Corp. has sole voting and
disposition power with respect to 3,000 shares.
(2) A form 13G has been filed with the Securities and Exchange Commission
by Delaware Management Company, Inc. and its parent holding company Delaware
Management Holdings, Inc. as part of a group of companies listed in the 13G
filing. The companies have sole voting power on 547,590 shares; shared voting
power on 7,280 shares; sole dispositive power on 5,984,500 shares and shared
dispositive power on 295,300 shares.
(3) Although no person or entity in the group owned beneficially more than
5% of the common stock outstanding, a number of persons acting together,
including Lester Crown, members of his family, relatives, certain family
partnerships, trusts associated with the Crown family, and other entities, are
the beneficial owners of an aggregate of 5,340,061 shares of Maytag common
stock, constituting 5.06% of the common stock. A Schedule 13D relating to the
ownership of shares of common stock by these persons and entities has been filed
with the Securities and Exchange Commission by Gerald A. Weber, as attorney and
agent. These persons and entities, including Lester Crown, disclaim that they
are a group for purposes of Section 13(d) of the Securities Exchange Act of 1934
or otherwise, and disclaim that any one of them is the beneficial owner of
shares owned by any other person or entity filing the Schedule 13D.
The following table shows for each director and nominee, for each executive
officer named in the Summary Compensation Table on Page 14 and for all directors
and executive officers as a group, the number of shares of Maytag common stock
beneficially owned as of February 16, 1996.
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
________________________________________________________________________________
Amount and Nature of
Name Beneficial Ownership Percent of Class
________________________________________________________________________________
Barbara R. Allen 100 *
Edward C. Cazier, Jr. 11,900 (b) *
Howard L. Clark, Jr. 13,836 (b) *
John P. Cunningham, Jr. 3,587 *
Lester Crown 4,503,565 (a)(b)(d) 4.27%
Joseph F. Fogliano 1,366 *
Edward H. Graham 39,682 (b)(c) *
Leonard A. Hadley 211,920 (a)(b)(c) *
Wayland R. Hicks 6,000 (c) *
Donald M. Lorton 78,432 (b)(c) *
Jon O. Nicholas 25,017 (b)(c) *
Robert D. Ray 15,600 (a)(b) *
7<PAGE>
Bernard G. Rethore 4,000 (c) *
W. Ann Reynolds 12,300 (b) *
John A. Sivright 23,712 (a)(b) *
Neele E. Stearns, Jr. 14,090 (b) *
Fred G. Steingraber 15,000 (b) *
Carole J. Uhrich 0 *
Peter S. Willmott 35,000 (b) *
Carleton F. Zacheis 43,296 (a)(b)(c) *
All directors and executive officers
as a group consisting of 21 persons,
including the above named. 5,068,643 (a)(b)(c)(d) 4.80%
- - - --------------------------------------------------------------------------------
* Less than one percent.
(a) Includes shares owned by associates or certain family members in which
the director disclaims any beneficial interest.
(b) Included in the totals are shares which the following directors,
executive officers named in the Summary Compensation Table on Page 14 and all
directors and executive officers as a group have the right to acquire under
unexercised stock options: Edward H. Graham 14,130 shares; Leonard A. Hadley
53,800 shares; Donald M. Lorton 23,790 shares; Jon O. Nicholas, 9,630 shares;
Carleton F. Zacheis 14,000 shares; Ms. Reynolds and Messrs. Cazier, Clark,
Crown, Ray, Sivright, Stearns, Steingraber and Willmott each have options to
acquire 10,000 shares, Messrs. Hicks and Rethore each have options to acquire
2,000 shares and all directors and executive officers as a group have options to
acquire 209,350 shares.
(c) Included in the individual totals are shares granted under stock
awards in 1994, 1995 and 1996, pursuant to the Corporation's Stock Incentive
Award Plan For Key Executives and as to which the following executive officers
or directors and all executive officers as a group have sole voting power:
Edward H. Graham 10,714; Leonard A. Hadley 48,568; Donald M. Lorton 9,840; Jon
O. Nicholas 6,916; Carleton F. Zacheis 10,292; and all executive officers and
directors as a group 90,702. Such shares are subject to forfeiture under the
terms of the awards.
(d) The number of shares shown as beneficially owned by Mr. Crown includes
shares held by the following concerns of which he is a partner: Arelijay
Company 956,325 and The Crown Fund 1,618,769; Henry Crown and Company (Not
Incorporated), of which a trust of which he is a trustee is a partner owns
48,775. In addition, 1,001,237 shares are owned by various trusts of which he
is a trustee; 55,491 shares are owned by various trusts of which he is a grantor
and a beneficiary; and 65,657 shares are owned by the Arie and Ida Crown
Memorial of which he is a director. The number of shares shown does not include
shares owned by various trusts of which Mr. Crown's children are beneficiaries.
Mr. Crown disclaims beneficial ownership of the shares listed in this footnote,
except to the extent of his beneficial ownership therein.
During 1995 Joseph F. Fogliano inadvertently failed to file with the
Securities and Exchange Commission one Form 4 related to one transaction. A
report of this transaction was made on Form 5.
COMMITTEES AND ATTENDANCE
The Board of Directors has an Audit Committee, a Compensation Committee and
a Nominating Committee as well as other committees.
8<PAGE>
The Audit Committee, which met five times in 1995, consists of Barbara R.
Allen, Edward C. Cazier, Jr., Howard L. Clark, Jr., Neele E. Stearns, Jr. and
Fred G. Steingraber. It is charged with the review of the Corporation's
financial statements with the Corporation's independent auditors and review of
the relationship between the Corporation and its external and internal auditors.
The Compensation Committee's duties are to review and approve compensation
plans and policies of the Corporation, recommend to the Board the salaries of
all officers of the Corporation, declare bonus and incentive plan allocations
for management employees of the Corporation, award stock options and provide
stock grants to key executives. The Committee consists of Wayland R. Hicks, W.
Ann Reynolds, John A. Sivright and Neele E. Stearns, Jr. The Committee met five
times in 1995.
The Nominating Committee, which met three times in 1995, nominates persons
to serve on the Board of Directors and recommends compensation levels and other
remunerative programs for directors. It consists of Lester Crown, Robert D.
Ray, W. Ann Reynolds and John A. Sivright.
During 1995 the Board of Directors held six meetings either in person or by
telephone.
During 1995 each director attended at least 75% of Board meetings and
meetings of the committees of which such director is a member.
(2) RELATIONSHIP WITH INDEPENDENT AUDITORS
A further purpose of the meeting is to select independent auditors to audit
the financial statements to be included in the Annual Report to Shareholders for
1996. The persons named in the enclosed form of proxy have advised the Board of
Directors that it is their intention, unless otherwise instructed by the
shareholders, to vote for the selection of Ernst & Young LLP as such independent
auditors. Ernst & Young LLP has audited the financial statements of the
Corporation since 1925 and is expected to have a representative present at the
meeting to make a statement if such representative desires to do so and to be
available to respond to appropriate questions.
(3) PROPOSED MAYTAG CORPORATION 1996 EMPLOYEE STOCK INCENTIVE PLAN
Approval of the 1996 Employee Stock Incentive Plan
Subject to approval by shareholders at the 1996 Annual Meeting, the Board
of Directors of the Corporation has adopted the Maytag Corporation 1996 Employee
Stock Incentive Plan (the Plan). The Board of Directors believes that the Plan
will provide an incentive for executives and other employees to promote the
success, and enhance the value, of the Corporation by linking the personal
interests of such persons to those of the Corporation s shareholders. The Board
of Directors also believes that the Plan will provide flexibility to the
Compensation Committee of the Board in its ability to motivate, attract, and
retain the services of executives and other employees upon whose judgment,
interest and special effort the successful conduct of its operation is largely
dependent. If the 1996 Employee Stock Incentive Plan is approved by the
shareholders, no additional shares will be granted under the Corporation's 1991
9<PAGE>
Stock Incentive Award Plan and the Corporation's 1992 Stock Option Plan for
Executives and Key Employees, both of which Plans were previously approved by
the shareholders.
The Plan provides the Compensation Committee with the discretion to make
grants during the life of the Plan to all officers and key employees of the
Corporation and its Subsidiaries. This may include employees who are members of
the Board of Directors and employees who reside in countries other than the
United States of America. Grants can be in the form of non qualified stock
options, incentive stock options, stock appreciation rights, restricted stock,
performance units, performance shares and other incentive awards.
Since the number and identity of employees to whom awards may be granted,
and the form of such awards, are at the discretion of the Committee, and such
decisions have not yet been determined, it is not possible at this time to
provide specific information as to actual grant recipients.
The following is a summarized description of the Plan. A copy of the Plan
is attached hereto as Appendix A. In the event this summary differs from the
Plan attached hereto, the Plan shall govern.
Duration of the Plan
If approved by the shareholders, the Plan will become effective on May 1,
1996 and will remain in effect, subject to the right of the Board of Directors
to terminate or amend the Plan, until all shares have been purchased or acquired
but not after April 30, 2006.
Administration of the Plan
The Plan will be administered by the Compensation Committee of the Board of
Directors of the Corporation, which shall have the authority, among other items
to: select employees to whom awards are granted; determine the size and type of
awards; and, determine the terms and conditions of such awards in a manner
consistent with the Plan.
Shares Subject to the Plan
Six million five hundred thousand (6,500,000) shares of Maytag common stock
will be available under the Plan. No more than one million (1,000,000) shares
may be granted in any form to, or vest in, any participant during any fical
year. Further, no more than two million five hundred thousand (2,500,000)
shares may be granted in the form of restricted stock or shares related to other
incentive awards, as described herein. If an award is paid out in cash, if an
award terminates, expires, or lapses, or if previously acquired shares are
tendered or shares otherwise issuable are withheld to exercise an option, the
related stock will again be available for grant. The maximum aggregate cash
payout to any one participant under performance units, performance shares or
other incentive awards may not exceed $5,000,000 in one fiscal year.
Stock Options
Stock options may be granted by the Committee in the form of Non qualified
Stock Options (NQSOs), Incentive Stock Options (ISOs), or a combination thereof.
Grants of ISOs must fulfill the requirements of Section 422 of the Internal
Revenue Code.
10<PAGE>
The purchase price per share under any option will be established by the
Committee but must equal at least one hundred percent (100%) of the fair market
value of a share of Maytag common stock on the date of the option grant, and
such price may not subsequently be changed by the Committee except as provided
in the Plan. The term of each option will be fixed by the Committee, and it is
expected that generally no option will have a term extending beyond ten years
from the date the option is granted. Options will be subject to such terms and
conditions and will be exercisable at such time or times as determined by the
Committee.
Options may be exercised by payment of the purchase price in cash, in
previously acquired shares of Maytag common stock, by withholding shares of
Maytag common stock which otherwise would be acquired on exercise, or a
combination thereof. Also, the Committee may allow broker-assisted cashless
exercises. The Committee, in its sole discretion, will establish a Participant's
rights to exercise a stock option in the event the Participant's employment is
terminated, such rights to be reflected in the Participant's award agreement.
Stock Appreciation Rights
A stock Appreciation Rights an (SAR) entitles the holder to receive, upon
exercise, for each SAR exercised, the difference between the fair market value
of a share of Maytag common stock on the date of exercise over the grant price
of each SAR, multiplied by the number of shares with respect to which theSAR is
exercised. SAR's may be granted independent of any other award, in lieu of a
related option, or in tandem with a related option. Subject to the terms and
conditions of the Plan, an SAR may be granted to a Participant at any time and
from time to time as determined by the Committee.
