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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended November 27, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ..................to................
Commission File No. 0-3488
H.B. FULLER COMPANY
(Exact name of registrant as specified in its charter)
Minnesota 41-0268370
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1200 Willow Lake Boulevard, St. Paul, Minnesota 55110-5101
(Address of principal executive offices) (Zip Code)
(651) 236-5900
(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock, par
value $1.00 per share
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]
The aggregate market value of the Common Stock, par value $1.00 per share, held
by non-affiliates of the Registrant as of January 31, 2000 was approximately
$873,930,000 (based on the closing price of such stock as quoted on the NASDAQ
National Market ($66.06) on such date).
The number of shares outstanding of the Registrant's Common Stock, par value
$1.00 per share, was 14,058,338 as of January 31, 2000.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I, II and IV incorporate information by reference to portions of the H.B.
Fuller Company 1999 Annual Report to Shareholders.
Part III incorporates information by reference to portions of the Registrant's
Proxy Statement dated March 10, 2000.
-1-
H.B. FULLER COMPANY
1999 Form 10-K Annual Report
Table of Contents
PART I Page
------ ----
Item 1. Business 3
Item 2. Properties 5
Item 3. Legal Proceedings 6
Item 4. Submission of Matters to a Vote of Security Holders 6
Executive Officers of the Registrant 6
PART II
-------
Item 5. Market for Registrant's Common Stock and Related Stockholder
Matters 8
Item 6. Selected Financial Data 8
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 8
Item 8. Financial Statements and Supplementary Data 8
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure 8
PART III
--------
Item 10. Directors and Executive Officers of the Registrant 9
Item 11. Executive Compensation 9
Item 12. Security Ownership of Certain Beneficial Owners and Management 9
Item 13. Certain Relationships and Related Transactions 9
PART IV
-------
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 9
Signatures 13
Schedule II - Valuation and Qualifying Accounts 14
-2-
PART I
Item 1.
Business
- --------
Founded in 1887 and incorporated as a Minnesota corporation in 1915, H.B. Fuller
Company (the "Company") today is a worldwide manufacturer and marketer of
adhesives, sealants, coatings, paints and other specialty chemical products.
The Company currently employs approximately 5,400 people and has sales
operations in 45 countries in North America, Europe, Latin America and the
Asia/Pacific region.
The Company's largest worldwide business category is adhesives, sealants and
coatings, which generated more than 90 percent of 1999 sales. These products,
in thousands of formulations, are sold to customers in a wide range of
industries, including packaging, woodworking, automotive, aerospace, graphic
arts (books/magazines), appliances, filtration, windows, sporting goods,
nonwovens, shoes and ceramic tile.
The Company also is a producer and supplier of powder coatings to metal
finishing industries; commercial and industrial paints in Latin American
markets; as well as mastics and coatings for thermal insulation, indoor air
quality and asbestos abatement applications in the United States.
Segment Information
- -------------------
See Note 14, "Business Segment Information", on pages 59 and 60 of the Company's
1999 Annual Report to Shareholders, incorporated herein by reference.
Line of Business and Classes of Similar Products
- ------------------------------------------------
The Company is engaged in one line of business, the manufacturing of specialty
chemical products which includes formulating, compounding and marketing
adhesives, sealants and coatings, paints, and related chemicals.
The following tabulation sets forth information concerning the approximate
contribution to consolidated sales of the Company's classes of products:
Class of Product Sales
---------------- -------------------------------------
1999 1998 1997
------ ------ ------
Adhesives, sealants and coatings 92% 91% 90%
Paints 8 8 7
Other - 1 3
----- ----- ------
100% 100% 100%
===== ===== ======
Non-U.S. Operations
- -------------------
Wherever feasible, the Company's practice has been to establish manufacturing
units outside of the United States to service the local markets. The principal
markets, products and methods of distribution in the non-U.S. business vary with
the country or business practices of the country. The products sold include not
only those developed by the local manufacturing plants but also those developed
within the United States and elsewhere in the world.
The Company's operations overseas face varying degrees of economic and political
risk. At the end of fiscal year 1999, the Company had plants in 22 countries
outside the United States and satellite sales offices in another 22 countries.
The Company also uses license agreements to maintain a worldwide manufacturing
network. In the opinion of management of the Company, there are several
countries where the Company has operating facilities, which have political risks
higher than in the United States. Where possible, the Company insures its
physical assets against damage from civil unrest.
-3-
Competition
- -----------
The Company encounters a high degree of competition in the marketing of its
products. Because of the large number and variety of its products, the Company
does not compete directly with any one competitor in all of its markets. The
Company competes with several large, multi-national companies as well as many
smaller local, independent firms. In North America, the Company competes with a
large number of both the multi-national companies and local firms.
