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SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
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 sec.240.14a-11(c) or sec.240.14a-12
Loctite Corp.
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(Name of Registrant as Specified In Its Charter)
Loctite Corp.
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / 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:
(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:
/X/ 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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LOCTITE CORPORATION
NOTICE OF THE 1995 ANNUAL MEETING OF STOCKHOLDERS
To the Stockholders:
The 1995 Annual Meeting of Stockholders of Loctite Corporation will be held
at the Hartford Club, 46 Prospect Street, Hartford, Connecticut on Wednesday,
April 26, 1995 at 3:00 p.m. (Local Time) for the following purposes:
1. To elect 11 Directors as described in the attached Proxy Statement to
hold office until the next Annual Meeting of Stockholders and until
their successors are elected and qualified;
2. To consider and act upon a proposal to amend Article Fourth of the
Certificate of Incorporation to increase the authorized number of shares
of Common Stock of Loctite Corporation from 100,000,000 shares to
300,000,000 shares;
3. To confirm the appointment of independent accountants for the current
fiscal year; and
4. To transact such other business as may properly come before said meeting
or any adjournments thereof.
The Board of Directors has fixed the close of business on Friday, March 10,
1995, as the record date for the determination of stockholders who are entitled
to notice of and to vote at this meeting and any and all adjournments thereof.
By Order of the Board of Directors
Eugene F. Miller
Secretary
Hartford, Connecticut 06106
March 15, 1995
YOU ARE CORDIALLY INVITED TO ATTEND THE MEETING. WHETHER OR NOT YOU PLAN TO
ATTEND, PLEASE SIGN, DATE AND VOTE OR OTHERWISE INDICATE YOUR CHOICES WITH
RESPECT TO THE MATTERS TO BE VOTED UPON ON THE ACCOMPANYING PROXY AND RETURN
YOUR PROXY CARD PROMPTLY IN THE ENCLOSED ENVELOPE, WHICH REQUIRES NO POSTAGE IF
MAILED IN THE UNITED STATES. IF FOR ANY REASON YOU DESIRE TO REVOKE YOUR PROXY,
YOU MAY DO SO AT ANY TIME BEFORE THE VOTING.
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LOCTITE CORPORATION
10 COLUMBUS BOULEVARD
HARTFORD, CONNECTICUT 06106
PROXY STATEMENT
This Proxy Statement is being furnished to stockholders of Loctite
Corporation (the "Company") in connection with the solicitation by the Board of
Directors of proxies for use at the Annual Meeting of Stockholders to be held at
the Hartford Club, 46 Prospect Street, Hartford, Connecticut on Wednesday, April
26, 1995 at 3:00 p.m. and at any and all adjournments thereof. This Proxy
Statement and the accompanying form of Proxy are being mailed to stockholders on
or about March 15, 1995.
The Board of Directors has fixed the close of business on Friday, March 10,
1995 as the record date for the determination of stockholders entitled to notice
of and to vote at the meeting. On that date, the Company had shares of
Common Stock outstanding and entitled to vote. Each stockholder is entitled to
one vote per share of Common Stock held by such stockholder on each matter
submitted to a vote.
You are encouraged to read this Proxy Statement and to fill in, date, sign,
and return the enclosed proxy. A stockholder executing and returning a proxy has
the power to revoke it at any time before it is voted at the meeting by filing
with the Secretary of the Company an instrument revoking it or a duly executed
proxy bearing a later date or by attending the meeting and voting in person.
Attendance at the meeting will not in and of itself constitute revocation of a
proxy. Properly executed proxies, not revoked, will be voted in accordance with
the instructions contained thereon. Unless a contrary specification is made
thereon, it is the intention of the persons named on the accompanying proxy to
vote FOR the election of the nominees listed below as Directors and FOR
Proposals 2 and 3 on the accompanying Notice of Meeting and otherwise in the
discretion of the Proxies.
The cost of solicitation of proxies will be borne by the Company. In
addition to this solicitation by mail, officers and regular employees of the
Company may, without receiving additional compensation therefor, make
solicitations by telephone, mail or personal interviews; and arrangements may be
made with banks, brokerage firms and others to forward proxy material to their
principals. The Company will defray the expenses of such additional
solicitations.
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PROPOSAL 1
ELECTION OF DIRECTORS
The Company's By-Laws provide that the maximum number of Directors is
twelve. At the Annual Meeting, nominations will be made for 11 Directors. All
elected Directors will hold office until the next Annual Meeting of the
Stockholders of the Company and until their respective successors are duly
elected and qualified. The nominees for election as Directors are listed on the
following pages with brief statements of their principal occupations and other
information. All nominees have been designated as such by the Board of Directors
based on the recommendations of its Committee on Human Resources, none of the
members of which is an employee of the Company. It is intended that, unless
authorization to do so is withheld, the shares represented by the enclosed proxy
will be voted for the election of the eleven nominees set forth below.
All of the nominees were elected by the stockholders to their present terms
at the 1994 Annual Meeting, except Messrs. Browning, Page and Henkel who were
appointed by the Board of Directors after the 1994 Annual Meeting. All nominees
have consented to being named herein and have agreed to serve if elected. In the
event any such nominees shall have become at the time of the meeting unable or
unwilling to serve as a Director (an event not now anticipated), the persons
named as proxies intend to vote the shares to which the proxy relates for the
remaining nominees and for such substitute nominee or nominees as shall be
recommended by the Committee on Human Resources of the Board of Directors.
The election of Directors requires the affirmative vote of a plurality of
the shares of Common Stock present in person or represented by proxy at the
annual meeting and entitled to vote on the election of directors. Votes withheld
and broker non-votes are not counted as votes in favor of any nominee, but are
taken into account in determining whether nominees have received a plurality.
NOMINEES FOR ELECTION AS DIRECTORS
ROBERT E. IX, age 65. Mr. Ix is the former Chairman and Chief Executive
Officer of Cadbury Schweppes, Inc., a food and confectionary company based in
the United Kingdom. He is a Director of New England Frozen Foods Inc., a
distributor of frozen foods, and Health Waters, Inc., a distributor of bottled
water. He is Chairman of the Committee on Human Resources, a member of the
Committee on Board Affairs, and has been a Director of the Company since 1978.
FREDERICK B. KRIEBLE, age 53. Mr. Krieble is the President of Management I,
Limited and Management II, Limited, which are family investment management
companies. He is a former Treasurer of the Company and son of Robert H. Krieble,
the retired Chairman of the Board of Directors of the Company. He is a member of
the Audit and Finance Committee and has been a Director of the Company since
1980.
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KENNETH W. BUTTERWORTH, age 69. Since October, 1986, Mr. Butterworth has
served as Chairman of the Loctite Board of Directors. He served as Chief
Executive Officer of the Company from February, 1985 until April, 1993. Mr.
Butterworth has been a Director of the Company since 1985.
