Maytag Corporation
403 West Fourth Street North
Newton, Iowa 50208
April 1, 1999
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 "1999 Proxy Materials").
Pursuant to Rule 14a-6(m) under the Exchange Act, a cover page is included with
the 1999 Proxy Materials. The 1999 Proxy Materials will be released to
shareholders on or about April 1, 1999.
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 1999 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 1998 Annual Report with SEC pursuant to Rule 14a-
3(c).
One copy of a conforming paper format copy of the 1999 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."
If you have any questions, please contact E. James Bennett at 515/787-8394 or
Jim L. Kaput of Sidley & Austin at 312/853-2655.
Very truly yours,
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.)
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Maytag Corporation
(Name of Registrant as Specified In Its Charter)
E. James Bennett
(Name of Person(s) Filing Proxy Statement
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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:
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(2) Aggregate number of securities to
which transaction applies:
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value of transaction computed pursuant to
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transaction:
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_/ 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
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which the offsetting fee was paid previ-
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______________________________________<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 May 13,
1999, at 9:00 a.m., for the purpose of considering and acting upon the
following:
(1) The election of four directors for three-year terms, expiring in 2002.
(2) Selection of Ernst & Young LLP as independent auditors to audit the
financial statements to be included in the Annual Report to
Shareholders for 1999.
(3) If properly presented at the Annual Meeting, a shareholder proposal
concerning the classification of the Board of Directors.
(4) If properly presented at the Annual Meeting, a shareholder proposal
concerning super majority voting provisions in the Certificate of
Incorporation.
(5) 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 15, 1999,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Annual Meeting.
Dated: April 1, 1999
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 May 13, 1999. Proxy statements and proxies will
be mailed to shareholders on April 1, 1999. A shareholder giving a proxy may
revoke it or give special voting instructions at any time before the proxy is
voted by executing a later-dated proxy, which is voted at the meeting or by
attending the Annual Meeting in person and signing a written notice to the
Secretary of the Corporation. If the enclosed proxy card is properly executed
and returned, the shares it represents will be voted in accordance with the
shareholder's instructions. If no instructions are given, the proxy will be
voted for each of the nominees for election as director, for the selection of
Ernst & Young, LLP as independent auditors and against the shareholder
proposals. Any shareholder attending the Annual Meeting may, on request, vote
his or her own shares at the meeting even though the shareholder has previously
sent in a proxy card or voted by phone, as described below.
With respect to the election of directors a shareholder may vote for all
nominees or withhold authority to vote for all or any nominees. Withholding
authority to vote for a director nominee will not prevent the nominee from being
elected. With respect to each other matter specified in the Notice of Annual
Meeting a shareholder may vote for or against the matter or abstain from voting
on the matter. A vote to abstain has the effect of a vote against the matter.
Any "broker non-votes" on a particular matter, which occur when brokers are
prohibited from exercising voting authority for beneficial owners who have not
provided voting instructions, will not be counted for the purpose of determining
the number of votes cast with respect to that matter, although such shares may
be considered present and entitled to vote for other purposes and will count for
purposes of determining a quorum. Approval of each matter specified in the
Notice of Annual Meeting requires a majority (in the case of election of
directors, a plurality) of the shares represented at the meeting and entitled to
vote on the matter. Accordingly, non-voted shares with respect to a matter will
not affect the approval of the matter or the outcome of the election of
directors.
If you hold your shares in your own name rather than through a broker, you
may vote by phone. To vote by phone, dial 1-888-221-0696. Employees holding
shares through the Salary Savings Plan or Employees' Discount Stock Purchase
Plan may also vote by phone.
The Corporation had 88,691,095 outstanding shares of common stock as of the
close of business on March 15, 1999, not including 28,459,498 shares of treasury
stock. The Corporation has no other voting securities outstanding. Shareholders
are entitled to one vote per share on each matter.
(1) DIRECTORS AND NOMINEES FOR ELECTION AS DIRECTORS
Under the authority of the Corporation's Bylaws, the Board consists of
fourteen directors divided into three groups. The term of each group expires in
different years. The four nominees for election to the Board of Directors this
year to hold office until the 2002 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 and William T. Kerr.
1<PAGE>
Proxies will be voted for each of the nominees unless other directions are
given in the proxy. If any nominee is unavailable for election, an event which
is not anticipated, such proxies will be voted for the election of the remaining
nominees and for the election of a substitute nominee, or the Board of Directors
may elect not to fill the vacancy and to reduce the number of directors.
Mr. Robert D. Ray will retire from the Maytag Corporation Board of
Directors at the conclusion of the 1999 Annual Meeting having served with great
distinction for fifteen years. His guidance and counsel will be missed.
The following sets forth certain information regarding each nominee and
each director whose term continues after the 1999 Annual Meeting based on
information received from each such nominee and continuing director.
NOMINEES FOR A TERM TO EXPIRE IN 2002 (pictures of each of the four nominees
listed below are shown in left margin)
Barbara R. Allen, 46, President, Corporate Supplier Solution,
Corporate Express, a supplier of office products and related categories.
Director since 1995.
Ms. Allen assumed her current position in 1998. She previously held
various marketing positions with The Quaker Oats Company becoming a Vice
President in 1987, Corporate Vice President and President of the Frozen
Foods Division in 1990, Vice President, Corporate Planning in 1992 and
Executive Vice President, International Food Products in 1995. Ms. Allen is
also a director of Chart House Enterprises.
Howard L. Clark, Jr., 55, Vice Chairman, Lehman Brothers Inc., an
investment banking and brokerage firm. Director since 1986.
Mr. Clark was Chairman, President and Chief Executive Officer of
Lehman Brothers Holdings, Inc. from 1990 until he assumed his current
position in 1993. 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., Compass International Services Corporation and
Walter Industries, Inc. Lehman Brothers Inc. provides certain investment
banking services to the Corporation.
Leonard A. Hadley, 64, Chairman and Chief Executive Officer, Maytag
Corporation. Director since 1985.