The grant price per share of any SAR will be established by the Committee
but must equal at least one hundred percent (100%) of the fair market value of a
share of Maytag common stock on the date the SAR is granted. The term of each
SAR will be fixed by the Committee, and it is expected that generally no SAR
will have a term extending beyond ten years from the date of grant. SARs will
be subject to such terms and conditions and will be exercisable at such time or
times as determined by the Committee.
The value of an SAR may be paid in cash, in shares of Maytag common stock,
or in some combination, as determined by the Committee. The Committee, in its
sole discretion, will establish a Participant's right to exercise an SAR in the
event the Participant's employment is terminated, such rights to be reflected in
the Participant's award agreement.
Restricted Stock
A restricted stock award consists of a grant of Maytag common stock to a
Participant, which is subject to substantial risk of forfeiture and the
transfer of which is subject to restrictions which lapse upon the passage of
time, the achievement of performance goals or upon the occurrence of other
events as determined by the Committee. This Period of Restriction is established
by the Committee at the time of grant, but cannot be shorter than three years.
Unless otherwise designated by the Committee during the Period of
Restriction a shareholder of restricted shares will have all other rights of a
shareholder, including the right to vote the shares and receive the dividends
paid thereon. The Corporation will retain the stock certificates until the
lapse of any Period of Restriction. The Committee, at its sole discretion, will
11<PAGE>
establish a Participant's rights to receive restricted stock in the event the
Participant's employment is terminated prior to vesting, such rights to be
reflected in the Participant's award agreement.
Performance Units and Performance Shares
Subject to the terms of the Plan, performance units and performance shares
may be granted to eligible employees at any time as determined by the Committee.
The Committee will have complete discretion to establish the initial number and
value of such units and shares, (except that the initial value of a performance
share will equal the fair market value of a share of Maytag common stock on the
date of grant) and the performance period (except that such period shall not be
shorter than three years).
The Committee will establish performance goals in its discretion which,
depending on the level of performance achieved, will determine the number and/or
value of performance units/shares earned. Where an award is intended to meet the
requirements for the performance-based exception to the deductibility limit
imposed by Section 162(m) of the Internal Revenue Code, the performance goals
will be based on any one or more of the following performance measures:
a) Return on Assets ("ROA") which equals net income divided by total
average assets.
b) Return on Sales ("ROS") which equals net income divided by net sales.
c) Cash Flow Return on Investment ("CFROI") which equals net after tax
free cash flows before capital spending, dividend payments, borrowings
and payments on debt and stock issuances and repurchases, divided by
average owner's equity.
d) Earnings Before Income Taxes ("EBIT") which equals net income plus
taxes.
e) Net Earnings which equals net earnings as reported.
f) Stock price appreciation.
g) Net operating income less cost of capital.
Payments of earned performance units/shares will occur within 75 days of
the end of the performance period and, at the discretion of the Committee, will
be paid in the form of cash and/or shares of Maytag common stock. At the
discretion of the Committee, Participants may be entitled to dividends declared
with respect to shares earned in connection with a grant of performance units
and/or performance shares.
If a Participant's employment is terminated for any reason other than by
the Corporation or a Subsidiary for cause or terminated by the Participant
without good reason, the Participant will receive a prorated payout of the
performance units/shares based on the portion of the performance period that
Participant remained employed, and on the level of performance goals achieved.
If a Participant's employment is terminated by the Corporation or a Subsidiary
for cause or terminated by the Participant without good reason, all performance
units/shares will be forfeited to the Corporation.
Other Incentive Awards
Subject to the terms of the Plan, other incentive awards may be granted to
eligible employees at any time as determined by the Committee. The Committee
will have complete discretion to establish the amount of other incentive awards
granted, the applicable related performance period and performance goals, and
other terms and conditions applicable to such grant. At the discretion of the
12<PAGE>
Committee, payment of other incentive awards may be in the form of cash or
shares of Maytag common stock.
Awards Nontransferable
No award may be assigned, transferred, pledged, or otherwise encumbered by
a Participant, other than by will or by the laws of descent and distribution. An
option on SAR may be exercised during the Participant's lifetime only by the
Participant or the Participant's legal representative.
Change of Control
In order to protect the Participant's rights in the event of a Change of
Control of the Corporation (as defined in the Plan), the Plan provides for the
immediate vesting of all outstanding options, SARs, and restricted stock awards
upon the occurrence of such an event. Also, in the event of a Change of Control,
the Plan provides that outstanding performance shares, performance units, and
other incentive awards will be fully earned and vested as of the effective date
of the Change of Control.
Amendment of Plan
The Board of Directors may amend or terminate the Plan at any time, subject
to any requirement of shareholder approval required by applicable law, rule or
regulation.
Federal Income Tax Considerations
Under current law, the federal income tax treatment of awards under the
Plan is summarized below:
NQSOs: The grant of an NQSO has tax consequences to the Corporation or to
the employee. The exercise of an NQSO will require an employee to include
in his or her taxable ordinary income the amount by which the fair market
value of the acquired shares on the exercise date exceeds the option price.
Upon a subsequent sale or taxable exchange of shares acquired upon NQSO
exercise, an employee will recognize long- or short-term capital gain or
loss equal to the difference between the amount realized on the sale and
the tax basis of such shares.
Subject to certain requirements imposed by Section 162(m) of the Internal
Revenue Code, the Corporation will be entitled to a deduction at the same
time and in the same amount as the employee is in receipt of income in
connection with his or her exercise of an NQSO.
ISOs: The grant of an ISO has no tax consequences to the Corporation or
the employee. If the employee exercises an ISO and does not dispose of the
acquired shares within the later of two years after the grant of the option
and one year after the date of exercise, the employee will realize no
taxable income, the Corporation will not be intitled to any tax deduction
and any gain or loss that is realized on a subsequent disposition of such
shares will be treated as long-term capital gain or loss. However, for
purposes of computing the employee's alternative minimum tax (if any), the
spread between the option price and the stock's fair market value on the
date of ISO exercise is treated as income.
If any employee exercises an ISO before the end of the above-stated holding
period, the employee will be treated as having exercised an NQSO for tax
purposes (see above). The Corporation also will receive NQSO tax treatment
13<PAGE>
upon the exercise.
SARs: There are no tax consequences to the Corporation or the employee
upon the grant of an SAR. Upon exercise of the SAR, the employee will be
deemed to have received taxable income in the amount of any cash plus the
fair market value of any shares issued or transferred as a result of the
exercise. Subject to certain requirements imposed by Section 162(m) of the
Internal Revenue Code, the Corporation will receive a tax deduction in the
same amount, at the same time.
Restricted Stock: Upon the lapse of restrictions imposed on restricted
stock (i.e., when the stock is no longer subject to a substantial risk of
forfeiture), the employee will recognize taxable ordinary income equal to
the fair market value of the stock as of the date of vesting. The employee
may, however, elect to recognize taxable income at the time of grant equal
to the fair market value of the stock at that time. Subject to certain
requirements imposed by Section 162(m) of the Internal Revenue Code, the
Corporation will receive a tax deduction in the same amount, at the same
time.
Performance Shares and Performance Units: There are no tax consequences to
the Corporation or the employee upon the grant of performance shares or
units. Upon payout of the shares or units, the employee will recognize
taxable ordinary income in the amount of the payout. Subject to certain
requirements imposed by Section 162(m) of the Internal Revenue Code, the
Corporation will receive a tax deduction in the same amount, at the same
time.
Other Incentive Awards: The tax consequences to the employee and the
Corporation will be considered in the design and implementation of such an
award.
Tax Withholding: With respect to any income tax withholding requirements
imposed upon the occurrence of a taxable event to a Participant, subject to
approval by the Committee, a Participant may elect have the Corporation to
withhold shares to satisfy the Participant's income tax withholding
obligations.
Section 162(m): Under Section 162(m) of the Internal Revenue Code,
compensation paid by the Corporation in excess of $1 million for any
taxable year to a Covered Employee generally is not deductible by the
Corporation or its affiliates for federal income tax purposes unless it is
based on the performance of the Corporation as measured by goals
established by a Compensation Committee of "outside directors", is paid
pursuant to a plan approved by shareholders of the Corporation, and meets
certain other requirements. Generally, Covered Employee under Section
162(m) means the chief executive officer and four other highest-paid
executive officers of the Corporation as of the last day of the taxable
year.
It is presently intended that the Committee will at all times consist of
outside directors as defined for purposes of Section 162(m), and that the
Committee will take the effect of Section 162(m) into consideration in granting
incentive awards under this Plan.
Vote Required for Approval
The affirmative vote of a majority of shares of common stock present and
entitled to vote at the Annual Meeting at which a quorum is present is required
14<PAGE>
to approve the Maytag Corporation 1996 Employee Stock Incentive Plan. If
approved, the Plan would become effective as of May 1, 1996.
The Board of Directors recommends a vote FOR the approval of the Plan.
EXECUTIVE COMPENSATION
The following table shows the compensation of the chief executive officer of the
Corporation, the other four most highly compensated executive officers of the
Corporation serving as such on December 31, 1995 and two former executive
officers who would have been among the other four most highly compensated
executive officers serving as such on December 31, 1995 had they not ceased
serving as executive officers earlier in 1995, based on salary and bonus earned
by them in 1995, (the "named executive officers").
<TABLE>
SUMMARY COMPENSATION TABLE
Annual Compensation Long Term Compensation
Awards Payouts
<CAPTION>
Name and Year Salary Bonus Other Restricted Securities LTIP All Other
Principal Annual Stock Underlying Payouts Compensa-
Position Compen- Award(s) Options/ tion <F2>
sation <F1> SAR's (#)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leonard A. Hadley 1995 $600,000 $400,000 $ 0 $ 0 174,190 $1,039,788 $ 7,444
Director, Chairman & 1994 563,800 505,000 0 0 25,000 0 7,234
CEO 1993 527,675 350,000 0 306,914 25,000 0 6,811
Donald M. Lorton 1995 $239,000 $108,563 $ 0 $ 0 37,020 $ 285,093 $ 8,602
Acting President,
North American
Appliance Group
Edward H. Graham 1995 $192,565 $ 82,632 $ 0 $ 0 27,290 $ 216,923 $ 7,167
Sr. VP, General 1994 179,200 102,144 0 0 2,810 0 6,889
Counsel and Ass't. 1993 166,667 73,901 0 64,020 5,380 0 6,404
Secretary
Carleton F. Zacheis 1995 $187,500 $ 85,500 $ 0 $ 0 27,220 $ 216,923 $ 7,045
Sr. VP Administration 1994 177,626 98,263 0 0 2,820 0 7,335
1993 158,750 77,808 0 64,020 5,060 0 6,717
Jon O. Nicholas 1995 $148,450 $ 53,946 $ 0 $ 0 22,060 $ 136,513 $ 5,538
Corp. VP 1994 135,333 64,960 0 0 2,160 0 5,471
Human Resources 1993 113,642 43,172 79,031 40,304 3,830 0 4,335
Joseph F. Fogliano <F3> 1995 $270,000 $115,830 $ 0 $ 0 0 $ 0 $ 816,514
Former Exec. VP & 1994 385,900 254,694 0 0 18,000 0 4,373
President North Amer. 1993 170,985 86,623 0 144,427 11,700 0 54,641
Appliance Group
John P. Cunningham, Jr. <F3> 1995 327,393 $ 0 $ 0 $ 0 74,030 $ 0 $ 40,412
Former Executive VP & 1994 325,000 225,225 0 0 25,626 0 2,445
CFO
15<PAGE>
<FN>
<F1> At December 31, 1995, the number of shares of restricted stock, the
number of restricted units and the respective values thereof held by the named
executive officers were as follows: Leonard A. Hadley, 35,757 shares valued at
$728,549 and 19,629 units valued at $399,941; Donald M. Lorton, 9,840 shares
valued at $200,490 and 5,388 units valued at $109,781; Edward H. Graham, 7,973
shares valued at $162,450 and 4,371 units valued at $89,059; Carleton F.
