1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Fiscal Year Ended June 30, 1996
Commission File #1-7608
A. TITLE AND ADDRESS OF PLAN:
RETIREMENT AND SAVINGS PLAN
OF
LOCTITE PUERTO RICO, INC.
#9 VICENTE QUILINCHINI AVENUE
SABANA GRANDE, PUERTO RICO 00637
B. NAME AND ADDRESS OF ISSUER OF SECURITIES HELD BY PLAN:
LOCTITE CORPORATION
10 COLUMBUS BOULEVARD
HARTFORD, CONNECTICUT 06106
2
Financial Statements and Exhibits
Page No.
--------
(A) Financial Statements:
Report of Independent Accountants 1
Statement of Net Assets Available for Plan Benefits - June 30, 1996 and 1995 2
Statement of Changes in Net Assets Available for Plan Benefits - Year Ended 3
June 30, 1996 and 1995
Notes to Financial Statements 4 - 5 - 6 - 7 - 8 - 9
Statement of Investments June 30, 1996 10
Schedules - Schedules I, II, and III have been omitted because the required
information is shown in the financial statements or notes thereto.
(B) Exhibits
Consent of Independent Accountants E-1
SIGNATURE
The Plan. 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 by the undersigned, thereunto duly authorized.
RETIREMENT AND SAVINGS PLAN OF LOCTITE PUERTO RICO, INC.
(Registrant)
/s/ Marcus J. Rodriguez
------------------------------------------
Marcus J. Rodriguez, Finance Director
DATE: DECEMBER 13, 1996
3
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RETIREMENT AND SAVINGS PLAN OF
LOCTITE PUERTO RICO, INC.
(SAVINGS PLAN FUND ONLY)
FINANCIAL STATEMENTS AND
ADDITIONAL INFORMATION
JUNE 30, 1996 AND 1995
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RETIREMENT AND SAVINGS PLAN OF
LOCTITE PUERTO RICO, INC.
(SAVINGS PLAN FUND ONLY)
TABLE OF CONTENTS TO FINANCIAL STATEMENTS AND
ADDITIONAL INFORMATION
Page
----
Financial Statements:
Report of Independent Accountants ..................................... 1
Statement of Net Assets Available for
Benefits with Fund Information ....................................... 2
Statement of Changes in Net Assets Available
for Benefits with Fund Information ................................... 3
Notes to the Financial Statements ..................................... 4-9
Additional Information:*
Schedule I - Schedule of Assets Held for Investment
Purposes ............................................................. 10
* Other schedules required by Section 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under
ERISA have been omitted because they are not applicable.
5
REPORT OF INDEPENDENT ACCOUNTANTS
October 11, 1996
To the Participants and Administrator of the
Retirement and Savings Plan of Loctite Puerto Rico, Inc.
(Savings Plan Fund only)
We have audited the accompanying statements of net assets available for benefits
of the Retirement and Savings Plan of Loctite Puerto Rico, Inc. (Savings Plan
Fund only) (the Plan) as of June 30, 1996 and 1995, and the related statements
of changes in net assets available for benefits for the years then ended. 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 audit.
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, as
well as evaluating the overall financial statement presentation. We believe that
our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
June 30, 1996 and 1995 and the changes in net assets available for benefits for
the years then ended in conformity with generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The additional information included in
Schedule I is presented for purposes of additional analysis and is not a
required part of the basic financial statements but is additional information
required by the Department of Labor's Rules and Regulations for Reporting and
Disclosures under the Employee Retirement Income Security Act of 1974. The
additional schedule and fund information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/S/ Price Waterhouse
- -----------------------------
CERTIFIED PUBLIC ACCOUNTANTS
(OF PUERTO RICO)
License No. 10 Expires Dec. 1, 1998
Stamp 1392019 of the P.R. Society of
Certified Public Accounts has been
affixed to the file copy of this report
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RETIREMENT AND SAVINGS PLAN OF
LOCTITE PUERTO RICO, INC.
(SAVINGS PLAN FUND ONLY)
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND INFORMATION)
June 30, 1996
-------------
Company Fixed Diversified U.S.
