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The following is an excerpt from a DEF 14A SEC Filing, filed by MAYTAG CORP on 4/1/2003.
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MAYTAG CORP - DEF 14A - 20030401 - PROPOSAL_1

Allow Proposal Topic That Won Our 51/5-Plus Yes Vote at 4 Consecutive Annual Meetings

 

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Shareholders recommend that each director be elected annually. This proposal recommends that our company’s governing documents be amended accordingly. This includes the bylaws.

 

Strong Institutional Investor Support

Twenty-five (25) proposals on this topic won an overall 63% approval rate at major companies in 2002. Annual election of each director is a Council of Institutional Investors www.cii.org core policy. Another CII policy is the adoption of shareholder proposals that win a majority of votes cast as this proposal topic did in 2000 and 2001. Institutional investors own 68% of Maytag stock.

 

Our 51%Plus Yes Votes in 1999, 2000, 2001 & 2002

This proposal topic won more than 51% of our yes-no vote at each of our 1999, 2000, 2001 and 2002 annual meetings—including our 57%-yes vote in 2002.

 

Shareholder resolutions should be binding

Shareholder resolutions should be binding according to Business Week in “The Best & Worst Boards” cover-page report, October 7, 2002.

 

Votes equally valuable

Shareholders believe that, consistent with our directors accepting our yes for their own election in 4-consecutive years, our directors should give equal value to our yes-votes for shareholder proposals.

 

Shareholders have no assurance that our management will not again spend shareholder money on unnecessary solicitations touting management’s stand on this topic, as our management did in 2000. The 4-consecutive 51%-plus yes votes were won without any solicitation by shareholders.

 

Staggered board combined with a poison pill

Certain independent proxy analysts are particularly concerned about 3-year director terms, combined with poison pills. Source: Annual Meeting Report, Northrop Grumman, April 1999, IRRC. Our management is further sheltered by strong state anti-takeover provisions.

 

Serious about good governance

Enron and the corporate disasters that followed forced many companies to get serious about good governance in my view. This includes electing each director annually. When the buoyant stock market burst, suddenly the importance of governance was clear. In a time of crises, a vigorous board can help minimize damage.

 

A look back at Business Week’s inaugural ranking of the best and worst boards in 1996 tells the story. For the 3 years after the list appeared, the stocks of companies with the best boards outperformed those with the worse boards by 2 to 1. Increasingly, institutional investors are flocking to stocks of companies perceived as being well governed and punishing stocks of companies seen as lax in oversight.

 

To protect our investment money at risk:

 

Elect Each Director Annually

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