Zacheis, 7,722 shares valued at $157,336 and 4,259 units valued at $86,777; and
Jon O. Nicholas, 5,095 shares valued at $103,811 and 2,808 units valued at
$57,213. Neither Joseph F. Fogliano nor John P. Cunningham, Jr., held any such
shares or units. Dividends are paid on restricted stock at the same time and at
the same rate as on the common stock. Dividend equivalents on restricted units
are accrued and accumulate at the same rate and at the same time as dividends
on the common stock. Dividend equivalents on restricted units are treated as
reinvested dividends applicable to the restricted units which units are paid
out if and when the performance goals (described in the Long-Term Incentive Plan
Awards Table below) are satisfied.
<F2> The amounts reported in this column for 1995 include the dollar value
of premiums paid for life insurance for the benefit of the named executive
officer and the dollar value of corporate contributions to the account of the
named executive officer pursuant to the terms of the Salary Savings 401(k) Plan.
The contributions for each named executive are as follows: Leonard A. Hadley,
life insurance $2,824, 401(k) $4,620; Donald M. Lorton, life insurance $3,982,
401(k) $4,620; Edward H. Graham, life insurance $2,547, 401(k) $4,620; Carleton
F. Zacheis, life insurance $3,139, 401(k) $3,906; Jon O. Nicholas, life
insurance $2,149, 401(k) $3,389; Joseph F. Fogliano, life insurance $1,350,
401(k) $4,380, earned but unused vested vacation $22,002, prorated payment
equivalent to but in lieu of all restricted stock and units under the 1991
Stock Incentive Award Plan - 1993, 1994, 1995 grants $610,282, separation
payment $135,000, payment to assist with temporary living $24,000, payment
associated with sale of residence $19,500; and John P. Cunningham, Jr., life
insurance $2,118, 401(k) $4,620, earned but unused vested vacation $33,674.
<F3> Joseph F. Fogliano resigned from the Corporation on August 31, 1995
and John P. Cunningham, Jr. resigned on December 12, 1995.
</TABLE>
The following table sets forth for the named executive officers, certain
information regarding stock options granted in 1995.
16<PAGE>
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR OPTION
TERM <F4>
<CAPTION>
(a) (b) (c) (d) (e) (f) (g)
Number of % of Total
Securities Options Exercise
Underlying Granted to or Base
Options/SAR's Employees in Price
Granted (#) Fiscal Year ($/Share) Expiration
Name <F1> <F2> <F3> Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Leonard A. Hadley 174,190 9.7% 17.625 10/03/2005 $1,930,769 $4,892,947
Donald M. Lorton 37,020 2.1% 17.625 10/03/2005 $ 410,340 $1,039,881
Edward H. Graham 27,290 1.5% 17.625 10/03/2005 $ 302,490 $ 766,568
Carleton F. Zacheis 27,220 1.5% 17.625 10/03/2005 $ 301,714 $ 764,602
Jon O. Nicholas 22,060 1.2% 17.625 10/03/2005 $ 244,519 $ 619,659
Joseph F. Fogliano <F5> 0 N/A N/A N/A N/A N/A
John P. Cunningham,Jr.<F6> 74,030 4.1% 17.625 12/12/1995 $ 820,568 $2,079,481
<FN>
<F1> All options reported in the table become exercisable beginning on
October 4, 1996, except that such options will become fully exercisable
in the event of a Change of Control [generally defined as occurring when a
person individually or together with its affiliates or associates (other
than an employee benefit plan of the Corporation) shall have become the
beneficial owner of 20% or more of the shares of the Corporation entitled
to vote for Directors or when Directors who are not a person or part of a
group which is or becomes the beneficial owner of 20% or more of the shares
of the Corporation fail to constitute a majority of the Board of
Directors].
<F2> Total options granted to employees in 1995 were 1,802,460.
<F3> Fair Market Value of underlying shares on the date of grant.
<F4> The dollar amounts under these columns are the result of hypothetical
potential gains from calculations assuming annual growth rates of 5% and
10% in the value of the Corporation's future stock price over the 10 year
term of the options which would result in the per share price of the
Corporation's stock increasing from $17.625 to $28.709 and $45.715,
respectively, for the options expiring on October 3, 2005. These
assumed rates of growth are required by the Securities and Exchange
Commission for illustration purposes only and are not intended to forecast
possible future stock prices.
<F5> Mr. Fogliano resigned prior to the grant of options in 1995.
<F6> All options granted to Mr. Cunningham in 1995 were, by the terms of the
17<PAGE>
options, cancelled upon his resignation on December 12, 1995.
</TABLE>
The following table sets forth for the named executive officers certain
information concerning options exercised during 1995 and unexercised options to
purchase common stock held by such officers at December 31, 1995.
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND
YEAR END OPTION/SAR VALUES
<CAPTION>
Number of Securities Value of Unexercised
Number Of Underlying Unexercised In-the-Money Options
Securities Options/SAR'S December 31, 1995
Underlying December 31, 1995 (B)
Options/SAR's Value <F1>
Name Exercised (#) Realized Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Leonard A. Hadley 0 0 53,800 174,190 $228,125 $479,023
Donald M. Lorton 3,200 $ 5,550 23,790 37,020 $103,632 $101,805
Edward H. Graham 0 0 14,130 27,290 $ 65,236 $ 75,048
Carleton F. Zacheis 0 0 14,000 27,220 $ 64,333 $ 74,855
Jon O. Nicholas 0 0 9,630 22,060 $ 47,491 $ 60,665
Joseph F. Fogliano 11,700 $22,669 0 0 0 0
John P. Cunningham, Jr. 0 0 0 0 0 0
<FN>
<F1> The value is calculated based on the aggregate amount of the excess
of $20.375 (the average of the high and low price of common stock as reported
in the New York Stock Exchange Composite Transactions Report for December 29,
1995) over the relevant exercise price(s).
</TABLE>
The following table sets forth for the named executive officers, certain
information regarding a long-term incentive plan grant that was made on
January 1, 1995.
<TABLE>
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
Estimated Future Payouts
Under Non-Stock Price-Based
Plans <F2>
<CAPTION>
(a) (b) (c) (d) (e) (f)
Performance or
Number of Shares, Other Period
Units or Other Until Maturation
Name Rights (#) <F1> or Payout Threshold (#) Target (#) Maximum (#)
<S> <C> <C> <C> <C> <C>
Leonard A. Hadley 30,141 3 Years 7,535 30,141 36,169
Donald M. Lorton 8,200 3 Years 2,050 8,200 9,840
18<PAGE>
Edward H. Graham 6,674 3 Years 1,669 6,674 8,009
Carleton F. Zacheis 6,656 3 Years 1,664 6,656 7,987
Jon O. Nicholas 4,367 3 Years 1,092 4,367 5,240
Joseph F. Fogliano 17,090 <F3> 3 Years 4,273 17,090 20,508
John P. Cunningham, Jr. 14,347 <F4> 3 Years 3,587 14,347 17,216
<FN>
<F1> All awards identified in this table are made pursuant to the
Corporation's 1991 Stock Incentive Award Plan which is a performance-based
restricted stock plan. Target awards are comprised of 60% restricted stock and
40% restricted units. Dividends are paid on restricted stock at the same rate
and at the same time as on the common stock and dividend equivalents on
restricted units are accrued and accumulate at the same rate and at the same
time as dividends on the common stock. Dividend equivalents are treated as
reinvested dividends applicable to the restricted units, which units are paid
out if and when the performance goals are satisfied. Target awards are based
upon a percentage of base salary and vary depending upon the individual's
position and responsibilities.
<F2> Estimated future payouts are predicated upon the achievement of
corporate return on sales and return on assets objectives over the period from
January 1, 1995 to December 31, 1997. The achievement of approximately 25% of
the objectives will result in payment of the threshold amount, achievement of
75% of the objectives will result in payment of an intermediate amount,
achieving 100% of the objectives will result in payment of the target amount,
and achieving or exceeding approximately 120% of the objectives will result in
payment of the maximum amount.
<F3> Joseph F. Fogliano received a prorated payment equal to a total of
3,798 shares and units in lieu of this award upon his resignation.
<F4> This award was forfeited upon Mr. Cunningham's resignation.
</TABLE>
RETIREMENT INCOME TABLE
The following table sets forth the estimated annual pension benefits payable
effective December 31, 1995, assuming retirement at age 65 after selected
periods of continuous service, under the Corporation's retirement plan which
applies to virtually all exempt salaried employees. The Corporation's
retirement plan for salaried employees provides for fixed retirement benefits
based on years of service and compensation received. All compensation shown
in the Salary and Bonus columns of the Summary Compensation Table is included as
compensation under the pension plan.
19<PAGE>
Average Annual
Earnings for
Highest 5 Estimated Annual Retirement Benefits
Consecutive Years of Credited Service at Retirement
Years of Final
10 Years of
Service
10 15 20 25 30 35*
$100,000 $ 14,074 $ 21,112 $ 28,149 $ 35,186 $ 42,223 $ 49,260
200,000 29,574 44,362 59,149 73,936 88,723 103,510
300,000 45,074 67,612 90,149 112,686 135,223 157,760
400,000 60,574 90,862 121,149 151,436 181,723 212,010
500,000 76,074 114,112 152,149 190,186 228,223 266,260
600,000 91,574 137,362 183,149 228,936 274,723 320,510
700,000 107,074 160,612 214,149 267,686 321,223 374,760
800,000 122,574 183,862 245,149 306,436 367,723 429,010
900,000 138,074 207,112 276,149 345,186 414,223 483,260
1,000,000 153,574 230,362 307,149 383,936 460,723 537,510
1,100,000 169,074 253,612 338,149 422,686 507,223 591,760
1,200,000 184,574 276,862 369,149 461,436 553,723 646,010
The above amounts have been computed on the basis of a straight-life
annuity and are not subject to any deduction for social security or other
offset amounts.
Benefits under the plan are limited to the extent required by provisions
of the Internal Revenue Code and the Employee Retirement Income Security Act of
1974. If payment of actual retirement benefits is limited by such provisions,
an amount equal to any reduction in retirement benefits will be paid as a
supplemental benefit under the Supplemental Employee Retirement Plan under
which such amounts are payable to all qualifying employees including the
officers of the Corporation.
*Maximum number of years of service for which the pension benefit accrues.
However, employees who were participants in the Maytag Company Salaried
Employees' Retirement Plan on December 31, 1990, and who retire or terminate
employment on or before January 1, 2005 have been grandfathered and are
eligible for additional credited service. For these employees, the maximum
amount of credited service that may be taken into account in calculating a
portion of the benefit under the current plan is forty (40) years until January
1, 2001, at which time such maximum will decrease by one (1) year until it is
reduced to thirty-five (35) years by the year 2005, provided, however, that the
declining maximum will not be applied to reduce any participant's years of
credited service below the number of years of credited service earned by such
participant as of the date on which the maximum first applies.
All named executive officers shown below, except Mr. Cunningham and Mr.
20<PAGE>
Fogliano, were in the Maytag Company Salaried Employees' Retirement Plan on
December 31, 1990. To calculate the effect of the above grandfathering
provision, add to the benefit shown for an employee with 35 years of service an
amount equal to one per cent (1%) multiplied by the number of years of service
in excess of 35 multiplied by the average annual earnings shown in the first
column of the table above.
