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 Section 240.14a-11(c) or Section 240.14a-12
McWhorter Technologies, Inc.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[_] No fee required
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
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[_] 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:
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(4) Date Filed:
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Notes:
MCWHORTER TECHNOLOGIES, INC.
400 EAST COTTAGE PLACE
CARPENTERSVILLE, ILLINOIS 60110
January 5, 1998
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 18, 1998 at McWhorter Technologies Corporate Headquarters,
400 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
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 18, 1998
The Annual Meeting of Stockholders of McWHORTER TECHNOLOGIES, INC. (the
"Company") will be held at the corporate headquarters of the Company, 400
Cottage Place, Carpentersville, Illinois 60110, on Wednesday, February 18,
1998, 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,
1998; 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 January 2, 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
Secretary
Dated: January 5, 1998
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.
MCWHORTER TECHNOLOGIES, INC.
400 EAST COTTAGE PLACE
LOGO
CARPENTERSVILLE, ILLINOIS 60110
PROXY STATEMENT
ANNUAL MEETING OF STOCKHOLDERS
FEBRUARY 18, 1998
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
5, 1998.
The Common Stock is the only voting stock of the Company outstanding. At the
close of business on January 2, 1998, 10,353,087 shares of Common Stock were
outstanding and 9,083,925 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 ("Valspar"), the Company 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.
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.
1
The Company's Annual Report to Stockholders for the fiscal year ended
October 31, 1997, 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 1999. 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 37, 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 62, 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 64, is Chairman and Chief Executive Officer of Harris
Chemical Group, Inc. ("HCG"), New York, New York, a holding company for a
group of inorganic chemicals and extractive minerals companies. He has held
this position with HCG or its predecessor companies since 1988. He is also
Chairman of HCG's European affiliates: Matthes & Weber GmbH (Germany); Societa
Chimica Larderello (Italy); Salt Union Ltd. (England); and Harris Soda
Products Europe (France); and Chairman of Harris Specialty Chemicals, Inc.
("HSC"), founded in 1994 and Chairman and Chief Executive Officer of Penrice
Soda Products (Australia). He is also a founder and Chairman of D. George
Harris & Associates, the industrial management and buyout company formed in
1987 which led the acquisitions for the foundation of HCG and HSC and the
other companies in the Harris Group. Prior to the HCG and HSC activities, he
was a Senior Advisor at Robert Fleming & Co., PLC for two years. Before that
he was President of SCM Chemicals and, subsequently, SCM Corporation, and,
before joining SCM, he was President of Rhone-Poulenc, Inc., the U.S.
subsidiary of France's largest chemical company. Mr. Harris 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
JOHN G. JOHNSON, JR., age 57, 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 since January 1993. 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 42, is President and Chief Operating Officer of the
Company. He has held the position of President since January 1, 1997, the
position of Chief Operating Officer since May 1995 and the position of
Secretary since February 1994. 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 55, 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 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 64, 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 is a
director of the Harris Chemical Group Inc. and Sybron Chemicals, Inc. 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
CORPORATE GOVERNANCE STANDARDS
The Board of McWhorter Technologies reviews and approves corporate governance
standards annually. During 1997, McWhorter's Board approved the following
statement which expresses the practices that had evolved within McWhorter since
the creation of the Company in 1994. 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: Governance and Nominating, Compensation,
Audit, 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 their
retirement 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 retirement 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
CERTAIN INFORMATION CONCERNING MEETINGS AND COMMITTEES OF THE BOARD OF
DIRECTORS
The Board of Directors held four meetings during the fiscal year ended
October 31, 1997 ("fiscal 1997"). The four standing committees of the Board of
Directors are the Audit Committee, the Compensation Committee, the
Environmental Committee and the Nominating Committee. Each director attended
100% of the meetings of the Board of Directors and Committees thereof except
for Mr. Harris who was absent from two Board meetings, one Environmental
Committee meeting and one Nominating Committee meeting.
Audit Committee. The members of the Audit Committee are Messrs. Giles
(Chairman), Harris, Johnson, and Tomfohrde, and Ms. Collins. The Audit
Committee held three meetings during fiscal 1997. 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 three meetings during fiscal 1997. 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 1997. 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 Committee. The members of the Nominating Committee are Ms.
