<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
H.B. FULLER COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11
(1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
(2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE>
[LOGO] H.B. FULLER COMPANY
World Headquarters
Office: 1200 Willow Lake Boulevard
St. Paul, Minnesota 55110-5132
Mail: P.O. Box 64683
St. Paul, Minnesota 55164-0683
Phone: 612-415-5900
Dear Shareholder:
We are pleased to invite you to the H.B. Fuller Company 1997 Annual Meeting
of Shareholders, to be held beginning at 3:00 p.m. on Thursday, April 17, 1997,
at Bandana Square, 1021 Bandana Boulevard East, St. Paul, Minnesota.
In addition to the items of business set forth in the accompanying Notice of
Annual Meeting of Shareholders and Proxy Statement, we will report on the
current activities of the Company and there will be an opportunity to discuss
matters of interest to you as a shareholder.
We sincerely hope you will be able to attend our Annual Meeting. However,
whether or not you plan to attend, please sign and return the enclosed proxy
card to assure that your shares are properly represented at the Annual Meeting.
We look forward to seeing you at the Annual Meeting.
Sincerely,
H.B. FULLER COMPANY
[SIGNATURE]
ANTHONY L. ANDERSEN
Chair-Board of Directors
March 6, 1997
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(This Page Intentionally Left Blank.)
<PAGE>
H.B. FULLER COMPANY
1200 Willow Lake Boulevard
P.O. Box 64683
St. Paul, Minnesota 55164-0683
612-415-5900
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 17, 1997
The Annual Meeting of Shareholders of H.B. Fuller Company will be held at
Bandana Square, 1021 Bandana Boulevard East, St. Paul, Minnesota, on Thursday,
April 17, 1997, beginning at 3:00 p.m. for the following purposes:
(1) to elect four directors for a three-year term;
(2) to ratify the appointment of Price Waterhouse as auditors for the
fiscal year ending November 29, 1997;
(3) to act upon a stockholder proposal regarding tobacco-related business
of the Company; and
(4) to transact such other business as may properly come before the
meeting.
Shareholders of record at the close of business on February 19, 1997 are
entitled to notice of, and to vote at, the meeting.
Whether or not you plan to attend the meeting in person, please mark, date
and sign the enclosed proxy card and mail it in the enclosed envelope. No
postage is required if the proxy card is mailed in the United States.
[SIGNATURE]
Richard C. Baker
Secretary
March 6, 1997
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(This Page Intentionally Left Blank)
<PAGE>
H. B. FULLER COMPANY
1200 Willow Lake Boulevard
P.O. Box 64683
St. Paul, Minnesota 55164-0683
612-415-5900
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS--APRIL 17, 1997
This Proxy Statement is furnished in connection with the solicitation of
proxies on behalf of the Board of Directors of H.B. Fuller Company, a Minnesota
corporation (the "Company"), to be voted at the 1997 Annual Meeting of
Shareholders and at any adjournment of the meeting. This Proxy Statement and
form of proxy is being first mailed or given to shareholders on or about March
6, 1997.
Proxies in proper form received by the time of the meeting will be voted as
specified. A shareholder giving a proxy may revoke it at any time before it is
voted by giving written notice of such revocation or a properly executed new
proxy to the Secretary of the Company, or by attending the meeting and voting in
person.
The Company will bear the cost of proxy preparation and solicitation,
including the charges and expenses of brokerage firms or other nominees for
forwarding proxy materials to beneficial owners. Solicitation will be primarily
by mailing this Proxy Statement and Notice of Annual Meeting to all shareholders
entitled to vote at the meeting. Morrow & Co., Inc. has been retained by the
Company to assist in the solicitation of proxies for the 1997 Annual Meeting of
Shareholders for a fee of approximately $5,000 plus associated costs and
expenses. In addition, proxies may be solicited by telephone, telecopier, or
personally by Company directors, officers and regular employees, who will
receive no additional compensation for their services other than their regular
salaries.
Shareholders of record at the close of business on February 19, 1997 will be
entitled to vote at the meeting and any adjournment of the meeting. At that
time, the Company had outstanding 14,087,476 shares of common stock and 45,900
shares of Series A preferred stock. Holders of common stock are entitled to one
vote per share and holders of Series A preferred stock are entitled to 80 votes
per share. Both classes of stock vote as a single class upon the election of
directors and upon all matters submitted to shareholders. On a combined basis,
17,759,476 votes are entitled to be cast at the meeting. There is no cumulative
voting. If a shareholder abstains from voting as to any matter (or withholds
authority to vote for one or more nominees for director), then the shares held
by such shareholder shall be deemed present at the meeting for purposes of
determining a quorum and for purposes of calculating the vote with respect to
such matter (and the election of directors). If a broker returns a "non-vote"
proxy, indicating a lack of authority to vote on such matter, then the shares
covered by such non-vote shall be deemed present at the meeting for purposes of
determining a quorum but shall not be deemed to be represented at the meeting
for purposes of calculating the vote with respect to such matter.
1
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SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
The table below presents, as of January 31, 1997, information about the
beneficial ownership of Company common stock for each director and each
executive officer named in the Summary Compensation Table and all directors and
executive officers (including the named individuals) as a group. No shareholder
known by the Company owns beneficially more than 5% of the Company's common
stock. Elmer L. Andersen, 1483 Bussard Court, Arden Hills, Minnesota 55112, owns
45,900 shares of the Company's Series A preferred stock, representing 100% of
the class. Combining the Series A preferred and common stock beneficially owned,
Elmer L. Andersen controls 21.7% of the voting power of the Company.
