1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 (FEE REQUIRED)
For The Fiscal Year Ended December 31, 1994
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (NO FEE REQUIRED)
For The Transition Period From To
Commission File Number 1-7608
A. Full title of the plan and the address of the plan, if different from that of
the issuer named below:
LOCTITE CORPORATION EMPLOYEE THRIFT INVESTMENT PLAN
B. Name of issuer of the securities held pursuant to the plan and the address of
its principal executive office:
LOCTITE CORPORATION
10 COLUMBUS BOULEVARD
HARTFORD, CONNECTICUT 06106
2
FINANCIAL STATEMENTS AND EXHIBITS
(a) Financial Statements: PAGE NO.
Report of Independent Accountants............................................................ 2
Statement of Financial Condition
- December 31, 1994 and 1993 ................................................................ 3-6
Statement of Income and Changes in Plan
Equity - Years ended December 31, 1994, 1993, and 1992....................................... 7-14
Notes to Financial Statements................................................................ 15-20
[Schedules - Schedules I, II, and III have been omitted because the required
information is shown in the financial statements or notes thereto.]
(b) Exhibits
(23) Consent of Independent Accountants ..................................................... E-1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
members of the Administrative Committee have duly caused this annual report to
be signed on the Committee's behalf by the undersigned, thereunto duly
authorized.
LOCTITE CORPORATION EMPLOYEE THRIFT INVESTMENT PLAN
(Name of Plan)
By /s/ Robert L. Aller
--------------------------------------
Robert L. Aller, Senior Vice President
and Chief Financial Officer
Chairman, Administrative Committee
Date: June 26, 1995
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Plan Administrator
of the Loctite Corporation Employee
Thrift Investment Plan
In our opinion, the accompanying statements of financial condition and the
related statements of income and changes in plan equity present fairly, in all
material respects, the net assets available for plan benefits of the Loctite
Corporation Employee Thrift Investment Plan at December 31, 1994 and 1993, and
the changes in net assets available for plan benefits for each of the three
years in the period ended December 31, 1994, in conformity with generally
accepted accounting principles. These financial statements are the
responsibility of the plan's management; our responsibility is to express an
opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
/s/ Price Waterhouse LLP
Hartford, Connecticut
June 26, 1995
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1994 AND 1993
SHORT TERM COMPANY STOCK
FUND FUND
1994 1993 1994 1993
-------- ------- ----------- -----------
Assets:
Cash $ 1,322 $ 403 $ 1,384 $ 36,974
Loctite Corporation
common stock receivable
(Cost: 1994 - $ 98,019;
1993 - $188,732) -- -- 100,905 184,151
Dividends receivable -- -- 78,194 74,305
Investments:(Note 2)
Loctite Corporation
common stock at market
(Cost: 1994 - $9,155,559;
1993 - $8,187,102) -- -- 17,400,068 13,519,186
Investment in Fidelity Advisor
Equity Income Fund
(Cost: 1994 - $4,097,822;
1993 - $3,880,607) -- -- -- --
Investment in Fidelity
Magellan Fund
(Cost: 1994 - $1,459,883) -- -- -- --
Investment in Templeton
Foreign Fund
(Cost: 1994 - $1,485,567) -- -- -- --
Investment in insurance
contracts -- -- -- --
Participant notes receivable -- -- -- --
Temporary investments 263,973 81,069 -- --
-------- ------- ----------- -----------
Total assets $265,295 $81,472 $17,580,551 $13,814,616
======== ======= =========== ===========
Liabilities and plan equity:
Accrued expenses $ -- $ -- $ 8,000 $ --
Plan equity 265,295 81,472 17,572,551 13,814,616