Collins (Chairwoman), and Messrs. Giles, Harris, Johnson, and Tomfohrde. The
Nominating Committee held one meeting during fiscal 1997. This committee
identifies and proposes to the full Board of Directors nominees to serve on
the Board of Directors.
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. On January 1, 1997, Mr. Stevenson
assumed the title of Chairman of the Board of Directors. 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 nonemployee 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
5
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.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following information presents the beneficial ownership of shares of
Common Stock as of December 1, 1997 (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.
TOTAL NUMBER
SHARES OF SHARES AND
BENEFICIALLY MWT STOCK MWT STOCK
NAME OF BENEFICIAL OWNER OWNED PERCENT OF CLASS EQUIVALENTS EQUIVALENTS
- ------------------------ ------------ ---------------- ----------- -------------
Norwest Corporation..... 640,651(1) 6.2% 0 640,651
6th and Marquette
Minneapolis, MN 55479
C. Angus Wurtele........ 1,269,162(2) 12.3% 0 1,269,162
1101 Third Street South
Minneapolis, MN 55415
The Capital Group
Companies, Inc......... 724,100(3) 7.0% 0 724,100
333 South Hope Street
Los Angeles, CA 90071
John R. Stevenson....... 123,415(4) 1.2% 24,842 148,257
Jeffrey M. Nodland...... 78,893(5) * 13,640 92,533
D. George Harris........ 37,153(6) * 6,682 43,835
Patrick T. Heffernan.... 41,951(7) * 2,069 44,020
Kevin W. Brolsma........ 33,311(8) * 1,040 34,351
Douglas B. Rahrig....... 32,839(9) * 2,064 34,903
Heinn F. Tomfohrde, III. 12,000(10) * 2,822 14,822
John G. Johnson, Jr..... 10,700(10) * 1,525 12,225
Michelle L. Collins..... 10,000(10) * 2,493 12,493
Edward M. Giles......... 10,000(10) * 2,493 12,493
All directors and
executive officers as
a group (11 persons) .. 404,426 3.9%
- --------
*Less than 1.0%
6
(1) Reported as of November 30, 1997. As of such date Norwest Bank Minnesota,
National Association, a wholly-owned subsidiary of Norwest Corporation
reported sole voting power over 291,644 shares, shared voting power over
341,724 shares, sole investment power over 117,509 shares, and shared
investment power over 480,342 shares. Norwest Corporation and Norwest
Bank Minnesota, National Association disclaim beneficial ownership of all
such shares.
(2) Based on Form 5 dated as of December 1997. As of such date 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 13F Report dated as of September 30, 1997.
(4) Includes options currently exercisable or exercisable within 60 days to
purchase 47,681 shares. As of October 31, 1997, includes 2,475 shares
held through the McWhorter Technologies, Inc. Employee Stock Ownership
Plan (the "ESOP").
(5) Includes options currently exercisable or exercisable within 60 days to
purchase 27,956 shares. As of October 31, 1997, includes 2,406 shares
held through the ESOP.
(6) Includes options currently exercisable to purchase 35,000 shares.
(7) Includes options currently exercisable or exercisable within 60 days to
purchase 16,851 shares. As of October 31, 1997, includes 2,420 shares
held through the ESOP.
(8) Includes options currently exercisable or exercisable within 60 days to
purchase 14,497 shares. As of October 31, 1997, includes 2,417 shares
held through the ESOP; and 563 shares held through the McWhorter
Technologies, Inc. Employee 401(k) Savings Plan the ("401(k) Plan").
(9) Includes options currently exercisable or exercisable within 60 days to
purchase 14,918 shares. As of October 31, 1997, includes 203 shares held
through the 401(k) Plan and 1,657 shares held through the ESOP.
(10) Includes options currently exercisable to purchase 10,000 shares.