Mr. Hadley joined the Corporation in 1959 in the Accounting
Department. He held a number of management positions before he was named a
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, Norwest Bank Iowa and Snap-on Incorporated.
William T. Kerr, 57, Chairman and Chief Executive Officer, Meredith
Corporation, a publishing and broadcasting company. Director since 1998.
2<PAGE>
Mr. Kerr joined Meredith Corporation in 1991 as President of the
Meredith Magazine Group and Executive Vice President of the Company, became
President and Chief Operating Officer in 1994, President and Chief
Executive Officer in 1997 and assumed his current position in 1998. Prior
to 1991 he was a Vice President of The New York Times Company and President
of its magazine group. He is also a director of Meredith Corporation,
Principal Mutual Life Insurance Company and Storage Technology Corporation.
DIRECTORS WHOSE TERMS CONTINUE AFTER THE ANNUAL MEETING
Lester Crown, 73, Chairman of the Board, Material Service Corporation.
Director since 1989. Term expires in 2000.
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 President of Henry Crown and Company.
Wayland R. Hicks, 56, Vice Chairman and & Chief Operating Officer of United
Rentals, Inc., an equipment rental firm. Director since 1994. Term expires in
2001.
Mr. Hicks became President & Chief Operating Officer of United Rentals,
Inc. in 1997 and became Vice Chairman and Chief Operating Officer in 1998. Mr.
Hicks was President and Chief Executive Officer of Indigo, Inc. N.V. from 1996
until 1997. He served as Chief Executive and Vice Chairman of Nextel
Communications, Inc. from 1994 until 1995. Prior to joining Nextel, Mr. Hicks
served in various management positions with Xerox Corporation, becoming a Group
Vice President in 1983 and an Executive Vice President in 1987. Mr. Hicks is
also a director of United Rentals, Inc., Katun Corporation and Perdue Farms.
Bernard G. Rethore, 57, Chairman, President & CEO of Flowserve Corporation,
a manufacturer of fluid transfer and control equipment and systems. Director
since 1994. Term expires in 2000.
Mr. Rethore became Chairman and Chief Executive Officer of Flowserve
Corporation in 1997 and added the title of President in 1998. He became
President and Chief Executive Officer of BW/IP, Inc. (a predecessor of
Flowserve) in 1995 and was elected Chairman of the Board in 1997. 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 Flowserve Corporation and Belden Inc.
W. Ann Reynolds, 61, President, The University of Alabama at Birmingham.
Director since 1988. Term expires in 2001.
Ms. Reynolds became President of The University of Alabama at Birmingham in
1997. Ms. Reynolds served as Chancellor of The City University of New York from
1990 to 1997. 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.
3<PAGE>
John A. Sivright, 70, Senior Consultant, Harris Bankcorp, Inc. Director
since 1976.
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. Term expires in 2001.
Neele E. Stearns, Jr., 63, former President and Chief Executive Officer, CC
Industries, Inc., a diversified holding company. Director since 1989. Term
expires in 2000.
Mr. Stearns served as Executive Vice President and Chief Operating Officer
of Henry Crown and Company, from 1979 until 1986. From 1986 until his
retirement in 1994 he served as President and Chief Executive Officer of CC
Industries, Inc. Mr. Stearns is also a director of Wallace Computer Services,
Inc.
Fred G. Steingraber, 60, Chairman and Chief Executive Officer of A. T.
Kearney, Inc., a management consulting firm. Director since 1989. Term expires
in 2001.
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 and Bank Fund, Inc., Lawter International and Mercury
Finance Corporation.
Carole J. Uhrich, 55, Executive Vice President and Assistant Chief
Operating Officer, Polaroid Corporation, a photographic imaging and equipment
company. Director since 1995. Term expires in 2000.
Ms. Uhrich 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, Group Vice President, Manufacturing and Product
Development in 1992, Executive Vice President, Global Supply Chain in 1996 and
Executive Vice President, President Commercial Imaging in 1997 before assuming
her current position in 1998. She also serves as a director of Ceridian
Corporation.
Lloyd D. Ward, 50, President and Chief Operating Officer, Maytag
Corporation. Director since February 1998. Term expires in 2000.
Mr. Ward joined the Corporation in 1996 as Executive Vice President and
President, Maytag Appliances and was elected to his current position in 1998.
Prior to joining the Corporation he held positions with Pepsico, Inc., including
Vice President, Operations, Pepsi-Cola East in 1988, President, Western
Division, Frito-Lay, Inc. 1991 and President, Central Division, Frito-Lay, Inc.,
1992 until he joined the Corporation.
4<PAGE>
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
March 1, 1999.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
____________________________________________________________________________
Amount and Nature
Name and Address of Beneficial Ownership Percent of Class
FMR Corp. (1) 6,368,179 shares 7.078%
82 Devonshire St.
Boston, Massachusetts 02109-3614
Crown Group (2) 5,348,769 shares 6.0%
c/o 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 December 31, 1998 showing it beneficially owns 6,368,179 shares of
the Corporation. This number included: 6,007,490 shares beneficially owned by
Fidelity Management and Research Company (Fidelity), as a result of its serving
as investment adviser to various registered investment companies and as
investment advisor to certain other funds; 103,100 shares beneficially owned by
Fidelity International Limited (FIL), an investment advisor to a number of non-
U.S. investment companies, including 7,600 shares owned by Fidelity American
Special Situations Trust (FASST) a unit trust established under the laws of
England; 265,189 shares beneficially owned by Fidelity Management Trust Company,
as a result of its serving as an investment manager of institutional accounts;
6,368,179 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. through its control of Fidelity Management Trust Company, each
have the sole voting power with respect to 220,589 shares and the sole
dispositive power with respect to 265,189 shares. FIL, FMR Corp., through its
control of Fidelity, and FASST each has sole power to vote and dispose of 7,600
shares. Edward C. Johnson 3d, FMR through its control of Fidelity, and the
funds each have sole disposition power with respect to 5,999,890 shares.