<TABLE>
<CAPTION>
NUMBER OF SHARES OF
COMMON STOCK PERCENT OF
BENEFICIALLY COMMON
NAME OF BENEFICIAL OWNER OWNED(1)(2) STOCK
- ----------------------------------------------- -------------------- ------------
<S> <C> <C>
Anthony L. Andersen............................ 399,848 2.8%
Norbert R. Berg................................ 9,100 *
Edward L. Bronstien, Jr........................ 13,882 *
Robert J. Carlson.............................. 4,839 *
Freeman A. Ford................................ 1,500 *
Gail D. Fosler................................. 300 *
Dr. Reatha Clark King.......................... 5,831 *
Walter Kissling................................ 257,663 1.8%
Dr. John J. Mauriel, Jr........................ 13,875 *
Lee R. Mitau................................... 500 *
Rolf Schubert.................................. 64,999 *
Lorne C. Webster............................... 49,011 *
John T. Ray, Jr................................ 42,741 *
Jerald L. Scott................................ 32,267 *
Dr. Hermann Lagally............................ 500 *
All directors and executive officers
as a group (22 persons)...................... 987,057 6.9%
</TABLE>
- ------------------------
*Indicates less than 1%
(1)Includes 103,813 shares which may be acquired under currently exercisable
options by any executive officers of the Company and 40,284 shares of
restricted stock which are subject to forfeiture. Also includes shares held
under the H.B. Fuller Thrift Plan and Profit Share Plus Plan and share units
held under the Directors' Stock Plan.
(2)Except for 4,560 shares owned by Jerald L. Scott's wife (as to which
beneficial ownership is disclaimed by Mr. Scott) and 273 shares owned by the
wife of another officer of the Company (as to which beneficial ownership is
disclaimed by such officer), each person named and all directors and
executive officers as a group have sole voting and investment power as to the
shares shown.
2
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ELECTION OF DIRECTORS
The Board of Directors is currently comprised of twelve directors and is
divided into three classes, each consisting of four directors. Each year one
class of directors stands for election for a three-year term. Lee R. Mitau was
elected as a director in Class III to fill the vacancy created by an increase in
number of directors. The term of office for Class I directors, consisting of
Robert J. Carlson, Gail D. Fosler, Reatha Clark King and Rolf Schubert, will
expire at the 1997 Annual Meeting; the term of office for Class II directors,
consisting of Anthony L. Andersen, Norbert R. Berg, Freeman A. Ford and John J.
Mauriel, Jr., will expire at the 1998 Annual Meeting; and the term of office for
Class III directors, consisting of Edward L. Bronstien, Jr., Walter Kissling,
Lee R. Mitau and Lorne C. Webster, will expire at the 1999 Annual Meeting.
At the 1997 Annual Meeting, four people are to be elected as Class I
directors to hold a three-year term of office from the date of their election
(until the 2000 Annual Meeting) and until their successors are duly elected and
qualified. The four nominees for election as Class I directors are Robert J.
Carlson, Gail D. Fosler, Reatha Clark King and Rolf Schubert, all of whom are
currently directors. Each of the nominees has agreed to serve as a director if
elected. The proposal for the election of directors appears as Item No. 1 on the
enclosed proxy card. The accompanying proxy is intended to be voted FOR the
election of the four nominees named above, unless authority to vote for one or
more of such nominees is withheld as specified in the proxy card. Therefore, if
no instruction is given, the accompanying proxy, if delivered to the Company,
will be voted FOR such election.
The affirmative vote of a majority of the combined voting power of the
common stock and Series A preferred stock represented and entitled to vote at
the meeting is required for the election of the above nominees to the Board of
Directors. If, for any reason, any nominee becomes unavailable for election, the
proxies solicited by the Board of Directors will be voted for a substituted
nominee selected by the Board of Directors, or the Board of Directors, at its
option, may reduce the number of directors constituting Class I directors. The
Board of Directors has no reason to believe that any of the nominees are not
available or will not serve if elected.
Information concerning the four nominees and the directors whose terms of
office will continue after the 1997 Annual Meeting is set forth below.
3
<PAGE>
- --------------------------------------------------------------------------------
NOMINEES FOR ELECTION TO BOARD OF DIRECTORS--CLASS I
(SUBJECT TO ELECTION, FOR A TERM ENDING IN 2000)
- --------------------------------------------------------------------------------
ROBERT J. CARLSON
[PHOTO] Robert J. Carlson, age 67, has been Chairman of
the Board of Advanced Aerospace Design Corp., an
aerospace vehicle design firm, since 1994. He was
Vice Chairman of the Board of J.I. Case
Corporation, a worldwide manufacturer of
agricultural and construction equipment, from
September 1992 to 1994. He was Chairman of the
Board and Chief Executive Officer of J.I. Case
Corporation from 1991 to 1992. He is a director of
Belov and Company, Inc. Mr. Carlson has been a
director of the Company since 1989 and is a member
of the Finance Committee.
GAIL D. FOSLER
[PHOTO] Gail D. Fosler, age 49, is Senior Vice President
and Chief Economist of The Conference Board, a
non-profit, business-sponsored research and
membership organization. From 1989 to 1997, she
was Vice President, Chief Economist and Executive
Director of The Conference Board. Ms. Fosler is a
director of the Unisys Corporation, a trustee of
John Hancock Mutual Funds and a director of the
National Bureau of Economic Research. Ms. Fosler
has been a director of the Company since 1992 and
is a member of the Finance Committee.
REATHA CLARK KING
[PHOTO] Reatha Clark King, age 58, has been President and
Executive Director of the General Mills Foundation
and Vice President of General Mills, Inc., a
diversified food company, since 1988. She served
as President of Metropolitan State University, St.
Paul, Minnesota, from 1977 to 1988. She is a
director of Norwest Corporation and is a trustee
of Minnesota Mutual Life Insurance Company. Dr.
King has been a director of the Company since 1978
and is a member of the Compensation and Corporate
Governance Committees.
ROLF SCHUBERT
[PHOTO] Rolf Schubert, age 58, has been Chief Technology
Officer of the Company since 1996. From 1982 to
1996 he was Vice President, Corporate Research and
Development of the Company. Mr. Schubert has been
a director of the Company since 1972 and is a
member of the Retirement Plans Committee.
4
<PAGE>
- --------------------------------------------------------------------------------
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE--CLASS II
(TERM ENDING IN 1998)
- --------------------------------------------------------------------------------
ANTHONY L. ANDERSEN
[PHOTO] Anthony L. Andersen, age 61, has been Chair of the
Board of Directors since 1992. He was Chief
Executive Officer of the Company from 1973 to
1995. He was President of the Company from 1971 to
1992. Mr. Andersen is a director of Apogee
Enterprises, Inc. and ECM Publishers, Inc., and is
a trustee of Minnesota Mutual Life Insurance
Company. Mr. Andersen has been a director of the
Company since 1966 and is a member and chair of
the Executive Committee and a member of the
Corporate Governance, Finance and Retirement Plans
Committees.
