<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant / /
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
MCWHORTER TECHNOLOGIES, INC.
- - --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- - --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
-----------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
-----------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
-----------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
-----------------------------------------------------------------------
(5) Total fee paid:
-----------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
-----------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
-----------------------------------------------------------------------
(3) Filing Party:
-----------------------------------------------------------------------
(4) Date Filed:
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<PAGE>
MCWHORTER TECHNOLOGIES, INC.
400 EAST COTTAGE PLACE
CARPENTERSVILLE, ILLINOIS 60110
------------------------
January 4, 1999
Dear Stockholder:
Our directors and officers join me in extending you a cordial invitation to
attend the Annual Meeting of Stockholders to be held at 11:00 a.m. CST, on
Wednesday, February 17, 1999 at McWhorter's Corporate Technology Center, 99 East
Cottage Place, Carpentersville, Illinois 60110.
Time will be set aside for discussion of each item of business described in the
accompanying Notice of Annual Meeting and Proxy Statement. A current report on
the business operations of the Company will be presented at the meeting and
stockholders will have an opportunity to ask questions.
Whether or not you plan to attend the meeting, we urge you to sign, date and
return the enclosed proxy so as many shares as possible may be represented at
the meeting. The vote of every stockholder is important and your cooperation in
returning your executed proxy promptly will be appreciated.
Sincerely,
John R. Stevenson
CHAIRMAN &
CHIEF EXECUTIVE OFFICER
<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 17, 1999
------------------------
The Annual Meeting of Stockholders of McWHORTER TECHNOLOGIES, INC. (the
"Company") will be held at the Corporate Technology Center at 99 E. Cottage
Place, Carpentersville, Illinois 60110, on Wednesday, February 17, 1999, at
11:00 a.m. CST, for the following purposes:
(1) To elect directors;
(2) To consider and vote upon the appointment of Ernst & Young LLP as
independent auditors for the Company's fiscal year ended October 31,
1999; and
(3) To transact such other business as may properly come before the Annual
Meeting or any adjournment or postponement thereof.
Holders of common stock, par value $0.01 per share (the "Common Stock"), of
record at the close of business on December 28, 1998 are the only stockholders
entitled to receive a notice of and to vote at the Annual Meeting of
Stockholders.
By order of the Board of Directors,
Louise Tonozzi-Frederick
CORPORATE SECRETARY
Dated: January 4, 1999
WHETHER OR NOT YOU EXPECT TO ATTEND THE ANNUAL MEETING, PLEASE COMPLETE, SIGN,
DATE, AND MAIL YOUR PROXY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED WITHIN THE UNITED STATES. IF YOU ARE PRESENT AT THE ANNUAL MEETING, YOU
MAY, IF YOU WISH, WITHDRAW YOUR PROXY AND VOTE YOUR SHARES PERSONALLY.
<PAGE>
MCWHORTER TECHNOLOGIES, INC.
400 EAST COTTAGE PLACE
CARPENTERSVILLE, ILLINOIS 60110
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 17, 1999
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of the Company of proxies in the accompanying form for use at
the Annual Meeting of Stockholders to be held for the purpose of considering and
acting upon the matters specified in the foregoing Notice of Annual Meeting. The
mailing date of the proxy materials is on or about January 4, 1999.
The Common Stock is the only voting stock of the Company outstanding. At the
close of business on December 28, 1998, 10,321,096 shares of Common Stock were
outstanding and 9,051,934 shares of Common Stock were eligible to vote at the
Annual Meeting (pursuant to the Agreement Containing Consent Order by and among
the Valspar Corporation, McWhorter Inc., and the Federal Trade Commission dated
September 30, 1993, 1,269,162 shares of Common Stock are restricted from being
voted). Each stockholder of record is entitled to one vote for each share of
Common Stock held on all matters to come before the Annual Meeting.
A proxy in the accompanying form which is properly signed, dated, returned,
and not revoked will be voted in accordance with the directions noted therein.
If no direction is indicated, it will be voted for the election of the nominees
named herein as directors, for ratification of the appointment of Ernst & Young
LLP as independent auditors and on all other matters presented for a vote in
accordance with the judgment of the person acting under the proxies. The Board
of Directors does not intend to bring any matter before the Annual Meeting
except as specifically indicated in the foregoing Notice of Annual Meeting, nor
does the Board of Directors know of any matters which anyone else proposes to
present for action at the Annual Meeting.
A proxy may be revoked by a holder of Common Stock at any time prior to its
use by the Company by voting in person at the Annual Meeting, by executing a
later proxy, or by submitting a written notice of revocation to the Secretary of
the Company at the Company's office or at the Annual Meeting.
Election of each director requires the affirmative vote of the holders of a
plurality of the shares of Common Stock present in person or represented by
proxy and entitled to vote at the Annual Meeting. Ratification of the
appointment of the independent auditors requires the affirmative vote of the
holders of a majority of the shares of Common Stock present in person or by
proxy and entitled to vote at the Annual Meeting. An automated system
administered by the Company's transfer agent is used to tabulate votes.
Abstentions, directions to withhold authority, and broker nonvotes are counted
as shares of Common Stock present in the determination of whether the shares of
Common Stock represented at the Annual Meeting constitute a quorum. Abstentions
are not counted in tabulations of the votes cast on proposals presented to
holders of Common Stock and neither abstentions nor broker nonvotes are counted
for purposes of determining whether a proposal has been approved.
1
<PAGE>
The cost of soliciting proxies has been, or will be, paid by the Company. In
addition to the solicitation of proxies by mail, directors, officers, and
employees of the Company may solicit proxies personally, by telephone,
facsimile, letter, or other form of communication at no additional compensation
to them. The Company will reimburse brokerage firms and others for their
expenses in forwarding proxy materials to beneficial owners of Common Stock.
The Company's Annual Report to Stockholders for the fiscal year ended
October 31, 1998, including financial statements, is enclosed with this Proxy
Statement. However, the Annual Report to Stockholders does not constitute a part
of this Proxy Statement.