DR. ROMAN DOHR, age 64. Since 1993, Dr. Dohr has worked as a consultant to
Henkel KGaA, a major worldwide manufacturer of chemicals, household products and
adhesives, and has also performed consulting services for other companies. From
1985 to 1993, he was Executive Vice President of Henkel and a member of its
Management Board, responsible for the Adhesives and Chemical Auxiliaries Group.
He is Chairman of the Audit and Finance Committee, and has been a Director of
the Company since 1985.
DR. JURGEN MANCHOT, age 58. From 1975 to the present, Dr. Manchot has been
a Vice Chairman of the Shareholders' Committee of Henkel KGaA, a major worldwide
manufacturer of chemicals, household products and adhesives. Dr. Manchot is also
a Director of The Clorox Company, a manufacturer of bleaches, household products
and foods, and Transaction Network Services, Inc., a nationwide communications
network company specializing in transaction-oriented data services. He is a
member of the Committee on Human Resources, the Committee on Board Affairs and
has been a Director of the Company since 1985.
STEPHEN J. TRACHTENBERG, age 57. Mr. Trachtenberg is President and
Professor of Public Administration at The George Washington University in
Washington, D.C., a position to which he was named in 1988. He is a Director of
NationsBank, N.A., a national bank with offices throughout the State of Maryland
and Washington, D.C. and NationsBank Trust Company, N.A., a fiduciary
institution in Washington, D.C. He is a member of the Committee on Human
Resources and has been a Director since 1987.
WALLACE BARNES, age 69. Mr. Barnes is Chairman of the Board of Barnes
Group, Inc., Bristol, Connecticut, a manufacturer of precision springs and
aerospace components, among other businesses. He served as Chairman and Chief
Executive Officer of Barnes Group, Inc. from 1977 to 1991. He is Chairman of the
Board of Directors of Rohr Industries, Inc., a manufacturer of aircraft parts
and equipment; a Director of Aetna Life & Casualty Company, an insurer; Rogers
Corporation, a producer of electronic interconnection products; and Tradewind
Turbines Corporation, a convertor of aircraft to turbine power. Mr. Barnes is
Chairman of the Committee on Board Affairs, a member of the Committee on Human
Resources and has been a Director since 1990.
DAVID FREEMAN, age 50. Since April, 1993 Mr. Freeman has served as Chief
Executive Officer of the Company and has been President and Chief Operating
Officer of the Company since February 1991. From March 1990 to February 1991,
Mr. Freeman was Chief Operating Officer and Executive Vice-President of the
Company. Mr. Freeman has been an employee of Loctite for 20 years. He is a
Director of Mechanics Savings Bank, a mutual savings bank with its principal
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office in Hartford, Connecticut, and Sealed Air Corporation, a manufacturer of
packaging materials. He has been a Director since 1990.
PETER C. BROWNING, age 53. Mr. Browning joined Sonoco Products Company, a
global manufacturer of industrial and consumer packaging products, as Executive
Vice President in October, 1993. From September, 1990 until October, 1993, he
served as Chairman, President and Chief Executive Officer of National Gypsum
Company, a producer of gypsum wallboard and related construction products. From
1989 until 1990, he served as President of one of the operating divisions of
that company. Mr. Browning is a Director of Phoenix Home Life Mutual Insurance
Company, a mutual life insurance company; First Union National Bank of South
Carolina; and Pelican Companies, a building materials distributor. He is a
member of the Committee on Human Resources and has been a Director since June,
1994.
STEPHEN F. PAGE, age 55. Since January, 1993, Mr. Page has served as
Executive Vice President and Chief Financial Officer of United Technologies
Corporation, a diversified manufacturer of aircraft engines and equipment,
elevators, air conditioners and aerospace equipment. He was previously employed
for 20 years by Black & Decker Corporation, most recently as its Executive Vice
President and Chief Financial Officer. Mr. Page is a member of the Audit and
Finance Committee and has been a Director since August, 1994.
CHRISTOPH HENKEL, age 37. From 1994 to the present, Mr. Henkel has been a
Vice Chairman of the Shareholders' Committee of Henkel KGaA, a major worldwide
manufacturer of chemicals, household products and adhesives, and has been a
member of the Shareholders' Committee since 1990. In addition, since 1990 Mr.
Henkel has held various management positions in the Henkel organization. Prior
to 1990, he worked for the Carnation Company, a subsidiary of Nestle S.A., a
worldwide manufacturer of confectionaries and related products. Mr. Henkel is a
member of the Audit and Finance Committee and has been a Director since
November, 1994.
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STOCK OWNERSHIP OF MANAGEMENT
The following table sets forth certain information with respect to the
Common Stock of the Company beneficially owned by each Director, nominee, and
executive officer named in the Summary Compensation Table, individually, and by
all Directors, nominees, and executive officers of the Company as a group, as of
February 28, 1995.
AMOUNT AND NATURE
OF BENEFICIAL
OWNERSHIP (1) PERCENT OF CLASS (2)
----------------- --------------------
Robert L. Aller................................ 65,258(3) --
John K. Armstrong.............................. 3,900 --
Louis J. Baccei................................ 13,653(3) --
Wallace Barnes................................. 1,309 --
Gerardus B.E.M. Briels......................... 21,621(3) --
Peter C. Browning.............................. 0 --
Kenneth W. Butterworth......................... 110,390(4) --
Dr. Roman Dohr................................. 900 --
David Freeman.................................. 94,564(3) --
Christoph Henkel............................... 1,000 --
Robert E. Ix................................... 4,200(5) --
Frederick B. Krieble........................... 989,132(6) 2.8%
Dr. Jurgen Manchot............................. 2,900 --
Eugene F. Miller............................... 24,145(3) --
Stephen F. Page................................ 500 --
Stephen J. Trachtenberg........................ 2,700 --
All Directors, nominees and executive officers 3.8%
as a
group (16 individuals)....................... 1,336,172(3)
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(1) Information with respect to beneficial ownership is based upon information
furnished by Directors, nominees, and executive officers or is contained in
filings made with the Securities and Exchange Commission. The listing of
such securities is not necessarily an admission of beneficial ownership by
such person. Unless otherwise indicated by footnote, each person held sole
voting and investment powers over such shares.
(2) No disclosure made for less than 1%.
(3) The number of shares of Common Stock shown includes 25,400 shares as to Mr.
Aller; 9,600 shares as to Mr. Baccei; 7,500 shares as to Mr. Briels; 54,000
shares as to Mr. Freeman; and 18,200 shares as to Mr. Miller, subject to
stock options granted by the Company which are exercisable currently or
within 60 days of February 28, 1995.
(4) Included in the amount shown are 2,290 shares held in trust for the benefit
of Mr. Butterworth's spouse.
(5) Included in the amount shown are 300 shares beneficially owned by Mr. Ix's
spouse.
(6) Included in the amount shown are 39,936 and 216,224 shares owned by
Management I, Limited and Management II Limited, family investment
companies, respectively, as to which Mr. Krieble has shared voting and
investment powers; 692,458 shares owned by another family investment
company, as to which Mr. Krieble has sole voting and investment powers; and
22,426 shares owned by Mr. Krieble's spouse.