NORBERT R. BERG
[PHOTO] Norbert R. Berg, age 65, retired as Deputy
Chairman of the Board of Control Data Corporation,
a computer manufacturing and data services
company, in 1988, a position he held since 1980.
He was a director of First Trust Company, Inc.
from 1970 to 1996 and a director of Control Data
Corporation from 1977 to 1990. Mr. Berg has been a
director of the Company since 1976 and is a member
and chair of the Compensation Committee and a
member of the Corporate Governance Committee.
FREEMAN A. FORD
[PHOTO] Freeman A. Ford, age 56, has been Chairman and
Chief Executive Officer of Fafco, Inc., Redwood
City, California, a manufacturer of energy
conservation equipment, since 1972. Mr. Ford has
been a director of the Company since 1975 and is a
member and chair of the Finance Committee and a
member of the Audit Committee.
JOHN J. MAURIEL, JR.
[PHOTO] John J. Mauriel, Jr., age 64, has been a member of
the faculty of The Carlson School of Management,
University of Minnesota, since 1965 and the
Director of the Bush Educator's Program since
1975. Dr. Mauriel has been a director of the
Company since 1968 and is a member and chair of
the Audit Committee and a member of the
Compensation Committee.
5
<PAGE>
- --------------------------------------------------------------------------------
MEMBERS OF BOARD OF DIRECTORS CONTINUING IN OFFICE--CLASS III
(TERM ENDING IN 1999)
- --------------------------------------------------------------------------------
EDWARD L. BRONSTIEN, JR.
[PHOTO] Edward L. Bronstien, Jr., age 69, has been
President of Rybovich Spencer, a yacht
construction, sales and service business in West
Palm Beach, Florida, since 1981. He is Chairman of
the Board of Island National Bank of Palm Beach,
Palm Beach, Florida. Mr. Bronstien has been a
director of the Company since 1972 and is a member
and chair of the Corporate Governance Committee
and a member of the Audit and Executive
Committees.
WALTER KISSLING
[PHOTO] Walter Kissling, age 65, has been Chief Executive
Officer of the Company since 1995 and President
since 1992. He was Chief Operating Officer of the
Company from 1990 to 1995. Mr. Kissling was an
Executive Vice President of the Company from 1990
to 1992. He has been Chairman since 1985 and a
director since 1969 of Kativo Chemical Industries,
S.A., a subsidiary of the Company. He is also a
director of Pentair, Inc. Mr. Kissling has been a
director of the Company since 1968 and is a member
of the Executive and Finance Committees.
LEE R. MITAU
[PHOTO] Lee R. Mitau, age 48, has been Executive Vice
President, General Counsel and Secretary of First
Bank System, Inc., a regional multi- state bank
holding company headquartered in Minneapolis,
since 1995. He was a partner in the Corporate
Department of the law firm of Dorsey & Whitney LLP
from 1983 to 1995. He is a director of Graco, Inc.
Mr. Mitau was Secretary of the Company from 1990
to 1995. He has been a director of the Company
since October 1996 and is a member of the
Compensation Committee.
LORNE C. WEBSTER
[PHOTO] Lorne C. Webster, age 68, has been Chairman of the
Board and Chief Executive Officer of Prenor Group,
Ltd., a Montreal-based Canadian financial services
holding company, since 1980. He is a director of
Consumers Packaging, Inc., Bank of Montreal,
Murphy Oil Corporation, Bankmont Financial
Corporation and Amalgamated Income LP. Mr. Webster
has been a director of the Company since 1970 and
is a member and chair of the Retirement Plans
Committee.
6
<PAGE>
DIRECTORS' COMPENSATION
Each director, except for full-time employees Anthony L. Andersen, Walter
Kissling and Rolf Schubert, is paid an annual retainer of $22,000, plus a fee of
$1,000 for each day of a board meeting attended, and a fee of $900 for each day
of a committee meeting attended. Committee chairs receive an additional $3,000
retainer annually. These retainer and meeting fees are for services performed,
including attendance at Board of Directors meetings and Board committee
meetings.
Directors may elect to defer receipt of all or a percentage of their
retainer or meeting fees under the Directors' Stock Plan. The amount deferred
will be increased by 10%. All deferred amounts are treated as if they had been
invested in shares of the Company's common stock and are converted into units of
shares which are credited to each participating director's account. In addition,
each participating director's account is credited with a number of units of
shares equivalent in market value to the dividend on the Company's common stock.
The payout of deferred retainer fees in common stock will be made at the
earliest to occur of: (i) the last date on which the director serves as a
director (i.e., the date of resignation, removal or end of the elected term), or
at the option of the director on the first, second, third, fourth or fifth
anniversaries of such last date as may be selected by the director in advance,
(ii) disability, (iii) death, or (iv) the date of a potential change in control
as defined in the Plan. During the fiscal year ended November 30, 1996, Norbert
R. Berg, Edward L. Bronstien, Jr., Robert J. Carlson, Reatha Clark King and John
J. Mauriel, Jr. elected to defer $48,050, $22,500, $34,100, $20,000 and $46,500,
respectively, under this Plan.
The Retirement Plan for Directors of the Company provides for payment of a
retirement benefit to eligible directors, beginning on the later of retirement
or age 60, in an amount equal to the director's annual retainer for the 12-month
period preceding retirement. The retirement benefit is paid each year in
installments for 15 years or the number of years of service as a director,
whichever is less. Eligible directors are Elmer L. Andersen (retired Chair of
the Board) and directors with a minimum of 10 years of service who have never
been employed by the Company or a subsidiary. The Retirement Plan for Directors
is an unfunded plan. The Company, however, has placed funds in trust that remain
subject to claims of the Company's creditors but otherwise are intended to
provide plan benefits.