Stock Income Equity Foreign Equity Loan
Fund Fund Fund Fund Fund Fund Total
------- ------ ---------- -------- ------ ---- -----
Assets
Investments, at fair value:
Loctite Corporation Common
Stock Fund $918,933 $ 918,933
Fixed Income Fund
Diversified Equity Fund $494,719 494,719
Templeton Foreign Fund $6,276 6,276
Fidelity Magellan Fund $14,558 14,558
Loans to participants $301,836 301,836
-------- -------- -------- ------ ------- -------- ----------
918,933 494,719 6,276 14,558 301,836 1,736,322
Guaranteed insurance contract, at
contract value $778,235 778,235
-------- -------- -------- ------ ------- -------- ----------
Total investments 918,933 778,235 494,719 6,276 14,558 301,836 2,514,557
-------- -------- -------- ------ ------- -------- ----------
Receivables:
Employee contributions 5,457 9,735 13,790 830 1,899 31,711
Employer contributions 12,450 12,450
Loans receivable 3,722 2,619 2,615 356 387 9,699
Interfund transfer pending (62) 3,478 (3,009) 179 (586)
Accrued interest and dividends
receivables 5,870 3,948 13 1 1 9,833
-------- -------- -------- ------ ------- -------- ----------
Total receivables 27,437 19,780 13,409 1,366 1,701 63,693
Cash (overdraft) (15) (343) (358)
-------- -------- -------- ------ ------- -------- ----------
Net assets available for benefits $946,355 $797,672 $508,128 $7,642 $16,259 $301,836 $2,577,892
======== ======== ======== ====== ======= ======== ==========
June 30, 1995
-------------
Total
-----
Assets
Investments, at fair value:
Loctite Corporation Common
Stock Fund $ 841,614
Fixed Income Fund
Diversified Equity Fund 358,277
Templeton Foreign Fund 633
Fidelity Magellan Fund 1,772
Loans to participants 28,069
----------
1,230,365
Guaranteed insurance contract, at
contract value 778,387
----------
Total investments 2,008,752
----------
Receivables:
Employee contributions
Employer contributions
Loans receivable
Interfund transfer pending
Accrued interest and dividends
receivables 10,619
----------
Total receivables 10,619
Cash (overdraft) 33,417
----------
Net assets available for benefits $2,052,788
==========
The accompanying notes are an integral part of this statement.
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RETIREMENT AND SAVINGS PLAN OF
LOCTITE PUERTO RICO, INC.
(SAVINGS PLAN FUND ONLY)
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS (WITH FUND
INFORMATION)
June 30, 1996
-------------
Company Fixed Diversified U.S.
Stock Income Equity Foreign Equity Loan
Fund Fund Fund Fund Fund Fund
------- ------ ---------- -------- ------ ----
Assets
Additions to net assets attributed to:
Investment income:
Interest $ 631 $ 47,696 $ 351 $ 18 $ 39
Dividends 19,525 17,114 109 2,427
Net appreciation (depreciation) in fair
market value of investments 14,162 57,477 338 (1,886)
-------- -------- -------- ------ ------- --------
Total investment income 34,318 47,696 74,942 465 580
-------- -------- -------- ------ ------- --------
Contributions:
Participants 55,464 119,542 131,390 6,624 13,710
Employer 129,859
Loan repayment interest 7,930 4,308 5,616 459 471 $ 120
Other interfund
Other income 1,278 53
-------- -------- -------- ------ ------- --------
Total contributions 193,253 123,850 138,284 7,136 14,181 120
-------- -------- -------- ------ ------- --------
Total additions 227,571 171,546 213,226 7,601 14,761 120
-------- -------- -------- ------ ------- --------
Deductions from net assets attributed to:
Benefits paid to participants (39,930) (43,178) (21,401)
Net transfer amount funds
Participants' loans (119,556) (136,223) (66,217) (1,771) (1,795) 325,562
Loan repayment 18,848 14,039 12,188 803 825 (46,703)
Loans terminations (5,212)
-------- -------- -------- ------ ------- --------
Total (deductions) additions (140,638) (165,362) (75,430) (968) (970) 273,647
-------- -------- -------- ------ ------- --------
Net increase 86,933 6,184 137,796 6,633 13,791 273,767
Net assets at beginning of year 859,422 791,488 370,332 1,009 2,468 28,069
-------- -------- -------- ------ ------- --------
Net assets at end of year $946,355 $797,672 $508,128 $7,642 $16,259 $301,836
======== ======== ======== ====== ======= ========
June 30, 1995
-------------
Total Total
----- -----
Assets
Additions to net assets attributed to:
Investment income:
Interest $ 48,735 $ 44,806
Dividends 39,175 26,854
Net appreciation (depreciation) in fair
market value of investments 70,091 95,191
---------- ----------
Total investment income 158,001 166,851
---------- ----------
Contributions:
Participants 326,730 321,436
Employer 129,859 124,987
Loan repayment interest 18,904
Other interfund
Other income 1,331
---------- ----------
Total contributions 476,824 446,423
---------- ----------
Total additions 634,825 613,274
---------- ----------
Deductions from net assets attributed to:
Benefits paid to participants (104,509) (52,386)
Net transfer amount funds
Participants' loans
Loan repayment
Loans terminations (5,212)
---------- ----------
Total (deductions) additions (109,721) (52,386)
---------- ----------
Net increase 525,104 560,888
Net assets at beginning of year 2,052,788 1,491,900
---------- ----------
Net assets at end of year $2,577,892 $2,052,788
========== ==========
The accompanying notes are an integral part of this statement.