(2) Although no person or entity in the group owned beneficially more than 5%
of the common stock outstanding as of March 1, 1999, 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 5,348,769 shares of
Maytag common stock, constituting 6.0 % 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 the amount of Maytag common stock held by each
director and nominee, each executive officer named in the Summary Compensation
5<PAGE>
Table on Page 14 and all directors and executive officers as a group, as of
March 1, 1999.
SECURITY OWNERSHIP OF DIRECTORS AND MANAGEMENT
____________________________________________________________________________
Amount and Nature of
Name Beneficial Ownership Percent of Class
____________________________________________________________________________
Barbara R. Allen 7,100 (b) *
William L. Beer 20,838 (b)(c) *
Howard L. Clark, Jr. 20,836 (b) *
Lester Crown 2,9050,823 (a)(b)(d) 3.26 %
Edward H. Graham 73,706 (b)(c) *
Leonard A. Hadley 416,747 (a)(b)(c) *
Wayland R. Hicks 15,000 (b) *
William T. Kerr 100 (b) *
Gerald J. Pribanic 41,224 (a)(b)(c) *
Robert D. Ray 23,600 (a)(b) *
Bernard G. Rethore 9,000 (b) *
W. Ann Reynolds 15,300 (b) *
John A. Sivright 27,000 (a)(b) *
Neele E. Stearns, Jr. 21,090 (b) *
Fred G. Steingraber 16,000 (b) *
Carole J. Uhrich 7,500 (b) *
Lloyd D. Ward 384,397 (b)(c) *
All directors and executive
officers as a group consisting
of 24 persons, including the
above named. 4,207,226 (a)(b)(c)(d) 4.72 %
- -----------------------------------------------------------------------------
* Less than one percent.
(a) Includes shares owned by associates or certain family members in which
the director disclaims any beneficial interest.
(b) These totals include shares which the following persons and all
directors and executive officers as a group have the right to acquire within 60
days of March 1, 1999 through the exercise of stock options: William L. Beer no
shares; Edward H. Graham 40,120 shares; Leonard A. Hadley 174,190 shares; Gerald
J. Pribanic 19,690 shares; Lloyd D. Ward 300,000 shares; Ms. Reynolds and
Messrs. Clark, Crown, Ray, Sivright and Stearns each have options to acquire
11,000 shares, Ms. Allen, and Ms. Uhrich each have options to acquire 7,000
shares, Mr. Rethore has options to acquire 5,000 shares. Messrs. Hicks and
Steingraber each have options to acquire 3,000 shares and all directors and
executive officers as a group have options to acquire 695,820 shares.
(c) These totals include shares granted under stock awards in 1997, 1998
and 1999, pursuant to the Corporation's 1996 Employee Stock Incentive Plan as to
which the following persons and all executive officers and directors as a group
have sole voting power: William L. Beer 6,405; Edward H. Graham 5,998; Leonard
A. Hadley 30,352; Gerald J. Pribanic 5,972; Lloyd D. Ward 16,645; and all
directors and executive officers as a group 91,468. 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
1,618,769 shares held by The Crown Fund, of which he is a partner. In addition,
719,240 shares are owned by various trusts of which he is a trustee; 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
6<PAGE>
which Mr. Crown's children are beneficiaries, parternships in which Mr. Crown is
a limited partner, and partnerships in which Mr. Crown s adult children are
partner. Mr. Crown disclaims beneficial ownership of the shares listed in this
footnote, except to the extent of his beneficial ownership therein.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
During 1998 Mr. Robert Downing, an executive officer inadvertently failed
to timely file with the Securities and Exchange Commission one report on Form 4
related to one transaction.
MEETINGS AND COMMITTEES
During 1998 the Board of Directors held five meetings either in person or
by telephone. Each director attended at least 75% of Board meetings and
meetings of the committees on which the director served.
The Board of Directors has an Audit Committee, a Compensation Committee and
a Nominating Committee as well as other committees.
The Audit Committee, currently consisting of Barbara R. Allen, Howard L.
Clark, Jr., Wayland R. Hicks, Fred G. Steingraber and Neele E. Stearns, Jr. met
four times in 1998. Its charge includes the review of the Corporation's
financial statements with the Corporation's independent auditors, approval of
audit arrangements, review of audit results and review of internal audit issues.
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 currently consists of Wayland R.
Hicks, William T. Kerr, Robert D. Ray, Bernard G. Rethore, John A. Sivright and
Neele E. Stearns, Jr. The Committee met three times in 1998.
The Nominating Committee, which met twice in 1998, nominates persons to
serve on the Board of Directors and recommends compensation levels and other
remunerative programs for directors. It currently consists of Lester Crown,
Robert D. Ray, W. Ann Reynolds, John A. Sivright and Fred G. Steingraber.
COMPENSATION OF DIRECTORS
Directors who are employees of the Corporation receive no compensation in
their capacities as director. Non-employee directors are paid a retainer of
$30,000 per annum, $1,250 for each Board and committee meeting attended and are
reimbursed for actual expenses. Telephone meetings are compensated at $750 per
meeting. Non-employee committee chairmen receive an additional $4,000 per
annum.
All non-employee directors with five or more years of service may
participate in the Maytag Corporation Directors' Pension Plan, an unfunded,
noncontributory pension plan. Each eligible participant will receive an annual
pension, beginning at the later of the director's attaining age 70 or ceasing
tenure as a director, equal to the director's annual retainer (excluding any
Board committee meeting and committee chair fees) for the 12 month period prior
to the commencement of such pension.
7<PAGE>
(2) RELATIONSHIP WITH INDEPENDENT AUDITORS
A further purpose of the Annual Meeting is to select independent auditors
to audit the financial statements to be included in the Annual Report to
Shareholders for 1999. It is intended that all proxies on the enclosed form,
will be voted for the selection of Ernst & Young LLP as independent auditors,
unless otherwise instructed. 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 the representative
desires to do so and to be available to respond to appropriate questions.