7
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, 1995 ("fiscal
1995"), October 31, 1996 ("fiscal 1996") and October 31, 1997 ("fiscal 1997")
for services rendered in all capacities to the Company:
ANNUAL COMPENSATION (1) LONG TERM COMPENSATION
------------------------------------- ----------------------
AWARDS
------------------------
ALL OTHER RESTRICTED STOCK
NAME & PRINCIPAL BONUS COMPENSATION STOCK UNDERLYING
POSITION(2) YEAR SALARY ($) ($)(3) ($)(3)(4) AWARDS($)(5) OPTIONS (#)
- ---------------- ---- ---------- -------- ------------ ------------ -----------
John R. Stevenson 1997 $392,318 $315,816 $146,303 $ 0 8,696
Chairman & Chief 1996 $344,998 $182,849 60,060 $ 13,562 11,570
Executive Officer 1995 $291,668 $ 31,733 11,000 $471,589 11,290
Jeffrey M. Nodland 1997 $273,842 $156,090 $ 80,694 $ 0 5,693
President & Chief 1996 $235,638 $104,387 $ 38,544 $ 5,021 7,934
Operating Officer 1995 $195,829 $ 19,172 $ 11,000 $309,964 10,484
Patrick T. Heffernan 1997 $188,776 $ 60,550 $ 32,913 $ 0 994
Senior Vice President, 1996 $182,489 $ 63,141 $ 27,059 $ 2,692 1,157
Coatings Resin 1995 $175,000 $ 12,460 $ 11,000 $269,367 0
Douglas B. Rahrig 1997 $170,454 $ 65,122 $ 32,015 $ 0 1,242
Vice President, 1996 $161,499 $ 62,338 $ 24,842 $ 741 1,983
Technology 1995 $150,000 $ 17,730 $ 11,000 $224,998 0
Kevin W. Brolsma 1997 $163,612 $ 55,808 $ 26,064 $ 0 1,118
Corporate Vice 1996 $156,417 $ 57,429 $ 23,574 $ 741 992
President 1995 $150,000 $ 10,680 $ 11,000 $229,009 0
- --------
(1) Includes amounts earned in fiscal year, whether or not deferred.
(2) Effective January 1, 1997 Mr. Stevenson assumed the title of Chief
Executive Officer and Chairman of the Board and Mr. Nodland assumed the
title of President and Chief Operating Officer. Effective August 1, 1997,
Kevin Brolsma assumed the title of Corporate Vice President.
(3) Pursuant to the McWhorter Technologies, Inc. Key Employee Annual Bonus
Plan, certain employees may elect to receive all or part of their bonus
for fiscal 1997 in the form of McWhorter Stock Equivalents. This election
will entitle the participant to an additional 1/3 of the amount deferred
to be allocated to his/her account in the form of McWhorter Stock
Equivalents. This 1/3 additional amount is reflected in the "All other
Compensation" column in the table above. Termination of employment with
McWhorter prior to October 31, 2000 will result in the loss of the 1/3
company contribution. The following are the amounts of the 1/3 Company
contribution in McWhorter Stock Equivalents:
COMPANY 1/3 MATCH
NAME ($)/(MWT STOCK EQUIVALENTS)
---- ---------------------------
John R. Stevenson............................. $105,272/4,149
Jeffrey M. Nodland............................ 52,030/2,050
Patrick T. Heffernan.......................... 10,093/ 398
Douglas B. Rahrig............................. 10,856/ 429
Kevin W. Brolsma.............................. 4,652/ 183
(4) 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 $41,032, Mr. Nodland
$28,664, Mr. Heffernan $22,819, Mr. Rahrig $21,160, and Mr. Brolsma
$21,412.
(5) For fiscal 1996, Restricted Stock Awards represent excess ERISA benefits
for 1995.
8
For fiscal 1995, named executives held the following number of shares of
restricted stock awards representing ERISA benefits for fiscal 1994
distributed on February 20, 1995 and performance-based awards which will
vest, if at all, over a five year period as certain performance
measurements are met. The vesting is contingent on the Company's achieving
aggressive earnings per share growth, returns on capital, and return on
equity goals. These performance-based awards of restricted shares will be
forfeited at the end of five years to the extent the vesting criteria have
not been met. For fiscal 1995, 1996 and 1997 the vesting criteria have not
been met.