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RETIREMENT AND SAVINGS PLAN OF
LOCTITE PUERTO RICO, INC.
(SAVINGS PLAN FUND ONLY)
NOTES TO THE FINANCIAL STATEMENTS
NOTE 1 - REPORTING ENTITY:
Retirement and Savings Plan of Loctite Puerto Rico, Inc. (savings plan fund
only) (the "Plan") was established on July 1, 1989. It is administered by a
Savings Plan Committee appointed by the Committee on Human Resources of the
board of directors of Loctite Puerto Rico, Inc. (the Company). The purpose of
the Plan is to encourage and provide a convenient way for the employees of
Loctite Puerto Rico, Inc. to save on a regular and long-term basis, to provide
additional retirement benefits, and to encourage such employees to make and
continue careers with the Company.
NOTE 2 - DESCRIPTION OF THE PLAN:
The following description of the Plan provides only general information.
Participants should refer to the Plan Agreement for a more complete description
of the Plan's provisions.
General
The Plan is a defined contribution plan covering all employees of the Company
who have one year of service (with at least 1,000 hours of service) and are age
twenty one or older. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 ("ERISA").
Contributions
Participants may contribute up to 16% of their annual compensation. The Company
makes a contribution equivalent to 50% of the first 6% of each participant's
contributions. The Company's contribution is invested solely in the Company's
common stock fund. The participants' and Company's contributions are remitted
monthly to the Trustee.
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Investments Options
Participants' contributions are invested in any one or more of the following
funds covered by the Plan as selected by the participants:
Company Stock Fund - Funds are invested solely in Loctite Corporation's
common stock. Participants' contributions to the Company's stock fund are
limited to a maximum of 25% of their contributions.
Fixed Income Fund - Funds are invested in guaranteed insurance contracts
("GIC") with Metropolitan Life Insurance Company, CNA Insurance Companies
and New York Life Insurance Company. These contracts are designed to
produce a fixed rate of return.
Diversified Equity Fund - Participants' contributions to the diversified
equity fund are invested in the Fidelity Advisor Equity Portfolio fund.
Foreign Fund - Funds are invested in the Templeton Foreign mutual fund,
which is composed of stocks and debt obligations of companies and
governments outside the United States (U.S.).
U.S. Equity Fund - Funds are invested in the Fidelity Magellan mutual
fund, which is composed mostly of equity investments of domestic (U.S.)
companies.
Participating Employees
There were 286 participating employees in the Plan as of June 30, 1996 and 268
as of June 30, 1995.
Vesting
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. In the event of a
participant's death, disability, or retirement, all amounts in the participant's
account become fully vested.
Loans
During 1995, the Plan was amended to include a Participant Loan Program. The
provisions of the Participant Loan Program are in compliance with ERISA and
Puerto Rico's laws and regulations.
5
10
A participant may request a loan from its own contribution accounts and the
employers' match contribution. The loan cannot exceed either 50% of the vested
balance in said accounts, or $50,000 less the highest outstanding loan balance
in the prior year. The loan terms range from one to five years or up to 10 years
for the purchase of dwellings. The loans are secured by the balance in the
participants account and bear interest at a rate commensurate with local
prevailing rates as determined by the plan administrator. Principal and interest
are collected through payroll deductions.