Throughout Latin America, the Company experiences substantial competition in
marketing its industrial adhesives. In Central America, the Company also
competes with several large paint manufacturing firms. In Europe, the Company
is a large manufacturer of adhesives and competes with several large companies.
The principal competitive factors in the sale of adhesives, sealants, coatings
and paints are product performance, customer service, technical service, quality
and price.
Customers
- ---------
Of the Company's $1,364,458,000 total sales to unaffiliated customers in 1999,
$791,029,000 was sold through North American operations. No single customer
accounts for 10% or more of the Company's consolidated sales.
Backlog
- -------
Orders for the Company's products are generally processed within one week.
Therefore, the Company had no significant backlog of unfilled orders at November
27, 1999, November 28, 1998 or November 29, 1997.
Raw Materials
- -------------
The Company purchases from large chemical suppliers raw materials including
solvents, plasticizers, waxes, resins, polymers and vinyl acetate monomer which
the Company uses to manufacture its principal products. Natural raw materials
including starch, dextrines, natural latex and resins are also used in the
Company's manufacturing processes. The Company attempts to find multiple
sources for all of its raw materials and alternate sources of supply are
generally available. An adequate supply of the raw materials used by the Company
is presently available in the open market. The Company's Latin American and
Asia/Pacific operations import many of their raw materials. Extended delivery
schedules of these materials are common, thereby requiring maintenance of higher
inventory levels than those maintained in North America and Europe.
A significant portion of the Company's raw materials are derived from petroleum-
based products and this is common to all adhesive manufacturers.
The Company is not a large consumer of energy and, therefore, has not
experienced any difficulties in obtaining energy for its manufacturing
operations. The Company anticipates it will be able to obtain needed energy
supplies in the future.
Patents, Trademarks and Licenses
- --------------------------------
Much of the technology used in the manufacturing of adhesives, coatings and
other specialty chemicals is in the public domain. To the extent that it is
not, the Company relies on trade secrets and patents to protect its know-how.
The Company has agreements with many of its employees for the purpose of
protecting the Company's rights to technology and intellectual property. The
Company also routinely obtains confidentiality commitments from customers,
suppliers and others to safeguard its proprietary information. Company
trademarks such as HB Fuller(R), Kativo(R), Protecto(R) and Rakoll(R) are of
continuing importance in marketing its products.
Research and Development
- ------------------------
The Company conducts research and development activities in an effort to improve
existing products and to design new products and processes. The Company's
research and development expenses during 1999, 1998 and 1997 aggregated
$21,340,000, $22,255,000 and $24,830,000 respectively.
-4-
Environmental Protection
- ------------------------
The Company regularly reviews and upgrades its environmental policies, practices
and procedures and seeks improved production methods that reduce waste,
particularly toxic waste, coming out of its facilities, based upon evolving
societal standards and increased environmental understanding.
The Company's high standards of environmental consciousness are supported by an
organizational program supervised by environmental professionals and the
Worldwide Environment, Health and Safety Committee, a committee with management
membership from around the world which proactively monitors practices at all
facilities. Company practices are often more stringent than local government
standards. The Company integrates environmental programs into operating
objectives, thereby translating philosophy into every day practice.
The Company believes that as a general matter its current policies, practices
and procedures in the areas of environmental regulations and the handling of
hazardous waste are designed to substantially reduce risks of environmental and
other damage that would result in litigation and financial liability. Some risk
of environmental and other damage is, however, inherent in particular operations
and products of the Company, as it is with other companies engaged in similar
businesses.
The Company is and has been engaged in the handling, manufacture, use, sale
and/or disposal of substances, some of which are considered by federal or state
environmental agencies to be hazardous. The Company believes that its
manufacture, handling, use, sale and disposal of such substances are generally
in accord with current applicable environmental regulations. Increasingly
strict environmental laws, standards and enforcement policies may increase the
risk of liability and compliance costs associated with such substances.
Environmental expenditures, reasonably known to management, to comply with
environmental regulations over the Company's next two fiscal years are estimated
to be approximately $12.0 million. See additional disclosure under Item 3,
Legal Proceedings.
Employees
- ---------
The Company and its consolidated subsidiaries employed approximately 5,400
persons on November 27, 1999, of which approximately 2,200 persons were employed
in the United States.
Item 2.