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BOARD OF DIRECTORS, COMMITTEE MEETINGS AND DIRECTOR COMPENSATION
The business and affairs of the Company are managed by the Board of
Directors subject to the Company's Certificate of Incorporation and By-Laws and
the laws of the State of Delaware.
Pursuant to the By-Laws, the Board of Directors elects the officers of the
Company, including the chief executive officer, who perform such duties and
possess such powers as customarily pertain to their respective offices, as are
imposed by the By-Laws, and as from time to time are prescribed by the Board of
Directors. The Board regularly reviews various aspects of the business and
affairs of the Company including budgets, results of operations, financial
matters, as well as the annual and longer term plans of the Company. The Board
also reviews and approves certain fundamental corporate matters such as changes
in capital structure, issuance of stock, dividend policy, major borrowings, and
acquisitions or divestitures.
The Directors are elected at each Annual Meeting of Stockholders. During
the fiscal year ended December 31, 1994, the Board of Directors held six
meetings.
The Board of Directors has established three committees to assist in the
discharge of its responsibilities. The functions of these committees, and the
members which are appointed annually by the Chairman of the Board of Directors,
are described below. During the fiscal year ended December 31, 1994, the Audit
and Finance Committee and the Committee on Human Resources held four meetings
each, and the Committee on Board Affairs held one meeting.
Audit and Finance Committee--The Audit and Finance Committee currently
consists of five members as follows: Dr. Roman Dohr (Chairman), John K.
Armstrong, Frederick B. Krieble, Stephen F. Page, and Christoph Henkel.
The Audit and Finance Committee recommends to the Board of Directors the
selection of the Company's independent accountants; reviews with its internal
auditors, independent accountants, and management the Company's policies and
procedures with respect to internal auditing, accounting, and financial
controls; reviews with the independent accountants the scope and results of
their audits, their findings and recommendations; approves the schedule of
planned professional services provided by the independent accountants prior to
the performance of such services; considers the range of audit and nonaudit
fees; reviews with the independent accountants, upon completion of their audit,
their report; makes recommendations to the Board of Directors concerning cash or
stock dividends to be declared; reviews and recommends to the Board matters
concerning capital expenditures and uses of the Company's cash and other
tangible assets, including facilities and real property; and generally reviews
and makes recommendations concerning the financial operations of the Company to
the Board of Directors.
Committee on Human Resources--The Committee on Human Resources currently
consists of five members as follows: Robert E. Ix (Chairman), Wallace Barnes,
Stephen J. Trachtenberg, Dr. Jurgen Manchot, and Peter C. Browning.
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The Committee on Human Resources reviews the salary structure and policies
of the Company; reviews and approves the salaries of all officers, operating
executives, and key employees above a certain position level; annually reviews
and recommends to the Board nominees for election to the Company's Board of
Directors and confirms the election of the Company's officers; reviews,
interprets and administers such of the Company's employee incentive compensation
plans as are specifically delegated to it by the plans or by the Board and
grants bonuses, options and benefits under such plans; reviews and administers
certain aspects of the Company's retirement and thrift investment plans; and
reviews employee fringe benefits.
Committee on Board Affairs--The Committee on Board Affairs currently
consists of five members as follows: Wallace Barnes (Chairman), Robert E. Ix,
Kenneth W. Butterworth, Dr. Jurgen Manchot, and David Freeman.
The Committee on Board Affairs is a standing Committee. It will meet as and
when needed, to consider and make recommendations to the full Board on matters
of Board process and governance, including review of potential candidates for
new directors, director compensation, evaluation of director performance and
continued suitability for membership on the Board; and any other similar matters
put to the Committee by the full Board.
Each member of the Board of Directors attended more than 90 percent of the
aggregate of the total number of meetings of the Board of Directors and the
total number of meetings held by Committees of the Board on which he served.
Except as otherwise indicated under "Executive and Consulting Agreements," each
director who is not an officer of the Company is paid an annual retainer fee of
$20,000 for membership on the Board, an additional fee of $1,000 for each Board
meeting, and a fee of $1,000 in the event of a Committee meeting which occurs
apart from a regular Board meeting. In addition, each Committee Chairman
receives an annual retainer fee of $3,000. Officers who are Directors do not
receive retainers or meeting fees.
Each non-employee Director receives an award of 300 unrestricted shares of
Common Stock, subject to adjustment for stock splits and dividends, at the time
of election or reelection to the Board of Directors at an Annual Meeting.
Directors are not required to pay any cash or other consideration for shares so
awarded.
Effective July 1, 1990, the Company adopted a retirement plan for outside
Directors to allow the Company to attract and retain the services of
non-employee Directors with the requisite qualifications. The plan is
administered by the Committee on Human Resources, is nonqualified and provides a
cash benefit paid from the general funds of the Company.
Each member of the Board terminating service with the Board shall be
entitled under the plan to an annual benefit in an amount equal to such member's
vested percentage multiplied by 50% of compensation received by such member for
serving on the Board during such member's final year of service. The vested
percentage is zero until the completion of three years' service, when it becomes
30% and then increases in 10% increments up to 100% for ten or more years of
service. In
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computing years of service, each member is credited with a year of service for
each full term served as a member of the Board for which the member is elected
by the stockholders of the Company, including such terms completed prior to the
effective date of the plan.
Only non-employee Directors of the Company are eligible to receive benefits
under the plan. Consequently, employee Directors do not become eligible until
they sever employment with the Company, and do not receive any credit for
vesting purposes for service on the Board while they were employees of the
Company. Benefits paid out under the plan terminate upon the date of death of
the former Board member.
Beginning in January 1994, Mr. Butterworth was retained as a consultant to
the Company and will receive payments of $17,000 per month until December 31,
1995. Additionally, during his tenure as a director, Mr. Butterworth will
receive an amount equal to two times the retainer and meeting fees paid to
non-employee directors of the Company. Although he is no longer an employee of
the Company, Mr. Butterworth will not participate in the Non-Employee Director
Retirement Plan and will not receive stock normally received by nonemployee
directors upon their election or re-election to the Board.
STOCKHOLDER NOMINATIONS
While there is no formal Nominating Committee of the Board of Directors,
this function has been delegated to the Committee on Human Resources. Under the
Company's By-laws, a stockholder may nominate persons for election to the Board
of Directors at any meeting of the stockholders called for the election of
directors. The stockholder must be entitled to vote for the election of
directors at the meeting and must provide timely notice in writing to the
Secretary of the Company of any nomination. To be timely, a stockholder's notice
must be delivered to or mailed and received at the principal executive offices
of the Company not less than 60 nor more than 90 days prior to the meeting. If
less than 70 days' notice or prior public disclosure of the date of the meeting
is given or made to stockholders, the stockholder's notice must be received by
the Company not later than the close of business on the tenth day following the
day on which notice of the date of the meeting or the public disclosure was
made. A stockholder's notice must contain (1) as to each nominee, all
information relating to the nominee that is required to be disclosed in
solicitations of proxies for election of directors under the regulations of the
Securities and Exchange Commission and (2) as to the stockholder giving the
notice, the name and address as they appear on the Company's books of the
stockholder proposing the nomination and any other stockholders known by the
stockholder to be supporting the nomination and the class and number of shares
which are beneficially owned by the stockholder. No stockholder nominations were
submitted with respect to the 1995 annual meeting in accordance with the
procedure prescribed by the Company's Bylaws.