The years of credited service for the named executive officers as of
December 31, 1995 are: Leonard A. Hadley 36.5; Donald M. Lorton 20.0; Edward
H. Graham 14.6; Carleton F. Zacheis 37.4; Jon O. Nicholas 23.3; Joseph F.
Fogliano 3.0; and John P. Cunningham, Jr. 2.0.
EMPLOYMENT CONTRACTS AND
TERMINATION OF EMPLOYMENT CHANGE-OF-CONTROL ARRANGEMENTS
The Corporation has entered into agreements with each of the named
executive officers which would become operable only in the event of a change-
of-control of the Company. Agreements provide that if the officer's employment
terminates for any reason within three years after a change-of-control, the
officer will be entitled to payments equal to three times total compensation
(salary and maximum bonus) at the rate in effect immediately prior to the
change-of-control, maximum payout on any outstanding restricted stock awards,
and to continued participation in certain of the Corporation's benefit programs
for the same three-year period. In addition, an agreement was made in 1995 with
Joseph F. Fogliano. After two years with the Corporation, Mr. Fogliano,
Executive Vice President and President North American Appliance Group,
resigned the position effective August 31, 1995. Mr. Fogliano will be paid
an annual salary of $405,000 until August 31, 1996. He received a cash
payment of $115,830 which represents an amount prorated through August 31,
1995 in lieu of his participation in the 1995 Annual Management Incentive Plan.
He also received a prorated payment of $610,282 in lieu of all restricted
stock and restricted units under the 1993, 1994 and 1995 Stock Incentive
Award Plan grants, a separation payment of $135,000, a $24,000 payment to
assist with temporary living expenses, and a $19,500 payment to assist with the
sale of his residence. The grant shown for Mr. Fogliano in the Long-Term
Incentive Awards Plans Table on Page 17 was cancelled on August 31, 1995.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY AND PRINCIPLES
The Compensation Committee of the Board of Directors (the "Committee"),
composed of four non-employee directors, establishes and administers the
executive compensation program for the Corporation's top executives. In 1995,
the Committee, with the assistance of independent compensation consultants,
undertook a reexamination of the Corporation's compensation philosophy and
p r ogram. The Committee has reaffirmed the Corporation's compensation
philosophy as it pertains to its executives as follows:
1. The Corporation is committed to increasing long-term shareholder
value and to ensuring that the objectives of the Corporation's
executives are aligned with that goal. Based on this commitment, it
is the Corporation's philosophy that the total compensation of its
executives closely mirror the performance of the Corporation -
reflecting increases and decreases in those factors contributing to
shareholder value, e.g. profitability, earnings per share and stock
21<PAGE>
price.
2. Providing an opportunity for above average total compensation is
important in order to attract and retain the best and brightest
employees. Providing performance goals are met, the Corporation's
total compensation program will be targeted at a level above the
average for similarly sized industrial firms nationwide.
3. It is the Corporation's goal to provide and consistently administer a
uniform program of total compensation for key employees throughout
the Corporation. This program will facilitate the movement of key
employees between business units and divisions, which supports the
b u siness objective of strengthening organizational development
efforts and providing developmental opportunities for talented
individuals.
The Committee believes compensation based on this philosophy will support
and encourage the commitment to achieving business and financial objectives
that will generate long-term shareholder value. It is also designed to attract
and retain outstanding executives, to encourage them to make long-term
commitments to the Corporation, and to accomplish the Corporation's leadership
succession objectives.
COMPONENTS OF EXECUTIVE COMPENSATION
The Committee views compensation as a total program comprised of annual
base salary and variable short- and long-term incentives. The total package is
designed to provide a significant percentage of executive compensation through
a t - risk programs which link long-term executive rewards to long-term
s h areholder rewards. This linkage is achieved through the following
compensation components:
Annual Base Salary
A salary range for each position is established using average base pay for
executives employed at industrial organizations selected by independent
compensation consultants. The performance of the organizations in the
industrial database is not known and therefore not considered when establishing
salary ranges. The companies included in the industrial database comprise many
of the companies included in the S&P Household Furnishings and Appliance Stock
Index used in the Performance Graph on Page 23, as well as other companies.
The Committee relies on a broad array of companies in various industries for
comparative analysis of executive compensation because the Committee believes
that the Corporation's competitors for executive talent are more varied than
the Peer Group chosen for comparing stockholder return in the Performance
Graph. Executive pay within the salary range is determined based upon
individual qualifications, experience and performance of specific individual
responsibilities.
Annual Variable Incentive
Annual variable incentive compensation is paid to executives in cash based
upon a percentage of base salary and varies depending upon the individual's
position, responsibility and performance. Executives are eligible for annual
cash incentive awards based upon three equally weighted performance factors:
(1) organizational operating incomeas defined compared to prior year, (2)
Corporate or entity operating income less the cost of working capital compared
to annual plan, and (3) organizational performance against key strategic
22<PAGE>
objectives. An award may be increased or decreased based upon the executive's
personal performance. Performance is reviewed and rated annually against these
factors. The Committee may adjust these formula-based awards if, in its
judgment, adjustment is warranted.
Long-Term Variable Incentives
Long-term variable incentive compensation opportunities are provided to
executives in positions with significant responsibilities, accountabilities and
potential impact on long-term Corporate performance. Long-term incentive
compensation is made available in the form of stock options and performance-
based restricted stock awards.
Stock Options - The Maytag Corporation Stock Option Plan for Executives
and Key Employees and the overall number of shares available have been approved
by shareholders. This plan provides the long-term focus for approximately 400
executives and other key employees. The size of stock option grants for the
named executive officers is determined at the discretion of the Committee.
Performance-Based Restricted Stock - The overall number of shares
available for grant under the Maytag Corporation 1991 Stock Incentive Award
Plan has been approved by shareholders. Eligibility for participation and the
level of awards to individual executives are approved by the Committee. The
level of each award is based upon a percentage of base salary and varies
d e p ending upon the executive's position and responsibilities. These
performance-based restricted stock awards (which are currently composed of 60%
restricted stock and 40% restricted units) are subject to vesting provisions
and dependent upon the Corporation achieving predetermined levels of return on
sales and return on assets over a specified three-year period. High levels of
performance in these factors, in the Committee's opinion, impact favorably on
long-term shareholder value. Approximately 70 executives are granted awards
under this variable long-term incentive.
Long-Term Variable Mix - In 1995, in order to further the Corporate
compensation philosophy and objectives, the Committee realigned long-term
variable incentive compensation. Based on the recomendation of independent
compensation consultants, the Committee shifted the long-term variable
incentive area from performance-based restricted stock grants to stock options.
This realignment is designed to more directly link the long-term interests of
the Corporation's executives with the long-term interests of shareholders.
Survey data indicates that grants approved by the Committee under these long-
term plans are competitive with grants made to executives in similar positions
at other industrial organizations.
EXECUTIVE STOCK OWNERSHIP GUIDELINES
In keeping with the Corporation's compensation philosophy and its efforts
to strengthen the link between the long-term interests of executives and the
long-term interests of shareholders, the Committee has approved stock ownership
guidelines which are applicable to approximately 70 key executives. The
guidelines provide for the long-term ownership of Maytag stock which in dollar
value aggregates a predetermined multiple of base salary. The amounts range
from four times annual base salary for the Chief Executive Officer to one times
annual base salary for operating unit vice presidents. The Committee will
review executive stock ownership levels annually and ensure compliance where
necessary.
23<PAGE>
TAX CODE LIMITATION ON EXECUTIVE COMPENSATION DEDUCTIONS
Unless certain conditions are met, Internal Revenue Code Section 162(m)
limits the annual deductibility of certain compensation in excess of $1 million
for the Chief Executive Officer and the four other most highly compensated
executive officers. As a result of Mr. Hadley's election to defer portions of
his 1995 annual variable compensation, there was loss of tax deductibility in
1995 and the Committee does not anticipate any significant loss of tax
deductibility in 1996. In order to maintain maximum tax deductibility of
executive compensation, the Committee is submitting the long-term variable
incentive plan (1996 Employee Stock Incentive Plan) to shareholders for
a p proval to ensure tax deductibility of future long-term compensation
incentives. The Committee will continue to monitor compensation programs in
light of Section 162(m); however, the Committee considers it important to
retain the flexibility to design compensation programs that are in the best
long-term interests of the Corporation and its shareholders.
SUMMARY
The Committee believes that the foregoing compensation programs will serve
the long-term interests of shareholders. These programs create a strong link
between long-term executive rewards and long-term shareholder rewards; they
attract, retain and motivate outstanding executive talent; and they further the
Corporation's long-term leadership succession objectives. The Committee will
continue to emphasize variable, performance-based compensation programs that it
believes positively affect long-term shareholder value. Finally, through stock
ownership guidelines, it is the goal of the Committee to ensure not only
qualified, professional managers, but fully committed "owner-operators".
PERFORMANCE OF THE CORPORATION AND CEO COMPENSATION
As indicated in the above discussion, the total compensation of the
Corporation's executives, including the CEO, consists of annual base salary,
annual variable incentive, and long-term variable incentives, as well as other
fringe benefits. These plans consider individual performance, Corporation
performance, and survey data regarding comparable positions at other industrial
organizations. The Corporation's performance in 1995 produced the second best
earnings year in the Corporation's history (excluding special charges). The
performance was second only to 1994, when appliance industry shipments grew at
an unprecedented rate. Return on assets improved to 6.21% in 1995 compared to
5.78% in 1994 (excluding special charges). The Corporation continued to shed
under-performing assets as it divested over $400 million of assets with the
sale of its home appliance operations in Europe in the second quarter of 1995.
The proceeds from this divestiture, as well as the proceeds from a 1994 year-
end divestiture and working capital improvements from ongoing operations,
allowed the Corporation to reduce year-over-year debt and interest expense by
nearly thirty percent. The Corporation also increased the quarterly dividend
12% and initiated a share repurchase program to improve shareholder value.
Other notable performance achievements for 1995 included:
* The North American Appliance Group began implementation of a new product
distribution system to improve customer service.
* U.S. Floor care continued with strong performance in both existing and new
product lines resulting in another record year of sales and profits at
Hoover.
* Dixie-Narco increased both sales and profits over 1994 and sold an under-
24<PAGE>
performing factory in Eastlake, Ohio at the end of 1995.
Mr. Hadley's 1995 salary of $600,000 represents a 6.4% increase over 1994.
In arriving at this rate, the Compensation Committee considered his annual base
salary compared to other CEOs in the industrial companies surveyed, his
outstanding performance as CEO during 1994, and his strategic actions and plans
for improving earnings in 1995 and beyond. Annual base salary increases for
the other named executives were based on individual performance, job content
and compensation of executives in comparable positions in the industrial
organizations surveyed.
The Committee-approved strategic and financial goals under the 1995 annual
variable incentive plan (discussed above) were set aggressively beyond 1994
performance - the Corporation's best year ever. The Corporation's outstanding
performance in 1995 fulfilled 100% of the strategic goals and although the
Corporation did not meet its aggressive financial goals. Based on this
performance, Mr. Hadley received 1995 annual variable incentive compensation of
$400,000, which is approximately 71% of his 1995 maximum opportunity.
In 1995, a grant based on percentages of Mr. Hadley's and the other named
executive officers' annual base salaries was made under the Performance-Based
Restricted Stock Plan. Payouts under the grant will be based on the extend to
which the Corporation acheives the return on sales and return on assets
objectives for the three-year period January 1, 1995 through December 31, 1997,
as reflected in the Long-Term Incentive Plans Table. The 1993 Performance-
Based Restricted Stock Plan grant matured in 1995. The Corporation's
performance over the period January 1, 1993 through December 31, 1995 exceeded
the maximum goals approved by the Committee in 1993. A maximum grant payout
was made under this Plan as reflected in the Summary Compensation Table - LTIP
Payouts.