Interest earned on the loans is credited to the respective funds from which the
loans were disbursed.
Forfeitures
Forfeitures are used to reduce the employer's contribution.
NOTE 3 - SUMMARY OF ACCOUNTING POLICIES:
Method of Accounting
The Plan's financial statements are prepared on the accrual basis of accounting.
Investments
Plan investments, other than the GIC's, are stated at fair market value in the
financial statements. The Company stock is valued at its quoted market price.
Mutual fund investments are valued at fair value, representing the value at
which shares of the fund may be purchased or redeemed. The fixed income fund,
composed of guaranteed insurance contracts with insurance companies is presented
at contract value.
Payment of Benefits
On termination of service, a participant shall receive a lump-sum amount equal
to the value of his or her account. Active participants may also elect hardship
and in service withdrawals in accordance with plan provisions.
NOTE 4 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500:
The following is a reconciliation of net assets available for benefits per the
financial statements to the Form 5500:
Year ended June 30,
---------------------------
1996 1995
---------- ----------
Net assets available for benefits per the
financial statements $2,577,892 $2,052,788
Amounts allocated to withdrawing participants
---------- ----------
Net assets available for benefits per the Form 5500 $2,577,892 $2,052,788
========== ==========
6
11
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500:
Year ended June 30,
-----------------------
1996 1995
-------- --------
Benefits paid to participant per the financial
statements $104,509 $ 52,386
Add: Amounts allocated to withdrawing participants
at June 30, 1996
Less: Amounts allocated to withdrawing participants
at June 30, 1995
-------- --------
Benefits paid to participants per the Form 5500 $104,509 $ 52,386
======== ========
Amounts allocated to withdrawing participants are recorded on Form 5500 for
benefit claims that have been processed and approved for payment prior to June
30 but not yet paid as of that date.
As of June 30, 1996, there are $33,240 ($25,000 for 1995) of requested and
approved loans, which have yet to be disbursed.
NOTE 5 - INVESTMENTS:
The Plan's investments are held in trust by Fleet Bank, National Association
Trustee (the "Trustee") under the terms of a Trust Agreement. The following
table presents the fair values of those investments that represent 5 percent or
more of the Plan's net assets.
Year ended June 30,
---------------------------
1996 1995
---------- ----------
Investments at fair value as determined by quoted market price:
Company stock fund -
Loctite Corporation Common Stock -
19,762 shares (1995 - 18,497 shares) $ 918,933 $ 841,614
Investments at fair value:
Mutual Funds -
Fidelity Advisory Services III Equity
Portfolio Inc. - 23,671 shares
(1995 - 19,816 shares) 494,719 358,277
Investments at contract value:
Guaranteed Insurance Contracts with:
New York Life Insurance Company
Contract No. GA-06857-2, 5.60%, due 12-31-98 181,603 179,571
Metropolitan Life Insurance Company
Contract No. GAC-13342-169, 6.54%, due 10-23-97 307,847 288,949
CNA Insurance Companies Contract No.
GP 12862-016, 6.6%, due 12-31-97 285,966 268,234
---------- ----------
Total investments $2,189,068 $1,936,645
========== ==========
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During June 30, 1996 and 1995, the Plan's investments (including gains and
losses on investments bought and sold during the year) appreciated in value by
$70,091 and $95,191, respectively, as follows:
Year ended June 30,
------------------------
1996 1995
-------- --------
Change in investments fair value, as
determined by quoted market price:
Loctite Corporation Common Stock
Fund $ 14,162 $ 48,982
Diversified Equity Fund 57,477 46,121
Fidelity Magellan Fund (1,886) 107
Templeton Foreign Fund 338 (19)
-------- --------
Net change in fair value $ 70,091 $ 95,191
======== ========
The following tables summarize the net gain on sales of Loctite Corporation's
common stock during 1996 and 1995:
Gain (loss)
Month of Number of on sale
sale shares sold Proceeds Cost of stock
-------- ----------- -------- ---- -----------
1996:
----
July 422 $ 7,820 $ 6,227 $ 1,593
August 170 3,190 2,507 683
August 1,016 48,360 37,323 11,037
September 235 11,083 8,711 2,372
October 54 2,621 1,974 647
February 42 2,021 1,560 461
March 145 7,012 5,427 1,585
April 24 1,255 903 352
May 45 441 422 19
------ ------ ------- -------
2,153 $83,803 $65,054 $18,749
===== ======= ======= =======
1995:
September 111 $ 4,824 $ 3,934 $ 890
October 11 484 392 92
December 109 4,767 3,814 953
February 147 6,640 5,347 1,293
June 50 2,440 1,863 577
---- ------- ------- -------
428 $19,155 $15,350 $ 3,805
=== ======= ======= =======
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ERISA requires the use of the revalued cost method for reporting realized and
unrealized gains and losses on Form 5500. Under this method, realized gains and
losses are calculated as sales proceeds less the current value as of the
beginning of the year (or acquisition cost if acquired during the year).