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EXECUTIVE COMPENSATION AND OTHER INFORMATION
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and non-cash compensation for each
of the last three fiscal years awarded to or earned by the Chief Executive
Officer of the Company and the four other most highly compensated executive
officers of the Company.
LONG TERM COMPENSATION
-------------------------------
AWARDS
ANNUAL -------------------------------
COMPENSATION RESTRICTED SECURITIES
-------------------- STOCK UNDERLYING ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) AWARD(S)(2) OPTIONS/SARS(#)(3) COMPENSATION(4)
- ---------------------------- ---- -------- -------- ----------- ------------------ ---------------
David Freeman, 1994 $370,006 $185,000 $ 0 6,000 $ 4,500
President and Chief 1993 348,756 0 0 10,000 7,075
Executive Officer 1992 304,890 152,500 0 2,000 6,866
Robert L. Aller, 1994 217,573 91,000 0 3,500 4,500
Senior Vice President -- 1993 210,750 0 0 0 7,075
Finance and Administration 1992 200,000 70,000 0 0 6,866
Gerardus B.E.M. Briels, 1994 203,591 104,250 0 5,000 4,500
Vice President and
President, 1993 190,000 0 0 0 7,075
North American Group 1992 165,384 95,000 0 5,000 548
Louis J. Baccei, 1994 179,969 74,400 0 4,000 1,800
Senior Vice President and 1993 169,923 0 0 0 2,339
President--Research, 1992 160,000 64,000 0 0 2,300
Development & Engineering
Eugene F. Miller, 1994 165,785 69,600 0 3,500 4,500
Vice President, Secretary 1993 160,269 0 0 0 6,398
and General Counsel 1992 152,000 53,000 0 0 6,660
- ---------------
(1) The bonus amounts are payable pursuant to the Company's Management Incentive
Compensation Plan described under the caption "Committee on Human Resources
Report on Executive Compensation." Bonuses payable under this Plan are
determined by reference to the executive's base salary in effect at fiscal
year end.
(2) As of December 31, 1994, the number and value of aggregate restricted stock
holdings were as follows: 15,000 shares ($697,500) by Mr. Freeman; 10,000
shares ($465,000) by Mr. Aller; 10,000 shares ($465,000) by Mr. Briels;
2,000 shares ($93,000) by Dr. Baccei; and 5,000 shares ($232,500) by Mr.
Miller. Dividends are paid on the restricted stock to the same extent paid
on all outstanding shares.
(3) Stock Appreciation Rights are not available under any of the Company's
incentive plans.
(4) The compensation reported represents Company contributions under the
Employee Thrift Investment Plan.
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OPTIONS
The following tables summarize option grants and exercises during fiscal
1994 to or by the executive officers named in the Summary Compensation Table
above, and the value of the options held by such persons at December 31, 1994.
Stock Appreciation Rights are not available under any of the Company's plans.
OPTION GRANTS IN FISCAL 1994
INDIVIDUAL GRANTS
---------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT
NAME GRANTED FISCAL 1994 ($/SHARE) DATE VALUE(1)
- ----------------------------- ----------- ------------ ----------- ---------- ----------
David Freeman................ 6,000(2) 3.3% $42.875 2/22/04 $137,700
Robert L. Aller.............. 3,500(2) 1.9% $42.875 2/22/04 80,325
Gerardus B.E.M. Briels....... 5,000(2) 2.8% $42.875 2/22/04 114,750
Louis J. Baccei.............. 4,000(2) 2.2% $42.875 2/22/04 91,800
Eugene F. Miller............. 3,500(2) 1.9% $42.875 2/22/04 80,325
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(1) Present value determinations were made using a Black-Scholes option pricing
model. The actual value, if any, an executive may realize will depend on
the excess of the stock price over the exercise price on the date the
option is exercised, so that there is no assurance the value realized by an
executive will be at or near the value estimated by the Black-Scholes
model. The estimated values under that model are based on a volatility
factor of 16.2% (which was based on the 1994 daily closing prices of the
stock), an interest rate factor of 7.85% (which was based on U.S. Treasury
Bonds with a maturity date closest to the expiration date of the option)
and dividend yield assumptions which factored in the actual dividends for
1994. There was no time of exercise assumption made, or any adjustment for
non-transferability or risk of forfeiture.
(2) These options were granted on February 22, 1994, and will become exercisable
as to the underlying shares on the following dates: 40% of the shares on
February 22, 1995; 20% of the shares on February 22, 1996; 20% of the
shares on February 22, 1997; and 20% of the shares on February 22, 1998.
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AGGREGATED OPTION EXERCISES IN FISCAL YEAR 1994
AND VALUE OF OPTIONS AT END OF FISCAL 1994
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS OPTIONS
SHARES AT FISCAL AT FISCAL
ACQUIRED YEAR-END(#) YEAR-END($)
ON VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE(1)
- -------------------------- ------------ -------------- -------------- ------------------
David Freeman............. 1,500 $ 50,438 49,200/16,800 $1,195,300/96,450
Robert L. Aller........... 0 0 24,000/ 6,500 519,500/35,187
Gerardus B.E.M. Briels.... 0 0 4,500/ 7,000 59,062/21,125
Louis J. Baccei........... 0 0 8,000/ 6,000 60,000/29,500
Eugene F. Miller.......... 0 0 16,800/ 7,500 145,500/42,687
- ---------------
(1) Value based on market value of the Company's Common Stock at date of
exercise (column 3) or end of fiscal 1994 (column 5), minus the exercise
price.
COMMITTEE ON HUMAN RESOURCES REPORT ON EXECUTIVE COMPENSATION
General Philosophy:
The Committee on Human Resources of the Board of Directors ("Committee") is
composed entirely of non-employee Directors and is responsible for considering
and submitting recommendations to the Board in connection with the Company's
executive compensation policies. It is the philosophy of the Committee to
establish a total compensation program for executive officers which is superior
to the Company's peer group and at least competitive with a broader range of
companies of comparable size and complexity in order to attract and retain the
best and the brightest managerial talent. Some of the companies studied by the
Committee are included in the S&P Chemicals and Materials Index, the stock
performance of which is shown on the Performance Graph on page 16. Other
companies which the Committee considers comparable are included in the broader
S&P Chemicals Index. The Committee believes that this philosophy will reward
stockholders with superior performance and return on investment.