As a component of long-term variable incentive compensation, options to
purchase 174,190 shares of common stock were granted to Mr. Hadley under the
terms of the Corporation's 1992 Stock Option Plan. This award is competitive
compared to the industrial companies surveyed and also reflects the realignment
of long-term incentives from performance-based restricted stock grants toward
stock options as the Corporation enhances the link between the long-term
interests of its executives and the long-term interests of its shareholders.
Grants of options to the named executive officers are reflected in the
Option/SAR Grants in Last Fiscal Year Table. The foregoing report is furnished
by the following members of the Compensation Committee:
Wayland R. Hicks John A. Sivright
W. Ann Reynolds Neele E. Stearns, Jr.
SHAREHOLDER RETURN PERFORMANCE
The following graph compares the Corporation's cumulative total
shareholder return on its common stock from December 31, 1990 to December 31,
1995 with the S&P 500 Stock Index and the S&P Household Furnishings and
Appliance Stock Index (both of which include the Corporation).
25<PAGE>
Cummulative Total Return
Based on reinvestment of $100 beginning December 31, 1990
$300
$250
$200 (Chart illustrating numeric data shown below.)
$150
$100
$50
Dec.-90 Dec.-91 Dec.-92 Dec.-93 Dec.-94 Dec.-95
- - - - - S & P __ Maytag
.... S & P Household Furnishings & Appliance Index
_______________________________________________________________________________
Dec-90 Dec-91 Dec-92 Dec-93 Dec-94 Dec-95
_______________________________________________________________________________
Maytag Corp. $100 $149 $149 $186 $160 $222
S&P 500(R) $100 $130 $140 $154 $156 $213
S&P(R) Household
Furnishings &
Appliance Index $100 $147 $165 $237 $195 $236
_______________________________________________________________________________
COMPENSATION OF DIRECTORS
Only directors who are not officers or employees of the Corporation are
entitled to compensation as directors and such directors are paid a retainer of
$23,000 per annum, $1,000 for each meeting of the Board attended, $1,000 for
attendance at each called committee meeting and reimbursement for actual
expenses. Telephone meetings are compensated at $750 per meeting. Non-employee
committee chairmen receive an additional $3,000 per annum except the Executive
Committee chair who receives an additional $4,000.
All directors who are not employees of the Corporation or one of its
subsidiaries are participants in the Maytag Corporation Directors Pension Plan
(the "Directors Pension Plan"), an unfunded, noncontributory pension plan.
Under the Directors Pension Plan, each participant who ceases to be a director
of the Corporation after completion of at least 5 years of service will receive
a pension, beginning at the later of the director's attaining age 70 or ceasing
tenure as a director. Such pension will be an annual amount, payable in
monthly installments equal to the director's annual retainer (excluding any
fees for attendance of meetings of the Board or any committee thereof, services
as a committee chairman and expense reimbursements) for the twelve-month period
prior to the commencement of such pension.
All directors who are not employees of the Corporation or one of its
subsidiaries are eligible to participate in the Maytag Directors Deferred
Compensation Plan, which provides that directors may elect to defer all or a
portion of compensation paid for services as a director until their retirement
or termination from the Board. Deferred amounts are paid interest at the prime
26<PAGE>
rate until retirement or termination. Benefits are payable from the general
assets of the Corporation. In the event of a change-of-control of the
Corporation all amounts deferred plus accumulations are immediately payable in
full.
Pursuant to the Corporation's Non-Employee Directors Stock Option Plan,
each non-employee director of the Corporation is awarded an option to purchase
2,000 shares of the Corporation's common stock on the day following the Annual
Meeting of the Corporation's shareholders in each year through 1999 (unless all
shares available under such Plan become subject to options prior to such time).
The option price under each option is and will be equal to the fair market
value of the common stock on the date of grant. The term of such options is
five years from the date of grant. Each option is exercisable immediately upon
grant. The aggregate number of shares of common stock that may be granted
pursuant to the Non-Employee Directors Stock Option Plan may not exceed
250,000, subject to adjustments to reflect any future stock dividends, stock
splits or other relevant capitalization changes. Such Plan may not be amended
or discontinued without shareholder approval.
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR 1997 ANNUAL MEETING
Proposals of shareholders intended for presentation at the 1997 Annual
Meeting must be received by the Secretary of the Corporation on or before
November 20, 1996, to be considered for inclusion in the 1997 Proxy Statement
and Proxy. The 1997 Annual Meetin is currently scheduled to be held on April
29, 1997. The Nominating Committee will consider nominees recommended by
shareholders as candidates for election to the Board of Directors at the Annual
Meeting of Shareholders. A shareholder wishing to nominate a candidate for
election to the Board is required to give written notice to the Secretary of
the Corporation of his or her intention to make such a nomination. The notice
of nomination must be received by the Corporation not less than sixty days nor
more than ninety days prior to the shareholders' meeting, or if less than
seventy days notice or prior public disclosure of the meeting date is given or
made, the notice of nomination must be received within ten days after the
meeting date is announced. The notice of nomination is required to contain
certain information about both the nominee and the shareholder making the
nomination. The Corporation may require that the proposed nominee furnish
other information to determine that person's eligibility to serve as a
director. A nomination which does not comply with the above procedure will be
disregarded.
OTHER MATTERS
The Corporation will bear the cost of the proxy solicitation. In addition
to solicitation by mail, the Corporation will request banks, brokers and other
custodian nominees and fiduciaries to supply proxy material to the beneficial
owners of the Corporation's common stock of whom they have knowledge, and will
reimburse them for their expenses in so doing; and certain directors, officers
and employees of the Corporation, not employed for the purpose, may solicit
proxies, without additional remuneration therefore, by personal interview,
mail, telephone or telegraph. The Corporation has retained Georgeson & Company
Inc. to aid in the solicitation of proxies for a fee of $12,500, plus
out-of-pocket expenses.
Neither the Corporation nor the members of its Board of Directors intend
to bring any other matters before the meeting, and they have no present
knowledge that any other matters will or may be brought before the meeting by
others. However, if any matters properly come before the meeting it is the
27<PAGE>
intention of the persons named in the accompanying form of proxy to vote the
proxy in accordance with their judgment.
28<PAGE>
Appendix "A"
Maytag Corporation
1996 Employee Stock Incentive Plan
Article 1. Establishment, Objectives, and Duration
1.1 Establishment of the Plan. Maytag Corporation, a Delaware corporation
(hereinafter referred to as the Company ), hereby establishes an incentive
compensation plan to be known as the Maytag Corporation 1996 Employee Stock
Incentive Plan (hereinafter referred to as the Plan ), as set forth in this
document. The Plan permits the grant of Non-qualified Stock Options, Incentive
Stock Options, Stock Appreciation Rights, Restricted Stock, Performance Shares
and Performance Units, and Other Incentive Awards.
Subject to approval by the Company's stockholders, the Plan shall become
effective as of May 1, 1996 (the Effective Date ) and shall remain in effect
as provided in Section 1.3 hereof.
1.2 Objectives of the Plan. The objectives of the Plan are to optimize
the long-term profitability and growth of the Company through incentives which
are consistent with the Company's goals and which link and align the personal
interests of Participants to those of the Company's stockholders; to provide
Participants with an incentive for excellence in individual performance; and to
promote teamwork among Participants.
The Plan is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.
1.3 Duration of the Plan. The Plan shall commence on the Effective Date,
as described in Section 1.1 hereof, and shall remain in effect, subject to the
right of the Board of Directors to amend or terminate the Plan at any time
pursuant to Article 16 hereof, until all Shares subject to it shall have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Award be granted under the Plan on or after April 30, 2006.
Article 2. Definitions
Whenever used in the Plan, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
2.1 "Award" means, individually or collectively, a grant under this Plan
of Non-qualified Stock Options, Incentive Stock Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares or Performance Units, or Other
Incentive Awards.
2.2 "Award Agreement" means an agreement entered into by the Company
and each Participant setting forth the terms and provisions applicable
to Awards granted under this Plan.
2.3 "Beneficial Owner" or "Beneficial Ownership" shall have the meaning
ascribed to such term in Rule 13d-3 of the General Rules and Regulations under
29<PAGE>
the Exchange Act.
2.4 "Board or Board of Directors" means the Board of Directors of the
Company.
2.5 "Cause" shall mean the occurrence of any one or more of the
following, as determined by the Committee, in the exercise of good faith and
reasonable judgment:
(i) The willful and continued failure by the Participant to
substantially perform his duties (other than any such failure
resulting from the Participant's Disability), after a written
d e m and for substantial performance is delivered to the
Participant that specifically identifies the manner in which the
Committee believes that the Participant has not substantially
performed his duties, and the Participant has failed to remedy
the situation within ten (10) business days of receiving such
notice; or
(ii) The Participant's conviction for committing an act of fraud,
embezzlement, theft, or any other act constituting a felony
involving moral turpitude or causing material harm, financial or
otherwise, to the Company; or
(iii)The willful and continued action, or failure to act, by the
Participant that results in actual or expected injury to the
Company or a Subsidiary, financial or otherwise. However, no act
or failure to act on a Participant's part shall be considered
willful unless done, or omitted to be done, by the Participant
not in good faith and without reasonable belief that his action
or omission was in the best interest of the Company.
2.6 "Change of Control" of the Company shall mean:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13 (d) (3) or 14 (d) (2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) (a "Person")
of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (i) the then
outstanding shares of common stock of the Company (the "Outstanding
Company Common Stock") or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote
generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change of Control: (i) any acquisition by the Company, (ii) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company or (iii) any acquisition by any corporation pursuant to a
transaction which complies with clauses (i), (ii) and (iii) of
subsection (c) below; or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual
becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was approved
by a vote of at least a majority of the directors then comprising the
30<PAGE>
Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any
such individual whose initial assumption of office occurs as a result
of an actual or threatened election contest with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the
Company (a "Business Combination"), in each case, unless, following
such Business Combination, (i) all or substantially all of the
i n d i v i duals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and Outstanding
C o mpany Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of
such transaction owns the Company or all or substantially all of the
Company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such Business Combination of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may be,
(ii) no Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectively, the then outstanding shares of common stock
of the corporation resulting from such Business Combination or the
combined voting power of the then outstanding voting securities of
such corporation except to the extent that such ownership existed
prior to the Business Combination and (iii) at least a majority of
the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at
the time of the execution of the initial agreement, or of the action
of the Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete liquidation
or dissolution of the Company.
2.7 "Code" means the Internal Revenue Code of 1986, as amended from time
to time.
2.8 "Committee" means the Compensation Committee of the Board, as
specified in Article 3 herein, or such other Committee appointed by the Board
to administer the Plan with respect to grants of Awards.
2.9 "Company" means Maytag Corporation, a Delaware corporation, as well
as any successor to such entity as provided in Article 19 herein.
2.10 "Director" means any individual who is a member of the Board of
Directors of the Company.
2.11 "Disability" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan.
31<PAGE>
2.12 "Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.13 "Employee" means any employee of the Company or Subsidiary.
Nonemployee Directors shall not be considered Employees under this Plan unless
specifically designated otherwise.
2.14 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.15 "Fair Market Value" shall be determined on the basis of the average
of the high and low sale prices on the principal securities exchange on which
the Shares are publicly traded or, if there is no such sales on the relevant
date, then on the last previous day on which sales were reported. In the event
that a Participant uses a cashless exercise method or a share withholding
method to exercise an Option, as provided in Section 6.6 herein, Fair Market
Value shall be based on the sale price of the shares sold to pay the option
exercise price.
2.16 "Freestanding SAR" means an SAR that is granted independently of any
Options, as described in Article 7 herein.