Properties
- ----------
The principal manufacturing plants are located in 23 countries:
U.S. Locations Other Locations
- -------------- ---------------
California (4) Argentina Japan
Florida Australia Mexico
Georgia (4) Austria New Zealand
Illinois (2) Brazil Nicaragua
Indiana Canada (3) People's Republic of China
Kentucky Chile Peru
Michigan (4) Colombia Philippines
Minnesota (7) Costa Rica (5) Republic of Panama
New Jersey Dominican Republic United Kingdom (3)
North Carolina Ecuador (2)
Ohio (2) Federal Republic of Germany (2)
Texas (2) Honduras
Washington Italy
The Company's principal executive offices and central research facilities are
Company owned and located in the St. Paul, Minnesota metropolitan area.
The Company has facilities for the manufacture of various products with total
floor space of approximately 1,571,000 square feet, including 325,000 square
feet of leased space. In addition, the Company has approximately 2,001,000
square feet of
-5-
warehouse space, including 491,000 square feet of leased space. Offices and
other facilities total 1,836,000 square feet, including 426,000 square feet of
leased space. The Company believes that the properties owned or leased are
suitable and adequate for its business.
Item 3.
Legal Proceedings
- -----------------
Environmental Remediation
- --------------------------
The Company is subject to the federal Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA") and similar state laws that impose
liability for costs relating to the clean-up of contamination resulting from
past spills, disposal or other release of hazardous substances. The Company is
currently involved in administrative proceedings or lawsuits under CERCLA or
such state laws relating to clean up of 11 sites. The future costs in
connection with all of these matters have not been determined due to such
factors as the unknown timing and extent of the remedial actions which may be
required, the full extent of clean-up costs and the amount of the Company's
liability in consideration of the liability and financial resources of the other
potentially responsible parties. However, based on currently available
information, the Company does not believe that any liabilities allocated to it
in these administrative proceedings or lawsuits, individually or in the
aggregate, will have a material adverse affect on the Company's business or
financial condition.
The Company has received requests for information from federal, state or local
government entities regarding 6 other contaminated sites. The Company has not
been named a party to any administrative proceedings or lawsuits relating to the
clean up of these sites.
From time to time the Company becomes aware of compliance matters relating to,
or receives notices from federal, state or local entities regarding possible or
alleged violations of environmental, health or safety laws and regulations. In
some instances, these matters may become the subject of administrative
proceedings or lawsuits and may involve monetary sanctions of $100,000 or more
(exclusive of interest and costs). Based on currently available information,
the Company does not believe that such compliance matters or alleged violations
of laws and regulations, individually or in the aggregate, will have a material
adverse affect on the Company's business or financial condition.
Other Legal Proceedings
- -----------------------
The Company is subject to legal proceedings incidental to its business. Based
on currently available information, the Company does not believe that an adverse
outcome in any pending legal proceedings individually or in the aggregate would
have a material adverse affect on the Company's business or financial condition.
Item 4.
Submission of Matters to a Vote of Security Holders
- ---------------------------------------------------
Not applicable.
Executive Officers of the Registrant
------------------------------------
The following sets forth the name, age and business experience for the past five
years of each of the executive officers of the Company as of January 31, 2000.
Unless otherwise noted, the positions described are positions with the Company
or its subsidiaries.
Name Age Position Period Served
- ---- --- -------- -------------
Albert P.L. Stroucken 52 Chairman of the Board October, 1999-Present
President and Chief Executive Officer April, 1998-Present
General Manager, Inorganics Division, 1997-1998
Bayer AG
Executive Vice President and 1992-1997
President, Industrial
Chemicals Division,
Bayer Corporation
-6-
Name Age Position Period Served
- ---- --- -------- -------------
Raymond A. Tucker 54 Senior Vice President October, 1999-Present
Chief Financial Officer July, 1999-Present
Treasurer July-October, 1999
Senior Vice President, Inorganic Products, 1997-1999
Bayer Corporation
Vice President, Finance and Administration, 1992-1997
Industrial Chemicals Division,
Bayer Corporation
Lars T. Carlson 62 Senior Vice President-Manufacturing Integration December, 1999-Present
Senior Vice President-Administration 1996-1999
Vice President 1986-1996
Richard C. Baker 47 Corporate Secretary 1995-Present
Vice President 1993-Present
General Counsel 1990-Present