The Committee has recently obtained from an internationally recognized
compensation consulting firm independent compensation data, which compares the
total compensation programs of the Company, certain of its peer group and
selected other companies which the Committee believes are comparable to the
Company. Based on a preliminary analysis of the compensation data obtained from
this compensation consultant, the Committee has determined that 1994 total
compensation for executive officers is at the low end of the range of compared
companies. Consequently, in order to offer a total compensation program which is
superior to the Company's
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peer group, the Committee will be considering in 1995 an upward adjustment to
its compensation package for executive officers.
Executive Officer Compensation Program:
The Company's executive officer compensation program is comprised of base
salary, annual cash incentive compensation, long term incentive compensation in
the form of stock options, restricted stock grants and various benefits,
including medical and pension plans generally available to all employees of the
Company.
Base Salary:
Base salary ranges for the Company's executive officers are reviewed
periodically by the Committee following analysis of published salary trends and
data among the Company's peer industries and other comparable companies, and
following review of periodic recommendations submitted by outside compensation
consultants. With the exception of Mr. Freeman, whose base salary was not
scheduled for review, the Committee approved average increases in base salaries
for executive officers during 1994, which reflected, to some degree, the effects
of inflation and, to a greater extent, performance appraisals. The Committee did
not consider independent compensation data when approving adjustments to base
salary for executive officers in 1994. After preliminary analysis of the recent
compensation data mentioned above, the Committee has determined that base
salaries for executive officers, excluding Mr. Freeman, are slightly below the
median salary range of compared companies. However, with regard to Mr. Freeman,
the Committee has found his base salary to be at the low end of the salary range
of compared companies.
Annual Incentive Compensation:
The Management Incentive Compensation Plan (the "Plan") is the Company's
annual incentive program for executive officers and key managers. When viewed
together with the Company's base salary program, the purpose of the Plan is to
provide a balance between fixed compensation and variable, results-oriented
compensation. The Plan is intended to reward superior results with overall
superior compensation. The Committee determines awards under the Plan by
comparing the Company's actual performance for each fiscal year with the
Company's annual business plan for such year, which is approved by the Board of
Directors. Key elements of each annual business plan are the Company's sales
growth and profitability and return on shareholders' equity, with particular
reference to the preceding fiscal year. Additional factors which the Committee
considers are the relationship of the year's results with the most recent
long-range and strategic goals and objectives, the general economic environment
during the year, and the performance of the Company's peer group. Finally, the
Committee also considers individual
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factors such as the executive's achievement of approved target accomplishments,
and his or her contributions to the long-range growth and profitability
objectives of the Company.
With regard to the Company's fiscal year ending December 31, 1994, the
Committee approved the maximum bonuses payable under the Plan for the executive
officers named in the Summary Compensation Table on page 9, which range from 40
to 50 percent of base salary. Executives with line responsibility are eligible
for a higher percentage bonus than staff executives because the performance of
line executives has a more direct impact on the Company's operating results.
Because the Company substantially exceeded all of the goals enumerated in its
1994 annual business plan, the Committee concluded that the Company's executive
officers had in each case earned the maximum bonus allowed by the Plan.
Other Compensation Plans:
The Company's stock option and restricted stock plans are intended to
provide long-term incentives to executive officers and key managers and to
encourage such individuals to maintain a significant long-term ownership
position in the Company's common stock. During recent years the Committee has
preferred to award restricted stock to employees at all levels below the
executive officer level and to reserve, although not exclusively, stock options
for executive officers and other managers in the belief that stock options more
closely tie executive performance to the enhancement of shareholder values. Both
in the case of restricted stock and stock options the Committee looks at the
executive's total holdings before making an award under either plan. In 1994,
the Committee awarded stock options to each executive officer, including Mr.
Freeman, which are reflected in the Option Grant Table on page 10. In
determining whether to award stock options and the size of such award to each
executive, the Committee considered the dates and numbers of shares awarded
previously to each such executive, as well as the ability of each executive
individually to contribute to achieving the sales and operating profit goals
established in the Company's 1994 annual business plan. As in the case of cash
compensation, the size of option awards tends to be larger for executives with
line rather than staff responsibilities.
The Company recently adopted a nonqualified thrift investment plan for
executive officers and other highly compensated employees whose participation in
the Company's qualified thrift investment plan is restricted because their
compensation exceeds applicable Internal Revenue Code limitations. This plan
became effective on January 1, 1995 and supplements the qualified plan by
providing the participants the opportunity to obtain benefits to the same extent
they are offered to other employees under the qualified plan.
Benefits:
The Company provides medical and pension benefits to the executive officers
that are generally available to Company employees. The amount of perquisites, as
determined in accor-
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dance with the rules of the Securities and Exchange Commission relating to
executive compensation, did not exceed reportable thresholds for fiscal 1994.
Limitation on Deductibility of Certain Compensation:
The Internal Revenue Service has adopted regulations which limit the
deductibility, for income tax purposes, of certain executive compensation in
excess of $1,000,000 in a single tax year. The Committee does not believe that
this limitation will be relevant to the Company in 1995. Accordingly, the
Committee has not yet established a policy with respect to qualifying executive
compensation for deductibility under these new tax regulations. However, in
anticipation of possible future growth in executive compensation to levels that
do exceed this $1,000,000 per year limit, the Committee will analyze during 1995
the alternatives available under the law to maximize the tax-deductibility of
future compensation paid to executives, including in particular the alternative
of submitting performance-based compensation plans to the Company's stockholders
for approval in 1996.
Chief Executive Officer Compensation:
During 1994 Mr. Freeman received a base salary of $370,000, which is the
amount to which his base salary was increased upon being named chief executive
officer in April, 1993. It has been the Committee's policy to review executive
officer and Chief Executive Officer base salaries on an 18 to 24 month basis;
consequently, Mr. Freeman's base salary was not increased during 1994, but will
be reviewed early in 1995. In reviewing Mr. Freeman's base salary, the Committee
expects to pay close attention to the independent compensation data recently
received which has compared the Company with its peer group and other comparable
companies. As has been noted already, Mr. Freeman's current base salary is at
the low end of the range of compared companies.
Based on the Company's outstanding performance in 1994 and the fact that it
substantially exceeded the sales and operating profit growth goals set down in
the Company's 1994 annual business plan, the Committee awarded Mr. Freeman a
bonus of $185,000, or 50% of his base salary, the maximum bonus to which Mr.
Freeman is entitled under the Company's Management Incentive Compensation Plan.
In awarding the maximum bonus under the Plan, the Committee also considered Mr.
Freeman's leadership in directing the streamlining of the European and Pacific
management operating structures, which the Committee expects will boost sales
and profitability,
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and the delivery on time and on budget of the Company's new $36 million North
American Administration and Research and Development headquarters building.
