Exhibit 4.3
LOCTITE CORPORATION
North American Group
1994 Field Sales Force Compensation Program
Stock Award Plan
I. Objective
To recognize the contribution of the field sales force on a regional
level to the objectives of Loctite Corporation's North American Group and
Loctite Corporation ("Loctite").
II. Plan Overview
This Plan is designed to recognize sales and profitability
achievement above projected Annual Business Plan (ABP) growth levels by
providing awards of Loctite common stock (the "Stock"). The Plan is aimed
at building a team atmosphere while directing all toward a common goal.
Awards under the Plan will be made as set forth below.
III. Eligibility
All North American Group sales personnel with an assigned Sales
Region (as defined below) as of January 1, 1994, or who are assigned to a
Sales Region after January 1, 1994 but on or before March 31, 1994, will
be eligible to participate in the Plan, including the Regional Sales
Manager, Territory Managers, Senior MRO, MRO and OEM Specialists, District
Managers and Account Managers. The Sales Regions shall consist of the
Automotive Sales Division zones, and all Sales Division regions whether
geographic, channel or customer specific, but shall not include
manufacturers' representatives.
North American Group sales personnel employed after March 31, 1994
will not be eligible to participate in the Plan unless recommended by the
Vice President of Sales and approved by the Executive Vice President of
Sales, each in their sole discretion.
Sales personnel whose responsibilities change during 1994 may be
eligible for participation in the Plan if so approved by the Vice
President of Sales and the Executive Vice President of Sales, each in
their sole discretion.
IV. Stock Award Program
The stock award program established under this Plan shall only be
funded for any Sales Region if such Sales Region's Gross Margin Growth, as
defined below, for 1994 exceeds ten percent (10%). Gross Margin Growth
shall be calculated by dividing (i) the amount, if any, by which the
Annual Gross Margin for said Sales Region for 1994 exceeds the Annual
Gross Margin for said Sales Region for 1993, by (ii) the Annual Gross
Margin for said Sales Region for 1993. The Annual Gross Margin for any
year shall be the gross margin expressed in dollars as determined in
accordance with the normal internal financial reporting practices of the
North American Group. Gross Margin Growth shall be computed only on those
orders shipped by midnight on December 31, 1994.
The value of the Stock to be contributed to the Plan for each Sales
Region shall be equal to the (i) Award Amount, multiplied by (ii) the
number of eligible participants in such Sales Region. The Award Amount
shall be equal to the product of (a) the number of full percentage points
of Gross Margin Growth for 1994 for such Sales Region in excess of ten
(10) percentage points, multiplied by (b) Two Hundred Dollars ($200). In
the event that the Gross Margin Growth for a Sales Region for 1994 equals
or exceeds twenty (20) percentage points, the Award Amount for such Sales
Region shall be computed as provided in the preceding sentence, and shall
then be increased by Two Thousand Dollars ($2,000). Anything to the
contrary in this Plan notwithstanding, the maximum aggregate Award Amount
for 1994 for any Sales Region shall not exceed Five Thousand Dollars
($5,000), even if Gross Margin Growth for 1994 greater than twenty-five
(25) full percentage points is achieved.
The Plan will be funded no later than fifteen (15) business days
after the Annual Gross Margins for the Sales Regions for 1994 have been
determined in accordance with the normal internal financial reporting
practices of the North American Group. The price per share used to
determine the number of shares of Stock to be contributed to the Plan
shall be the closing price for one share of Stock on the New York Stock
Exchange on December 30, 1994, adjusted downward to the extent necessary
to avoid the contribution of any fractional Shares to the Plan. The Stock
so contributed to the Plan shall be Stock held in Loctite's treasury.
The Stock so contributed to the Plan with respect to each Sales
Region will be used to fund Stock awards to eligible participants in said
Sales Region. The amount of the award to each participant shall be
determined in the sole discretion of the management of the North American
Group, subject to the final approval of the President of the North
American Group, and such awards need not be uniform or made to all
participants. Loctite shall withhold an amount of Stock from any such
award sufficient to satisfy Federal and state withholding tax
requirements.
Awards made hereunder shall be paid in Stock, and participants shall
have no right to receive cash in lieu of Stock. All awards must consist
of one or more whole shares of Stock and no fractional shares may be
awarded.
The termination of employment for any reason whatsoever of a Plan
participant prior to the completion of 1994 will automatically eliminate
any funding with respect to that person and terminate such participant's
eligibility to receive an award under the Plan.
V. Administration or Modification of Plan
Any and all modifications to this Plan including the exclusion or
inclusion of an account, a participant, eligibility, responsibility
changes, deviation to commission schedule, etc. will be the decision of
the management of the North American Group, subject to the final approval
of the President of the North American Group, who, in their sole
discretion, will have final authority for Plan administration and/or
modifications. Loctite reserves the right to modify or cancel this Plan
at any time for any reason.
VI. Duration of Plan
This Plan shall be effective January 1, 1994 through December 31,
1994.
VII. Miscellaneous
No participant shall have any right to any award or Stock hereunder
until all requirements for the award of Stock hereunder have been met and
such an award has been made.
Loctite shall not be required to issue or deliver any certificate for
shares of Stock prior to the completion of any registration or
qualification for exemption from registration of such Stock under all
applicable Federal and state laws.
In the event of any recapitalization, reclassification, split-up or
consolidation of shares of Stock, or Stock dividend, merger or
consolidation of Loctite, the management of the North American Group,
subject to the final approval of the President of the North American
Group, may make such adjustments to the Plan or the amount of awards to be
funded as they shall deem appropriate, in their sole discretion.