The Board of Directors recommends a vote FOR the selection of Ernst & Young
LLP as independent auditors.
(3) SHAREHOLDER PROPOSAL CONCERNING THE ANNUAL ELECTION OF THE ENTIRE BOARD OF
DIRECTORS.
The Corporation has received a shareholder proposal from a shareholder (the
"Proponent") representing 200 shares of common stock, for inclusion in this
Proxy Statement. The name and address of the person who submitted the proposal
will be furnished upon request made to the Corporation. The proposal is as
follows:
RESOLVED: ELECT THE ENTIRE BOARD OF DIRECTORS EACH YEAR. Maytag
Corporation shareholders request the Board of Directors to take all necessary
steps to enact this resolution today.
This includes the requirement that a change to the length of the directors
term of office can be made only by a majority of shareholder votes cast, on a
separate-issue basis and this resolution applies to successor companies.
8<PAGE>
PROPONENT S STATEMENT OF SUPPORT
It is intuitive that directors, accountable through annual election,
perform better. The current piecemeal director election gives Maytag
Corporation directors 3-years of isolation from the impact of their performance.
WHAT INCENTIVE IS THERE FOR GOOD CORPORATE GOVERNANCE -- HIGHLIGHTED BY
ANNUAL ELECTION OF ALL DIRECTORS?
50 institutional investors, managing a total of $840 million, told McKinsey
& Co. they would pay an 11% average premium for the stock of a company with good
governance practices.
Why the big jump? Some investors said they believed that good governance
will boost performance over time. Others felt good governance decreases the
risk of bad news - and when trouble occurs, they rebound faster.
Business Week Sept. 15, 1997
GOOD CORPORATE GOVERNANCE CAN COUNTER-BALANCE RECENT EVENTS:
RESEARCH ALERT - Maytag cut. Brown Brothers Harriman lowered its near-term
rating on Maytag Corp. to neutral from buy.
Reuters Sept. 28, 1998
Maytag excised from Bruce Hutson s fund due to low yields.
New York Times June 21, 1998
Maytag depends on very mature U.S. retail home appliance business.
Value Line Sept. 11, 1998
Maytag still remains in 3rd place in the domestic home appliance industry.
Value Line Sept. 11, 1998
The American appliance industry is mature and highly competitive.
Standard & Poors Aug. 15, 1998
The latest battle over Hoover Europe s infamous free flights continues.
Hoover Europe s former parent, Maytag, eventually paid out $72 million to fly
some 220,000 people. But Hoover still is not unable to close out one of the
most embarrassing blunders in corporate history. Harry Cichy, head of the
plaintiffs group said as many as 350,000 people might have grounds to sue
Hoover.
AP Online July 15, 1998
POINT:
Maytag Corp. s CEO Hadley said Maytag continues to shed weak products.
Reuters Sept. 18, 1998
COUNTER POINT:
Who is responsible for the weak products in the first place?
POINT:
The Neptune washer price is $1,100. Hadley says this compares with a
typical washing machine price of $425.
Reuters Sept. 18, 1998
COUNTER POINT:
Can Maytag continue to charge this 158% premium indefinitely.
9<PAGE>
Also:
CEO Mr. Leonard Hadley has $7 million ($7,290,493) in unexercised stock
options from previous years.
Source: Internet - http://www.paywatch.org
With 14 seats the Maytag board may be too large for optimum size. Board
oversight could be minimal since the board met only 6 times in 1997. It cannot
be determined whether all, or some of these meetings, were entirely by
telephone.
Source: Maytag 1997 proxy statement.
The best boards continue to raise the bar, said Business Week:
Place The Entire Board Of Directors Up For Election Each Year
YES ON 3
BOARD OF DIRECTORS STATEMENT IN OPPOSITION TO THE SHAREHOLDER PROPOSAL
The Board of Directors believes that the proposal on annual election of the
entire Board of Directors is not in the best interests of the Corporation or its
shareholders and recommends a vote AGAINST the proposal.
A similar proposal from the same shareholder was submitted at the 1998
Annual Meeting. It was defeated by a significant majority.
By way of history, in 1977 Maytag shareholders decided, by an 89.5 %
affirmative vote, that the Board should be divided into three classes of
directors elected to staggered three-year terms with one class elected each
year. At the time of adoption, the Board and the overwhelming majority of
shareholders believed that the classified Board was in the Corporation's best
interest and the Board continues to hold this view. The classified board
facilitates continuity and stability in the composition of the Board by assuring
that a majority of the Directors at any time will have had prior experience and
in-depth knowledge of the Corporation. Prior experience and knowledge are
exceedingly important considering the highly competitive nature of the major
appliance industry.
A classified board is a widely used safeguard to protect against inadequate
tender offers or unsolicited attempts to seize control of a company. The
Corporation's classified board could prevent a hostile replacement of the Board
in less than 12 months, which encourages someone who might seek to control the
Corporation to negotiate with the Board. This would give the Board time to
evaluate any proposal, study alternatives and seek the best result for all
shareholders.
Further, the Board believes that a Director's performance and contribution
is more appropriately measured over a longer period of time such as three years,
rather than the short- term focus implied in annual elections. This is
consistent with the Board's role in making decisions that have a long-term
impact.
10<PAGE>
Adoption of the Proponent's proposal would not by itself eliminate the
classified Board. It is a request that the Board take all "necessary steps to
enact this resolution today." If the Board were to consider such a request
desirable, it would have to present a formal amendment repealing the classified
Board provision to the Corporation's shareholders and such amendment would need
to be approved by the vote of the holders of at least two-thirds of the stock of
the Corporation issued and outstanding and entitled to vote at any regular or
special meeting of shareholders.