William L. Gacki 51 Vice President and Treasurer October, 1999-Present
Director, Treasury 1995-October, 1999
Linda J. Welty 44 Group President, General Manager September, 1998-Present
Specialty Group
Vice President, General Manager, 1997-1998
Superabsorbent Materials, Clariant International
Global Business Director 1994-1996
Superabsorbent Materials, Clariant International
Peter Koxholt 55 Group President, General Manager Europe January, 1999-Present
Head of Business Unit Textile Chemicals 1995-1998
& Specialties, Bayer AG
Vice President, Enamels and Ceramics Business, 1991-1995
Bayer Corporation
Antonio Lobo 57 Vice President, Group President, 1999-Present
General Manager Latin America
Vice President, Latin American Group Manager 1996-1999
Vice President, Asia/Pacific Group Manager 1989-1996
Alan R. Longstreet 53 Senior Vice President-Performance Products December, 1999-Present
Senior Vice President Global SBU's 1998-1999
Vice President-Asia/Pacific Group Manager 1996-1998
Vice President-ASC Structural 1992-1996
David J. Maki 58 Vice President 1990-Present
Controller 1987-Present
Michael D. Modak 43 Vice President-Industrial Products January, 2000-Present
Director, Corporate Development 1994-1999
Walter Nussbaumer 42 Vice President, Chief Technology Officer December, 1999-Present
and Full-Valu
Vice President, Chief Technology Officer January, 1999-Present
Director of Research & Development 1997-1998
Corporate Research & Development, 1992-1997
Group Leader
-7-
Name Age Position Period Served
- ---- --- -------- -------------
Matthew Critchley 50 Group President, General Manager Asia/Pacific October, 1998-Present
Managing Director, Australia/New Zealand 1994-1998
The executive officers of the Company are elected annually by the Board of
Directors with the exception of the Group Presidents, Group Managers, Vice
President-Industrial Products and the Chief Technology Officer, who hold
appointed offices.
PART II
Information for Items 5 through 8 of this report appear in the 1999 H.B. Fuller
Company Annual Report to Shareholders as indicated in the following table and is
incorporated herein by reference to the applicable portions of such Annual
Report:
Annual Report to Shareholders
Page
--------
Item 5.
Market for Registrant's Common Stock
- ------------------------------------
and Related Stockholder Matters
-------------------------------
Trading Market 64
High and Low Market Value 64
Dividend Payments 64
Dividend Restrictions (Note 13) 56
Holders of Common Stock 64
Item 6.
Selected Financial Data
- -----------------------
1989 - 1999 in Review and
Selected Financial Data 62-63
Item 7.
Management's Discussion and Analysis of
- ---------------------------------------
Financial Condition and Results of Operations
---------------------------------------------
Management's Discussion and Analysis of Results of
Operations and Financial Condition 31-39
Item 7A.
Quantitative and Qualitative Disclosures
- ----------------------------------------
About Market Risk
-----------------
Financial Instruments 45
Item 8.
Financial Statements and Supplementary Data
- -------------------------------------------------
Consolidated Financial Statements 40-60
Quarterly Data (Unaudited)(Note 15) 60
Report of the Independent Accountants 61
Item 9.
Changes in and Disagreements with Accountants
- ---------------------------------------------
on Accounting and Financial Disclosure
--------------------------------------
None
-8-
PART III
Item 10.
Directors and Executive Officers of the Registrant
- --------------------------------------------------
The information under the heading "Election of Directors" (but not including the
sections entitled "Directors' Compensation" and "Board Meetings and Committees")
and the section entitled "Section 16(a) Beneficial Ownership Reporting
Compliance" contained in the Company's Proxy Statement dated March 10, 2000 (the
"2000 Proxy Statement") are incorporated herein by reference.
The information contained at the end of Part I hereof under the heading
"Executive Officers of the Registrant" is incorporated herein by reference.
Item 11.
Executive Compensation
- ----------------------
The section under the heading "Election of Directors" entitled "Directors'
Compensation" and the sections under the heading "Executive Compensation"
entitled "Summary Compensation Table," "Option Grants in Last Fiscal Year,"
"Aggregated Option Exercises in Fiscal Year 1999 and Fiscal Year End Option
Values," "Retirement Plans," "Employment and Consulting Agreements," and
"Change in Control Arrangements" contained in the 2000 Proxy Statement are
incorporated herein by reference.
Item 12.
Security Ownership of Certain Beneficial Owners and Management
- --------------------------------------------------------------
The information under the heading "Security Ownership of Certain Beneficial
Owners and Management" contained in the 2000 Proxy Statement is incorporated
herein by reference.
Item 13.
Certain Relationships and Related Transactions
- ----------------------------------------------
The section entitled "Exchange Agreement" contained in the 2000 Proxy Statement
is incorporated herein by reference.
PART IV
Item 14.