ELECTION OF DIRECTORS
(PROPOSAL 1)
The Company's Board of Directors consists of seven members, all of whom are
to be elected at the Annual Meeting. The persons named below have been
designated by the Board of Directors as nominees for election as directors for
terms expiring at the Annual Meeting of Stockholders in 2000. All nominees are
currently serving as directors. Unless otherwise instructed, properly executed
proxies that are returned in a timely manner will be voted for election of the
seven nominees. If any of the nominees is unable or unwilling to stand for
election, it is intended that shares of Common Stock represented by proxy will
be voted for a substitute nominee determined by the holders of the proxies, in
their discretion, or the Board of Directors may make an appropriate reduction in
the number of directors to be elected. The Board of Directors is not aware that
any of the nominees is unable or unwilling to stand for election.
The following material contains information concerning the nominees,
including their recent employment, position with the Company, other
directorships, and business experience:
MICHELLE L. COLLINS, age 38, is a Managing Director of Svoboda, Collins,
L.L.C., a private equity fund in Chicago, Illinois. She has held this position
since January 1, 1998. Previously she was a Principal of the investment banking
firm of William Blair & Company, L.L.C. In her capacity in the Corporate Finance
Department, she provided financial advisory services primarily consisting of
equity offering and merger and acquisition transactions to corporate clients.
Ms. Collins joined the firm in 1986. Previously, she was employed by Chase
Manhattan Bank N.A. beginning in 1982. Ms. Collins is a director of CDW Computer
Centers, Inc. and has been a director of the Company since February 1994.
EDWARD GILES, age 63, is Chairman of The Vertical Group, Inc., the
successor to the venture capital activities of F. Eberstadt & Co., Inc. He has
held this position since 1988. Previously, he was President of F. Eberstadt &
Co., Inc. beginning in 1979 and Vice Chairman of Eberstadt Fleming beginning in
1985. He is director of Ventana Medical Systems and Synthetech Inc. and an
advisory director of Sit Kim International Investments. Mr. Giles has been a
director of the Company since May 1994.
D. GEORGE HARRIS, age 65, is Chairman and Chief Executive Officer of D.
George Harris & Associates, Inc., New York, NY, a firm he founded in 1987,
specializing in leveraged buyouts in the chemical and other process industries.
He is also Chairman and CEO of U.S. Silica Company and Chairman of Harris
Specialty Chemicals. Until April 1998, he was chairman and CEO of Penrice Soda
products and Harris Chemical Group, Inc., ("HCG") holding this position with HCG
or its predecessor companies since 1988. He also serves as a trustee of the
Tax-Free Fund for Utah. Mr. Harris has been a director of the Company since
February 1994 and was Chairman of the Board of Directors of the Company from
February 1994 through December 31, 1996.
2
<PAGE>
JOHN G. JOHNSON, JR., age 58, is the Principal of Johnson Eight, a
management consulting firm. Previously he held the position of President and
Chief Executive Officer of Safety-Kleen Corp. Elgin, Illinois, a recycler of
hazardous and non-hazardous waste fluids. He held the position of Chief
Executive Officer from January 1995 to August 1997, and the position of
President and Director from January 1993 to August 1997. Prior to joining
Safety-Kleen he was employed by ARCO beginning in 1958. From 1988 until December
1992 he served as President of ARCO Chemical Americas, a division of ARCO
Chemical, and served as Director of ARCO Chemical. Mr. Johnson has been a
director of the Company since May 1995.
JEFFREY M. NODLAND, age 43, is President and Chief Operating Officer of the
Company. He has held the position of President since January 1, 1997, and the
position of Chief Operating Officer since May 1995. Mr. Nodland was the
Executive Vice President of the Company from May 1995 to December 1996 and the
Senior Vice President and Chief Financial Officer from February 1994 to May
1995. Previously he held the position of President of McWhorter, Inc. beginning
in June 1991, and Vice President, Maintenance & Marine Coatings of Valspar
beginning in October 1989. Mr. Nodland has been a director of the Company since
November 1993.
JOHN R. STEVENSON, age 56, is Chairman and Chief Executive Officer of the
Company. He has held the position of Chairman since January 1, 1997 and the
position of Chief Executive Officer since 1994. Mr. Stevenson was President of
the Company from February 1994 to December 1996. Prior to being named in
February 1994 to this position Mr. Stevenson was Vice President, Special
Products Group and Administration of the Valspar Corporation ("Valspar")
beginning in August 1992. Previously he held the position of Vice President,
Administration of Valspar beginning in February 1991 and Vice President,
Corporate Services of Valspar beginning in February 1985. Mr. Stevenson has been
a director of the Company since November 1993.
HEINN F. TOMFOHRDE, III, age 65, is retired. Prior to his retirement he
held the position of President, Chief Operating Officer, and Director of
International Specialty Products, Inc. and its predecessor company GAF Chemicals
Corp. from 1987 through 1991. Previously, he held the position of President and
Chief Operating Officer of Union Carbide's Consumer and Industrial Products and
Services Group beginning in 1985. Mr. Tomfohrde has been a director of the
Company since February 1994 and has been the Lead Director since February 1997.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF THE
ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR.
3
<PAGE>
CORPORATE GOVERNANCE STANDARDS
The Board of McWhorter Technologies reviews and approves corporate
governance standards annually. It is the Company's intent to publish an updated
set of standards each year in its proxy statement.
1. The Board will evaluate the performance of the CEO at least annually in
meetings of independent directors.
2. The Board will conduct a periodic evaluation of each independent director.
3. When the CEO also holds the position of Chairman of the Board, the Board
will elect a non-executive director to function as Lead Director.
4. Each year the Board will review and approve a three year strategic plan and
a one year operating plan for the Company.
5. There will be, at a minimum, the following committees with 100% independent
director membership: Nominating and Governance, Compensation, Audit, and
Environmental.
6. All directors will stand for election every year.
7. Upon a change in the employment status, geographical location, attainment of
the age of 70 or completion of 10 years as a member of the Board of
Directors, a director will submit a letter to the Board offering not to
stand for reelection to the Board at the next annual meeting of the
Company's stockholders. The Board of Directors shall have complete
discretion as to whether such offer shall be accepted.