In the statement of support of its proposal, the Proponent cites many
events which purport to show inadequacies in the performance of the Corporation,
which would presumably be cured by declassifying the Board. Over the last
several years the Corporation has experienced significant growth and in 1998 set
all-time records for sales, net income and earnings per share. Capital
investment in the business has been aggressive and innovative new products have
been introduced. During the same period, over 21,000,000 shares of common stock
have been repurchased by the Corporation. This record of performance has
contributed to solid increases in shareholder value. For all of the above
reasons, the Board believes the classified Board continues to be in the best
interest of the Corporation and shareholders.
The affirmative vote of a majority of the shares present in person or by
proxy at the Annual Meeting and entitled to vote on the proposal is required to
approve the proposal.
The Board of Directors recommends a vote AGAINST this proposal.
(4) SHAREHOLDER PROPOSAL CONCERNING SUPER MAJORITY VOTING
PROVISIONS OF THE CERTIFICATE OF INCORPORATION
The Corporation has received a shareholder proposal from a shareholder (the
"Proponent") representing 800 shares of common stock, for inclusion in the Proxy
Statement. The name and address of the person who submitted the proposal will
be furnished upon request made to the Corporation. The proposal is as follows:
RESOLVED: Reinstate simple majority vote.
Maytag Corporation shareholders request the Board of Directors to enact
this resolution:
Reverse the Maytag super-majority provision that means if a vast majority
of shareholders (but less than an overwhelming 80%) vote to change certain key
items, management can tell the majority to forget it. Since not all shares
vote, Maytag actually has an insurmountable 90% super-majority requirement.
PROPONENT S STATEMENT OF SUPPORT
Why return to simple majority vote?
-Super-majority requirements of any kind are widely opposed.
-The bi-partisan National Conference of State Legislatures urged States to
ban super-majority rules.
-Major professionally-managed funds, including those holding substantial
Maytag stock, declare that super-majority rules are not in the best
interest of shareholders.
11<PAGE>
Maytag also needs to reinstate simple majority vote to make its corporate
governance more competitive. The following Maytag rules are not in the best
interest of shareholders according to a significant number of institutional
shareholders. Institutions own 65% of Maytag stock.
-No cumulative voting
-Super-majority vote required to approve merger
-No confidential voting -- enables management to contact you and ask you to
change your vote
-Poison pill
-Some shareholders are particularly concerned about classified boards
combined with poison pills. Maytag has both.
Maytag can also be more competitive by correcting the following director
deficiencies. Correcting these deficiencies are supported by a significant
number of institutional shareholders.
Sivright
23 years on the board. Also serves on Maytag s key Compensation and Nomination
Committees.
To allow fresh ideas the National Association of Corporate Directors
guidelines said: Consider limits on length of director service to 10-15
years.
Steingraber
With 4 board seats and demanding job, tends to be overextended. Yet also serves
on Maytag s key Audit and Nominating committees.
Clark
His employer, Lehman Brothers, provides lucrative investment banking services
for Maytag. Yet Clark serves on the key Audit Committee.
Institutional Shareholder Services, Bethesda, MD (www.cda.com/iss)
recommends independent directors on key committees.
Hadley
With 4 board seats and demanding job, tends to be overextended.
Return Maytag to competitive corporate governance:
RETURN TO SIMPLE MAJORITY VOTE
YES ON 4
12<PAGE>
BOARD OF DIRECTOR S STATEMENT IN OPPOSITION TO THE PROPOSAL
The Board of Directors believes that the proposal concerning super majority
voting provisions is not in the best interests of the Corporation or its
shareholders and recommends a vote AGAINST the proposal.
The Proponent s resolution is so vague the Board is uncertain what is
specifically being requested. There are various super majority voting
provisions in the Certificate of Incorporation. Only one, however, requires an
80% majority. Assuming that the resolution is directed at that provision,
Article Ninth of the Certificate of Incorporation requires an 80% vote of the
shares outstanding and entitled to vote when a potential acquiror of the
Corporation offers a premium price to some shareholders rather than the same
price to all shareholders.
The Board believes that it is unfair to the shareholders to permit a
potential acquiror to pay a premium price to acquire a position in the
Corporation, and then offer the remaining shareowners a lower price. A super
majority voting requirement under such circumstances (a Fair Price provision)
is necessary to protect the interests of all shareholders. At the 1984 Annual
Meeting, the owners of over 83% of the shares represented at the meeting (over
two-thirds of the shares issued and outstanding) voted to adopt the Fair Price
provision as part of the Certificate of Incorporation.
It is also possible that the Proponent s resolution refers to all super
majority provisions of the Certificate and Bylaws of the Corporation. Rather
than detail a list of the super majority provisions and a discussion of the
merits of each, if it would be inappropriate to repeal the Fair Price provision,
it would be inappropriate to repeal all super majority provisions, since that
would result in the repeal of the Fair Price provision.
The Proponent s statement of support references many matters which the
Board does not believe relate to super majority voting, such as tenure of
directors, cumulative voting, confidential voting and the number of boards upon
which individual directors serve. Adoption of the proposal would have no impact
on any of these issues. Adoption of the proposal would not eliminate super
majority provisions. If the Board were to consider such a request desirable, it
would have to present formal amendments to repeal the super majority provisions
to the Corporation s shareholders and such a request would have to be approved
by the vote of the holders of at least two-thirds of the stock outstanding and
entitled to vote at any regular or special meeting of shareholders as to each
super majority provision (80% with regard to the Fair Price provision of the
Certificate of Incorporation) .
The affirmative vote of a majority of the shares present in person or by
proxy at the Annual Meeting and entitled to vote on the proposal is required to
approve the proposal.
The Board of Directors recommends a vote AGAINST this proposal.