The Company maintains a program whereby non-employee directors are
reimbursed for annual physical examinations. During the fiscal year ended
November 30, 1996, the Company paid reimbursements of $414 on behalf of Norbert
R. Berg and $578 on behalf of Edward L. Bronstien, Jr. for their physical
examinations.
The Company has a Matching Gifts to Education Program, which became
effective in 1983. Under the Program, the Company provides a matching gift for
each employee's or director's contribution to an eligible educational
institution. The maximum amount to be contributed by the Company in a year is
$1,000 for each employee or director. During the fiscal year ended November 30,
1996, the Company matched contributions of $1,000 each with respect to John J.
Mauriel, Jr., Freeman A. Ford, Reatha Clark King and Norbert R. Berg, and $250
with respect to Walter Kissling.
7
<PAGE>
BOARD AND COMMITTEE RESPONSIBILITIES AND MEETINGS
The Board of Directors is responsible for the overall affairs of the
Company, and conducts its business through meetings of the Board and six
standing committees: Audit, Compensation, Corporate Governance, Executive,
Finance and Retirement Plans. Ad hoc committees are also established under the
direction of the Board when necessary to address specific issues.
The Board of Directors held five meetings during the fiscal year ended
November 30, 1996. Each director attended at least 82% of the aggregate of the
total number of Board and committee meetings of which he or she was a member
during such fiscal year. Average attendance was 98%. The contributions of all
directors have been substantial and are highly valued.
The Audit Committee (i) recommends to the Board of Directors the engagement
or dismissal of the independent public auditor, (ii) reviews the work and audit
plan of the independent public auditor, (iii) reviews financial statements and
related disclosures with the independent public auditor and financial
management, (iv) reviews audit fees, (v) reviews and approves the scope and
results of the Company's internal auditing procedures, (vi) reviews the adequacy
of the Company's internal accounting and financial control systems, (vii)
reviews the adequacy of the Company's risk management policies and insurance
coverage, and (viii) reviews compliance with the Company's ethical conduct
policy. The committee's members are nonemployee directors Edward L. Bronstien,
Jr., Freeman A. Ford and John J. Mauriel, Jr. The committee held four meetings
during the fiscal year ended November 30, 1996.
The Compensation Committee (i) reviews and establishes the Company's overall
compensation strategies and programs with respect to officers and directors,
(ii) reviews and approves the Chief Executive Officer's compensation, (iii)
approves the total amount of individual achievement award monies and incentive
awards, and (iv) administers, sets certain terms of, and grants options and
other stock-based awards under, the Company's 1992 Stock Incentive Plan. The
committee's members are nonemployee directors Norbert R. Berg, Reatha Clark
King, John J. Mauriel, Jr. and Lee R. Mitau. The committee held three meetings
during the fiscal year ended November 30, 1996.
The Corporate Governance Committee (i) suggests to the Board nominees for
directors, (ii) evaluates the performance of directors and is responsible for
new director orientation and ongoing director education, (iii) recommends to the
Board the election of executive officers, (iv) recommends to the Board
appointments to, and the responsibilities of, Board committees, (v) reviews the
Company's organizational structure and succession planning, (vi) evaluates the
performance of the Chair of the Board and the Chief Executive Officer, and (vii)
reviews the functioning of the Board and the fulfillment of its legal duties and
makes recommendations regarding such matters to the Board. Recommendations by
shareholders of potential director nominees may be addressed to the Corporate
Governance Committee in care of the Secretary of the Company, who will forward
such recommendations to the committee for consideration. The committee's members
are Norbert R. Berg, Edward L. Bronstien, Jr., Anthony L. Andersen and Reatha
Clark King. The committee held six meetings during the fiscal year ended
November 30, 1996.
The Executive Committee acts only in the intervals between meetings of the
Board and is subject at all times to the control and direction of the Board and,
within the
8
<PAGE>
foregoing limits, may exercise all of the powers of the Board in the management
of the business of the Company, except the power to: (i) declare dividends, (ii)
fill vacancies on the Board, and (iii) adopt, amend, or repeal bylaws. The
committee's members are Anthony L. Andersen, Edward L. Bronstien, Jr. and Walter
Kissling. The committee held no meetings during the fiscal year ended November
30, 1996.
The Finance Committee reviews and makes recommendations to the Board
regarding: (i) major financing programs, (ii) dividend policy, (iii) capital and
operating budgets and policy, (iv) purchase and sale of the Company's
securities, (v) financial aspects of acquisitions and divestitures, (vi)
third-party guarantees, and (vii) level of overall borrowing authority. The
committee's members are Anthony L. Andersen, Robert J. Carlson, Freeman A. Ford,
Gail D. Fosler and Walter Kissling. The committee held six meetings during the
fiscal year ended November 30, 1996.
The Retirement Plans Committee (i) oversees the funding of all of the
Company's worldwide pension, thrift and retirement plans, (ii) defines
investment policies and performance indices for each of the plans it oversees,
(iii) may manage internally all or a portion of the retirement plans' funds,
(iv) selects and removes investment fund managers, trustees and actuarial
consultants, (v) annually reviews actuarial assumptions and computations to
determine that the Company's contributions are accurate, and (vi) makes
recommendations to the Board regarding the Company's plans and trusts. The
committee's members are Anthony L. Andersen, Rolf Schubert and Lorne C. Webster.
The committee held four meetings during the fiscal year ended November 30, 1996.
EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE MEMBERSHIP AND RESPONSIBILITY
The Compensation Committee of the Board of Directors (the "Committee") is
responsible for reviewing and establishing overall compensation strategies and
programs worldwide to ensure the Company's ability to attract, retain and
motivate qualified executives and directors. For officers and key managers at
executive pay grades (or others as necessary to provide perspective), the
Committee (i) reviews, modifies and/ or approves the management's
recommendations on base salaries, incentive programs, restricted stock and other
executive compensation items to appropriately motivate and reward this group of
employees, (ii) reviews and approves the Chief Executive Officer's compensation,
including base salary, incentive programs and other executive compensation items
to appropriately motivate and reward this employee, and (iii) reviews and
approves the Chair of the Board's base salary. In all cases, the Committee
reserves the right to change compensation programs at any time.
The Chairperson and members of the Committee are elected by the Board of
Directors. The Committee currently consists of four nonemployee Directors.