-------- ------- ----------- -----------
Total liabilities
and plan equity $265,295 $81,472 $17,580,551 $13,814,616
======== ======= =========== ===========
(See accompanying notes to financial statements)
This statement is continued on the next page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1994 AND 1993
FIXED INCOME FIDELITY ADVISOR
FUND EQUITY INCOME FUND
1994 1993 1994 1993
----------- ----------- ----------- -----------
Assets:
Cash $ 27,006 $ -- $ 977 $ --
Loctite Corporation
common stock receivable
(Cost: 1994 - $ 98,019;
1993 - $188,732) -- -- -- --
Dividends receivable -- -- -- --
Investments:(Note 2)
Loctite Corporation
common stock at market
(Cost: 1994 - $9,155,559;
1993 - $8,187,102) -- -- -- --
Investment in Fidelity Advisor
Equity Income Fund
(Cost: 1994 - $4,097,822;
1993 - $3,880,607) -- -- 4,989,499 4,766,549
Investment in Fidelity
Magellan Fund
(Cost: 1994 - $1,459,883) -- -- -- --
Investment in Templeton
Foreign Fund
(Cost: 1994 - $1,485,567) -- -- -- --
Investment in insurance
contracts 12,042,582 13,377,948 -- --
Participant notes receivable -- -- -- --
Temporary investments -- -- -- --
----------- ----------- ----------- -----------
Total assets $12,069,588 $13,377,948 $ 4,990,476 $ 4,766,549
=========== =========== =========== ===========
Liabilities and plan equity:
Accrued expenses $ 5,800 $ 6,600 $ 2,400 $ 1,800
Plan equity 12,063,788 13,371,348 4,988,076 4,764,749
----------- ----------- ----------- -----------
Total liabilities
and plan equity $12,069,588 $13,377,948 $ 4,990,476 $ 4,766,549
=========== =========== =========== ===========
(See accompanying notes to financial statements)
This statement is continued on the next page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1994 AND 1993
FIDELITY MAGELLAN TEMPLETON FOREIGN
FUND FUND
1994 1993 1994 1993
Assets: ---------- ---------- ---------- ----------
Cash $ 1,001 $ -- $ 976 $ --
Loctite Corporation
common stock receivable
(Cost: 1994 - $ 98,019;
1993 - $188,732) -- -- -- --
Dividends receivable -- -- -- --
Investments:(Note 2)
Loctite Corporation
common stock at market
(Cost: 1994 - $9,155,559;
1993 - $8,187,102) -- -- -- --
Investment in Fidelity Advisor
Equity Income Fund
(Cost: 1994 - $4,097,822;
1993 - $3,880,607) -- -- -- --
Investment in Fidelity
Magellan Fund
(Cost: 1994 - $1,459,883) 1,418,102 -- -- --
Investment in Templeton
Foreign Fund
(Cost: 1994 - $1,485,567) -- -- 1,367,187 --
Investment in insurance
contracts -- -- -- --
Participant notes receivable -- -- -- --
Temporary investments -- -- -- --
---------- ---------- ---------- ----------
Total assets $1,419,103 $ -- $1,368,163 $ --
========== ========== ========== ==========
Liabilities and plan equity:
Accrued expenses $ 600 $ -- $ 500 $ --
Plan equity 1,418,503 -- 1,367,663 --
---------- ---------- ---------- ----------
Total liabilities
and plan equity $1,419,103 $ -- $1,368,163 $ --
========== ========== ========== ==========
(See accompanying notes to financial statements)
This statement is continued on the next page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1994 AND 1993
PARTICIPANT LOANS TOTAL
1994 1993 1994 1993
----------- ----------- ----------- -----------
Assets:
Cash $ -- $ -- $ 32,666 $ 37,377
Loctite Corporation
common stock receivable
(Cost: 1994 - $ 98,019;
1993 - $188,732) -- -- 100,905 184,151
Dividends receivable -- -- 78,194 74,305
Investments:(Note 2)
Loctite Corporation
common stock at market
(Cost: 1994 - $9,155,559;
1993 - $8,187,102) -- -- 17,400,068 13,519,186
Investment in Fidelity Advisor
Equity Income Fund
(Cost: 1994 - $4,097,822;
1993 - $3,880,607) -- -- 4,989,499 4,766,549
Investment in Fidelity
Magellan Fund
(Cost: 1994 - $1,459,883) -- -- 1,418,102 --
Investment in Templeton
Foreign Fund
(Cost: 1994 - $1,485,567) -- -- 1,367,187 --
Investment in insurance
contracts -- -- 12,042,582 13,377,948