8. Any director who is also an officer of the Company shall submit his or her
resignation as a director to the Board immediately upon retirement or
termination as an officer and employee of the company. It will be in the
sole discretion of the Board of Directors as to whether such resignation
shall be accepted.
9. Succession planning and management development will be reported annually by
the CEO to the Board.
10. Incentive compensation plans will link pay directly and objectively to
measured financial goals set in advance by the Compensation Committee.
11. McWhorter's Board will not include directors who directly or indirectly
draw significant consulting, legal or other fees from the Company.
12. A minimum of 50% of directors retainer fees will be paid in Company stock.
13. Independent directors will make up a majority of the Board of Directors.
4
<PAGE>
CERTAIN INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during the fiscal year ended
October 31, 1998 ("fiscal 1998"). The four standing committees of the Board of
Directors are the Audit Committee, the Compensation Committee, the Environmental
Committee and the Nominating and Governance Committee. Each director attended
100% of the meetings of the Board of Directors and Committees on which the
director served.
AUDIT COMMITTEE. The members of the Audit Committee are Messrs. Giles
(Chairman), Harris, Johnson, and Tomfohrde, and Ms. Collins. The Audit Committee
held two meetings during fiscal 1998. This committee reviews the accounting and
auditing principles and procedures of the Company with a view to the
safeguarding of the Company's assets and the reliability of its financial
records; recommends to the Board of Directors the engagement of the Company's
independent auditors; reviews with the independent auditors the plans and
results of the auditing engagement; and considers the independence of the
Company's auditors.
COMPENSATION COMMITTEE. The members of the Compensation Committee are
Messrs. Giles, Harris, Johnson, and Tomfohrde (Chairman), and Ms. Collins. The
Compensation Committee held four meetings during fiscal 1998. This committee
establishes salaries, incentives, and other forms of compensation for executive
officers and other key employees of the Company; administers the various
incentive compensation and benefit plans of the Company; and recommends policies
related to such incentive compensation and benefit plans.
ENVIRONMENTAL COMMITTEE. The members of the Environmental Committee are
Messrs. Giles, Harris, Johnson (Chairman), and Tomfohrde, and Ms. Collins. The
Environmental Committee held two meetings during fiscal 1998. This committee
reviews the environmental principles and procedures of the Company with a view
to achieving and maintaining compliance with all applicable environmental laws
and regulations; implementing programs and procedures that address issues
related to the environment; and integrating environmental planning with the
Company's business operations.
NOMINATING AND GOVERNANCE COMMITTEE. The members of the Nominating and
Governance Committee are Ms. Collins (Chairwoman), and Messrs. Giles, Harris,
Johnson, and Tomfohrde. The Nominating and Governance Committee held two meeting
during fiscal 1998. This committee identifies and proposes to the full Board of
Directors nominees to serve on the Board of Directors. This committee will
consider nominees to serve on the Board of Directors recommended by
Stockholders. Stockholders should submit such recommendations to Sue Riley,
Shareholder Services Manager, 400 E. Cottage Place, Carpentersville, Illinois
60110.
5
<PAGE>
DIRECTOR COMPENSATION
Employee directors do not receive additional compensation for serving on the
Board of Directors. Non-employee directors receive an annual retainer of $17,000
payable, at the director's option, either entirely in deferred stock or half in
deferred stock and half in cash. In February 1997, the Board of Directors
approved the designation of a Lead Director (non-employee) of the Company. The
Lead Director receives annual compensation of $8,000 more than other
non-employee directors of the Company. A non-employee director is entitled to
receive shares of Common Stock represented by the deferred stock awards when
such director ceases to be a member of the Board of Directors. Each non-employee
director also receives a fee of $1,000 in cash for each Board of Directors or
committee meeting attended, provided that this fee is not paid for committee
meetings held on the same day as a Board of Directors meeting. Upon his or her
initial election to the Board of Directors, each non-employee director (except
for Mr. Harris in his previous role as Chairman of the Board of Directors)
received an initial non-qualified option to purchase 10,000 shares of Common
Stock at a price equal to the market value of such shares at the date of grant.
Mr. Harris, in his previous role as Chairman of the Board of Directors, received
an initial non-qualified option to purchase 35,000 shares of Common Stock at an
exercise price equal to the market value of such shares at the date of grant.
The exercise price for such options for Messrs. Giles, Harris, and Tomfohrde and
Ms. Collins is $16.2125 per share and for Mr. Johnson is $15.00 per share.
6
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following information presents the beneficial ownership of shares of
Common Stock as of December 1, 1998 (unless otherwise stated) by (i) each
stockholder known by the Company to be the owner of more than five percent of
the outstanding shares of Common Stock, (ii) each director, (iii) each executive
officer named in the Summary Compensation Table, and (iv) all directors and
executive officers as a group. Except as noted below, the shares of Common Stock
indicated in the following table are held with sole power over both investment
and voting.
This table also sets forth the number of McWhorter Stock Equivalents
credited to the individual's deferred compensation account or equivalents
granted through the Key Employee Annual Bonus Plan. The deferred compensation
account reflects the election of the individual to defer restricted stock and
stock option gains, and/or Company ESOP restoration contributions. The value of
McWhorter Stock Equivalents is determined by the price of McWhorter stock.
Therefore, the value of an individual's account is fully at risk and tied to
McWhorter stock performance. These stock equivalents do not carry any voting
rights.
<TABLE>
<CAPTION>
TOTAL NUMBER
SHARES MWT OF SHARES AND
BENEFICIALLY PERCENT OF STOCK MWT STOCK
NAME OF BENEFICIAL OWNER OWNED CLASS EQUIVALENTS EQUIVALENTS
- - ------------------------------------------------------------- ----------- ----------- ----------- -------------
<S> <C> <C> <C> <C>
SHAPIRO CAPITAL MANAGEMENT COMPANY, INC.