From time to time, the Committee hires one or more professionally competent
and experienced disinterested outside consultants to thoroughly analyze and
review the Company's compensation systems and programs. The purpose of these
reviews is to satisfy the Committee that the Company's compensation plans,
programs and systems are designed to meet its stated objectives.
9
<PAGE>
The Committee meets at least three times per year. During these meetings,
the Committee typically addresses the following agenda:
AUTUMN MEETING
- - Sets pay range structures for the Company's executive group by reviewing
competitive market data and anticipated increases in overall pay structures
within such competitive markets (generally referred to as "market movement")
and then sets guidelines for salary increases, if any, based on that
competitive market data, market movement and the outlook for year-end Company
performance. The market data is selected from compensation surveys which
include data from general manufacturing companies (which may include chemical
manufacturing companies) of a revenue size comparable to the Company. Because
of the general nature of compensation surveys, the Company does not know if
specific positions within companies in the S&P Specialty Index are included in
such surveys.
- - Determines individual achievement award fund. An individual achievement award
fund is accrued at the beginning of each year for the purpose of rewarding
managers at the end of the year for performance during the year. The aggregate
size of the fund is determined by calculating the amounts necessary to pay out
the maximum of the award opportunities of all management employees
participating in this program (determined for each executive as discussed
below). The Committee then decides how much, if any, of this fund will be
released to management each year. Since the individual achievement award is
not driven by financial performance (unlike the incentive award), the
Committee has determined not to use a specific formula for determining the
percentage of the individual achievement award fund to be released each year.
In determining the percentage of this fund to be released, the Committee uses
its experience and independent judgment to assess a variety of factors,
including the effectiveness of key managers in addressing critical strategic
issues, the overall performance of the Company and the success of managers in
dealing with new challenges, directions and priorities. However, the Committee
generally will release 100% of the award fund only if the Company exceeds its
budgeted earnings target by 5%, and proportionately less of the fund as the
Company's performance fails to meet budgeted targets. Due to lower than
expected earnings by the Company during fiscal year 1996, significantly less
than 100% of the fund was released with respect to fiscal 1996.
WINTER MEETING
- - Reviews, modifies and/or approves executive officers' annual incentive and
individual achievement awards, if any, for the prior fiscal year and any
salary increases for the current fiscal year.
SPRING MEETING
- - Analyzes current trends and philosophies of compensation and how they may
impact the Company in its objective to attract, retain and motivate its
employees.
- - Reviews competitive market data and recommends changes if necessary to
maintain competitive nonemployee director compensation, benefits and
perquisites.
COMPENSATION OVERVIEW
The Company's compensation objective is to establish overall strategies and
programs that ensure the Company's ability to attract, retain and motivate the
best
10
<PAGE>
available employees, key managers and directors on a worldwide basis. The
Company's basic strategy for achieving this objective is to establish pay ranges
which set the Company's basic average compensation targets (including both base
and short-term incentive elements) at or above competitive levels for comparable
positions when performance targets are met.
Currently, the Company's executive compensation (including the compensation
of Messrs. Kissling, Ray, Scott and Dr. Lagally) is comprised of five basic
elements: base pay, short-term incentive compensation comprised of two
components (incentive award and individual achievement award) and long-term
incentive compensation comprised of two components (restricted stock or
restricted stock units and performance units). Short-term incentive awards are
designed such that, when performance targets are met, management compensation
will be at or above competitive levels. When performance falls below target
levels, management compensation will fall below competitive levels. This aspect
is referred to as "variable compensation."
To ensure external competitiveness, the Company participates in extensive
annual compensation surveys using multiple sources to verify competitive pay
levels. To establish and maintain internal equity, the Company uses a job
evaluation process in setting the internal hierarchy of jobs.
Base pay and short-term incentive compensation are based on a pay-for-
performance philosophy. Annual performance evaluations help to assure that these
components of compensation are administered in a consistent manner from entry
level to the top positions in the Company. The Company's compensation systems
involve the following integrated elements:
1) MERIT INCREASES in base salary are tied to a formal, annual performance
planning and assessment program for most Company employees worldwide,
including all non-union United States employees of the Company except for the
Chair of the Board. Such increases are made within a prescribed range of minimum
and maximum base salary set by management based upon market surveys of
comparable positions. Proposed merit increases for each officer are reviewed and
approved on an individual basis by the Committee. The amount of any merit
increase is determined based on an assessment of individual performance, market
pay rates and overall Company performance.
2) SHORT-TERM INCENTIVE AWARDS are tied directly to Company and individual
performance.
- - NON-MANAGEMENT EMPLOYEES participate in the Company's Profit Share Plus Plan,
under which annual cash payments and common stock awards may be made based
upon achievement of a pre-set level of total Company earnings and by
individual performance. Distributions of such common stock from this Plan are
made only upon termination of employment. Cash payments and common stock
awards under Profit Share Plus represent compensation in addition to a
fully-competitive base salary. The Company's objective is to include employees
in all countries in which it operates in the Profit Share Plus Plan.
Implementation of this objective is a matter of timing and local law
requirements.
11
<PAGE>
- - MID-LEVEL MANAGERS may participate in the individual achievement award
program. These award payments are governed by:
-- Company performance as judged by the Committee (as discussed above in
reference to the Committee's Autumn Meeting).
-- The individual employee's "value ranking" as set by a committee of
appropriate superiors. Value ranking attempts to identify the relative
contributions of the Company's employees and is based on factors such as
scope of responsibilities, future potential, current performance and past
performance.
-- The individual employee's personal achievement with respect to his or her
area of responsibility.
- - SENIOR MANAGEMENT EMPLOYEES (including all executive officers of the Company
except for the Chair of the Board) participate in incentive award and
individual achievement award plans, which represent the variable portion of
their total compensation.