EXECUTIVE COMPENSATION
The following table shows the compensation of the chief executive officer of the
Corporation and the other four most highly compensated executive officers of the
Corporation serving as such on December 31, 1998 (the "named executive
officers")
13<PAGE>
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
Long-Term Compensation
Annual Compensation Awards Payouts
Name and Principal Position Year Salary Bonus Other Annual Restricted Securities LTIP All Other
Compensation Stock Underlying Payouts Compensation
Award(s) Options/SAR's (B)
(A) (#)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Leonard A. Hadley 1998 $770,000 $1,000,000 0 0 100,000 $1,529,040 $13,838
Director, 1997 700,000 700,000 0 0 75,000 958,185 13,493
Chairman & CEO 1996 648,000 600,000 0 0 146,260 619,352 9,955
Lloyd D. Ward 1998 $505,917 $473,280 0 0 100,000 $736,465 $7,230
Director, 1997 447,000 259,202 0 0 42,000 275,041 7,160
President & COO 1996 318,750 219,256 0 0 290,240 81,112 4,361
(9 mo)
William L. Beer 1998 $259,750 $164,406 0 0 12,690 $217,349 $5,926
President Maytag Appliances 1997 186,250 90,873 0 0 18,000 117,198 4,689
1996 157,321 55,744 0 0 17,400 71,834 3,978
Edward H. Graham 1998 $230,000 $151,800 0 0 7,340 $327,162 $9,519
Sr. VP, General Counsel and 1997 215,000 112,479 0 0 9,800 212,150 9,060
Ass't. Secretary 1996 208,000 99,216 0 0 25,000 139,106 8,356
Gerald J. Pribanic 1998 $230,000 $151,800 0 0 11,010 $283,122 $7,605
Executive VP & CFO 1997 210,000 109,864 0 0 14,360 110,545 7,208
1996 185,233 92,417 0 0 35,000 70,829 5,943
<FN>
(A) At December 31, 1998, 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, 23,097 shares valued at
$1,443,563 and 15,399 units valued at $962,438; Lloyd D. Ward, 12,463 shares valued at $778,938 and 8,309 units valued
at $519,313; William L Beer, 4,613 shares valued at $288,313 and 3,075 units valued at $192,188; Edward H. Graham, 4,680
shares valued at $292,500 and 3,119 units valued at $194,938; and Gerald J. Pribanic, 4,612 shares valued at $288,250
and 3,074 units valued at $192,125. 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; these units are paid out if and when the performance goals (described in the Long
Term Incentive Plan Awards Table below) are satisfied.
(B) The amounts reported in this column for 1998 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 $9,838, 401(k) $4,000; Lloyd D. Ward, life insurance $3,230, 401(k)
$4,000; William L. Beer, life insurance $2,176, 401(k) $3,750; Edward H. Graham, life insurance $5,519, 401(k) $4,000;
Gerald J. Pribanic, life insurance $3,605, 401(k) $4,000.
</FN>
14<PAGE>
<CAPTION>
The following table sets forth, for the named executive officers, certain information regarding stock options granted in 1998.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED ANNUAL
RATES OF STOCK PRICE
APPRECIATION FOR OPTION
TERM (4)
(a) (b) (c) (d) (e) (f) (g)
Name Number of % of Total Exercise or Expiration
Securities Options Granted Base Price Date
Underlying to Employees in ($/Share) 5% 10%
Options/SAR's Fiscal Year (3)
Granted (#) (2)
(1)
<S> <C> <C> <C> <C> <C> <C>
Leonard A. Hadley 100,000 11.4% 46.3438 08/27/2008 2,914,620 7,386,020
Lloyd D. Ward 100,000 11.4% 46.3438 08/27/2008 2,914,620 7,386,020
William L. Beer 12,690 1.4% 46.3438 08/27/2008 369,865 937,286
Edward H. Graham 7,340 0.8% 46.3438 08/27/2008 213,933 542,134
Gerald J. Pribanic 11,010 1.3% 46.3438 08/27/2008 320,900 813,201
<FN>
(1) Of the 100,000 shares granted to Mr. Ward, 70,000 become exercisable beginning on August 28, 2003. The remaining
30,000 shares granted to Mr. Ward and all the other options reported in the table become exercisable beginning on
August 28, 2001, 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] and in the event of a termination which qualifies as a Retirement (as defined
in the Corporation's Retirement Plan for Salaried Employees or any other similar retirement plan of the
Corporation or of a Subsidiary).
(2) Total options granted to employees in 1998 were 877,855.
(3) Fair Market Value of underlying shares on the date of grant.
(4) 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 $46.3438 to
$75.490 and $120.204, respectively, for the options expiring on August 27, 2008. 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.
</FN>
15<PAGE>
<CAPTION>
The following table sets forth for the named executive officers certain
information concerning options exercised during 1998 and unexercised options
to purchase common stock held by such officers at December 31, 1998.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND
YEAR END OPTION/SAR VALUES
Number Of Number of Securities Underlying Value of Unexercised
Securities Unexercised Options/SAR'S In-the-Money Options
Underlying Value December 31, 1998 December 31,1998
Name Options/SAR's Realized (A)
Exercised (#)
Exercisable Unexercisable Exercisable Unexercisable
<S> <C> <C> <C> <C> <C> <C>
Leonard A. Hadley 50,000 $2,334,375 174,190 321,260 $7,816,776 $10,298,243
Lloyd D. Ward 0 $ 0 68,300 363,940 $2,834,450 $12,128,760
William L. Beer 19,690 $ 901,934 0 48,090 $ 0 $ 1,518,797
Edward H. Graham 600 $ 25,950 40,120 42,140 $1,828,088 $ 1,509,275
Gerald J. Pribanic 0 $ 0 19,690 60,370 $ 901,198 $ 2,144,643
<FN>
(A) The value is calculated based on the aggregate amount of the excess of $62.50 (the
average of the high and low price of common stock as reported in the New York Stock Exchange
Composite Transactions Report for December 31, 1998) over the relevant exercise price(s).
</FN>
<CAPTION>
The following table sets forth, for the named executive officers, certain information
regarding long-term incentive plan grants made in 1998.