3060 Peachtree Road, N.W.
Atlanta, GA 30305 1,352,575(1) 13.1% 0 1,352,575
C. ANGUS WURTELE
1700 Foshay Tower
827 Marquette Ave.
Minneapolis, MN 55402 1,269,162(2) 12.3% 0 1,269,162
THE CAPITAL RESEARCH & MANAGEMENT COMPANY
333 South Hope Street
Los Angeles, CA 90071 706,000(3) 6.8% 0 706,000
WELLS FARGO & COMPANY
420 Montgomery Street
San Francisco, CA 94163 547,856(4) 5.3% 0 547,856
JOHN R. STEVENSON 135,596(5) 1.3% 26,956 162,552
JEFFREY M. NODLAND 90,594(6) * 14,634 105,228
PATRICK T. HEFFERNAN 47,804(7) * 2,699 50,503
DOUGLAS B. RAHRIG 38,663(8) * 2,187 40,850
D. GEORGE HARRIS 37,153(9) * 7,392 44,545
DOUGLAS J. GRAFF 24,668(10) * 380 22,548
HEINN F. TOMFOHRDE, III 15,000(11) * 3,866 18,866
JOHN G. JOHNSON, JR. 10,900(11) * 2,235 13,135
MICHELLE L. COLLINS 10,000(11) * 3,203 13,203
EDWARD M. GILES 10,000(11) * 3,203 13,203
All directors and executive officers as a group
(12 persons) 485,609 4.7%
</TABLE>
- - ------------------------
* Less than 1.0%
7
<PAGE>
(1) Based on Form 13F filed September 30, 1998.
(2) Mr. Wurtele reported sole voting and investment power over 898,217 shares
and shared voting and investment power as follows: 25,425 shares owned by
Mr. Wurtele's spouse and; 345,520 shares held for Mr. Wurtele's benefit as
co-trustee. Pursuant to the Agreement Containing Consent Order by and among
Valspar, the Company and the Federal Trade Commission dated September 30,
1993, all such shares are restricted from being voted.
(3) Based on Schedule 13G Report dated July 9, 1998.
(4) The Company has been informed by Wells Fargo & Company that on November 2,
1998, following the merger of Wells Fargo & Company into WFC Holdings
Corporation, a wholly-owned subsidiary of Norwest Corporation, Norwest
Corporation changed its name to "Wells Fargo & Company". Reported as of
October 31, 1998. As of such date Norwest Bank Minnesota, National
Association, a wholly-owned subsidiary of Wells Fargo & Company reported
sole voting power over 286,645 shares, shared voting power over 256,891
shares, sole investment power over 118,854 shares, and shared investment
power over 386,717 shares. Wells Fargo & Company and Norwest Bank
Minnesota, National Association disclaim beneficial ownership of all such
shares.
(5) Includes options currently exercisable or exercisable within 60 days to
purchase 67,638 shares. As of October 31, 1998, includes 2,742 shares held
through the McWhorter Technologies, Inc. Employee Stock Ownership Plan (the
"ESOP").
(6) Includes options currently exercisable or exercisable within 60 days to
purchase 40,009 shares. As of October 31, 1998, includes 2,722 shares held
though the ESOP.
(7) Includes options currently exercisable or exercisable within 60 days to
purchase 22,777 shares. As of October 31, 1998, includes 2,808 shares held
through the ESOP.
(8) Includes options currently exercisable or exercisable within 60 days to
purchase 20,347 shares. As of October 31, 1998, includes 269 shares held
through the McWhorter Technologies, Inc. Employee 401(k) Savings Plan (the
"Plan") and 1,982 shares held through the ESOP.
(9) Includes options currently exercisable to purchase 35,000 shares.
(10) Includes options currently exercisable or exercisable within 60 days to
purchase 13,912 shares. As of October 31, 1998, includes 1,902 shares held
through the 401(k) Plan and 2,554 shares held through the ESOP.
(11) Includes options currently exercisable to purchase 10,000 shares.
8
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash compensation paid to the Company's
Chief Executive Officer and its other four most highly paid executive officers
(the "named executives") in the fiscal years ended October 31, 1996 ("fiscal
1996"), October 31, 1997 ("fiscal 1997") and October 31, 1998 ("fiscal 1998")
for services rendered in all capacities to the Company:
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION(1) --------------------------------
--------------------------------------------- RESTRICTED
ALL OTHER STOCK STOCK UNDERLYING
NAME & PRINCIPAL POSITION YEAR SALARY($) BONUS($)(2) COMPENSATION($)(2)(3) AWARDS($)(4) OPTIONS(#)
- - -------------------------- --------- --------- ----------- --------------------- ------------- -----------------
<S> <C> <C> <C> <C> <C> <C>
John R. Stevenson 1998 $ 442,316 $ 0 $ 36,500 $ 0 6,897
CHAIRMAN & CHIEF 1997 $ 392,318 $ 315,816 $ 146,303 $ 0 8,696
EXECUTIVE OFFICER 1996 $ 344,998 $ 182,849 $ 60,060 $ 13,562 11,570
Jeffrey M. Nodland 1998 $ 305,382 $ 0 $ 25,180 $ 0 3,547
PRESIDENT & CHIEF 1997 $ 273,842 $ 156,090 $ 80,694 $ 0 5,693
OPERATING OFFICER 1996 $ 235,638 $ 104,387 $ 38,544 $ 5,021 7,934
Patrick T. Heffernan 1998 $ 194,232 $ 0 $ 15,950 $ 0 493
SENIOR VICE PRESIDENT 1997 $ 188,776 $ 60,550 $ 32,913 $ 0 994
COATINGS RESIN 1996 $ 182,489 $ 63,141 $ 27,059 $ 2,692 1,157
Douglas B. Rahrig 1998 $ 178,766 $ 7,200 $ 15,817 $ 0 788
VICE PRESIDENT, 1997 $ 170,454 $ 65,122 $ 32,015 $ 0 1,242
TECHNOLOGY 1996 $ 161,499 $ 62,338 $ 24,842 $ 741 1,983
Douglas J. Graff 1998 $ 157,692 $ 77,269 $ 37,134 $ 96,425 5,000
VICE PRESIDENT, 1997 $ 138,439 $ 49,526 $ 21,306 $ 0 7,000
COMPOSITE POLYMERS 1996 $ 127,419 $ 42,048 $ 20,677 $ 0 5,000
</TABLE>
- - --------------------------
1) Includes amounts earned in fiscal year, whether or not deferred.