2.17 "Good Reason" means:
(i) A material reduction or alteration in the nature or status of
the Participant's authorities, duties, or responsibilities;
(ii) The Company's requiring the Participant to be based at a
location in excess of fifty (50) miles from the location of the
Participant's principal job location or office;
(iii)A material reduction in the Participant's base salary; or
(iv) A material reduction in the value to be received by the
Participant from any compensation or health and welfare benefit
p r ograms unless all similarly situated Participants' are
similarly affected.
The Participant's right to terminate employment for Good Reason
shall not be affected by the Participant's incapacity due to
p h y sical or mental illness. The Participant's continued
employment shall not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good
Reason herein.
2.18 "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
2.19 "Insider" shall mean an individual who is, on the relevant date, an
officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2.20 "Named Executive Officer" means a Participant who, as of the date of
vesting and/or payout of an Award, as applicable, is one of the group of
covered employees, as defined in the regulations promulgated under Code Section
162(m), or any successor statute.
32<PAGE>
2.21 "Nonemployee Director" means an individual who is a member of the
Board of Directors of the Company but who is not an Employee of the Company or
Subsidiary.
2.22 "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
2.23 "Option" means an Incentive Stock Option or a Nonqualified
Stock Option, as described in Article 6 herein.
2.24 "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
2.25 "Other Incentive Award" means an award granted pursuant to Article 10
hereof.
2.26 "Participant" means an Employee who has outstanding an Award granted
under the Plan.
2.27 "Performance-Based Exception" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m).
2.28 "Performance Period" means the time period during which performance
goals must be achieved with respect to an Award, as determined by the
Committee, but which period shall not be shorter than three years.
2.29 "Performance Share" means an Award granted to a Participant, as
described in Article 9 herein.
2.30 "Performance Unit" means an Award granted to a Participant, as
described in Article 9 herein.
2.31 "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way, which period shall not be
shorter than three years (based on the passage of time, the achievement of
performance goals, and/or upon the occurrence of other events as determined by
the Committee at its discretion), and the Shares are subject to a substantial
risk of forfeiture, as provided in Article 8 herein.
2.32 "Person" shall have the meaning ascribed to such term in
Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d)
thereof, including a group as defined in Section 13(d) thereof.
2.33 "Restricted Stock" means an Award granted to a Participant pursuant
to Article 8 herein.
2.34 "Retirement" means severance from employment with the Company or its
Subsidiaries on or after the date on which the Participant becomes eligible to
receive normal or early retirement benefits under the Maytag Corporation
Salaried Employees' Retirement Plan, or such successor plan as may be
implemented in the future.
2.35 "Shares" means the shares of common stock of the Company.
2.36 "Share Pool" means the number of shares authorized for issuance under
paragraph 4.1, as adjusted for awards and payouts under paragraph 4.2 and as
adjusted for changes in corporate capitalization under paragraph 4.3.
33<PAGE>
2.37 "Stock Appreciation Right" or "SAR" means an Award, granted alone or
in connection with a related Option, designated as an SAR, pursuant to the
terms of Article 7 herein.
2.38 "Subsidiary" means any corporation, partnership, joint venture,
affiliate, or other entity in which the Company has a majority voting interest,
and which the Committee designates as a participating entity in the Plan.
2.39 "Tandem SAR" means an SAR that is granted in connection with a
related Option pursuant to Article 7 herein, the exercise of which shall
require forfeiture of the right to purchase a Share under the related Option
(and when a Share is purchased under the Option, the Tandem SAR shall similarly
be canceled).
Article 3. Administration
3.1 The Committee. The Plan shall be administered by the Compensation
Committee of the Board, or by any other Committee appointed by the Board
consisting of not less than two (2) Directors who fulfill the disinterested
administration requirements of Rule 16b-3 under the Exchange Act and the
"outside director" requirements of Internal Revenue Code Section 162(m). The
members of the Committee shall be appointed from time to time by, and shall
serve at the discretion of, the Board of Directors.
The Committee shall be comprised solely of Directors who are eligible to
administer the Plan pursuant to Rule 16b-3 under the Exchange Act. However, if
for any reason the Committee does not qualify to administer the Plan as
contemplated by Rule 16b-3 of the Exchange Act, the Board of Directors may
appoint a new Committee so as to comply with Rule 16b-3.
3.2 Authority of the Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions herein, the Committee shall have full power to select Employees who
shall participate in the Plan; determine the sizes and types of Awards;
determine the terms and conditions of Awards in a manner consistent with the
Plan; construe and interpret the Plan and any agreement or instrument entered
into under the Plan; establish, amend, or waive rules and regulations for the
Plan's administration; and (subject to the provisions of Article 16 herein)
amend the terms and conditions of any outstanding Award to the extent such
terms and conditions are within the discretion of the Committee as provided in
the Plan. Further, the Committee shall make all other determinations which may
be necessary or advisable for the administration of the Plan. As permitted by
law, the Committee may delegate the authority granted to it herein.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Plan and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its shareholders, Employees, Participants, and their
estates and beneficiaries.
Article 4. Shares Subject to the Plan and Maximum Awards
4.1 Number of Shares Available for Grants. Subject to adjustment as
provided in Section 4.3 herein, the number of Shares hereby reserved for
issuance under the Plan shall be six million five hundred thousand (6,500,000).
However, the aggregate maximum number of Shares of Restricted Stock and Shares
relating to Other Incentive Awards which may be granted pursuant to Articles 8
34<PAGE>
and 10 herein, shall be two million five hundred thousand (2,500,000).
Unless and until the Committee determines that an Award to a Named
Executive Officer shall not be designed to comply with the Performance-Based
Exception, the following rules shall apply to grants of such Awards under the
Plan:
(a) Subject to adjustment as provided in Section 4.3 herein, the maximum
aggregate number of Shares (including Options, SARs, Restricted
Stock, Performance Units and Performance Shares paid out in Shares,
or Other Incentive Awards paid out in Shares) that may be granted or
that may vest in any fiscal year, as applicable, pursuant to any
Award held by any employee shall be one million (1,000,000).
(b) The maximum aggregate cash payout (including Performance Units and
Performance Shares paid out in cash, or Other Incentive Awards paid
out in cash) with respect to Awards granted in any fiscal year which
may be made to any Named Executive Officer shall be five million
dollars ($5,000,000).
4.2 Share Pool Adjustments for Awards and Payouts. The following Awards
and Payouts shall reduce, on a one for one basis, the number of shares
authorized for issuance under the Share Pool:
(a) An Award of an Option;
(b) An Award of an SAR (except a Tandem SAR);
(c) An Award of Restricted Stock;
(d) A payout of a Performance Share in Shares; and
(e) A payout of a Performance Unit in Shares.
The following transactions shall restore, on a one for one basis, the
number of shares authorized for issuance under the Share Pool:
(1) A Payout of an SAR, Tandem SAR, or Restricted Stock award in the form
of cash;
(2) A cancellation, termination, expiration, forfeiture, or lapse for any
reason (with the exception of the termination of a Tandem SAR upon
exercise of the related Options, or the termination of a related
Option upon exercise of the corresponding Tandem SAR) of any Shares
subject to an Award; and
(3) Payment of an Option Price with previously acquired Shares or by
withholding Shares which otherwise would be acquired on exercise
(i.e., the Share Pool shall be increased by the number of Shares
turned in or withheld as payment of the exercise price).
4.3 Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether
or not such reorganization comes within the definition of such term in Code
Section 368) or any partial or complete liquidation of the Company, such
adjustment shall be made in the number and class of Shares available in the
35<PAGE>
Share Pool, the number and class of and/or price of Shares subject to
outstanding Awards granted under the Plan and the number of Shares set forth in
Section 4.1(a), as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of
rights; provided, however, that the number of Shares subject to any Award shall
always be a whole number.
Article 5. Eligibility and Participation
5.1 Eligibility. Persons eligible to participate in this Plan include all
officers and other employees of the Company and its Subsidiaries, as determined
by the Committee, including Employees who are members of the Board and
Employees who reside in countries other than the United States of America.
5.2 Actual Participation. Subject to the provisions of the Plan, the
Committee may, from time to time, select from all eligible Employees, those to
whom Awards shall be granted and shall determine the nature and amount of each
Award.
Article 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Plan,
Options may be granted to one or more Participants in such number, and upon
such terms, and at any time and from time to time as shall be determined by the
Committee.
6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Option Agreement also shall specify whether the
Option is intended to be an ISO within the meaning of Code Section 422, or an
NQSO whose grant is intended not to fall under the provisions of Code
Section 422.
6.3 Option Price. The Committee shall designate the Option Price for each
grant of an Option under this Plan which Option Price shall be at least equal
to one hundred percent (100%) of the Fair Market Value of a Share on the date
the Option is granted, and which Option Price may not be subsequently changed
by the Committee except pursuant to Section 4.3 hereof.
6.4 Duration of Options. Each Option granted to an Employee shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, that unless otherwise designated by the Committee at the time of
grant, no Option shall be exercisable later than the tenth (10th) anniversary
date of its grant.
6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 Payment. Options granted under this Article 6 shall be exercised by
the delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
The Option Price upon exercise of any Option shall be payable to the
36<PAGE>
Company in full either: (a) in cash or its equivalent, or (b) by tendering
previously acquired Shares having an aggregate Fair Market Value at the time of
exercise equal to the total Option Price (provided that the Shares which are
tendered by Insiders must have been held by the Participant for at least six
(6) months prior to their tender to satisfy the Option Price), or (c) by
withholding Shares which otherwise would be acquired on exercise having an
aggregate Fair Market Value at the time of exercise equal to the total Option
Price, or (d) by a combination of (a), (b), and (c).
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law
restrictions, or by any other means which the Committee determines to be
consistent with the Plan's purpose and applicable law.
As soon as practicable after receipt of a written notification of exercise
and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable Federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws
applicable to such Shares.
6.8 Termination of Employment. Each Option Award Agreement shall set
forth the extent to which the Participant shall have the right to exercise the
Option following termination of the Participant's employment with the Company
and/or its Subsidiaries. Such provisions shall be determined in the sole
discretion of the Committee, shall be included in the Award Agreement entered
into with each Participant, need not be uniform among all Options issued
pursuant to the Plan, and may reflect distinctions based on the reasons for
termination of employment.
Subject to Section 15, in the event that a Participant's Option Award
Agreement does not set forth such termination provisions, the following
termination provisions shall apply:
(a) In the event a Participant's employment with the Company and/or its
Subsidiaries is terminated by the Company and/or its Subsidiaries for
Cause, or terminated by the Participant by reason of voluntary
resignation (which shall not include resignation upon Disability or
R e tirement), all Options which are unvested at the date of
termination shall be forfeited to the Company.
(b) In the event a Participant's employment with the Company and/or its
Subsidiaries is terminated for any reason (including a termination
due to death, Disability, Retirement, termination by the Company
and/or its Subsidiaries without Cause) other than a termination by
the Company and/or its Subsidiaries for Cause or a temination by the
Participant by reason of voluntary resignation, all Options shall
immediately become fully vested on the date of termination.
Subject to Section 15, unless otherwise provided in the Participant's
Option Award Agreement, all Options in which the Participant has a vested right
upon termination shall be exercisable for the lesser of one (1) year following
37<PAGE>
the date of termination or the expiration date of the Option.
6.9 Nontransferability of Options.
(a) Incentive Stock Options. No ISO granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothe-
cated, other than by will or by the laws of descent and distribution.
Further, all ISOs granted to a Participant under the Plan shall be
exercisable during his or her lifetime only by such Participant.