-- INCENTIVE AWARDS are based on the achievement of financial results of the
manager's business unit and, in the case of corporate-wide managers, of
the total Company. Payout targets are set based on the financial budget as
annually approved by the Board of Directors. Performance targets for
corporate-level managers are generally net after-tax earnings for the
Company. Performance targets at the business unit level may be based on
the operating earnings of the manager's business unit as well as the net
after-tax earnings of the Company. Payments do not occur unless stated
performance targets are met. Although individual executive incentive award
plans will vary, a typical corporate executive officer will have the
opportunity to earn up to 15% of base salary under the incentive award
program. A typical business unit executive will have the opportunity to
earn up to 35% of base salary under the incentive award plan. In general,
in fiscal 1996, due to actual performance against targets, most senior
executives did not receive an incentive award.
-- INDIVIDUAL ACHIEVEMENT AWARDS are determined as discussed above with
reference to mid-level managers. A typical corporate executive officer
will have the opportunity to earn up to 30% of base salary under the
individual achievement award program. A typical business unit executive
will have the opportunity to earn up to 15% of such employee's base salary
under the individual achievement award program.
The aggregate amount of incentive and individual achievement award
opportunity is set for each executive such that the expected payout at budgeted
performance, together with such executive's base salary, would result in a total
compensation package equal to or in excess of the market rate of pay for such
position based on market survey data.
3) LONG-TERM INCENTIVES are provided primarily through the Performance Unit
Plan, adopted pursuant to the Company's 1992 Stock Incentive Plan, approved at
the Company's 1992 Annual Meeting of Shareholders. Under this Plan, performance
units are annually assigned to the Company's top-ranked employees (approximately
forty in number). These units may accrue value based on the cumulative
achievement of budgeted sales and earnings over a set number of years. If, at
the end of such period, cumulative budget targets are achieved, each performance
unit is converted to a dollar value based on a pre-set matrix, and each
participant's total unit value is used by the Company to purchase common stock
of the Company. This common stock is then held by
12
<PAGE>
the Company for an additional three years as restricted stock, to further the
Company's goal of retained ownership by key employees. For a description of the
terms of such restricted stock, see footnote 4 to the Summary Compensation
Table.
Other long-term incentives in the form of stock options or restricted stock
or restricted stock unit grants are distributed to key employees periodically on
the basis of their contribution to the Company and their value ranking, with the
goal of establishing significant and retained ownership by management. In June
1996, restricted stock and restricted stock units were granted to certain key
employees. The restricted stock is restricted from sale for ten years to
emphasize the importance of long-term planning and decision-making and to align
the interests of the key employees with the long-term performance of the
Company. The Profit Share Plus Plan, discussed above, also provides mid-level
and senior management with common stock awards based on the size of the
employee's individual achievement award payment. Such common stock is
distributed only upon termination of employment.
Although the Chair of the Board participates in certain of these plans as a
result of awards made prior to fiscal year 1996, he received no further awards
in fiscal 1996.
COMPENSATION OF THE CHIEF EXECUTIVE OFFICER
The Chief Executive Officer's compensation is determined by the Committee in
the same manner as all other key managers, with the most important criterion
being the profitability of the Company. The Chief Executive Officer is
compensated on the basis of the following factors:
1) MARKET PAY FOR THE POSITION. Each year the Committee thoroughly reviews
competitive market data from several survey sources and compares it to the
current pay of the Chief Executive Officer. The market data is selected from
compensation surveys which include data from general manufacturing companies
(which may include chemical manufacturing companies) of a revenue size
comparable to the Company. The Committee attempts to set the compensation of the
Chief Executive Officer at or above competitive levels. As stated above, because
of the general nature of compensation surveys, the Company does not know if
specific positions within companies in the S&P Specialty Index are included in
such surveys.
2) SHORT-TERM INCENTIVES. In 1996, Mr. Kissling was eligible to receive an
aggregate of 75% of his base salary under two separate components of short-term
incentive. Of this 75%, 45% was based on individual achievement and 30% was
based on financial performance of the Company. The Compensation Committee has
not established a specific formula for determining the relative allocation of
percentages between the two components of short-term incentive and has
determined to manage this aspect of executive compensation utilizing its
experience and independent judgment.
a) THE PERFORMANCE OF THE CHIEF EXECUTIVE OFFICER. In 1996, Mr. Kissling
was eligible to earn up to 45% of his base salary under the individual
achievement award program described above. The Committee set Mr. Kissling's
1996 individual achievement award at 41% of his base salary based on a
subjective evaluation of his performance by the Corporate Governance
Committee.
b) THE PERFORMANCE OF THE COMPANY. The Chief Executive Officer's
incentive award is based on the Company's net after-tax earnings budget
as annually approved by the Board of Directors. In 1996, Mr. Kissling was
eligible to earn an
13
<PAGE>
incentive award of up to 30% of his base salary based on the Company's net
earnings, with 20% of his base salary paid if 100% of budget was achieved
and 30% if 105% of the budget was achieved. In light of the Company's
performance against budget in fiscal 1996, Mr. Kissling received no
incentive award for fiscal 1996.
3) LONG-TERM INCENTIVES. The Chief Executive Officer participates in the
Company's long-term incentive programs along with all other key managers. In
1996, he was awarded 100 performance units, an amount determined principally
with reference to his value ranking in the Company -- which is the highest rank
of the Company's senior managers. Additionally, he was awarded 1,500 shares of
restricted stock units, subject to the same ten-year restriction from sale
discussed above.
INTERNATIONAL SERVICE COMPENSATION
The Company has sales in over 100 countries and operations in 42 countries
around the world. It is the Company's policy to staff operations wherever
possible with local national employees. However, the Company recognizes that
there are situations where it is necessary or desirable to assign an employee to
live and work in another country for a designated period of time.
The Company utilizes international assignments in order to accelerate
executive development, to promote global understanding, knowledge and experience
in Company operations, to start up new operations and to transfer important
techniques and information from one division or region to another. The Company
currently has eleven employees in international assignments, two of whom are
officers of the Company.
Like most major multinational employers, the Company has a formal policy
which governs an international service assignment. One of the objectives of the
policy is to assist the employee in maintaining reasonable continuity in
purchasing power and standard of living between the home and host countries. To
facilitate this objective, the Company uses several allowances and
differentials. For instance, if an employee who is a citizen of the United
States goes to live and work in Hong Kong for three years, the Company would pay
the difference in the cost of housing and the cost of goods and services between
the United States and Hong Kong for this three-year period. Like most major
multinational employers, the Company's policy also provides that a premium may
be paid to each international assignee to compensate employees for the
difficulties inherent in international service assignments.
