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DILLON, READ & CO. INC.
November 27, 1996
Dear Prospective Bidder:
Re: Guidelines for Submission of Proposals
As previously announced, the Special Committee (the "Special Committee") of
Loctite Corporation has determined to seek to sell the Company at a price that
fully reflects its value and has instructed its advisors to respond to third
party inquiries, contact potential buyers and take all steps necessary to help
achieve this goal. Accordingly, the Special Committee has established the
procedures set forth below to ensure that the sale process will be conducted in
a fair and orderly manner which will best serve the Company's stockholders'
interests.
1. YOUR FINAL PROPOSAL SHOULD BE SUBMITTED TO THE SPECIAL
COMMITTEE IN WRITING NO LATER THAN 4:30 p.m. (NEW YORK CITY
TIME) ON WEDNESDAY, DECEMBER 4, 1996 (THE "SUBMISSION
DEADLINE"), TO:
Dillon, Read & Co. Inc.
535 Madison Avenue
New York, NY 10022
Attention: William Powell
Telephone: (212) 906-7000
Facsimile: (212) 753-9614
2. The Special Committee intends that it would negotiate a
definitive agreement (the "Merger Agreement") with the bidder
selected by the Special Committee and that it would recommend
approval of such agreement to the Board of Directors at a
meeting of the Board to be held on December 5.
3. The Special Committee views the Submission Deadline as the end
of an auction process for the sale of the Company. In
addition, the Special Committee has noted the concerns of
potential bidders with respect to creating a level playing
field in the face of an existing bid by a major stockholder of
the Company who has representation on the Company's Board of
Directors. The Special Committee has the authority to, and
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intends that it would, enter into an agreement with the bidder
selected by the Special Committee granting any and all
inducements to such bidder which are appropriate under all of
the circumstances (including, without limitation, termination
payments, stock options or other such arrangements), which
inducements would be payable or applicable in the event that
Board of Directors approval of the Merger Agreement with the
bidder selected by the Special Committee is not obtained.
4. A form of Merger Agreement is being enclosed with this letter.
Please include with your final proposal whether:
(a) the Merger Agreement is acceptable in its present form, or
(b) the specific nature of any proposed changes, including a
marked copy of the Merger Agreement showing these changes.
Please do not retype the Merger Agreement.
Your willingness to accept the Merger Agreement without
significant modification will be an important factor in the
evaluation of your final proposal. Please consider carefully
any modifications you may suggest. You should indicate in your
proposal that you are prepared to execute promptly the Merger
Agreement in the form submitted by you.
5. Your proposal should not be subject to any remaining due
diligence. If you require any additional information or
discussions to submit a proposal, please promptly contact
Dillon, Read & Co. Inc., who will work to accommodate your
requests. Please do not contact any of the officers, directors
or employees of the Company directly.
6. The Special Committee expressly reserves the right, in its
sole and absolute discretion, to accept or reject any proposal
for any reason whatsoever (and without disclosing the reason
for such decision) and to modify the procedures set forth
herein at any time.
A proposal will be deemed accepted only upon execution and
delivery of a definitive Merger Agreement.
Please do not hesitate to contact Dillon, Read & Co. Inc. with any questions.
Very truly yours,
DILLON, READ & CO. INC.