Participant notes receivable 716,783 -- 716,783 --
Temporary investments -- -- 263,973 81,069
----------- ----------- ----------- -----------
Total assets $ 716,783 $ -- $38,409,959 $32,040,585
=========== =========== =========== ===========
Liabilities and plan equity:
Accrued expenses $ -- $ -- $ 17,300 $ 8,400
Plan equity 716,783 -- 38,392,659 32,032,185
----------- ----------- ----------- -----------
Total liabilities
and plan equity $ 716,783 $ -- $38,409,959 $32,040,585
=========== =========== =========== ===========
(See accompanying notes to financial statements)
This statement ends on this page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
SHORT TERM FUND
1994 1993 1992
----------- ----------- -----------
Contributions and
transfers:
Participants/rollovers $ 3,374,471 $ 3,233,577 $ 2,825,425
Interfund transfers (1,150,841) (1,034,063) (1,139,032)
Banite transfer -- -- 3,033
Loctite Corporation
(Net of forfeitures
1994 - $ 5,929;
1993 - $ 7,588;
1992 - $11,220) -- -- --
----------- ----------- -----------
Total contributions
and transfers 2,223,630 2,199,514 1,689,426
----------- ----------- -----------
Investment experience:
Dividends and interest 13,499 17,110 13,436
Unrealized appreciation
(depreciation) of
investments -- -- --
Realized gain (loss) on
distribution of
investments -- -- --
----------- ----------- -----------
Total investment
experience 13,499 17,110 13,436
----------- ----------- -----------
Deductions attributed to:
Participant withdrawals
and distributions 2,053,306 2,264,827 1,550,138
Plan expenses -- -- --
----------- ----------- -----------
Total deductions 2,053,306 2,264,827 1,550,138
----------- ----------- -----------
Net increase (decrease)
in plan equity 183,823 (48,203) 152,724
Plan equity at beginning
of year 81,472 129,675 (23,049)
----------- ----------- -----------
Plan equity at end
of year $ 265,295 $ 81,472 $ 129,675
=========== =========== ===========
(See accompanying notes to financial statements)
This statement is continued on the next page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
COMPANY STOCK FUND
1994 1993 1992
----------- ----------- -----------
Contributions and
transfers:
Participants/rollovers $ 7,594 $ -- $ --
Interfund transfers 34,079 448,463 434,919
Banite transfer -- -- --
Loctite Corporation
(Net of forfeitures
1994 - $ 5,929;
1993 - $ 7,588;
1992 - $11,220) 1,312,653 1,305,163 1,170,910
----------- ----------- -----------
Total contributions
and transfers 1,354,326 1,753,626 1,605,829
----------- ----------- -----------
Investment experience:
Dividends and interest 305,259 289,783 256,687
Unrealized appreciation
(depreciation) of
investments 2,919,532 (3,524,433) (2,554,259)
Realized gain (loss) on
distribution of
investments 698,034 419,872 1,115,591
----------- ----------- -----------
Total investment
experience 3,922,825 (2,814,778) (1,181,981)
----------- ----------- -----------
Deductions attributed to:
Participant withdrawals
and distributions 1,497,816 1,068,079 1,535,059
Plan expenses 21,400 -- --
----------- ----------- -----------
Total deductions 1,519,216 1,068,079 1,535,059
----------- ----------- -----------
Net increase (decrease)
in plan equity 3,757,935 (2,129,231) (1,111,211)
Plan equity at beginning
of year 13,814,616 15,943,847 17,055,058
----------- ----------- -----------
Plan equity at end
of year $17,572,551 $13,814,616 $15,943,847
=========== =========== ===========
(See accompanying notes to financial statements)
This statement is continued on the next page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
FIXED INCOME FUND
1994 1993 1992
----------- ----------- -----------
Contributions and
transfers:
Participants/rollovers $ 74,003 $ -- $ --
Interfund transfers (2,251,825) (207,690) 133,072
Banite transfer -- -- 18,402
Loctite Corporation
(Net of forfeitures
1994 - $ 5,929;