Also included in this international service policy is a provision for tax
equalization. This helps to assure that the affected employee will neither bear
the burden of any additional taxation nor reap any windfall as a consequence of
the international assignment.
It is important to note that these allowances, differentials and tax
equalization payments, with the exception of the premium described above, are
not intended to be a gain to the employee.
DEDUCTIBILITY OF EXECUTIVE COMPENSATION
Internal Revenue Code Section 162(m) limits the ability of the Company to
deduct certain compensation in excess of one million dollars paid to the
individuals named in the Summary Compensation Table.
14
<PAGE>
In fiscal 1995, the Company entered into a deferred compensation arrangement
which preserves the deductibility of certain compensation paid to Mr. Kissling.
In addition, the Committee may defer awards granted under the Company's
short-term incentive programs, if such deferral is necessary to preserve the
deductibility of such awards. Consequently, the Committee believes that all
compensation proposed to be paid to the individuals named in the Summary
Compensation Table under the Company's existing compensation programs will be
fully deductible through fiscal year 1997.
The Committee believes that discretionary control over certain aspects of
executive compensation is critical to the overall compensation philosophy of the
Company, which is to attract, retain and motivate employees of the Company in a
manner which balances the best interests of the stakeholders. Guided by this
philosophy, the Committee has reviewed, and will continue to review as
circumstances change, the effects of the Section 162(m) limit on the Company.
MR. NORBERT R. BERG,
DR. REATHA CLARK KING,
DR. JOHN J. MAURIEL, JR., and
MR. LEE R. MITAU
The Members of the Committee.
15
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the cash and noncash compensation for each of
the last three fiscal years awarded to or earned by the Chief Executive Officer
of the Company and the four highest paid individuals operating in an executive
officer capacity with the Company (indicating their respective positions as of
the end of fiscal 1996) whose salary and variable compensation award in fiscal
1996 exceeded $100,000.
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
------------------------- --------------
VARIABLE RESTRICTED
COMPENSATION OTHER ANNUAL STOCK ALL OTHER
NAME AND PRINCIPAL POSITION YEAR SALARY(1) BONUS(2) COMPENSATION(3) AWARDS(4) COMPENSATION(5)
- --------------------------- --------- ---------- ------------- --------------- -------------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Anthony L. Andersen 1996 $ 504,000 $ 121,000 $ 52,500 $ 15,818
Chair-Board of Directors 1995 504,000 188,559 56,813 11,862
1994 476,160 15,490
Walter Kissling(6) 1996 $ 482,082 $ 200,000 $ 605,692 $ 52,313 $ 11,340
President, Chief 1995 442,316 106,312 512,298 52,500 6,318
Executive Officer 1994 416,262 165,000 738,063 56,813 12,214
John T. Ray, Jr. 1996 $ 325,772 $ 100,000 $ 52,313 $ 13,550
Sr. Vice President 1995 313,242 84,662 52,500 11,584
Adhesives, Sealants and 1994 298,326 103,916 56,813 16,876
Coatings Division
Jerald L. Scott 1996 $ 252,660 $ 70,000 $ 207,061 $ 52,313 $ 11,816
Sr. Vice President, 1995 207,297 51,876 242,327 52,500 8,899
Operations 1994 197,426 55,000 56,813 13,297
Dr. Hermann Lagally(7) 1996 $ 292,661 $ 53,341 $ 41,850 $ 250,601
Group Vice President, 1995 216,640 59,985 42,000
Europe 1994 192,729 38,315 45,450
</TABLE>
- ------------------------
(1)Includes cash compensation deferred at the election of the executive officer
under the terms of the H.B. Fuller Thrift Plan.
(2)Variable compensation is that portion of total compensation which is "at
risk." See discussion of variable compensation under the heading
"Compensation Overview" in the Compensation Committee Report contained
elsewhere in this Proxy Statement. For the fiscal year 1996, the variable
compensation for executive officers named in the table above (other than Mr.
Andersen who does not participate in these plans) represents the following
percentage of each such executive officer's respective total variable
compensation opportunity:
PERCENTAGE OF AWARD TO TOTAL OPPORTUNITY
----------------------------------------
Mr. Kissling 55%
Mr. Ray 47%
Mr. Scott 42%
Dr. Lagally 42%
(3)Includes cash payments provided by the Company to offset higher costs of
living and adverse impacts of different tax treatment incurred by certain
executive officers when such officers are transferred from one country to
another. These allowances are
16
<PAGE>
paid according to the Company's international service policy, which applies
to all employees who are transferred from one country to another and are not
intended to be a gain to the employee. Please refer to the Compensation
Committee Report on Executive Compensation elsewhere in this Proxy Statement
for further explanation of the Company's international service policy.
(4)The Company issues Restricted Stock and Restricted Stock Units under its
Performance Unit Plan, Restricted Stock Plan and Restricted Stock Unit Plan.
The terms and conditions of the Restricted Stock and Restricted Stock Units
issued under
these plans are similar. Restricted Stock represents shares of the Company's
common stock held by the Company on behalf of the participant. Each
Restricted Stock Unit represents the right to receive one share of the
Company's common stock. Restricted Stock and Restricted Stock Units will be
forfeited and reacquired by the Company unless the participant remains in the
continuous employment of the Company or an affiliate of the Company for a
period of ten years from the date of award, except with respect to Restricted
Stock or Restricted Stock Units issued upon conversion of Performance Units,
in which case continuous employment of three years is required to avoid
forfeiture, or in the event of death, disability or retirement, in which case
the risk of forfeiture and all other restrictions will lapse immediately.
Dividends are paid on Restricted Stock and dividend equivalents will accrue
with respect to Restricted Stock Units at the same rate as paid to all
holders of the Company's common stock but in the form of additional shares of
Restricted Stock or Restricted Stock Units, as the case may be, rather than
cash. The restrictions on the Restricted Stock and Restricted Stock Units
will lapse upon a change in control of the Company. As of November 30, 1996,
Mr. Andersen held a total of 4,686 shares of Restricted Stock (including
accrued dividend shares) having a then current value of $221,414, Mr.