Exhibits, Financial Statement Schedule and Reports on Form 8-K
- --------------------------------------------------------------
Reference
--------------------------
Form 10-K Annual Report
Annual Report to Shareholders
Page Page
------ ------
(a)(1.) Index to Consolidated Financial Statements
Incorporated by Reference to the applicable portions of
the 1999 Annual Report to Shareholders of H.B. Fuller
Company:
Consolidated Statements of Income for the
Three Years Ended November 27, 1999,
November 28, 1998 and November 29, 1997 40
Consolidated Balance Sheets as of
November 27, 1999 and November 28, 1998 41
-9-
Form 10-K Annual Report
Annual Report to Shareholders
Page Page
----- ------
Consolidated Statements of Stockholders' Equity
for the Three Years Ended November 28, 1999,
November 28, 1998 and November 29, 1997 42
Consolidated Statements of Cash Flows
for the Three Years Ended November 28, 1999,
November 28, 1998 and November 29, 1997 43
Notes to Consolidated Financial Statements 44-60
Report of Independent Accountants 61
(a)(2.) Index to Consolidated Financial Statement
Schedule for the Three Years Ended November 27,
1999, November 28, 1998 and November 29, 1997:
Report of Independent Accountants on Financial
Statement Schedule 14
Schedule II Valuation and Qualifying Accounts 14
All other financial statement schedules are omitted as the required information
is inapplicable or the information is given in the financial statements or
related notes.
(a)(3.) Exhibits
--------
Exhibit Number
3(a) Restated Articles of Incorporation of H.B. Fuller Company, October 30,
1998 - incorporated by reference to Exhibit 3(a) to the Registrant's
Annual Report on Form 10-K405 for the year ended November 28, 1998.
3(b) By-Laws of H.B. Fuller Company as amended through July 14, 1999 -
incorporated by reference to Exhibit 3(b) to the Registrant's Quarterly
Report on Form 10-Q for the quarter ended August 28, 1999.
4(a) Rights Agreement, dated as of July 18, 1996, between H.B. Fuller Company
and Norwest Bank Minnesota, National Association, as Rights Agent, which
includes as an exhibit the form of Right Certificate - incorporated by
reference to Exhibit 4 to the Registrant's Form 8-K, dated July 24, 1996.
4(b) Specimen Stock Certificate.
4(c) Stock Exchange Agreement, dated July 18, 1996, between H.B. Fuller
Company and Elmer L. Andersen, including Designations for Series B
Preferred Stock- incorporated by reference to Exhibit 10 to the
Registrant's Form 8-K, dated July 24, 1996.
4(d) Agreement dated as of June 2, 1998 between H.B. Fuller Company and a
group of investors, primarily insurance companies, including the form of
Notes -incorporated by reference to Exhibit 4(a) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended August 29, 1998.
*10(a) H.B. Fuller Company 1992 Stock Incentive Plan - incorporated by
reference to Exhibit 10(a) to the Registrant's Annual Report on Form 10-
K for the year ended November 30, 1992.
-10-
*10(b) H.B. Fuller Company Restricted Stock Plan - incorporated by reference
to Exhibit 10(c) to the Registrant's Annual Report on Form 10-K for
the year ended November 30, 1993.
*10(c) H.B. Fuller Company Restricted Stock Unit Plan - incorporated by
reference to Exhibit 10(d) to the Registrant's Annual Report on Form
10-K for the year ended November 30, 1993.
*10(d) H.B. Fuller Company Directors' Deferred Compensation Plan as Amended
February 10, 1999 - incorporated by reference to Exhibit 10(b) to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
February 27, 1999.
*10(e) H.B. Fuller Company 1987 Stock Incentive Plan - incorporated by
reference to Exhibit 4(a) to the Registrant's Registration Statement
on Form S-8 (Commission File No. 33-16082).
*10(f) H.B. Fuller Company Executive Benefit Trust dated October 25, 1993
between H.B. Fuller Company and First Trust National Association, as
Trustee, relating to the H.B. Fuller Company Supplemental Executive
Retirement Plan - incorporated by reference to Exhibit 10(k) to the
Registrant's Annual Report on Form 10-K for the year ended November
29, 1997.
*10(g) Form of Employment Agreement signed by executive officers -
incorporated by reference to Exhibit 10(e) to the Registrant's Annual
Report on Form 10-K for the year ended November 30, 1990 (Commission
File No. 0-3488).
*10(h) H.B. Fuller Company Supplemental Executive Retirement Plan - 1998
Revision - incorporated by reference to Exhibit 10(j) to the
Registrant's Annual Report on Form 10-K405 for the year ended November
28, 1998.