1993 - $ 7,588;
1992 - $11,220) -- -- --
----------- ----------- -----------
Total contributions
and transfers (2,177,822) (207,690) 151,474
----------- ----------- -----------
Investment experience:
Dividends and interest 896,312 1,018,159 927,451
Unrealized appreciation
(depreciation) of
investments -- -- --
Realized gain (loss) on
distribution of
investments -- -- --
----------- ----------- -----------
Total investment
experience 896,312 1,018,159 927,451
----------- ----------- -----------
Deductions attributed to:
Participant withdrawals
and distributions -- -- --
Plan expenses 26,050 39,600 42,000
----------- ----------- -----------
Total deductions 26,050 39,600 42,000
----------- ----------- -----------
Net increase (decrease)
in plan equity (1,307,560) 770,869 1,036,925
Plan equity at beginning
of year 13,371,348 12,600,479 11,563,554
----------- ----------- -----------
Plan equity at end
of year $12,063,788 $13,371,348 $12,600,479
=========== =========== ===========
(See accompanying notes to financial statements)
This statement is continued on the next page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
FIDELITY ADVISOR EQUITY INCOME FUND
1994 1993 1992
---------- ---------- ----------
Contributions and
transfers:
Participants/rollovers $ 11,326 $ -- $ --
Interfund transfers (126,215) 793,290 571,041
Banite transfer -- -- --
Loctite Corporation
(Net of forfeitures
1994 - $ 5,929;
1993 - $ 7,588;
1992 - $11,220) -- -- --
---------- ---------- ----------
Total contributions
and transfers (114,889) 793,290 571,041
---------- ---------- ----------
Investment experience:
Dividends and interest 218,380 98,603 105,156
Unrealized appreciation
(depreciation) of
investments 5,735 569,310 289,775
Realized gain (loss) on
distribution of
investments 123,901 18,272 183
---------- ---------- ----------
Total investment
experience 348,016 686,185 395,114
---------- ---------- ----------
Deductions attributed to:
Participant withdrawals
and distributions -- -- --
Plan expenses 9,800 10,800 8,400
---------- ---------- ----------
Total deductions 9,800 10,800 8,400
---------- ---------- ----------
Net increase (decrease)
in plan equity 223,327 1,468,675 957,755
Plan equity at beginning
of year 4,764,749 3,296,074 2,338,319
---------- ---------- ----------
Plan equity at end
of year $4,988,076 $4,764,749 $3,296,074
========== ========== ==========
(See accompanying notes to financial statements)
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
FIDELITY MAGELLAN FUND
1994 1993 1992
---------- ---------- ----------
Contributions and
transfers:
Participants/rollovers $ 19,222 $ -- $ --
Interfund transfers 1,414,073 -- --
Banite transfer -- -- --
Loctite Corporation
(Net of forfeitures
1994 - $ 5,929;
1993 - $ 7,588;
1992 - $11,220) -- -- --
---------- ---------- ----------
Total contributions
and transfers 1,433,295 -- --
---------- ---------- ----------
Investment experience:
Dividends and interest 28,631 -- --
Unrealized appreciation
(depreciation) of
investments (41,781) -- --
Realized gain (loss) on
distribution of
investments (242) -- --
---------- ---------- ----------
Total investment
experience (13,392) -- --
---------- ---------- ----------
Deductions attributed to:
Participant withdrawals
and distributions -- -- --
Plan expenses 1,400 -- --
---------- ---------- ----------
Total deductions 1,400 -- --
---------- ---------- ----------
Net increase (decrease)
in plan equity 1,418,503 -- --
Plan equity at beginning
of year -- -- --
---------- ---------- ----------
Plan equity at end
of year $1,418,503 $ -- $ --
========== ========== ==========
(See accompanying notes to financial statements)
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
TEMPLETON FOREIGN FUND
1994 1993 1992
---------- ---------- ----------
Contributions and
transfers:
Participants/rollovers $ 14,952 $ -- $ --