The awards were granted as follows:
ERISA BENEFITS PERFORMANCE BASED
FISCAL 1994 ($)/(# OF SHARES) AWARDS ($)/(# OF SHARES)
----------------------------- ------------------------
John R. Stevenson....... $21,593/1,448 $449,996/29,032
Jeffrey M. Nodland...... $ 9,961/ 668 $300,003/19,355
Patrick T. Heffernan.... $ 6,874/ 461 $262,493/16,935
Kevin W. Brolsma........ $ 4,011/ 269 $224,998/14,516
Douglas B. Rahrig....... $ 0/ 0 $224,998/14,516
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding individual grants of
stock options made during fiscal 1997 to the named executives:
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM(2)
- ------------------------------------------------------------------------ ----------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS EXERCISE OR
UNDERLYING GRANTED TO BASE
OPTIONS EMPLOYEES IN PRICE PER EXPIRATION
NAME GRANTED(1) FISCAL 1997 SHARE DATE 5%(2) 10%(2)
- ---- ---------- ------------- ----------- ---------- ---------- -----------
John R. Stevenson....... 8,696 7.50% 20.125 12/10/06 $ 15,329 $ 31,265
Jeffrey M. Nodland...... 5,963 5.10% 20.125 12/10/06 $ 10,511 $ 21,439
Patrick T. Heffernan.... 994 0.90% 20.125 12/10/06 $ 1,752 $ 3,574
Kevin W. Brolsma........ 1,118 1.00% 20.125 12/10/06 $ 1,971 $ 4,020
Douglas B. Rahrig....... 1,242 1.06% 20.125 12/10/06 $ 2,189 $ 4,465
- --------
(1) Indicates options granted on December 10, 1996 due to increase in salary,
that become exercisable in 20% annual increments beginning one year from
the date of grant.
(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.
9
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 1997 and
unexercised options held as of October 31, 1997.
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES OCTOBER 31, 1997 (#) OCTOBER 31, 1997 ($)*
ACQUIRED ON VALUE ------------------------- -------------------------
NAME EXERCISE REALIZED ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------ ----------- ------------- ----------- -------------
John R. Stevenson....... 0 0 43,628 49,259 $435,295 $460,910
Jeffrey M. Nodland...... 0 0 25,177 31,536 $254,205 $296,002
Patrick T. Heffernan.... 0 0 16,422 12,714 $157,902 $119,172
Kevin W. Brolsma........ 0 0 14,076 11,164 $135,344 $103,664
Douglas B. Rahrig....... 0 0 14,274 12,081 $137,461 $112,844
- --------
* 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, 1997.
COMPENSATION COMMITTEE INTERLOCKS WITH INSIDER PARTICIPATION
During fiscal 1997, 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 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, grants of stock
equivalents and awards of restricted stock.
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
10
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 1997 the Committee approved an increase
in the base salaries of Messrs. Stevenson, Nodland, Brolsma, Heffernan, and
Rahrig.
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 1997 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
1997 those criteria were as follows: sales volume, gross margin, earnings per
share and a discretionary component as determined by the Compensation
Committee. The Committee's policy also provides that the Committee, in its
sole discretion and on an individual basis, could consider bonuses for truly
extraordinary performance in an amount not to exceed an additional 50% of base
salary. Pursuant to the bonus program, the executive officers on average
received bonuses equal to 58% of the available bonus. 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. With respect
to fiscal 1997 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. Since the
formation of the Company there has been only one option grant (other than
those to reflect salary increases or promotions) to each executive officer.
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 increase 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, 1996 and 1997 the vesting
criteria has not been met.
11
The Committee adopted a policy in fiscal 1994 of awarding shares of Common
Stock as restricted stock annually to those employees (including executive
officers) on whose behalf contributions by the Company to the Company's
Employee Stock Ownership Plan (the "ESOP") and Employee 401(k) Savings Plan
(the "401(k) Plan") are subject to the compensation limitation set by Section
401(a)(17) of the Internal Revenue Code for qualified retirement vehicles. The
number of shares of Common Stock awarded as restricted stock is calculated on
the basis of the difference between the employee's salary and such limitation
amount (currently $160,000) multiplied by the Company's contribution rate to
the ESOP and the 401(k) Plan and divided by the fair market value of the
Common Stock. This policy was supplanted effective October 1, 1996 by the
terms of the Deferred Compensation Plan.
Deferred Compensation. In fiscal 1996, the McWhorter Technologies, Inc.
Deferred Compensation Plan (the "Plan") was adopted by the Compensation
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 1997, 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 cannot be
distributed 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 and bonus the Committee also considered
the significant financial and strategic achievements of the Company in fiscal
1996 and 1997, (particularly with respect to the discretionary portion of Mr.
Stevenson's fiscal 1997 bonus, the Committee considered the successfully
implemented programs that have substantially accelerated the Company's
improved profitability), 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. Pursuant to the annual bonus plan and
the deferred compensation plan described above, Mr. Stevenson deferred his
entire fiscal 1997 bonus in the form of McWhorter Stock Equivalents and
received a 1/3 company match valued at $105,272.