(b) Nonqualified Stock Options. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article 6
may be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a
Participant's Award Agreement, all NQSOs granted to a Participant
under this Article 6 shall be exercisable during his or her lifetime
only by such Participant.
Article 7. Stock Appreciation Rights
7.1 Grant of SARs. Subject to the terms and conditions of the Plan, SARs
may be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee may grant Freestanding SARs, Tandem
SARs, or any combination of these forms of SAR.
The Committee shall have complete discretion in determining the number of
SARs granted to each Participant (subject to Article 4 herein) and, consistent
with the provisions of the Plan, in determining the terms and conditions
pertaining to such SARs.
The Committee shall designate, at the time of grant, the grant price of a
Freestanding SAR which grant price shall at least equal the Fair Market Value
of a Share on the date of grant of the SAR. The grant price of Tandem SARs
shall equal the Option Price of the related Option. Grant prices of SARs shall
not subsequently be changed by the Committee except pursuant to Section 4.3
hereof.
7.2 Exercise of Tandem SARs. Tandem SARs may be exercised for all or part
of the Shares subject to the related Option upon the surrender of the right to
exercise the equivalent portion of the related Option. A Tandem SAR may be
exercised only with respect to the Shares for which its related Option is then
exercisable.
Notwithstanding any other provision of this Plan to the contrary, with
respect to a Tandem SAR granted in connection with an ISO: (i) the Tandem SAR
will expire no later than the expiration of the underlying ISO; (ii) the value
of the payout with respect to the Tandem SAR may be for no more than one
hundred percent (100%) of the difference between the Option Price of the
underlying ISO and the Fair Market Value of the Shares subject to the
underlying ISO at the time the Tandem SAR is exercised; and (iii) the Tandem
SAR may be exercised only when the Fair Market Value of the Shares subject to
the ISO exceeds the Option Price of the ISO.
7.3 Exercise of Freestanding SARs. Freestanding SARs may be exercised
upon whatever terms and conditions the Committee, in its sole discretion,
imposes upon them.
38<PAGE>
7.4 SAR Agreement. Each SAR grant shall be evidenced by an Award
Agreement that shall specify the grant price, the term of the SAR, and such
other provisions as the Committee shall determine.
7.5 Term of SARs. The term of an SAR granted under the Plan shall be
determined by the Committee, in its sole discretion; provided, however, that
unless otherwise designated by the Committee, such term shall not exceed ten
(10) years.
7.6 Payment of SAR Amount. Upon exercise of an SAR, a Participant shall
be entitled to receive payment from the Company in an amount determined by
multiplying:
(a) The difference between the Fair Market Value of a Share on the date
of exercise over the grant price; by
(b) The number of Shares with respect to which the SAR is exercised.
At the discretion of the Committee, the payment upon SAR exercise may be
in cash, in Shares of equivalent value, or in some combination thereof.
7.7 Rule 16b-3 Requirements. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on exercise of an SAR
(including, without limitation, the right of the Committee to limit the time of
exercise to specified periods) as may be required to satisfy the requirements
of Section 16 of the Exchange Act (or any successor rule).
7.8 Termination of Employment. Each SAR Award Agreement shall set forth
the extent to which the Participant shall have the right to exercise the SAR
following termination of the Participant's employment with the Company and/or
its Subsidiaries. Such provisions shall be determined in the sole discretion of
the Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all SARs issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of
employment.
Subject to Section 15, in the event that a Participant's SAR Award
Agreement does not set forth such termination provisions, the following
termination provisions shall apply:
(a) In the event a Participant's employment with the Company and/or its
Subsidiaries is terminated by the Company and/or its Subsidiaries for
Cause, or terminated by the Participant by reason of voluntary
resignation which shall not include resignation upon Disability or
R e tirement), all Options which are unvested at the date of
termination shall be forfeited to the Company.
(b) In the event a Participant's employment with the Company and/or its
Subsidiaries is terminated for any reason (including a termination
due to death, Disability, Retirement, termination by the Company
and/or its Subsidiaries without Cause) other than a termination by
the Company and/or its Subsidiaries for Cause or a termination by the
Participant by reason of voluntary resignation, all Options shall
immediately become fully vested on the date of termination.
Subject to Section 15, unless otherwise provided in the Participant's SAR
Award Agreement, all SARs in which the Participant has a vested right upon
39<PAGE>
termination shall be exercisable for the lesser of one (1) year following the
date of termination or the expiration date of the SAR.
7.9 Nontransferability of SARs. Except as otherwise provided in a
Participant's Award Agreement, no SAR granted under the Plan may be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated, other
than by will or by the laws of descent and distribution. Further, except as
otherwise provided in a Participant's Award Agreement, all SARs granted to a
Participant under the Plan shall be exercisable during his or her lifetime only
by such Participant.
Article 8. Restricted Stock
8.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Plan, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
8.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
e v idenced by an Award Agreement that shall specify the Period(s) of
Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.
8.3 Transferability. Except as provided in this Article 8, the Shares of
Restricted Stock granted herein may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction established by the Committee and specified in
the Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Agreement. All rights with respect to the Restricted
Stock granted to a Participant under the Plan shall be available during his or
her lifetime only to such Participant.
8.4 Other Restrictions. Subject to Article 11 herein, the Committee may
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Plan as it may deem advisable including, without
limitation, a requirement that Participants pay a stipulated purchase price for
each Share of Restricted Stock, restrictions based upon the achievement of
specific performance goals (Company-wide, divisional, and/or individual), time-
based restrictions on vesting following the attainment of the performance
goals, and/or restrictions under applicable Federal or state securities laws.
The Company shall retain the certificates representing Shares of
Restricted Stock in the Company's possession until such time as all conditions
and/or restrictions applicable to such Shares have been satisfied.
Except as otherwise provided in this Article 8, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Plan shall become freely
transferable by the Participant after the last day of the applicable Period of
Restriction.
8.5 Voting Rights. Unless otherwise designated by the Committee at the
time of grant, Participants Shares of Restricted Stock have been granted
hereunder may exercise full voting rights with respect to those Shares during
the Period of Restriction.
40<PAGE>
8.6 Dividends and Other Distributions. Unless otherwise designated by the
Committee at the time of grant, Participants holding Shares of Restricted Stock
granted hereunder shall be credited with regular cash dividends paid with
respect to the underlying Shares while they are so held during the Period of
Restriction. The Committee may apply any restrictions to the dividends that the
Committee deems appropriate. Without limiting the generality of the preceding
sentence, if the grant or vesting of Shares of Restricted Stock granted to a
Named Executive Officer is designed to comply with the requirements of the
Performance-Based Exception, the Committee may apply any restrictions it deems
appropriate to the payment of dividends declared with respect to such Sharesof
Restricted Stock, such that the dividends and/or the Shares of Restricted Stock
maintain eligibility for the Performance-Based Exception.
In the event that any dividend constitutes a derivative security or an
equity security pursuant to the rules under Section 16 of the Exchange Act,
such dividend shall be subject to a vesting period equal to the remaining
vesting period of the Shares of Restricted Stock with respect to which the
dividend is paid.
8.7 Termination of Employment. Each Restricted Stock Award Agreement
shall set forth the extent to which the Participant shall have the right to
receive unvested Sharesof Restricted Stock, following termination of the
Participant's employment with the Company and/or its Subsidiaries. Such
provisions shall be determined in the sole discretion of the Committee, shall
be included in the Award Agreement entered into with each Participant, need not
be uniform among all Shares of Restricted Stock issued pursuant to the Plan,
and may reflect distinctions based on the reasons for termination of
employment; provided, however that, except in the cases of terminations
connected with a Change of Control and terminations by reason of death or
Disability, the vesting of Shares of Restricted Stock which qualify for the
Performance-Based Exception and which are held by Named Executive Officers
shall not occur prior to the time they otherwise would have, but for the
employment termination.
Subject to Section 15 in the event that Participant's Restricted Stock
Award Agreement does not set forth such termination provisions, the following
termination provisions shall apply:
(a) In the event a Participant's employment with the Company and/or its
Subsidiaries is terminated by the Company and/or its subsidiaries
for Cause, or terminated by the Participant by reason of voluntary
resignation (which shall not include Resignation upon Disability or
Retirement), all Shares of Restricted Stock which are unvested at the
date of termination shall be forfeited to the Company.
(b) Unless the Award qualifies for the Performance-Based Exception, in
the event a Participant's employment with the Company and/or its
Subsidiaries is terminated for any reason (including a termination
due to death, Disability, Retirement or termination by the Company
and/or its Subsidiaries without Cause) other than a termination by
the Company and/or its Subsidiaries for Cause or a termination by the
Participant by reason of voluntary resignation, all Shares of
Restricted Stock of such Participant shall immediately become fully
vested on the date of termination. If the Award qualifies for the
Performance-Based Exception and any one of the above terminations
occurs, Participant shall vest in a prorated number of Shares of
Restricted Stock at the same time as other Participants vest who did
not terminate employment during the Performance Period. The prorated
41<PAGE>
payout shall be based upon the length of time that the Participant
held the Restricted Stock during the Performance Period, and shall
further be adjusted based on the achievement of the preestablished
performance goals.
Article 9. Performance Units and Performance Shares
9.1 Grant of Performance Units/Shares. Subject to the terms of the Plan,
Performance Units and/or Performance Shares may be granted to Participants in
such amounts and upon such terms, and at any time and from time to time, as
shall be determined by the Committee.
9.2 Value of Performance Units/Shares. Each Performance Unit shall have
an initial value that is established by the Committee at the time of grant.
Each Performance Share shall have an initial value equal to the Fair Market
Value of a Share on the date of grant. The Committee shall set performance
goals in its discretion which, depending on the extent to which they are met,
will determine the number and/or value of Performance Units/Shares that will be
paid out to the Participant. For purposes of this Article 9, the time period
during which the performance goals must be met shall be called a Performance
Period.
9.3 Earning of Performance Units/Shares. Subject to the terms of this
Plan, after the applicable Performance Period has ended, the holder of Perform-
ance Units/Shares shall be entitled to receive payout on the number and value
of Performance Units/Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance goals have been achieved, as established by the Committee.
9.4 Form and Timing of Payment of Performance Units/Shares. Payment of
earned Performance Units/Shares shall be made in a single lump sum within
seventy-five (75) calendar days following the close of the applicable
Performance Period. Subject to the terms of this Plan, the Committee, in its
sole discretion, may pay earned Performance Units/Shares in the form of cash or
in Shares (or in a combination thereof) which have an aggregate Fair Market
Value equal to the value of the earned Performance Units/Shares at the close of
the applicable Performance Period. Such Shares may be granted subject to any
restrictions deemed appropriate by the Committee.
At the time of grant or shortly thereafter, the Committee, at its
discretion and in accordance with terms designated by the Committee, may allow
for a voluntary and/or mandatory deferral of all or any part of an otherwise
earned Performance Unit/Share Award.
At the discretion of the Committee, Participants may be entitled to
receive any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares which
have been earned, but not yet distributed to Participants (such dividends shall
be subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in
Section 8.6 herein). In addition, Participants may, at the discretion of the
Committee, be entitled to exercise their voting rights with respect to such
Shares.
9.5 Termination of Employment. Subject to Section 15, in the event a
Participant's employment with the Company and/or its Subsidiaries is terminated
by the Company and/or its Subsidiaries for Cause or terminated by the
42<PAGE>
Participant by reason of voluntary resignation (which shall not include
resignation upon Disability, Retirement), all Performance Units/Shares shall
be forfeited by the Participant to the Comapny.
Subject to Section 15, in the event a Participant's employment with the
Company and/or its Subsidiaries is terminated during a Performance Untis/Shares
shall be forfeited by the Participant to the Company.