Interfund transfers 1,385,306 -- --
Banite transfer -- -- --
Loctite Corporation
(Net of forfeitures
1994 - $ 5,929;
1993 - $ 7,588;
1992 - $11,220) -- -- --
---------- ---------- ----------
Total contributions
and transfers 1,400,258 -- --
---------- ---------- ----------
Investment experience:
Dividends and interest 86,986 -- --
Unrealized appreciation
(depreciation) of
investments (118,381) -- --
Realized gain (loss) on
distribution of
investments -- -- --
---------- ---------- ----------
Total investment
experience (31,395) -- --
---------- ---------- ----------
Deductions attributed to:
Participant withdrawals
and distributions -- -- --
Plan expenses 1,200 -- --
---------- ---------- ----------
Total deductions 1,200 -- --
---------- ---------- ----------
Net increase (decrease)
in plan equity 1,367,663 -- --
Plan equity at beginning
of year -- -- --
---------- ---------- ----------
Plan equity at end
of year $1,367,663 $ -- $ --
========== ========== ==========
(See accompanying notes to financial statements)
This statement is continued on the next page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
PARTICIPANT LOANS
1994 1993 1992
-------- -------- --------
Contributions and
transfers:
Participants/rollovers $ -- $ -- $ --
Interfund transfers 695,423 -- --
Banite transfer -- -- --
Loctite Corporation
(Net of forfeitures
1994 - $ 5,929;
1993 - $ 7,588;
1992 - $11,220) -- -- --
-------- -------- --------
Total contributions
and transfers 695,423 -- --
-------- -------- --------
Investment experience:
Dividends and interest 21,360 -- --
Unrealized appreciation
(depreciation) of
investments -- -- --
Realized gain (loss) on
distribution of
investments -- -- --
-------- -------- --------
Total investment
experience 21,360 -- --
-------- -------- --------
Deductions attributed to:
Participant withdrawals
and distributions -- -- --
Plan expenses -- -- --
-------- -------- --------
Total deductions -- -- --
-------- -------- --------
Net increase (decrease)
in plan equity 716,783 -- --
Plan equity at beginning
of year -- -- --
-------- -------- --------
Plan equity at end
of year $716,783 $ -- $ --
======== ======== ========
(See accompanying notes to financial statements)
This statement is continued on the next page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
STATEMENT OF INCOME AND CHANGES IN PLAN EQUITY
YEARS ENDED DECEMBER 31, 1994, 1993, AND 1992
TOTAL
1994 1993 1992
----------- ----------- -----------
Contributions and
transfers:
Participants/rollovers $ 3,501,568 $ 3,233,577 $ 2,825,425
Interfund transfers -- -- --
Banite transfer -- -- 21,435
Loctite Corporation
(Net of forfeitures
1994 - $ 5,929;
1993 - $ 7,588;
1992 - $11,220) 1,312,653 1,305,163 1,170,910
----------- ----------- -----------
Total contributions
and transfers 4,814,221 4,538,740 4,017,770
----------- ----------- -----------
Investment experience:
Dividends and interest 1,570,427 1,423,655 1,302,730
Unrealized appreciation
(depreciation) of
investments 2,765,105 (2,955,123) (2,264,484)
Realized gain (loss) on
distribution of
investments 821,693 438,144 1,115,774
----------- ----------- -----------
Total investment
experience 5,157,225 (1,093,324) 154,020
----------- ----------- -----------
Deductions attributed to:
Participant withdrawals
and distributions 3,551,122 3,332,906 3,085,197
Plan expenses 59,850 50,400 50,400
----------- ----------- -----------
Total deductions 3,610,972 3,383,306 3,135,597
----------- ----------- -----------
Net increase (decrease)
in plan equity 6,360,474 62,110 1,036,193
Plan equity at beginning
of year 32,032,185 31,970,075 30,933,882
----------- ----------- -----------
Plan equity at end
of year $38,392,659 $32,032,185 $31,970,075
=========== =========== ===========
(See accompanying notes to financial statements)
This statement ends on this page.