ROBERT E. IX, CHAIRMAN
WALLACE BARNES
STEPHEN J. TRACHTENBERG
DR. JURGEN MANCHOT
PETER C. BROWNING
MEMBERS OF THE COMMITTEE ON HUMAN RESOURCES
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COMPARATIVE STOCK PERFORMANCE
The following is a graph which compares the five year cumulative return
from investing $100 on December 31, 1989 in each of Loctite Corporation common
stock; the S&P 500; the S&P Chemicals; and the S&P Chemicals & Materials Index,
with dividends assumed to be reinvested when received. The S&P Chemicals
&Materials Index is an index published by Standard & Poor's Corporation which
tracks 20 companies in the S&P MidCap 400 Index that have been categorized as
chemicals and materials companies.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
AMONG LOCTITE, S&P 500, S&P CHEMICALS AND S&P MID-CAP CHEM & MAT INDICES
MEASUREMENT PERIOD S&P MID- CAP
(FISCAL YEAR COVERED) LOCTITE CORP CHEM & MAT S&P 500 S&P CHEMICALS
1989 100 100 100 100
1990 130 111 97 85
1991 221 173 126 111
1992 206 187 136 121
1993 170 206 150 136
1994 219 219 152 157
*$100 INVESTED ON 12/31/89 IN STOCK OR INDEX. INCLUDING REINVESTMENT OF
DIVIDENDS. FISCAL YEAR ENDING DECEMBER 31.
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PENSION BENEFITS
The Company's non-contributory, defined benefit pension plan covers all
persons regularly employed by the Company on a salaried and hourly basis, except
certain employees covered by collective bargaining agreements.
The pension plan establishes an account for each employee when the employee
becomes an "Active Participant" in the plan (upon completion of one year of
continuous service) and credits the account with a percentage of pay for each
year worked after becoming an Active Participant. For employees with less than
10 years of service, this annual credit equals 4% of that year's compensation
which is not in excess of 1/3 of the current social security wage base and 6% of
that year's compensation which exceeds 1/3 of the current social security wage
base. For employees with 10 or more years of service, this annual credit equals
5% of that year's compensation which is not in excess of 1/3 of the current
social security wage base and 7% of that year's compensation which exceeds 1/3
of the current social security wage base. Accounts are also credited with a
guaranteed rate of interest. To the extent that the pension plan benefits of any
of the executives named in the Summary Compensation Table are limited by the
provisions of Section 401(a)(17) or 415 of the Internal Revenue Code of 1986, as
amended, the Company's nonqualified retirement plan supplements the benefits
under the pension plan.
The estimated annual pension benefits payable under the pension plan, as
supplemented by the nonqualified retirement plan, upon retirement at age 65,
assuming no change in salary and annual interest credits of 8%, for each of the
following executives are $199,465 for David Freeman, $83,267 for Robert L.
Aller, $19,358 for Gerardus B.E.M. Briels, $41,561 for Louis J. Baccei, and
$100,758 for Eugene F. Miller.
Mr. Briels is also entitled to receive pension benefits under a pension
plan for designated foreign executives which provides for defined benefits in
the event of retirement at a specified age and after a specified number of years
of service based on average final compensation (highest average consecutive
three calendar year earnings during the last ten calendar years of employment).
Benefits under this plan are estimated to be as follows:
PENSION PLAN TABLE
AVERAGE YEARS OF SERVICE
FINAL ------------------------------------------------------------
COMPENSATION 15 20 25 30 35
- ------------ -------- -------- -------- -------- --------
$100,000 $ 30,000 $ 40,000 $ 50,000 $ 50,000 $ 50,000
$200,000 $ 60,000 $ 80,000 $100,000 $100,000 $100,000
$300,000 $ 90,000 $120,000 $150,000 $150,000 $150,000
$400,000 $120,000 $160,000 $200,000 $200,000 $200,000
$500,000 $150,000 $200,000 $250,000 $250,000 $250,000
Benefits shown in the foregoing table are straight life annuity amounts
(although benefits under the plan are actually payable in either an actuarially
equivalent lump sum or an actuarially
17
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equivalent series of equal installment payments over ten years) and are subject
to reduction by the sum of pension benefits under any other plan of the Company,
any mandatory or legally required severance or termination benefit paid by the
Company and Social Security or other governmental pension. For Mr. Briels, as of
December 31, 1994, average final compensation is $235,994 and years of service
are 30.
EXECUTIVE AND CONSULTING AGREEMENTS
The Company has agreements with seven of its senior executives, including
Messrs. Freeman, Aller, Briels and Miller which provide that the executives will
be entitled to a two-year term of employment with the Company following any
"Change-in-Control" of the Company (as defined). In the event that the
executive's employment with the Company terminates for any reason other than
Cause (as defined below), voluntary resignation (including retirement), death or
permanent disability prior to the end of the two-year period following a
Change-in-Control, the executive will receive severance pay equal to the total
compensation and benefits the executive would have received if the term of
employment had continued for the full two-year period. However, portions of the
severance pay will be reduced to the extent that such severance pay would be
non-deductible to the Company under Section 280G of the Internal Revenue Code of
1986 as amended. The restrictions under Section 280G will not apply if the
present value of all payments to be received by the executive (whether under the
agreement or otherwise) does not exceed three times the average compensation
received by the executive during the five years preceding the Change-in-Control.
Cause is defined as (a) a continued breach of the executive's duties of
employment after notice from the Company; or (b) willful misconduct by the
executive which is demonstratively and materially injurious to the Company. If
the executive's employment terminates for Cause, voluntary resignation, death or
disability, the executive receives no benefits under that agreement other than
as accrued as of the date of such termination, and must look to the Company's
normal policies for any retirement, death or disability benefits.
The agreements provide that a Change-in-Control shall have occurred if: (a)
a Person (as defined) has the power to vote 30% or more of the common stock of
the Company; (b) a Person acquires or agrees to acquire all or substantially all
of the assets or business of the Company; (c) during any two year period, the
new members of the Board of Directors elected during that period constitute a
majority of the Board unless such new members are approved by at least a two-
thirds vote of the Board members in office at the beginning of such period; or
(d) the Board of Directors determines that a Person directly or indirectly
exercises a controlling influence over the Company.
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OWNERSHIP OF THE COMPANY'S SECURITIES
The following table sets forth as of December 31, 1994, the beneficial
ownership of the Company's Common Stock by each person known to the Company to
own beneficially more than 5% of the Company's outstanding Common Stock, the
Company's only class of voting securities.
SHARES
NAME AND ADDRESS BENEFICIALLY PERCENT OF
OF BENEFICIAL OWNER OWNED CLASS
- -------------------------------------------------------- ---------- ----------
HC Investments, Inc.(1)................................. 10,929,383 30.9%
1100 North Market Street
Wilmington, Delaware 19890
Capital Research and Management Company(2).............. 1,795,000 5.08%
333 South Hope Street
Los Angeles, California 90071
- ---------------
(1) A wholly-owned U.S. subsidiary of Henkel KGaA, Germany, with which Drs. Dohr
and Manchot and Mr. Henkel, Director nominees, are associated.