Subject to Section 15, unless the Committee determines otherwise in the
event of a termination due to death or Disability, payment of earned
Performance Units/Shares shall be made at the same time as payments are made to
Participants who did not teminate employment during the applicable Performance
Period.
9.6 Nontransferability. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Shares may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution. Further, except as otherwise
provided in a Participant's Award Agreement, a Participant's rights under the
Plan shall be exercisable during the Participant's lifetime only by the
Participant or the Participant's legal representative.
Article 10. Other Incentive Awards
10.1 Grant of Other Incentive Awards. Subject to the terms and provisions
of the Plan, Other Incentive Awards may be granted to Participants in such
amount, upon such terms, and at any time and from time to time as shall be
determined by the Committee.
10.2 Other Incentive Award Agreement. Each Other Incentive Award grant
shall be evidenced by an Award Agreement that shall specify the amount of the
Other Incentive Award granted, the terms and conditions applicable to such
grant, the applicable Performance Period and performance goals, and such other
provisions as the Committee shall determine, subject to the terms and
provisions of the Plan.
10.3 Nontransferability. Except as otherwise provided in a Participant's
Award Agreement, Other Incentive Awards may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution.
10.4 Form and Timing of Payment of Other Incentive Awards. Payment of
Other Incentive Awards shall be made at such times and in such form, either in
cash or in Shares (or a combination thereof) as established by the Committee
subject to the terms of the Plan. Such Shares may be granted subject to any
restrictions deemed appropriate by the Committee. Without limiting the
generality of the foregoing, annual incentive awards may be paid in the form of
Shares and/or Other Incentive Awards (which may or may not be subject to
restrictions, at the discretion of the Committee).
Article 11. Performance Measures
Unless and until the Committee proposes for shareholder vote and
shareholders approve a change in the general performance measures set forth in
this Article 11, the attainment of which may determine the degree of payout
and/or vesting with respect to Awards to Named Executive Officers which are
designed to qualify for the Performance-Based Exception, the performance
43<PAGE>
measure(s) to be used for purposes of such grants shall be chosen from among
the following alternatives, as reported on the Company's Annual Report on 10-K:
(a) Return on Assets ("ROA") which equals net income divided by total
average assets.
(b) Return on Sales ("ROS") which equals net income divided by net sales.
(c) Cash Flow Return on Investment ("CFROI") which equals net after tax
free cash flows before capital spending, dividend payments,
borrowings and payments on debt and stock issuances and repurchases,
divided by average owner's equity.
(d) Earnings Before Income Taxes ("EBIT") which equals net income plus
taxes.
(e) Net Earnings which equals net earnings as reported.
(f) Stock price appreciation.
(g) Net operating income less cost of capital.
The Committee shall have the discretion to adjust the determinations of
the degree of attainment of the preestablished performance goals; provided,
however, that Awards which are designed to qualify for the Performance-Based
Exception, and which are held by Named Executive Officers, may not be adjusted
upward (the Committee shall retain the discretion to adjust such Awards
downward).
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining shareholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining shareholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards which shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m) and, thus, which use performance measures other than those
specified above.
Article 12. Beneficiary Designation
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
Article 13. Deferrals
The Committee may permit a Participant to defer such Participant's receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant by virtue of the lapse or waiver of restrictions with respect
to Restricted Stock, or the satisfaction of any requirements or goals with
44<PAGE>
respect to Performance Units/Shares or Other Incentive Awards. If any such
deferral election is required or permitted, the Committee shall, in its sole
discretion, establish rules and procedures for such payment deferrals.
Article 14. Rights of Employees
14.1 Employment. Nothing in the Plan shall interfere with or limit in any
way the right of the Company to terminate any Participant's employment at any
time, nor confer upon any Participant any right to continue in the employ of
the Company or any Subsidiary..
For purposes of this Plan, a transfer of a Participant's employment
between the Company and a Subsidiary, or between Subsidiaries, shall not be
deemed to be a termination of employment. Upon such a transfer, the Committee
may make such adjustments to outstanding Awards as it deems appropriate to
reflect the changed reporting relationships.
14.2 Participation. No Employee shall have the right to be selected to
receive an Award under this Plan, or, having been so selected, to be selected
to receive a future Award.
Article 15. Change of Control
15.1 Treatment of Outstanding Awards. Upon the occurrence of a Change of
Control, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:
(a) Any and all Options and SARs granted hereunder shall become
immediately exercisable, and shall remain exercisable throughout
their entire term;
(b) Any Period of Restriction and other restrictions imposed on
Restricted Shares shall lapse; and
(c) Unless otherwise specified in Participant's Award Agreement at time
of grant, 120% of the target payout opportunities attainable under
all outstanding Awards of Performance Units and Performance Shares
and Other Incentive Awards shall be deemed to have been fully earned
for the entire Performance Period(s) as of the effective date of the
Change of Control. The vesting of all such Awards shall be
accelerated as of the effective date of the Change of Control, and
in full settlement of such Awards, there shall be paid out in cash to
Participants within thirty (30) days following the effective date of
the Change of Control 120% of all targeted Award opportunities
associated with such outstanding Awards.
15.2 Termination, Amendment, and Modifications of Change-of-Control
Provisions. Notwithstanding any other provision of this Plan or any Award
Agreement provision, the provisions of this Article 15 may not be terminated,
amended, or modified to affect adversely any Award theretofore granted under
the Plan without the prior written consent of the Participant with respect to
said Participant's outstanding Awards.
Article 16. Amendment, Modification, and Termination
45<PAGE>
16.1 Amendment, Modification, and Termination. The Board may at any time
and from time to time, alter, amend, suspend or terminate the Plan in whole or
in part; subject to any requirement of shareholder approval required by
applicable law, rule or regulation, including Rule 16b-3 under the Exchange Act
ad Section 162(m) of the Internal Revenue Code.
The Committee shall not have the authority to cancel outstanding Awards
and issue substitute Awards in replacement thereof.
16.2 Awards Previously Granted. Subject to Section 15.2, no termination,
amendment, or modification of the Plan shall adversely affect in any material
way any Award previously granted under the Plan, without the written consent of
the Participant holding such Award.
16.3 Compliance with Code Section 162(m). At all times when Code Section
162(m) is applicable, all Awards granted under this Plan shall comply with the
requirements of Code Section 162(m); provided, however, that in the event the
Committee determines that such compliance is not desired with respect to any
Award or Awards available for grant under the Plan, then compliance with Code
Section 162(m) will not be required. In addition, in the event that changes are
made to Code Section 162(m) to permit greater flexibility with respect to any
Award or Awards available under the Plan, the Committee may, subject to this
Article 16, make any adjustments it deems appropriate.
Article 17. Withholding
17.1 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy Federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of the Plan.
17.2 Share Withholding. With respect to withholding required upon the
exercise of Options or SARs, upon the lapse of restrictions on Restricted
Stock, or upon any other taxable event arising as a result of Awards granted
hereunder, Participants may elect, subject to the approval of the Committee, to
satisfy the withholding requirement, in whole or in part, by having the Company
withhold Shares having a Fair Market Value on the date the tax is to be
determined equal to the minimum statutory total tax which could be imposed on
the transaction. All such elections shall be irrevocable, made in writing,
signed by the Participant, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.
Article 18. Indemnification
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified by the Company against and from any loss, cost,
liability, or expense that may be imposed upon or reasonably incurred by him or
her in connection with or resulting from any claim, action, suit, or proceeding
to which he or she may be a party or in which he or she may be involved by
reason of any action taken or failure to act under the Plan. Such person shall
be indemnified by the Company for all amounts paid by him or her in settlement
thereof, with the Company's approval, or paid by him or her in satisfaction of
any judgement in any such action, suit, or proceeding against him or her,
provided he or she shall give the Company an opportunity, at its own expense,
46<PAGE>
to handle and defend the same before he or she undertakes to handle and defend
it on his or her own behalf. The foregoing right of indemnification shall not
be exclusive of any other rights of indemnification to which such persons may
be entitled under the Company's Articles of Incorporation of Bylaws, as a
matter of law, or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
Article 19. Successors
All obligations of the Company under the Plan with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the
business and/or assets of the Company.
Article 20. Legal Construction
20.1 Gender and Number. Except where otherwise indicated by the context,
any masculine term used herein also shall include the feminine; the plural
shall include the singular and the singular shall include the plural.
20.2 Severability. In the event any provision of the Plan shall be held
illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Plan, and the Plan shall be construed and
enforced as if the illegal or invalid provision had not been included.
20.3 Requirements of Law. The granting of Awards and the issuance of
Shares under the Plan shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental agencies or national
securities exchanges as may be required.
20.4 Securities Law Compliance. With respect to Insiders, transactions
under this Plan are intended to comply with all applicable conditions or
Rule 16b-3 of its successors under the Exchange Act. To the extent any
provision of the Plan or action by the Committee fails to so comply, it shall
be deemed null and void, to the extent permitted by law and deemed advisable by
the Committee.
20.5 Governing Law. To the extent not preempted by Federal law, the Plan,
and all agreements hereunder, shall be construed in accordance with and
governed by the laws of the State of Delaware.
47<PAGE>
PROXY CARD
- - - ----------
MAYTAG CORPORATION
Proxy for Annual Meeting, April 30, 1996, Solicited by the Board of Directors
Leonard A. Hadley, Gerald J. Pribanic and E. James Bennett, and each of
them (with full power to act without the other and with power of substitution),
are hereby appointed attorneys and proxies of the undersigned to attend the
Annual Stockholders Meeting on April 30, 1996, and any adjournment thereof, and
to vote and act for the undersigned on reverse side:
This proxy revokes all previous proxies. Unless specified to the contrary
it will be voted FOR items (1) and (2).
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
See Reverse
Side <PAGE>
X Please mark
votes as in
this example.
The Board of Directors recommends a vote "FOR" items (1) and (2).
1. Election of Directors
Nominees: Barbara R. Allen; Howard L. Clark, Jr.; Leonard A. Hadley;
Robert D. Ray and Peter S. Willmott.
FOR or WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
(INSTRUCTION: For, except vote withheld from the following nominee(s): write
that nominee's name on the space provided below.)
______________________________________________________________________________
2. FOR AGAINST or ABSTAIN
The selection of Ernst & Young LLP as independent public auditors to
examine the financial statements to be included in the Annual Report to
Stockholders for 1996.
______________________________________________________________________________
3. FOR AGAINST or ABSTAIN
The adoption of the 1996 Maytag Corporation Employee Stock Incentive Plan.
______________________________________________________________________________
In their discretion, the proxies are authorized to vote upon any other
matters which may properly come before the meeting or any adjournment.
Dated _____________________, 1996 Dated _____________________, 1996
_________________________________ _________________________________
(Signature of Stockholder) (Signature of Stockholder)
Please date, sign exactly as name appears above, and return in the enclosed
envelope. Executors, administrators, trustees, guardians or attorneys should
indicate the capacity in which they sign. Corporate owners should sign in
their corporate names and affix their seals.
______ MARK HERE
FOR ADDRESS
CHANGE AND
NOTE AT LEFT<PAGE>
March 20, 1996
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of shareholders to be
held at 9:00 a.m. on Tuesday, April 30, 1996, at the Newton High School Center
for Performance, Newton, Iowa. Detailed information as to the business to be
transacted at the meeting is contained in the accompanying Notice of Annual
Meeting and Proxy Statement.
Regardless of whether you plan to attend the meeting, it is important that your
shares be voted. Accordingly, we ask that you sign and return your proxy as
soon as possible in the envelope provided.
Sincerely,
s/s Leonard A. Hadley
Leonard A. Hadley
Chairman and
Chief Executive Officer <PAGE>