2) Pursuant to the McWhorter Technologies, Inc. Key Employee Annual Bonus Plan,
certain employees could elect to receive all or part of their bonus for
fiscal 1998 in the form of McWhorter Stock Equivalents. This election will
entitle the participant to an additional 1/3 of the amount deferred to be
allocated to his/her account in the form of McWhorter Stock Equivalents.
This 1/3 additional amount is reflected in the "All other Compensation"
column in the table above. Termination of employment with McWhorter prior to
October 31, 2001 will result in the loss of that 1/3 company contribution.
The following are the amounts of the 1/3 Company contribution in McWhorter
Stock Equivalents:
<TABLE>
<CAPTION>
COMPANY 1/3 MATCH
($) / (MWT STOCK
NAME EQUIVALENTS)
- - ------------------------------ ----------------------------
<S> <C>
Douglas B. Rahrig $ 1,200 / 59
Douglas J. Graff $ 24,134 / 1184
</TABLE>
3) Includes contributions or allocations by the Company to defined contribution
or savings plans (tax-qualified and supplemental) on behalf of the named
executives as follows: Mr. Stevenson $36,500, Mr. Nodland $25,180, Mr.
Heffernan $15,950, Mr. Rahrig $14,617, and Mr. Graff 13,000.
4) For fiscal 1996, Restricted Stock Awards represent excess ERISA benefits for
1995. For fiscal 1998, Restricted Stock Award represents a performance based
award which will vest if at all as certain performance measurements are met.
These restricted shares will be forfeited to the extent the vesting criteria
have not been met.
9
<PAGE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding individual grants of
stock options made during fiscal 1998 to the named executives:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
INDIVIDUAL GRANTS VALUE AT ASSUMED
------------------------------------------------------ ANNUAL
NUMBER OF PERCENT OF RATES OF STOCK PRICE
SECURITIES TOTAL OPTIONS APPRECIATION
UNDERLYING GRANTED TO EXERCISE OR FOR OPTION TERM(2)
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION --------------------
NAME GRANTED(1) FISCAL 1998 PER SHARE DATE 5%(2) 10%(2)
- - --------------------------------------- ------------- ------------- ----------- ----------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
John R. Stevenson 6,897 7.48% $ 25.375 11/13/07 $ 110,064 $ 278.923
Jeffrey M. Nodland 3,547 3.85% $ 25.375 11/13/07 $ 56,602 $ 143,445
Patrick T. Heffernan 493 .54% $ 25.375 11/13/07 $ 7,868 $ 19,938
Douglas B. Rahrig 788 .86% $ 25.375 11/13/07 $ 12,575 $ 31,868
Douglas J. Graff 5,000 5.43% $ 25.375 11/12/07 $ 79,791 $ 202,206
</TABLE>
- - --------------------------
(1) Indicates options granted in November 1997 due to a promotion and increase
in salary. These options become exercisable in 20% annual increments
beginning one year from the date of grant and accelerate upon certain
"change of control" events.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by the Securities and Exchange Commission and therefore
are not intended to forecast possible future appreciation, if any, in the
market value of the Common Stock.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
The following table sets forth information with respect to the named
executives concerning the exercise of options during fiscal 1998 and unexercised
options held as of October 31, 1998.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE- MONEY OPTIONS AT
OCTOBER 31, 1998(#) OCTOBER 31, 1998($)*
SHARES ACQUIRED VALUE -------------------------- --------------------------
NAME ON EXERCISE REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - -------------------------------- ----------------- --------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
John R. Stevenson 0 0 62,205 37,579 $ 276,294 $ 114,839
Jeffrey M. Nodland 0 0 36,520 23,740 $ 165,677 $ 76,153
Patrick T. Heffernan 0 0 22,248 7,381 $ 92,335 $ 26,313
Douglas B. Rahrig 0 0 19,544 7,599 $ 81,243 $ 25,757
Douglas J. Graff 0 0 11,912 15,728 $ 45,931 $ 24,608
</TABLE>
- - --------------------------
* The value of the unexercised in-the-money options is based on the difference
between the exercise price of the options and the fair market value of the
Common Stock on October 31, 1998.
10
<PAGE>
EMPLOYMENT AGREEMENT
In connection with the previously announced transition of Mr. Stevenson's
responsibilities as Chief Executive Officer of the Company to Mr. Nodland, while
continuing his services to the Company, including his services as Chairman of
the Board, the Company and Mr. Stevenson entered into an employment agreement
dated November 12, 1998 (the "Agreement"). The Agreement provides for Mr.
Stevenson's employment by the Company through February 29, 2004 at a salary of
$350,000 for the period from March 1, 1999 through February 29, 2000, a salary
of $250,000 for the period from March 1, 2000 through February 28, 2001 and for
the subsequent three years, a salary equal to the compensation paid by the
Company to its non-employee directors. The Agreement does not contemplate that
Mr. Stevenson will receive a bonus for any of these periods. The Agreement
prohibits Mr. Stevenson from accepting any other full-time employment before
February 28, 2004 and obligates him, during the employment term and for two
years thereafter, to abide by certain prohibitions on the disclosure of
confidential information, the solicitation of Company employees for other
employment and other acts detrimental to the Company or its employees. Pursuant
to the Agreement, Mr. Stevenson was also awarded 22,922 shares of restricted
stock on November 12, 1998 and is entitled to participate in certain of the
Company's benefit plans, including life, health, dental and long-term disability
insurance programs and its ESOP and 401(k) Plan. The Agreement also provides for
Mr. Stevenson to receive his full salary and the other benefits under the
Agreement if his employment is terminated without "cause" (as defined in the
Agreement) by the Company or is terminated for any reason following a "change of
control" (as defined in the Agreement) of the Company.
COMPENSATION COMMITTEE INTERLOCKS WITH INSIDER PARTICIPATION
During fiscal 1998, Messrs. Giles, Harris, Johnson, and Tomfohrde and Ms.