LONG-TERM INCENTIVE PLANS - AWARDS IN LAST FISCAL YEAR
Estimated Future Payouts Under Non-Stock
Price-Based Plans (B)
(a) (b) (c) (d) (e) (f)
Number of Shares, Performance or Other
Units or Other Period Until Threshold (#) Target (#) Maximum (#)
Name Rights (#)(A) Maturation or Payout
<S> <C> <C> <C> <C> <C>
Leonard A. Hadley 14,894 3 Years 3,742 14,894 17,873
Lloyd D. Ward 8,669 3 Years 2,167 8,669 10,403
William L. Beer 3,417 3 Years 854 3,417 4,100
Edward H. Graham 2,966 3 Years 742 2,966 3,559
Gerald J. Pribanic 2,966 3 Years 742 2,966 3,559
<FN>
(A) All awards identified in this table are made pursuant to the Corporation's 1996 Employee Stock Incentive Plan.
The awards are performance-based restricted stock awards. 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; these 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.
16<PAGE>
(B) Estimated future payouts are predicated upon the achievement of corporate return on sales and return on assets
objectives over the period from January 1, 1998 to December 31, 2000. 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.
</FN>
</TABLE>
RETIREMENT BENEFITS
The following table sets forth the estimated annual pension benefits
payable effective December 31, 1998, 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.
17<PAGE>
<TABLE>
<CAPTION>
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*
<C> <C> <C> <C> <C> <C> <C>
$ 200,000 29,288 43,932 58,576 73,220 87,864 102,508
300,000 44,788 67,182 89,576 111,970 134,364 156,758
400,000 60,288 90,432 120,576 150,720 180,864 211,008
500,000 75,788 113,682 151,576 189,470 227,364 265,258
600,000 91,288 136,932 182,576 228,220 273,864 319,508
700,000 106,788 160,182 213,576 266,970 320,364 373,758
800,000 122,288 183,432 244,576 305,720 366,864 428,008
900,000 137,788 206,682 275,576 344,470 413,364 482,258
1,000,000 153,288 229,932 306,576 383,220 459,864 536,508
1,100,000 168,788 253,182 337,576 421,970 506,364 590,758
1,200,000 184,288 276,432 368,576 460,720 552,864 645,008
1,400,000 215,288 322,932 430,576 538,220 645,864 753,508
1,600,000 246,288 369,432 492,576 615,720 738,864 862,008
1,800,000 277,288 415,932 554,576 693,220 831,864 970,508
2,000,000 308,288 462,432 616,576 770,720 924,864 1,079,008
2,200,000 339,288 508,932 678,576 848,220 1,017,864 1,187,508
<FN>
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.
</FN>
</TABLE>
18<PAGE>
Mr. Hadley and Mr. Graham 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, 1998, are: Leonard A. Hadley 39.5; Lloyd D. Ward 3.0; William L.
Beer 24.6; Edward H. Graham 19.1; and Gerald J. Pribanic 8.7.
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 Corporation. 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.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION PHILOSOPHY AND PRINCIPLES
The Compensation Committee of the Board of Directors (the "Committee"),
composed of six non-employee directors, establishes and administers the
executive compensation program for the Corporation's top executives. 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 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 business
objective of strengthening organizational development efforts and
providing developmental opportunities for talented individuals.
The Committee believes compensation based on this philosophy supports and
encourages the commitment to achieving business and financial objectives that
19<PAGE>
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 at risk programs which link long term executive rewards to long term
shareholder 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 22, 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 shareholder 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 (Bonus)
Annual variable incentive compensation (bonus) 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 two performance factors:
(1) Corporate net income, or entity operating income less the cost of working
capital, compared to annual plan (65% weighting), and (2) Corporate or entity
performance against key strategic objectives (35% weighting). 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 1996 Employee Stock Incentive Plan and
the number of shares available have been approved by shareholders. This plan
provides the long term focus for approximately 2000 executives and other key
employees. The size of stock option grants for the named executive officers
is determined at the discretion of the Committee.
20<PAGE>
Performance-Based Restricted Stock - The overall number of shares available
for grant under the Maytag Corporation 1996 Stock Incentive 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 depending 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 75 executives are granted awards under this
variable long-term incentive.
Summary - Survey data indicates that grants approved by the Committee under
this long term plan and predecessor long term plans are competitive with
grants made to executives in similar positions at other industrial
organizations. This stock based incentive plan is designed to encourage a
significant equity ownership interest in the Corporation to help assure that
the long term interests of the Corporation's executives are closely aligned
with the long term interests of the shareholders.
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 approved stock ownership
guidelines which are applicable to approximately 75 key executives. The
guidelines provide for the long term ownership of the Corporation's common
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 reviews executive stock ownership levels annually
and during 1998 all executives either attained their guidelines or made
significant progress toward meeting their guidelines.
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 1998 annual variable compensation, there was no loss of tax
deductibility in 1998 and the Committee does not anticipate any significant
loss of tax deductibility in 1999. In order to maintain maximum tax
deductibility of executive compensation, the Committee received approval from
shareholders in 1996 for the long term variable incentive plan (1996 Employee
Stock Incentive Plan) 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.
21<PAGE>
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 the Corporation has 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 1998 produced a record earnings-per-
share figure. Return on assets improved to 11.2% in 1998 (excluding special
charges) compared to 7.6% in 1997 (excluding special charges). The strong
financial results were driven by the corporation's strengthened balance sheet,
the stock repurchase efforts that have reduced the number of shares
outstanding, and an outstanding year for Maytag Appliances, Hoover, and Dixie-
Narco. At the end of 1998, the Corporation is positioned for growth. Maytag
has the products, customers, brand recognition, and financial discipline and
strength to grow. Maytag has taken the actions necessary to build the
platform for growth that will leverage these strengths.
Mr. Hadley's 1998 salary of $770,000 represents a 10% increase over 1997.
In arriving at this rate, the Compensation Committee considered his annual
base salary compared to CEO compensation in the other industrial companies
surveyed, his outstanding performance as CEO during 1997, and his strategic
actions and plans for improving earnings in 1998 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 1998
annual variable incentive plan (discussed above) were set aggressively beyond
1997 performance. The Corporation's outstanding performance in 1998 fulfilled
100% of the strategic goals and exceeded aggressive financial goals. Based on
this performance, Mr. Hadley received 1998 annual variable incentive
compensation of $1,000,000.