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LOCTITE CORPORATION EMPLOYEE
THRIFT INVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF THE PLAN
General
The Loctite Corporation Employee Thrift Investment Plan (the "Plan") became
effective on January 1, 1982 and is a qualified defined contribution thrift plan
which enables employees to save systematically through payroll deductions.
Through April 30, 1994, eligible employees were able to participate in the Plan
after completion of at least one year of service. Effective May 1, 1994,
eligible employees may participate in the Plan after completion of three months
of service. Effective May 1, 1994 the Plan also accepts rollovers from other
qualified plans.
Contributions and Investment Options
Participants may elect to make a contribution of 1% to 16% of their
compensation. Monthly contributions are made by the Company, which are invested
in shares of its common stock, in an amount equal to 50% of each participant's
contribution (up to 6% of participant compensation). Participant contributions
are made through payroll deductions and, through April 30, 1994, were invested
at the participant's election into one or a combination of three funds, and
after April 30, 1994, into one or a combination of five funds, as described
below:
Company Stock Fund -- The Company Stock Fund is invested solely in Loctite
Corporation common stock. Participant contributions to the Company Stock
Fund are limited to a maximum of 25% of their contributions.
Fixed Income Fund -- The Fixed Income Fund is invested in investment
contracts which produce a fixed rate of return. Participant contributions
made in 1994 to the Fixed Income Fund were invested in a deposit
administration contract with New York Life Insurance Company, which yields
an effective annual rate of 5.60% compounded annually, maturing on December
31, 1998. Participant contributions made in 1993 to the Fixed Income Fund
were invested in a deposit administration contract with Continental
Assurance Company which yields an effective annual rate of 6.60% compounded
annually, maturing on December 31, 1997. Participant contributions made in
1992 were invested in a deposit administration contract with Continental
Assurance Company which yields an effective annual rate of 6.72% compounded
annually, maturing on December 31, 1996.
Mutual Funds -- Prior to May 1, 1994 participant contributions were
invested in a single mutual fund, Fidelity Advisor Equity Income Fund
(formerly referred to as the Diversified Equity Fund). Effective May 1,
1994, the Plan was amended to offer two additional mutual fund investment
choices: Fidelity Magellan Fund, a growth fund, and Templeton Foreign Fund,
a foreign growth fund.
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The Short Term Fund receives the monthly participant contributions and invests
them in short term instruments pending allocation of these contributions to the
elected funds. The Short Term Fund is invested in Fleet Bank, N.A. Short Term
Investment Fund.
Employees participating in the Plan were as follows:
December 31, December 31, December 31,
1994 1993 1992
------------ ------------ ------------
Company Stock Fund 1,079 1,049 1,044
Fixed Income Fund 878 1,009 1,020
Fidelity Advisor Equity
Income Fund 588 542 507
Fidelity Magellan Fund 342 -- --
Templeton Foreign Fund 334 -- --
The participants above may have invested in more than one of the investment
funds. All Plan participants are enrolled in the Company Stock Fund because of
the Company's matching contribution, which is credited to that fund. The number
of participants electing to direct a portion of their contributions to the
Company Stock Fund were 617, 629, and 613 respectively, at December 31, 1994,
1993, and 1992.
