[FORM OF LETTER TO CERTAIN STOCKHOLDERS]
RE: MAYTAG CORPORATION
You should have recently received the Proxy materials for the upcoming Annual
Meeting of Maytag Corporation. We have several items on this year's Proxy and
would like to take this opportunity to highlight some of the major issues.
o MAYTAG 2000 EMPLOYEE STOCK INCENTIVE PLAN. The Plan requests an additional
3.9 million shares, which is less than 5% of the shares outstanding on the
record date. The Board believes that the Plan will provide incentives,
which link and align the personal interests of employees to those of the
Corporation's shareholders. A significant amount of total compensation of
our higher level employees is at risk in the form of equity-based grants,
including stock options which are inherently performance based. We believe
our compensation structure focuses management's attention on developing and
implementing strategies that will positively affect the value of the stock
over the long term. THE BOARD'S COMPENSATION COMMITTEE, MADE UP ENTIRELY OF
INDEPENDENT OUTSIDE DIRECTORS APPROVED THE PLAN. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE FOR THE APPROVAL OF THE PLAN.
o SHAREHOLDER PROPOSAL CONCERNING THE ANNUAL ELECTION OF THE ENTIRE BOARD OF
DIRECTORS. The purpose of a staggered or classified board of directors is
to safeguard the Corporation against the efforts of a third-party intent on
quickly taking control of the business and not paying fair value for the
business and its assets. If all Directors can be elected at once, a
third-party can orchestrate the complete removal of all sitting directors.
With the threat of an entirely new board, the current Board of Directors
could lose the time needed to evaluate and react to any such third-party
offer. The Board also believes that a classified Board of Directors
facilitates continuity and stability in the composition of the Board by
assuring that a majority of the Directors at any time will have prior
experience and in-depth knowledge of the Corporation. STAGGERED BOARDS CAN
BE USEFUL AGAINST INAPPROPRIATE TAKEOVERS. AN INDEPENDENT BOARD WILL USE
THIS TOOL; TEN OUT OF TWELVE DIRECTORS ARE INDEPENDENT OUTSIDE DIRECTORS.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
o SHAREHOLDER PROPOSAL TO REINSTATE SIMPLE-MAJORITY VOTE. The proponent's
resolution is so vague that 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.
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
permit a potential acquirer 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 interest of all shareholders.
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The Proponent's resolution might also refer to all super-majority
provisions of the Certificate and Bylaws of the Corporation. Super-majority
provisions assure that carefully considered corporate governance rules are
not replaced without a substantial consensus majority for change.
Super-majority provisions along with other defensive tools empower the
Board to act in the shareholders' best interests by carefully considering
and responding in a reasoned manner to hostile bids. In addition, repeal of
all super-majority provisions would repeal the highly desirable Fair Price
provision. SUPER-MAJORITY VOTING PROVISIONS CAN BE USEFUL AGAINST
INAPPROPRIATE TAKEOVERS. AN INDEPENDENT BOARD WILL USE THIS TOOL; TEN OUT
OF TWELVE DIRECTORS ARE INDEPENDENT OUTSIDE DIRECTORS. THE BOARD OF
DIRECTORS RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
o SHAREHOLDER PROPOSAL REGARDING "GOLDEN PARACHUTES". The Corporation's
severance pay agreements enable the Corporation to attract and retain top
management talent and would encourage executive officers to remain with the
Corporation in the face of a potential change of control. Management can
remain focused and objective during a potential change of control, rather
than being distracted by the uncertainties of their future employment and
personal financial situation, thereby allowing them to act decisively to
maximize shareholder value for all shareholders. Requiring shareholder
approval of executive severance pay agreements would hamper the
Corporation's flexibility to act promptly and decisively in attracting and
retaining executives and would put the Corporation at a disadvantage to
other companies with which it competes for executive management. EXECUTIVE
COMPENSATION IS MONITORED BY THE BOARD'S COMPENSATION COMMITTEE MADE UP
ENTIRELY OF INDEPENDENT OUTSIDE DIRECTORS. THE BOARD OF DIRECTORS
RECOMMENDS A VOTE AGAINST THIS PROPOSAL.
We encourage you to support the recommendations of management for the Stock
Incentive Plan and against each of the shareholder proposals. Should you have
any questions concerning any of the Proxy items, please contact Frederick G.
Wohlschlaeger, Senior Vice President, General Counsel and Secretary
(515-787-7040) or John Tolson, Director, Investor Relations (515-787-8136).
Respectfully,
Lloyd D. Ward,
Chairman & Chief Executive Officer