*10(i) Amendments to H.B. Fuller Company Executive Benefit Trust, dated
October 1, 1997 and March 2, 1998, between H.B. Fuller Company and
First Trust National Association, as Trustee, relating to the H.B.
Fuller Company Supplemental Executive Retirement Plan - incorporated
by reference to Exhibit 10(k) to the Registrant's Annual Report on
Form 10-K405 for the year ended November 28, 1998.
*10(j) Retirement Plan for Directors of H.B. Fuller Company - incorporated by
reference to Exhibit 10(n) to the Registrant's Annual Report on Form
10-K405 for the year ended November 30, 1994.
*10(k) Performance Unit Plan - incorporated by reference to Exhibit 10(a) to
the Registrant's Quarterly Report on Form 10-Q for the quarter ended
February 27, 1999.
*10(l) Employment Agreement, dated as of April 16, 1998, between H.B. Fuller
Company and Albert Stroucken - incorporated by reference to Exhibit
10(a) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended May 30, 1998.
*10(m) Consulting Agreement and First Amendment to International Service
Agreement and Non-Competition Agreement, effective as of April 30,
1998, between H.B. Fuller Company and Walter Kissling - incorporated
by reference to Exhibit 10(b) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended May 30, 1998.
*10(n) H.B. Fuller Company 1998 Directors' Stock Incentive Plan -
incorporated by reference to Exhibit 10(c) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended May 30, 1998.
*10(o) Restricted Stock Award Agreement, dated as of April 23, 1998, between
H.B. Fuller Company and Lee R. Mitau - incorporated by reference to
Exhibit 10(d) to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended May 30, 1998.
*10(p) Managing Director Agreement with Peter Koxholt signed October 15,
1998.
*10(q) Change in Control Agreement dated as of October 15, 1998 between H.B.
Fuller Company and Peter Koxholt.
-11-
*10(r) First Amendment to H.B. Fuller Company Supplemental Executive
Retirement Plan dated November 4, 1998 - incorporated by reference to
Exhibit 10(x) to the Registrant's Annual Report on Form 10-K405 for
the year ended February 28, 1998.
*10(s) Form of Change in Control Agreement dated as of April 8, 1998 between
H.B. Fuller Company and each of its executive officers, other than
Peter Koxholt and Albert Stroucken - incorporated by reference to
Exhibit 10(y) to the Registrant's Annual Report on Form 10-K405 for
the year ended February 28, 1998.
*10(t) H.B. Fuller Company Key Employee Deferred Compensation Plan
- incorporated by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8 (Commission File No. 333-89453).
*10(u) Employment Agreement dated May 6, 1999 between H.B. Fuller Company and
Raymond A. Tucker - incorporated by reference to Exhibit 10(a) to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
August 28, 1999.
*10(v) First Declaration of Amendment to the Retirement Plan for Directors of
H.B. Fuller Company dated February 10, 1999.
*10(w) H.B. Fuller Company Directors Benefit Trust, dated February 10, 1999,
between H.B. Fuller Company and U.S. Bank National Association, as
Trustee, relating to the Retirement Plan for Directors.
*Asterisked items are management contracts or compensatory plans or arrangements
required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of
this Form 10-K.
11 Statement re: Computation of Net Income Per Common Share
13 Pages 31-64 of the 1999 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Consent of PricewaterhouseCoopers LLP
24 Powers of Attorney
27 Financial Data Schedule
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the fourth quarter of the
fiscal year ended November 27, 1999.
(c) See Exhibit Index and Exhibits attached to this Form 10-K.
----------------------------------------------------------
(d) See Financial Statement Schedule included at the end of this Form
------------------------------------------------------------------
10-K.