Respectfully submitted, Compensation Committee
Heinn F. Tomfohrde, III, Chairman
Michelle L. Collins
Edward M. Giles
D. George Harris
John G. Johnson, Jr.
12
STOCK PERFORMANCE GRAPH
The graph below compares the Company's cumulative total stockholder return
from April 29, 1994 (the date on which stock was traded ex dividend) to
October 31, 1997 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 42 MONTH CUMULATIVE TOTAL RETURN*
AMONG MCWHORTER TECHNOLOGIES, INC., THE S&P 500 INDEX
AND THE S&P CHEMICALS (SPECIALTY) INDEX
[GRAPH APPEARS HERE]
Measurement Period McWhorter S&P S&P Chemicals
(Fiscal Year Covered) Technologies, Inc. 500 INDEX (Specialty)
- ------------------- ------------------ --------- -------------
Measurement Pt-
4/11/94 $100 $100 $100
FYE 10/94 $131 $108 $89
FYE 10/95 $107 $136 $105
FYE 10/96 $135 $169 $120
FYE 10/97 $181 $223 $135
*$100 invested on 4/11/94 in
stock or on 3/31/94 in Index--
including reinvestment of
dividends. Fiscal year ending
October 31.
13
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 1998 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
1999 Annual Meeting of Stockholders must do so no later than September 7,
1998. 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
Secretary
14
McWhorter Technologies, Inc.
400 East Cottage Place
Carpentersville, IL 60110
Solicited by the Board of Directors
for the Annual Meeting of Shareholders on February 18, 1998
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 January 2, 1998 at the Annual Meeting of Shareholders to be
held on February 18, 1998 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 18, 1998.
- --------------------------------------------------------------------------------
HAS YOUR ADDRESS CHANGED? DO YOU HAVE ANY COMMENTS?
- -------------------------------- --------------------------------
- -------------------------------- --------------------------------
- -------------------------------- --------------------------------
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
------------------
McWHORTER
TECHNOLOGIES, INC.
------------------
With- For All
1. Election of Directors. For 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
shall be voted for the remaining nominees.
For Against Abstain
2. Ratify the appointment of Ernst & Young LLP as [_] [_] [_]
independent auditors for the Company for the
1998 fiscal year.
3. In their discretion, the proxies are authorized to vote upon any other
business that 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
Confidential Voting Instructions
To: First Trust, St. Paul, Minnesota, 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 1997 and a Notice of Annual Meeting and Proxy
Statement relating to the Annual Meeting of Stockholders to be held on February
18, 1998.
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 13, 1998. 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 ANY COMMENTS?
- -------------------------------- --------------------------------
- -------------------------------- --------------------------------
- -------------------------------- --------------------------------
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
------------------
McWHORTER
TECHNOLOGIES, INC.
------------------
With- For All
1. Election of Directors. For 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
shall be voted for the remaining nominees.
For Against Abstain
2. Ratify the appointment of Ernst & Young LLP as [_] [_] [_]
independent auditors for the Company for the
1998 fiscal year.
3. In their discretion, the proxies are authorized to vote upon any other
business that 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
[MCW4K - McWHORTER TECHNOLOGIES, INC. - confidential voting - ESOP/401(k)]
[FILE NAME: MCW4K1.ELX] [VERSION - 1] [11/28/97]
Confidential Voting Instructions
To: Norwest Bank Minneapolis, MN, 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 1997 and a Notice of Annual Meeting and Proxy
Statement relating to the Annual Meeting of Stockholders to be held on February
18, 1998.
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 13, 1998. 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 ANY COMMENTS?
- -------------------------------- --------------------------------
- -------------------------------- --------------------------------
- -------------------------------- --------------------------------
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
------------------
McWHORTER
TECHNOLOGIES, INC.
------------------
With- For All
1. Election of Directors. For 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
shall be voted for the remaining nominees.
For Against Abstain
2. Ratify the appointment of Ernst & Young LLP as [_] [_] [_]
independent auditors for the Company for the
1998 fiscal year.
3. In their discretion, the proxies are authorized to vote upon any other
business that 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
[MCW4K - McWHORTER TECHNOLOGIES, INC. - confidential voting - ESOP/401(k)]
[FILE NAME: MCW4K1.ELX] [VERSION - 1] [11/28/97]