Collins served as members of the Compensation Committee of the Board of
Directors, none of whom has ever served as an officer or employee of the
Company.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors (the "Committee") is
comprised of the five independent non-employee directors named below. The
Committee is responsible for establishing salaries, incentives, and other forms
of compensation for the Company's executive officers and other key employees,
administering the various incentive compensation and benefit plans of the
Company, and recommending policies related to such incentive compensation and
benefit plans. The Committee has adopted the following as the purpose of the
Company's executive compensation program: (1) retain and attract quality
executives critical to the success of the Company; (2) direct executive
attention to performance measures that are important to stockholders, such as
growth in earnings per share, earnings quality, stock price appreciation, and
full compliance with legal and ethical standards; (3) reward executives for
progress in achieving longer term strategic goals; and (4) promote stock
ownership to ensure that the interests of the executives and stockholders are
closely aligned. The Company's incentive plans are designed to condition a
significant amount of an executive's compensation on the performance of the
Company. The compensation plans are also designed to encourage executive stock
ownership. In its administration of the various compensation programs, the
Committee focuses on these goals of tying compensation to performance and
encouraging executive stock ownership. The compensation program for executive
officers consists of two annual components, base salary and cash bonus, and
three long-term components, grants of stock options, awards of restricted stock
and grants of stock equivalents in connection with bonus deferrals.
11
<PAGE>
Section 162(m) of the Internal Revenue Code generally limits to $1,000,000
the tax deductibility of compensation paid by a public company to its chief
executive and four other most highly compensated executive officers. Certain
performance based compensation is not subject to the limitation and certain
regulations have been proposed under Section 162(m). Because the Committee
believes the nonperformance based compensation of each of the executive officers
will be below the Section 162(m) tax deductibility amount for the foreseeable
future, the Committee has not yet taken any specific action or adopted any
policy in this regard.
BASE SALARY. During fiscal 1995, the Committee adopted a policy that the
base salaries for executives should be set at slightly above the base salary
average for positions of comparable responsibility in selected companies. The
selected companies would consist of at least seven coatings intermediates and
specialty chemicals companies, if possible. Those salaries should be adjusted
over time based upon both the performance of the executives and the performance
of the Company relative to the performance of the peer group. Based on this
analysis, during fiscal 1998 the Committee approved an increase in the base
salaries of all executive officers.
BONUS PROGRAMS. One element of the annual compensation plan for executive
officers is the opportunity to earn a substantial cash bonus. These bonuses are
based upon the accomplishment of certain pre-established goals and criteria. An
available bonus amount, expressed as a percentage of base salary, is established
in advance. This places a substantial portion of an executive's annual
compensation at risk. The available bonus amount as a percentage of salary for
the executive officers in fiscal 1998 was 80% (90% for the President and 100%
for the Chairman of the Board). The evaluation criteria are reviewed, evaluated,
and appropriately modified on an annual basis. For fiscal 1998 those criteria
were as follows: sales volume in pounds, gross margin, earnings per share and a
discretionary component as determined by the Committee. The Committee's policy
also provides that the Committee, in its sole discretion and on an individual
basis, can consider awarding bonuses for truly extraordinary performance in an
amount not to exceed an additional 50% of base salary. Pursuant to the bonus
program, only two of the executive officers received bonuses for fiscal 1998. In
fiscal 1997, the Board of Directors adopted the McWhorter Technologies Inc. Key
Employee Annual Bonus Plan. Under this plan, certain key employees may elect to
receive all or part of their bonus in the form of McWhorter Stock Equivalents
under the Company's Deferred Compensation Plan. With respect to fiscal 1998
annual bonuses that are deferred in the form of stock equivalents, the Company
also matches 1/3 of such deferral in the form of additional stock equivalents.
STOCK OPTIONS AND RESTRICTED STOCK. The Committee's policy is that the
primary component of long-term compensation for executive officers should be
stock options. The Committee believes that tying the compensation of executives
to the price of the Common Stock is the most effective means of aligning their
interests with those of the Company's stockholders. The Committee's policy is
that executive officers should be granted stock options at an exercise price
equal to the market price at the time of grant and with a total exercise price,
expressed as a percentage of base salary, which is in the middle of the range of
option values granted to executive officers at comparable publicly-held coatings
intermediates and specialty chemicals companies. Based on this policy, the
Committee has granted options to purchase a number of shares with a total
exercise price on the date of grant equal to 2 1/2 times the executive officer's
base salary (3 times in the case of the President and 3 1/2 times in the case of
the Chairman of the Board). Additional options are granted to reflect increases
in base salary. The Committee has not adopted a specific policy on when any
other options might be granted. Nonetheless, options are not granted on an
annual basis.
12
<PAGE>
The other long-term component of executive compensation is restricted stock
awards. Under the current program, restricted shares vest, if at all, over a
five year period, based on a comparison of the Company's earnings per share in
each year to a base year (fiscal 1994). The vesting in each year is also
contingent on the Company's achieving certain return on capital and return on
equity goals. In fiscal 1995 the Committee made restricted stock awards to the
executive officers with respect to a number of shares equal in value on the date
of award to 1 1/2 times the executive officer's base salary. Additional awards
are not made to reflect increases in base salary. These restricted shares are
forfeited to the extent the vesting criteria have not been met before the end of
fiscal 1999. For fiscal 1995 through 1998 the vesting criteria have not been
met.
DEFERRED COMPENSATION. In fiscal 1996, the McWhorter Technologies, Inc.
Deferred Compensation Plan (the "Plan") was adopted by the Committee for a
select group of management or highly compensated employees. The Plan became
effective October 1, 1996. The Plan provides an opportunity to defer a portion
of base annual salary, annual bonus, restricted stock and stock option gains on
a pre-tax basis. Under the Plan the Company credits the employee with an amount
equal to excess ERISA benefits and the Company may make discretionary
contributions. To date, the Company has made no discretionary contributions
under this plan. During fiscal 1998, all of the named executives participated in
the Plan and the amounts credited by the Company under the Plan to their
accounts was equal to excess ERISA benefits. To the extent that restricted stock
or stock option gains are deferred, they are required to be deferred in the form
of stock equivalents and generally cannot be distributed without significant
penalty until the individual retires or leaves the Company.