Vesting and Payment of Benefits
Participants are fully vested at all times in their contributions and the
investment experience associated therewith. Participants become fully vested in
the Company's contributions and the investment experience associated therewith
when they complete five years of service with the Company or after two years of
participation in the Plan, whichever is more favorable to the employee. In the
event of the participant's death, disability, or retirement, all amounts in the
participant's account become fully vested. Forfeitures of participants'
non-vested Company Stock Fund accounts are used by the Company to reduce its
contributions to the Plan.
Employees may begin withdrawing their before-tax contributions and earnings from
the Plan at age 59 1/2. Withdrawals or distributions are made from participants'
vested balances in their elected funds and are paid in cash from the Short Term
Fund and in common stock from the Company Stock Fund.
Participants may make non-hardship withdrawals from after-tax contributions,
rollover contributions, vested matching contributions, and the related earnings
on these contributions. Participants may also make withdrawals from their
before-tax contributions and the pre-1989 earnings on those contributions if
they satisfy the IRS regulations for hardship withdrawals.
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The Company anticipates the Plan will continue without interruption, but
reserves the right to discontinue the Plan. In the event the Plan is terminated,
participants receive all funds in their accounts including common stock, whether
or not vested.
Loans to Participants
Effective May 1, 1994, the Plan allows participants to borrow from their vested
account balances. While all loans must be at least $1,000, the maximum amount
which participants may borrow is the lesser of 50% of their vested balance,
reduced by any current outstanding loan balance, or $50,000 reduced by the
highest outstanding loan balance in the preceding 12 months. Additionally, the
maximum loan amount may be limited since the payroll deduction for loan
repayments cannot be more than 30% of the participant's gross pay each pay
period. The interest rate for all loans requested during a given month is set at
one percentage point above the prime rate as published in the Wall Street
Journal on the first business day of the month and remains set for the duration
of the loan. General loans may be repaid over one to five years while primary
residence loans may be repaid over one to ten years. Loan distributions are paid
in cash from the Short Term Fund. Loan repayments plus interest are paid through
payroll deductions.
Tax Status
The Internal Revenue Service has determined and informed the Company by a letter
dated July 23, 1985, that the Plan and related trust are designed in accordance
with applicable sections of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter and a new determination letter
has been requested. However, the Plan Administrator believes that the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
NOTE 2 - SUMMARY OF ACCOUNTING POLICIES
Investments in the Fixed Income Fund and the Short Term Fund are valued at cost
plus interest earned. Investments and receivables in the Company Stock Fund are
valued at market. Investments in the mutual funds are valued at market.
Realized gain on Loctite Corporation common stock distributed to participants
from the Company Stock Fund represents the difference between the average
monthly market price and the average cost. Realized gain (loss) on the sale of
mutual fund investments represents the excess (deficiency) of proceeds from the
sale of the investments over the cost of the specifically identified
investments.
Expenses of operating the Loctite Corporation Employee Thrift Investment Plan
are payable from assets held by the Plan, unless the Company elects to pay such
expenses. The Plan incurred operating expenses of $59,850, $50,400, and $50,400
for the years ended December 31, 1994, 1993, and 1992, respectively.
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19
NOTE 3 - INVESTMENT IN LOCTITE CORPORATION COMMON STOCK
During 1994 and 1993, contributions to the Company Stock Fund resulted in the
issuances (net of redemptions) of 6,326 and 19,961 shares, respectively, of
Loctite Corporation common stock. These shares were issued and redeemed by the
Company at the average monthly market price.
NOTE 4 - MASTER TRUST
The assets of the Plan, the assets of the Retirement Plan of Loctite Corporation
and the assets of the Retirement and Savings Plan of Loctite Puerto Rico, Inc.
are maintained under a Master Trust Agreement with Fleet Bank, N.A., Trustee.
The assets of the Plan and the assets of each Retirement Plan are segregated,
and accounted for and reported on separately by the Trustee. Therefore, separate
financial statements of the Master Trust have not been included.