-----
-12-
S I G N A T U R E S
-------------------
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
H.B. FULLER COMPANY
Dated: February 24, 2000 By /s/ Albert P.L. Stroucken
-------------------------------------
ALBERT P.L. STROUCKEN
Chairman of the Board,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated:
Signature Title
--------- -----
/s/ Albert P.L. Stroucken Chairman of the Board,
- -----------------------------------
ALBERT P.L. STROUCKEN President and Chief Executive Officer
and Director
(Principal Executive Officer)
/s/ Raymond A. Tucker Senior Vice President,
- -----------------------------------
RAYMOND A. TUCKER Chief Financial Officer
(Principal Financial Officer)
/s/ David J. Maki Vice President and Controller
- -----------------------------------
DAVID J. MAKI (Principal Accounting Officer)
*Anthony L. Andersen *Norbert R. Berg
- ----------------------------------- -------------------------------------
ANTHONY L. ANDERSEN, Director NORBERT R. BERG, Director
*Edward L. Bronstien, Jr. *Robert J. Carlson
- ----------------------------------- -------------------------------------
EDWARD L. BRONSTIEN, JR., Director ROBERT J. CARLSON, Director
*Freeman A. Ford *Gail D. Fosler
- ----------------------------------- -------------------------------------
FREEMAN A. FORD, Director GAIL D. FOSLER, Director
*Reatha Clark King *Walter Kissling
- ----------------------------------- -------------------------------------
REATHA CLARK KING, Director WALTER KISSLING, Director
*John J. Mauriel, Jr. *Lee R. Mitau
- ----------------------------------- -------------------------------------
JOHN J. MAURIEL, JR., Director LEE MITAU, Director
*Rolf Schubert *Lorne C. Webster
- ----------------------------------- -------------------------------------
ROLF SCHUBERT, Director LORNE C. WEBSTER, Director
*By: /s/ Richard C. Baker Dated: February 24, 2000
------------------------------
RICHARD C. BAKER
Attorney in Fact
-13-
REPORT OF INDEPENDENT ACCOUNTANTS ON
------------------------------------
FINANCIAL STATEMENT SCHEDULE
----------------------------
To the Board of Directors
of H.B. Fuller Company
Our audits of the consolidated financial statements referred to in our report
dated January 10, 2000 appearing in the 1999 Annual Report to Stockholders of
H.B. Fuller Company (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the financial statement schedule listed in Item 14(a) of this Form
10-K. In our opinion, this financial statement schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
January 10, 2000
Schedule II
-----------
H.B. Fuller Company and Consolidated Subsidiaries
Valuation and Qualifying Accounts
(Dollars in thousands)
Allowance for doubtful receivables
------------------------------------------
November 27, November 28, November 29,
1999 1998 1997
---- ---- ----
Balance at beginning of period $ 5,073 $ 5,879 $ 7,043
Additions(deductions):
Charged to costs and expenses 3,034 2,232 1,183
Accounts charged off during year (2,984) (2,836) (1,991)
Accounts of acquired businesses - (154) (88)
Effect of currency exchange rate
changes on beginning of year
balance (252) (48) (268)
------- ------- -------
Balance at end of period $ 4,871 $ 5,073 $ 5,879
======= ======= =======
-14-
EXHIBIT LIST
Exhibit Number
3(a) Restated Articles of Incorporation of H.B. Fuller Company, October 30,
1998 - incorporated by reference to Exhibit 3(a) to the Registrant's
Annual Report on Form 10-K405 for the year ended November 28, 1998.
3(b) By-Laws of H.B. Fuller Company as amended through July 14, 1999
- incorporated by reference to Exhibit 3(b) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended August 28, 1999.
4(a) Rights Agreement, dated as of July 18, 1996, between H.B. Fuller
Company and Norwest Bank Minnesota, National Association, as Rights
Agent, which includes as an exhibit the form of Right Certificate
- incorporated by reference to Exhibit 4 to the Registrant's Form 8-K,
dated July 24, 1996.
4(b) Specimen Stock Certificate.
4(c) Stock Exchange Agreement, dated July 18, 1996, between H.B. Fuller
Company and Elmer L. Andersen, including Designations for Series B
Preferred Stock - incorporated by reference to Exhibit 10 to the
Registrant's Form 8-K, dated July 24, 1996.
4(d) Agreement dated as of June 2, 1998 between H.B. Fuller Company and a
group of investors, primarily insurance companies, including the form
of Notes - incorporated by reference to Exhibit 4(a) to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
August 29, 1998.
*10(a) H.B. Fuller Company 1992 Stock Incentive Plan - incorporated by
reference to Exhibit 10(a) to the Registrant's Annual Report on Form
10-K for the year ended November 30, 1992.
*10(b) H.B. Fuller Company Restricted Stock Plan - incorporated by reference
to Exhibit 10(c) to the Registrant's Annual Report on Form 10-K for
the year ended November 30, 1993.
*10(c) H.B. Fuller Company Restricted Stock Unit Plan - incorporated by
reference to Exhibit 10(d) to the Registrant's Annual Report on Form
10-K for the year ended November 30, 1993.
*10(d) H.B. Fuller Company Directors' Deferred Compensation Plan as Amended
February 10, 1999 - incorporated by reference to Exhibit 10(b) to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
February 27, 1999.
*10(e) H.B. Fuller Company 1987 Stock Incentive Plan - incorporated by
reference to Exhibit 4(a) to the Registrant's Registration Statement
on Form S-8 (Commission File No. 33-16082).