CHIEF EXECUTIVE OFFICER COMPENSATION. In establishing Mr. Stevenson's base
salary, the Committee considered information concerning the salaries of chief
executive officers of other companies in similar industries and of similar size
and complexity and attempted to set levels at or slightly above the comparable
companies. In establishing the multiple of 3 1/2 applied to Mr. Stevenson's
salary in determining the number of shares of Common Stock as to which he was
granted stock options and the multiple of 1 1/2 in determining the number of
shares of restricted stock, the Committee considered information concerning the
potential for long-term compensation that was provided by other companies in
similar industries of similar size and complexity. In establishing Mr.
Stevenson's salary the Committee also considered the significant financial and
strategic achievements of the Company and the considerable challenges which have
been inherent in the role of Chief Executive Officer of the Company in its early
years as an independent public company.
Respectfully submitted,
Compensation Committee
Heinn F. Tomfohrde, III, Chairman
Michelle L. Collins
Edward M. Giles
D. George Harris
John G. Johnson, Jr.
13
<PAGE>
STOCK PERFORMANCE GRAPH
The graph below compares the Company's cumulative total stockholder return
from April 11, 1994 (the date on which the stock commenced trading on a "when
issued" basis) to October 31, 1998 with the cumulative total return of (1) the
Standard & Poor's 500 Stock Index ("S&P 500") and (2) Standard & Poor's
Specialty Chemical Group ("S&P Specialty Chemical"). The graph assumes the
investment of $100 in the Common Stock at April 11, 1994, and the S&P 500 and
the S&P Specialty Chemical at April 29, 1994 and the reinvestment of all
dividends. The comparisons in this graph are required by the Securities and
Exchange Commission and are not intended to forecast or be indicators of
possible future performance of the Common Stock.
COMPARISON OF TOTAL RETURN
AMONG THE COMPANY, THE S&P 500, AND THE S&P SPECIALTY CHEMICAL.
$100 invested on 4/11/94 in stock or on 3/31/94
in Index - Including reinvestment of dividends.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
MCWHORTER S&P SPECIALITY
<S> <C> <C> <C>
Technologies S&P 500 Chemicals
4/11/94 $100 $100 $100
10/31/94 $131 $106 $95
10/31/95 $114 $134 $105
10/31/96 $135 $167 $128
10/31/97 $181 $223 $135
10/31/98 $143 $272 $122
</TABLE>
Fiscal year ending October 31.
14
<PAGE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
(PROPOSAL 2)
Ernst & Young LLP has served as the Company's independent auditors since the
formation of the Company. The Board of Directors has selected Ernst & Young LLP
to serve as the independent auditors of the Company for the 1999 fiscal year.
This selection will be submitted for ratification by the stockholders at the
Annual Meeting. Representatives of Ernst & Young LLP are expected to be present
at the Annual Meeting. They will have the opportunity to make a statement if
they desire to do so and are expected to be available to respond to appropriate
questions. In the absence of instructions to the contrary, shares of Common
Stock represented by properly executed proxies will be voted in favor of the
ratification of Ernst & Young LLP to serve as independent auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE IN FAVOR OF THE
RATIFICATION OF THE APPOINTMENT OF INDEPENDENT AUDITORS.
STOCKHOLDER PROPOSALS
In accordance with rules promulgated by the Securities and Exchange
Commission, any stockholder who wishes to submit a proposal for inclusion in the
proxy material to be distributed by the Company in connection with the 2000
Annual Meeting of Stockholders must do so no later than September 6, 1999. Any
such proposal should be submitted in writing to the Secretary of the Company at
its principal executive offices.
By Order of the Board of Directors,
Louise Tonozzi-Frederick
CORPORATE SECRETARY
15
<PAGE>
MCWHORTER TECHNOLOGIES, INC.
400 EAST COTTAGE PLACE
CARPENTERSVILLE, IL 60110
SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF SHAREHOLDERS ON FEBRUARY 17, 1999
The undersigned hereby appoints as Proxies, John R. Stevenson and Jeffrey M.
Nodland, each with the power to appoint his substitute and hereby authorizes
them to represent and to vote, as designated on the reverse side, all shares of
capital stock of McWhorter Technologies, Inc. (the "Company") held of record
by the undersigned on December 28, 1998 at the Annual Meeting of Shareholders
to be held on February 17, 1999 and any adjournments thereof.
- - -------------------------------------------------------------------------------
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES
OF AMERICA.
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS GIVEN WITH RESPECT TO A PARTICULAR PROPOSAL, THIS PROXY WILL BE VOTED FOR
SUCH PROPOSAL. YOUR VOTE MUST BE RECEIVED PRIOR TO THE ANNUAL MEETING OF
SHAREHOLDERS, FEBRUARY 17, 1999.
- - -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE COMMENTS?
- - ------------------------------------ -------------------------------------
- - ------------------------------------ -------------------------------------
- - ------------------------------------ -------------------------------------
<PAGE>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
------------------------------
MCWHORTER TECHNOLOGIES, INC.
------------------------------
1. Election of Directors.
For All With- For All
Nominees hold Except
/ / / / / /
MICHELLE L. COLLINS, EDWARD M. GILES,
D. GEORGE HARRIS, JOHN G. JOHNSON, JR.,
JEFFREY M. NODLAND, JOHN R. STEVENSON,
AND HEINN F. TOMFOHRDE III
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through that nominee(s) name. Your
shares will be voted for the remaining nominee(s).
For Against Abstain
2. Ratify the appointment of Ernst & Young / / / / / /
LLP as independent auditors for the
Company for the 1999 fiscal year.
3. In their discretion, the proxies are authorized to vote upon any other
business as may properly come before the meeting.
Mark box at right if an address change or comment has been / /
noted on the reverse side of this card.