(2) A registered investment adviser and an operating subsidiary of The Capital
Group Companies, Inc., exercised as of December 31, 1994, investment
discretion with respect to the above mentioned shares, which were owned by
various institutional investors. Said subsidiary has no power to direct the
vote of the above shares.
SECTION 16 REPORTS
Section 16 of the Securities Exchange Act of 1934 requires officers and
Directors and certain stockholders to file with the Securities and Exchange
Commission reports of their transactions in the Company's Common Stock. These
reports must be filed by specified due dates. In 1994, on the basis of copies of
such reports provided to the Company, all reports were timely filed except for
one report on Form 3 by each of Mr. Browning and Mr. Page, and one transaction
on Form 5 by Mr. Freeman.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In connection with the adoption of the Company's Shareholder Rights Plan on
April 14, 1994, the Company entered into an agreement (the "Henkel Agreement")
with its largest shareholder, HC Investments, Inc. (and its parent company,
Henkel Corporation, and its ultimate parent corporation, Henkel KGaA
(collectively, "Henkel")). The Henkel Agreement provided for, among other
things, the termination of the existing Standstill Agreement, dated May 23,
1985, between the Company and Henkel Corporation, as successor to Henkel of
America, Inc., the enlargement of the size of the Board of Directors from 10 to
the maximum of 12 members
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currently permitted under the Company's Certificate of Incorporation (with the
Company being restricted from expanding or reducing the size of the Board of
Directors without Henkel's prior written consent) and various mechanisms to
ensure that the arrangement between the Company and Henkel set forth in the
Henkel Agreement and the Shareholder Rights Plan will remain in place for 10
years. In addition, under the Henkel Agreement, Henkel's right of first refusal
on the shares of the Company's Common Stock held by the Krieble family remains
in effect.
Under the Henkel Agreement, in connection with the annual election of
directors, Henkel is entitled to recommend to serve as a member of the Board of
Directors of the Company the following number of persons: three persons at any
time that Henkel, together with its affiliates, owns at least 25% of the
outstanding shares of Common Stock; two persons at any time that Henkel,
together with its affiliates, owns between 15% and 25% of the outstanding shares
of Common Stock; and one person at any time that Henkel, together with its
affiliates, owns between 10% and 15% of the outstanding shares of Common Stock.
The Henkel Agreement provides that Henkel is not entitled to recommend any
directors from and after the time that Henkel, together with its affiliates,
owns less than 10% of the outstanding shares of Common Stock. Such
recommendations by Henkel are subject to the approval of a majority of all of
the directors, which approval may not be unreasonably withheld.
The Henkel Agreement also provides that at least one director recommended
by Henkel must be a member of any key committee of the Board of Directors that
has up to four members, and at least two directors recommended by Henkel must be
members of any key committee of the Board of Directors that has five or more
members. Under the Henkel Agreement, the obligation to appoint directors
recommended by Henkel to committees of the Board of Directors will lapse from
and after the time that Henkel, together with its affiliates, owns less than 10%
of the outstanding shares of Common Stock.
Henkel, together with its affiliates, owns approximately 10,945,283 shares
of Common Stock as of February 21, 1995, the date of the meeting of the Board of
Directors at which the nomination for election of directors was held, or
approximately 30.9% of the outstanding shares of Common Stock. Henkel was
therefore entitled to recommend under the Henkel Agreement three persons to be
directors of the Company. Henkel recommended Dr. Roman Dohr, Dr. Jurgen Manchot
and Mr. Christoph Henkel to serve as directors on the Board of Directors, each
of whom has been serving as such previously, and the entire Board of Directors
approved such nominees.
PROPOSAL 2
INCREASE IN AUTHORIZED STOCK
The Company's Certificate of Incorporation currently authorizes the
issuance of 100,000,000 shares of Common Stock, $0.01 par value per share. As of
February 28, 1995, 35,389,000 shares of Common Stock were issued and
outstanding, an additional 661,000 shares of Common Stock
20
23
were subject to options granted under the company's stock option plans, and an
additional 13,417 shares were held as treasury shares, leaving a balance of
34,714,583 authorized, unissued and unreserved shares of Common Stock. The
Company's Board of Directors has proposed that the Company's Certificate of
Incorporation be amended to increase the authorized number of shares of Common
Stock to 300,000,000.
The Board of Directors believes that the authorization of such additional
shares of Common Stock is in the best interests of the Company and its
stockholders and is appropriate in order to provide added flexibility for future
corporate purposes which may include capital and financing needs, stock
distributions and stock splits, business acquisitions, management incentive and
employee benefit plans and other general corporate purposes. The increase in the
number of authorized shares of Common Stock will permit the Board of Directors
to approve the issuance of additional shares of Common Stock if warranted
without the need for further action by stockholders to authorize such shares,
subject to present or future requirements of any stock exchange upon which the
Common Stock may be listed and applicable law. The Board of Directors believes
that the availability of such additional shares of Common Stock would enable the
Company to act promptly to take advantage of various corporate opportunities as
such opportunities arise without the delay or cost of calling a special
stockholder meeting. The proposed increase would also make additional shares of
Common Stock available for the outstanding rights under the Company's
Shareholder Rights Plan, dated April 14, 1994 (the "Plan"), if those rights were
ever triggered pursuant to the provisions of the Plan.
The additional authorized shares of Common Stock could also conceivably be
issued to make any attempt to acquire control of the Company more difficult and
costly and thereby discourage attempts to acquire the Company. For example,
additional shares of Common Stock could be sold in private placement
transactions to purchasers who support the Board of Directors and who are
opposed to a takeover bid which the Board of Directors believes is not in the
best interests of the Company and its shareholders. Additional shares of Common
Stock could also be issued to increase the aggregate number of outstanding
shares of Common Stock, thereby diluting the interest of parties attempting to
obtain control of the Company. If an issuance of additional shares of Common
Stock is made on other than a pro rata basis to all shareholders, dilution of
ownership interest and voting power of existing shareholders may occur and,
depending on the consideration for which the shares of Common Stock were issued,
could dilute earnings per share.
There are at present no plans or arrangements concerning the issuance of
additional shares of Common Stock, except pursuant to outstanding stock options
and employee benefit plans. If any plans or arrangements are made concerning the
issuance of any such shares, holders of the then outstanding shares of Common
Stock may or may not be given the opportunity to vote thereon, depending upon
the nature of any such transaction, the law applicable thereto, the policy of
any stock exchange upon which the shares of Common Stock may be listed at such
time and the judgment of the Board of Directors.