*10(f) H.B. Fuller Company Executive Benefit Trust dated October 25, 1993
between H.B. Fuller Company and First Trust National Association, as
Trustee, relating to the H.B. Fuller Company Supplemental Executive
Retirement Plan - incorporated by reference to Exhibit 10(k) to the
Registrant's Annual Report on Form 10-K for the year ended November
29, 1997.
*10(g) Form of Employment Agreement signed by executive officers
- incorporated by reference to Exhibit 10(e) to the Registrant's
Annual Report on Form 10-K for the year ended November 30, 1990
(Commission File No. 0-3488).
*10(h) H.B. Fuller Company Supplemental Executive Retirement Plan - 1998
Revision - incorporated by reference to Exhibit 10(j) to the
Registrant's Annual Report on Form 10-K405 for the year ended November
28, 1998.
*10(i) Amendments to H.B. Fuller Company Executive Benefit Trust, dated
October 1, 1997 and March 2, 1998, between H.B. Fuller Company and
First Trust National Association, as Trustee, relating to the H.B.
Fuller Company Supplemental Executive Retirement Plan - incorporated
by reference to Exhibit 10(k) to the Registrant's Annual Report on
Form 10-K405 for the year ended November 28, 1998.
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*10(j) Retirement Plan for Directors of H.B. Fuller Company - incorporated by
reference to Exhibit 10(n) to the Registrant's Annual Report on Form
10-K405 for the year ended November 30, 1994.
*10(k) Performance Unit Plan - incorporated by reference to Exhibit 10(a) to
the Registrant's Quarterly Report on Form 10-Q for the quarter ended
February 27, 1999.
*10(l) Employment Agreement, dated as of April 16, 1998, between H.B. Fuller
Company and Albert Stroucken - incorporated by reference to Exhibit
10(a) to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended May 30, 1998.
*10(m) Consulting Agreement and First Amendment to International Service
Agreement and Non-Competition Agreement, effective as of April 30,
1998, between H.B. Fuller Company and Walter Kissling - incorporated
by reference to Exhibit 10(b) to the Registrant's Quarterly Report on
Form 10-Q for the quarter ended May 30, 1998.
*10(n) H.B. Fuller Company 1998 Directors' Stock Incentive Plan
- incorporated by reference to Exhibit 10(c) to the Registrant's
Quarterly Report on Form 10-Q for the quarter ended May 30, 1998.
*10(o) Restricted Stock Award Agreement, dated as of April 23, 1998, between
H.B. Fuller Company and Lee R. Mitau - incorporated by reference to
Exhibit 10(d) to the Registrant's Quarterly Report on Form 10-Q for
the quarter ended May 30, 1998.
*10(p) Managing Director Agreement with Peter Koxholt signed October 15,
1998.
*10(q) Change in Control Agreement dated as of October 15, 1998 between H.B.
Fuller Company and Peter Koxholt.
*10(r) First Amendment to H.B. Fuller Company Supplemental Executive
Retirement Plan dated November 4, 1998 - incorporated by reference to
Exhibit 10(x) to the Registrant's Annual Report on Form 10-K405 for
the year ended February 28, 1998.
*10(s) Form of Change in Control Agreement dated as of April 8, 1998 between
H.B. Fuller Company and each of its executive officers, other than
Peter Koxholt and Albert Stroucken - incorporated by reference to
Exhibit 10(y) to the Registrant's Annual Report on Form 10-K405 for
the year ended February 28, 1998.
*10(t) H.B. Fuller Company Key Employee Deferred Compensation Plan
-incorporated by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8 (Commission File No. 333-89453).
*10(u) Employment Agreement dated May 6, 1999 between H.B. Fuller Company and
Raymond A. Tucker - incorporated by reference to Exhibit 10(a) to the
Registrant's Quarterly Report on Form 10-Q for the quarter ended
August 28, 1999.
*10(v) First Declaration of Amendment to the Retirement Plan for Directors of
H.B. Fuller Company dated February 10, 1999.
*10(w) H.B. Fuller Company Directors Benefit Trust, dated February 10, 1999,
between H.B. Fuller Company and U.S. Bank National Association, as
Trustee, relating to the Retirement Plan for Directors.
11 Statement re: Computation of Net Income Per Common Share
13 Pages 31-64 of the 1999 Annual Report to Shareholders
21 Subsidiaries of the Registrant
23 Consent of PricewaterhouseCoopers LLP
24 Powers of Attorney
27 Financial Data Schedule
*Asterisked items are management contracts or compensatory plans or arrangements
required to be filed as an exhibit to this Form 10-K pursuant to Item 14(c) of
this Form 10-K.
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