-------------------------------
Please be sure to sign and date this Proxy. Date
- - ------------------------------------------------------------------------------
- - -----Shareholder sign here-------------------------Co-owner sign here---------
DETACH CARD DETACH CARD
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS
TO: BANK OF AMERICA, TRUSTEE OF THE MCWHORTER TECHNOLOGIES, INC. EMPLOYEE
STOCK OWNERSHIP PLAN (ESOP) AND MCWHORTER TECHNOLOGIES, INC.
EMPLOYEE 401(k) SAVINGS PLAN
THESE INSTRUCTIONS ARE BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
McWHORTER TECHNOLOGIES, INC.
I acknowledge receipt of a copy of the Annual Report of McWhorter
Technologies, Inc. for fiscal year 1998 and a Notice of Annual Meeting and
Proxy Statement relating to the Annual Meeting of Stockholders to be held on
February 17, 1999.
You are hereby instructed, with respect to the shares of McWhorter
Technologies, Inc. allocated to my account in the ESOP and/or 401(k) Plan, to
vote as indicated on the reverse side of this card and to confer
discretionary authority to vote upon other business that may properly come
before the meeting.
- - -------------------------------------------------------------------------------
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES
OF AMERICA.
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
THESE VOTING INSTRUCTIONS MUST BE RECEIVED BY THE TRUSTEE BY 5:00 P.M. EST
ON FEBRUARY 12, 1999. SHARES FOR WHICH THE PARTICIPANTS DO NOT GIVE
TIMELY VOTING INSTRUCTIONS WILL BE VOTED BY THE TRUSTEE AS INSTRUCTED
BY THE ADMINISTRATION COMMITTEE, OR, IF NO INSTRUCTIONS ARE RECEIVED,
AS THE TRUSTEE DETERMINES.
- - -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE COMMENTS?
- - ------------------------------------ -------------------------------------
- - ------------------------------------ -------------------------------------
- - ------------------------------------ -------------------------------------
<PAGE>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
------------------------------
MCWHORTER TECHNOLOGIES, INC.
------------------------------
1. Election of Directors.
For All With- For All
Nominees hold Except
/ / / / / /
MICHELLE L. COLLINS, EDWARD M. GILES,
D. GEORGE HARRIS, JOHN G. JOHNSON, JR.,
JEFFREY M. NODLAND, JOHN R. STEVENSON,
AND HEINN F. TOMFOHRDE III
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through that nominee(s) name. Your
shares will be voted for the remaining nominee(s).
For Against Abstain
2. Ratify the appointment of Ernst & Young / / / / / /
LLP as independent auditors for the
Company for the 1999 fiscal year.
3. In their discretion, the proxies are authorized to vote upon any other
business as may properly come before the meeting.
Mark box at right if an address change or comment has been / /
noted on the reverse side of this card.
-------------------------------
Please be sure to sign and date this Proxy. Date
- - ------------------------------------------------------------------------------
- - -----Shareholder sign here-------------------------Co-owner sign here---------
DETACH CARD DETACH CARD
<PAGE>
CONFIDENTIAL VOTING INSTRUCTIONS
TO: NORWEST BANK MINNESOTA, NA, TRUSTEE OF THE VALSPAR CORPORATION STOCK
OWNERSHIP TRUST AND THE VALSPAR CORPORATION PROFIT SHARING TRUST
THESE INSTRUCTIONS ARE BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
McWHORTER TECHNOLOGIES, INC.
I acknowledge receipt of a copy of the Annual Report of McWhorter
Technologies, Inc. for fiscal year 1998 and a Notice of Annual Meeting and
Proxy Statement relating to the Annual Meeting of Stockholders to be held on
February 17, 1999.
You are hereby instructed, with respect to the shares of McWhorter
Technologies, Inc. allocated to my account in The Valspar Corporation Stock
Ownership Trust and The Valspar Corporation Profit Sharing Trust, to vote as
indicated on the reverse side of this card and to confer discretionary
authority to vote upon other business that may properly come before the
meeting.
- - -------------------------------------------------------------------------------
PLEASE MARK, DATE, SIGN AND RETURN THIS PROXY CARD PROMPTLY, USING THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED STATES
OF AMERICA.
- - -------------------------------------------------------------------------------
- - -------------------------------------------------------------------------------
THESE VOTING INSTRUCTIONS MUST BE RECEIVED BY THE TRUSTEE BY 5:00 P.M. EST
ON FEBRUARY 12, 1999. SHARES FOR WHICH THE PARTICIPANTS DO NOT GIVE
TIMELY VOTING INSTRUCTIONS WILL BE VOTED BY THE TRUSTEE AS INSTRUCTED
BY THE ADMINISTRATION COMMITTEE, OR, IF NO INSTRUCTIONS ARE RECEIVED,
AS THE TRUSTEE DETERMINES.
- - -------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE COMMENTS?
- - ------------------------------------ -------------------------------------
- - ------------------------------------ -------------------------------------
- - ------------------------------------ -------------------------------------
<PAGE>
/X/ PLEASE MARK VOTES
AS IN THIS EXAMPLE
------------------------------
MCWHORTER TECHNOLOGIES, INC.
------------------------------
1. Election of Directors.
For All With- For All
Nominees hold Except
/ / / / / /
MICHELLE L. COLLINS, EDWARD M. GILES,
D. GEORGE HARRIS, JOHN G. JOHNSON, JR.,
JEFFREY M. NODLAND, JOHN R. STEVENSON,
AND HEINN F. TOMFOHRDE III
NOTE: If you do not wish your shares voted "For" a particular nominee, mark
the "For All Except" box and strike a line through that nominee(s) name. Your
shares will be voted for the remaining nominee(s).
For Against Abstain
2. Ratify the appointment of Ernst & Young / / / / / /
LLP as independent auditors for the
Company for the 1999 fiscal year.
3. In their discretion, the proxies are authorized to vote upon any other
business as may properly come before the meeting.
Mark box at right if an address change or comment has been / /
noted on the reverse side of this card.
-------------------------------
Please be sure to sign and date this Proxy. Date
- - ------------------------------------------------------------------------------
- - -----Shareholder sign here-------------------------Co-owner sign here---------
DETACH CARD DETACH CARD