In 1998, a grant of restricted stock and stock units, based on
percentages of Mr. Hadley's and the other named executive officers' annual
base salaries was made. Payouts under the grant will be based on the extent
to which the Corporation achieves the return on sales and return on assets
objectives for the three-year period January 1, 1998, through December 31,
2000, as reflected in the Long Term Incentive Plans Table. The restricted
stock and units granted in 1996 matured in 1998. The Corporation's
performance over the period January 1, 1996, through December 31, 1998,
exceeded the target goals approved by the Committee in 1996. An above target
22<PAGE>
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 100,000 shares of common stock were granted to Mr. Hadley under the
terms of the Corporation's 1996 Employee Stock Incentive Plan. This award is
competitive compared to the industrial companies surveyed. 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 William T. Kerr Bernard G. Rethore
Neele E. Stearns, Jr. Robert D. Ray John A. Sivright
SHAREHOLDER RETURN PERFORMANCE
The following graph compares the Corporation s cumulative total shareholder
return on its common stock from December 31, 1993, to December 31, 1998, with
the S&P 500 Stock Index and the S&P Household Furnishings and Appliance Stock
Index (both of which include the Corporation).
Cumulative Total Return
Based on reinvestment of $100 beginning December 31, 1993
$350
$300
$250
$200
Line graph depicting the amounts listed in table below.
$150
$100
$ 50
___________________________________________________________________________
Dec. 93 Dec. 94 Dec. 95 Dec. 96 Dec. 97 Dec. 98
___________________________________________________________________________
Maytag $100 $83 $113 $110 $207 $346
S & P 500 $100 $98 $132 $159 $208 $264
S & P Household
Furnishings &
Appliance Index $100 $80 $ 95 $ 92 $120 $140
SHAREHOLDER PROPOSALS AND NOMINATIONS FOR 2000 ANNUAL MEETING
Proposals of shareholders intended for presentation at the 2000 Annual
Meeting must be received by the Secretary of the Corporation on or before
December 2, 1999, to be considered for inclusion in the 2000 Proxy Statement
and Proxy. The 2000 Annual Meeting is currently scheduled to be held on May
12, 2000. The Nominating Committee will consider nominees recommended by
shareholders as candidates for election to the Board of Directors at the
23<PAGE>
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. The
Corporation expects to solicit proxies primarily by mail. Proxies may also be
solicited personally, by telephone and by mail by certain directors, officers
and employees of the Corporation. The Corporation will reimburse brokers and
their nominees for their expenses in communicating with the persons for whom
they hold shares of the Corporation. 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 except the Board of Directors has been notified that a shareholder may
request management to report on steps Maytag is taking to make its corporate
governance more competitive. If any matters, including the above request,
properly come before the meeting it is the intention of the persons named in
the accompanying form of proxy to vote the proxy in accordance with their
judgment.
24<PAGE>
MAYTAG CORPORATION
Proxy for Annual Meeting, May 13, 1999, 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 Shareowners Meeting on May 13, 1999, 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) and AGAINST items (3) and (4).
CONTINUED AND TO BE SIGNED ON REVERSE SIDE
- -----------------------------------------------------------------------------
PLEASE SIGN, DATE AND RETURN THIS CARD PROMPTLY
USING THE ENCLOSED ENVELOPE
April 1, 1999
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of shareholders to be
held at 9:00 a.m. on Thursday, May 13, 1999, 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, or vote your shares by telephone
if you prefer.
Sincerely,
Leonard A. Hadley
Chairman and
Chief Executive Officer
On the reverse side of this card are instructions on how to vote your
shares for the election of directors and all other proposals by telephone.
Please consider voting by telephone. Your vote is recorded as if you mailed
in your proxy card. We believe voting this way is convenient.
25<PAGE>
X Please mark votes in oval in the following manner using dark ink only.
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 and
William T. Kerr
FOR or WITHHELD
ALL FROM ALL
NOMINEES NOMINEES
____________________________________
For all nominees except as noted above
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
Shareholders for 1999.
The Board of Directors recommends a vote "AGAINST" items (3) and (4).
3. FOR AGAINST or ABSTAIN
The proposal of a Shareholder concerning the classification of the Board
of Directors.
4. FOR AGAINST or ABSTAIN
The proposal of a Shareholder concerning super majority voting.
In their discretion, the proxies are authorized to vote upon any other
matters which may properly come before the meeting or any adjournment.
Dated ______________________, 1999
_________________________________ _________________________________
(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
26<PAGE>
- -----------------------------------Fold and detach here----------------------
CONTROL NUMBER **VOTE BY TELEPHONE**
___________________
Call ** Toll Free *** On a Touch Tone Telephone
1-888-221-0696
There is NO CHARGE to you for this call
Your telephone vote authorizes the named proxies to vote your shares in the
same manner as if you marked, signed and returned your proxy card.
You will be asked to enter a Control Number which is located in the box on the
left side of this form.
OPTION #1: To vote as the Board of Directors recommends on ALL proposals:
Press 1
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1--THANK YOU FOR VOTING
OPTION #2: If you choose to vote on each proposal separately, press 0. You
will hear these instructions:
Proposal 1: To vote FOR ALL nominees, press 1; to WITHHOLD FOR ALL nominees,
press 9.
To WITHHOLD FOR AN INDIVIDUAL nominee, Press 0 and listen to the
instructions.
Proposal 2: To vote FOR, press 1; AGAINST, press 9; ABSTAIN, press 0
The instructions are the same for all remaining proposals.
WHEN ASKED, PLEASE CONFIRM YOUR VOTE BY PRESSING 1--THANK YOU FOR
VOTING
If you vote by telephone, DO NOT mail back your proxy.
27<PAGE>