NOTE 5 - PARTICIPANTS' TAX STATUS
Participants may elect to make contributions in amounts from 1% to 10% on a
pre-tax basis and from 1% to 16% on an after-tax basis or any combination
thereof up to a total of 16% of their compensation. Effective January 1, 1994,
the maximum contribution for members whose earnings exceeded $66,000 was 6%
pre-tax and 7% for a combination of pre-tax and after-tax contributions. Pre-tax
contributions, the Company's contributions and investment experience are
generally not taxable to the participant until withdrawn or distributed from the
Plan. Pre-tax contributions are subject to reduction in the event that such
contributions exceed limitations imposed by the Internal Revenue Code.
NOTE 6 - NET GAIN ON SALE OF STOCK
The following tables summarize the net gain on sale of stock during 1994:
Number of Gain(Loss)
Shares on Sale
Sold Proceeds Cost of Stock
-------- ---------- ---------- ----------
Company Stock Fund 37,442 $1,558,157 $ 860,123 $698,034
Fidelity Advisor Equity
Income Fund 41,725 652,291 528,390 123,901
Fidelity Magellan Fund 509 34,831 35,073 (242)
Templeton Foreign Fund -- -- -- --
------ ---------- ---------- --------
Total 79,676 $2,245,279 $1,423,586 $821,693
====== ========== ========== ========
The Department of Labor requires plans to report such gains and losses under the
current value method. Such method calculates realized gains and losses on
investments sold as sales proceeds less the current value as of the beginning of
the year (or acquisition cost if acquired during the
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year). Unrealized gains and losses are calculated as the current value of the
investments held at the end of the year less their current value as of the
beginning of the year (or acquisition cost if acquired during the year).
Realized and unrealized gains and losses calculated using the current value
method for the year ended December 31, 1994 and the amounts presented in the
financial statements are reconciled as follows:
Financial
Statements Form 5500
----------- -----------
Net realized gain on investments
sold $ 821,693 $ 194,868
Net unrealized appreciation in fair
market value of investments 2,765,105 3,391,930
---------- ----------
Net gain $3,586,798 $3,586,798
========== ==========
NOTE 7 - DISTRIBUTIONS AND WITHDRAWALS PAYABLE
The following is a reconciliation of plan equity per the financial statements to
net assets available for benefits per the Form 5500:
December 31, December 31,
1994 1993
-------------- --------------
Plan equity per the financial statements $38,392,659 $32,032,185
Participant withdrawals and distributions
payable at December 31 (130,005) (314,814)
------------- -------------
Net assets available for benefits per the
Form 5500 $38,262,654 $31,717,371
=========== ============
The withdrawals and distributions payable by fund are as follows:
December 31, December 31,
1994 1993
------------ ------------
Short Term Fund $ 91,735 $171,342
Company Stock Fund 38,270 143,472
Fixed Income Fund -- --
Fidelity Advisor Equity Income Fund -- --
Fidelity Magellan Fund -- --
Templeton Foreign Fund -- --
-------- --------
Total $130,005 $314,814
======== ========
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The following is a reconciliation of benefits and withdrawals paid to
participants per the financial statements to the Form 5500:
Year Ended
December
31, 1994
-------------
Benefits and withdrawals paid to participants per the $3,551,122
financial statements
Add: Amounts payable at December 31, 1994 130,005
Less: Amounts payable at December 31, 1993 (314,814)
----------
Benefits paid to participants per the Form 5500 $3,366,313
==========
NOTE 8 - NEW ACCOUNTING PRONOUNCEMENT
In September 1994, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued Statement of Position 94-4,
"Reporting of Investment Contracts Held by Health and Welfare Benefits Plans and
Defined - Contribution Pension Plans" (SOP 94-4). The statement must be adopted
by the Plan no later than the Plan year ended December 31, 1995 but earlier
adoption is permitted. This statement requires fair value reporting of certain
investment contracts held by health and welfare benefit plans and defined -
contribution benefit plans. The Plan will adopt SOP 94-4 in Plan year ended
December 31, 1995.
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INDEX TO EXHIBITS
Description Page No.
- ----------- --------
(23) Consent of Independent Accountants E-1
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