21
24
None of the outstanding shares of Common Stock have preemptive rights or
cumulative voting rights. The proposed amendment to the Company's Certificate of
Incorporation would not change the terms and conditions of the outstanding
shares of Common Stock and the additional shares of Common Stock proposed to be
authorized when issued would be identical to the outstanding shares of Common
Stock. Each certificate representing shares of Common Stock outstanding
immediately prior to the effective date of the proposed amendment to the
Company's Certificate of Incorporation, if it is adopted by the stockholders at
the Annual Meeting, would remain outstanding and represent the same number of
shares of Common Stock as before such effective date. Additional shares of
Common Stock may be issued under authority of the Board of Directors for such
price or consideration as may be approved by the Board without further
stockholder approval unless required by the policy of any stock exchange upon
which the shares of Common Stock may be listed at such time or by applicable
law.
The following resolution will be voted on by the stockholders at the Annual
Meeting:
RESOLVED, that Article Fourth of the Certificate of Incorporation of
the Company be amended by deleting the present provisions thereof and
inserting the following in lieu thereof:
"Fourth. The total number of shares of stock which the Corporation
shall have authority to issue is 300,000,000. The par value of each share
is $0.01. All such shares are of one class and are Common Stock."
The affirmative vote of the holders of the majority of the outstanding
shares of Common Stock is required to approve the foregoing amendment.
Abstentions and broker non-votes will have the effect of votes against the
foregoing amendment. The Board of Directors unanimously recommends that the
stockholders of the Company vote FOR approval of the increase in authorized
shares of Common Stock.
PROPOSAL 3
CONFIRMATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Board of Directors of the Company has appointed Price Waterhouse LLP,
independent accountants, to examine the accounts of the Company for the current
fiscal year and to report on the Company's financial statements for that period.
The firm of Price Waterhouse LLP has acted as independent accountants for the
Company since 1966. Representatives of Price Waterhouse LLP will be present at
the Annual Meeting to make a statement if they desire to do so and to respond to
appropriate questions.
The Audit and Finance Committee reviews annually the services that Price
Waterhouse LLP may be requested to provide from time-to-time and considers the
effect that the performance of these services may have on their audit
independence. It establishes guidelines, including dollar limitations, under
which Price Waterhouse LLP may be retained to perform nonaudit services.
22
25
The Committee annually reviews the services actually performed to determine that
they were in accordance with the guidelines it established.
There is no requirement that the appointment of Price Waterhouse LLP as the
Company's independent accountants be submitted to the stockholders for their
approval. However, the Board of Directors believes that stockholders should be
provided an opportunity to express their views on the subject. The Board of
Directors will not be bound by a negative vote, but will take that vote into
consideration in future years.
The Board of Directors unanimously recommends a vote FOR confirmation of
the appointment of Price Waterhouse LLP as independent accountants of the
Company for the current fiscal year.
OTHER MATTERS
The Board of Directors and management of the Company know of no matters to
be presented at the Annual Meeting other than those set forth in the Notice of
Annual Meeting of Stockholders. However, if any other matters properly come
before the meeting, the persons named in the enclosed proxy intend to vote the
shares to which the proxy relates on such matters in accordance with their best
judgment.
23
26
STOCKHOLDER PROPOSALS
Proposals intended for inclusion in the 1996 Proxy Statement should be sent
to the Secretary, Loctite Corporation, 10 Columbus Boulevard, Hartford, 06106
and must be received by November 16, 1995. The Company's next Annual Meeting is
scheduled to take place on April 24, 1996. In addition, the Company's By-laws
permit stockholders to bring proposals before the Annual Meeting if the
stockholder has given timely notice of the proposal in writing to the Secretary.
For a stockholder's notice to be timely, it must be delivered to or mailed and
received at the foregoing address not less than 60 nor more than 90 days prior
to the scheduled Annual Meeting, regardless of any postponements, deferrals or
adjournments of that meeting to a later date. If less than 70 days notice or
prior public disclosure of the date of the scheduled Annual Meeting is given or
made, the stockholder's notice must be delivered or received not later than the
close of business on the 10th day following the earlier of the day on which
notice of the date of the scheduled Annual Meeting was mailed or the day on
which the public disclosure was made. A stockholder's notice must include (1) a
brief description of the proposal desired to be brought before the Annual
Meeting, (2) the name and address as they appear on the Company's books of the
stockholder proposing such business, (3) the class and number of shares which
are beneficially owned by the stockholder on the date of the stockholder's
notice and (4) any material interest of the stockholder in the proposal.
By Order of the Board of Directors
EUGENE F. MILLER
Secretary
Hartford, Connecticut
March 15, 1995
24
27
PROXY
THIS PROXY IS SOLICITED BY AND ON BEHALF OF
THE BOARD OF DIRECTORS OF
LOCTITE CORPORATION Loctite Corporation Proxy
P
R PROXY FOR ANNUAL MEETING OF STOCKHOLDERS APRIL 26, 1995
O
X
Y The undersigned hereby appoints Eugene F. Miller and William V. Grickis, Job-FINAL: 2/21/95
Jr., or either of them, proxies, with full power of substitution, to act for
and to vote the shares of stock of Loctite Corporation which the undersigned
would be entitled to vote if personally present at the Annual Meeting of
Stockholders of said Company to be held on April 26, 1995, and at any and all
adjournments thereof. 3 Proposals
Receipt of the Company's Notice of the Annual Meeting of Stockholders
and Proxy Statement is acknowledged.
IMPORTANT -- THIS PROXY MUST BE SIGNED AND DATED ON THE REVERSE SIDE.
-----------
CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE
-----------
28
/X/ PLEASE MARK Loctite Corporation Proxy
VOTES AS IN
THIS EXAMPLE. Job-FINAL: 2/21/95
3 Proposals *
MULTIPLE ISSUE (2) PROOF
THIS BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ALL OF THE FOLLOWING PROPOSALS:
FOR AGAINST ABSTAIN
1. ELECTION OF DIRECTORS: 2. To increase the authorized / / / / / /
Nominees: R.E. Ix, F.B. Krieble, K.W. Butterworth, number of shares of Common
Dr. R. Dohr, Dr. J. Manchot, S.J. Trachtenberg, Stock of Loctite Corporation
Wallace Barnes, David Freeman, Peter C. Browning, from 100,000,000 shares to
Stephen F. Page and Christoph Hankel. 300,000,000 shares:
FOR WITHHOLD AUTHORITY 3. APPOINTMENT OF PRICE / / / / / /
/ / / / WATERHOUSE LLP as Inde-
pendent Accountants:
/ /
----------------------------------------- 4. In their discretion, the Proxies are authorized to
To withhold authority to vote for any nominee, vote upon such other business as may properly
write that nominee's name above. come before the meeting.
MARK HERE
FOR ADDRESS / /
CHANGE AND
NOTE AT LEFT
(Please date and sign exactly as name appears on this
proxy. Joint owners should each sign. When signing as
attorney, executor, administrator, trustee, guardian, etc.
give title as well.)
This proxy when properly executed will be voted as
directed hereon, or if no direction is indicated, will be Signature: Date:
voted FOR the election of the Board of Directors' ------------------------ ------------------
nominees for Directors and FOR proposals 2 and 3. Signature: Date:
------------------------ ------------------