Unrealized gains and losses are calculated as current value of 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 June 30,
1996 and 1995 and the amounts presented in the financial statements are
reconciled as follows:
1996 1995
---- ----
Financial Financial
statements Form 5500 statements Form 5500
---------- --------- ---------- ---------
Net gain (loss) on investments
sold $18,749 $ 3,697 $ 3,805 $ 1,071
Unrealized gain (loss) in fair market
value of investments 51,342 66,394 91,386 94,120
-------- -------- ------- -------
Net gain (loss) $70,091 $70,091 $95,191 $95,191
======= ======= ======= =======
NOTE 6 - GUARANTEED INSURANCE CONTRACT:
Participants' contributions to the fixed income fund were invested in four
guaranteed insurance contracts: one with Metropolitan Life Insurance Company,
one with CNA Insurance Company and two with New York Life Insurance Company
which guaranteed return ranging from 5.6% to 6.6%, maturing from October 23,
1997 to December 28, 2000.
NOTE 8 - INCOME TAXES:
The Plan has been qualified as tax exempt by the Puerto Rico Department of
Treasury under the provisions of Section 165(a) of the Puerto Rico Income Tax
Act of 1954, as amended. The Plan also qualifies as tax exempt for federal
income tax purposes under the provisions of Section 1022 (i) of ERISA.
Under present U.S. and Puerto Rico income tax laws and regulations, a
participant is not subject to income taxes on the contributions of the company,
or on the interest, dividends or profits on the sale of securities received by
the Trustee until the participant's account is distributed, either partially or
totally, to the participant.
NOTE 9 - FEES AND EXPENSES:
As indicated in the Plan Agreement, the Trustee's fees and all administrative
expenses incurred in the management of the Plan are paid by the Company.
NOTE 10 - PLAN TERMINATION:
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of plan termination,
participants will become 100 percent vested in their accounts.
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ADDITIONAL INFORMATION
SCHEDULE I
RETIREMENT AND SAVINGS PLAN OF LOCTITE PUERTO RICO, INC.
(SAVINGS PLAN FUND ONLY)
ITEM 27a FORM 5500 - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JUNE 30, 1996
Number of shares
or Principal
Identity of Issues amount Cost of assets Current value
------------------ ---------------- -------------- -------------
FIXED INCOME FUND
New York Life Insurance Co.-
Contract No. GIC-30414-4,
5.75%, Mat. 12/28/00 2,819 $ 2,819 $ 2,819
==========
New York Life Insurance Co.-
Contract No. GA-06857-2,
5.60%, Mat. 12/31/98 181,603 181,603 181,603
==========
Metropolitan Life Insurance Co.-
Contract No. GAC-13342-169,
6.54%, Mat. 10/23/97 307,847 307,847 307,847
==========
CNA Insurance Companies-
Contract No. GP 12862-016,
6.6%, Mat. 12/31/97 285,966 285,966 285,966
========== ---------- ----------
778,235 778,235
---------- ----------
LOAN FUND
Loans to participants $ 301,836 301,836 301,836
========== ---------- ----------
COMPANY STOCK FUND
Loctite Corporation-
Common stock 19,762 753,177 918,933
========== ---------- ----------
MUTUAL FUNDS
Fidelity Advisor Equity Portfolio Fund 23,671 373,429 494,719
==========
Templeton Foreign Fund 627 5,977 6,276
==========
Fidelity Magellan Fund 195 16,337 14,558
========== ---------- ----------
395,743 515,553
---------- ----------
Total Investments $2,228,991 $2,514,557
========== ==========
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INDEX TO EXHIBITS
Description Page No.
----------- --------
(23) Consent of Independent Accountants E-1