Kissling held a total of 6,199 Restricted Stock Units (including accrued
dividend equivalents) having a then current value of $292,903, Mr. Ray held a
total of 6,199 shares of Restricted Stock (including accrued dividend shares)
having a then current value of $292,903, Mr. Scott held a total of 1,513
Restricted Stock (including accrued dividend shares) having a then current
value of $71,489 and a total of 4,686 Restricted Stock Units (including
accrued dividend equivalents) having a then current value of $221,414, and
Dr. Lagally held a total of 4,641 Restricted Stock Units (including accrued
dividend equivalents) having a then current value of $219,287. The amounts
indicated in the table represent the value of the Restricted Stock or
Restricted Stock Units awarded as of the date of grant (June 14, 1996, August
3, 1995, and July 15, 1994).
(5)Amounts include (i) the Company's contributions under the terms of the H.B.
Fuller Thrift Plan (a 401K plan), including the following amounts for fiscal
year 1996: Mr. Andersen ($9,500), Mr. Ray ($9,500), and Mr. Scott ($7,766),
and (ii) the dollar value of group term life insurance premiums paid by the
Company for the benefit of the named executive officers in the following
amounts for fiscal year 1996: Mr. Andersen ($6,318), Mr. Kissling ($11,340),
Mr. Ray ($4,050), and Mr. Scott ($4,050). No amounts were contributed by the
Company for fiscal years 1995 and 1996 under the Company's Profit Share Plus
Plan, a non-leveraged employee stock ownership plan; however, amounts for
fiscal 1994 also include the fair market value on the date of grant of shares
of the Company's common stock awarded to the individual under the Profit
Share Plus Plan. In years when contributions are made, the amount to be
contributed by the Company to each employee's account under the
17
<PAGE>
Profit Share Plus Plan is calculated according to a pre-determined formula
based on each employee's cash award with respect to that year. The Company's
contributions are made in cash, common stock or a combination of cash and
common stock. Substantially all of the assets of the Profit Share Plus Plan
are invested in common stock of the Company. A participant is fully vested in
the balance of his or her account upon the occurrence of certain specified
circumstances, including a change in control of the Company or the completion
of five years of continuous service. Each of the individuals named in the
Summary Compensation Table have been employed by the Company for more than
five years, and therefore, are fully vested in the balance of each such
executive officer's account, respectively. Distribution of a participant's
vested account balance is made only upon the termination of employment. An
indemnity of $250,601 paid to Dr. Lagally upon termination of his employment
with a Company subsidiary was based on Austrian law and relates to years of
service up to December 1, 1995.
(6)Includes cash compensation deferred by Mr. Kissling under a deferred
compensation agreement with the Company, whereby beginning January 1, 1995
Mr. Kissling agreed to defer 35% of his base salary and cash individual
achievement and incentive awards earned through September 30, 1997. The
deferred amount (including previously accrued interest) is credited on a
monthly basis with interest equal to Wall Street prime plus 1%. The entire
deferred amount plus accrued interest will be distributed in a lump sum on
the earlier of: (i) June 30 of the year following the year Mr. Kissling
ceases to be a U.S. resident for U.S. income tax purposes, (ii) 60 days
following death of Mr. Kissling, (iii) January 10, 2001, or (iv) upon a
change in control of Company. As of November 30, 1996, an aggregate of
$306,775 had been deferred and $27,400 in interest had been accrued under
this agreement. The Company has placed funds in trust that remain subject to
claims of the Company's creditors but otherwise are intended to assist the
Company in making payment of such deferred amounts together with accrued
interest.
(7)Dr. Hermann Lagally's 1996 salary and variable compensation award reflect the
foreign exchange rate in effect on December 2, 1996.
18
<PAGE>
LONG-TERM INCENTIVE PLANS--AWARDS IN LAST FISCAL YEAR
The following table reflects awards made under the Company's long-term
incentive plans during the fiscal year ended November 30, 1996 to the Chief
Executive Officer and the executive officers named in the Summary Compensation
Table.(1)
<TABLE>
<CAPTION>
ESTIMATED FUTURE
PAYOUTS UNDER
NON-STOCK PRICE
NUMBER OF SHARES, PERFORMANCE OR OTHER BASED PLANS
UNITS OR PERIOD UNTIL -----------------
NAME OTHER RIGHTS(2) MATURATION OR PAYOUT TARGET SUPERIOR
- ---------------- ----------------- -------------------- ------- --------
<S> <C> <C> <C> <C>
Mr. Andersen(1)
Mr. Kissling 100 November 30, 1998 $75,000 $150,000
Mr. Ray 43 November 30, 1998 32,250 64,500
Mr. Scott 43 November 30, 1998 32,250 64,500
Dr. Lagally 35 November 30, 1998 26,250 52,500
</TABLE>
- ------------------------
(1)A new Performance Unit Plan was implemented covering the 1996-1998 budget
years and the previous Performance Unit Plan covering 1995-1997 was
terminated. The new Plan differs significantly from previous plans in that
there will be no payout if cumulative Target goals are not met. The Threshold
payout has been removed; however, the payout potential at Target and Superior
goals has been increased. Mr. Andersen is not a participant in this plan.
(2)Represents Performance Units awarded during fiscal year ending November 30,
1996 under the Company's Performance Unit Plan. The Performance Units are
denominated in cash and payable in shares of restricted stock ("Restricted
Stock") upon the achievement of certain cumulative performance goals for the
period ending November 30, 1998 (the "Performance Period"). Performance goals
are based on target levels of net after-tax consolidated income and trade
sales, and the potential payouts under the Performance Unit Plan are adjusted
pursuant to a formula which adjusts for performance against the target goals.
As of the last day of the Performance Period, the participant's Performance
Units are converted to the largest number of whole shares of Restricted Stock
(restricted for a period of three years) that equals the aggregate value of
Performance Units earned during the Performance Period divided by the fair
market value of the Company's common stock. See footnote 4 to the Summary
Compensation Table for a description of the general terms of the Restricted
Stock that may be awarded under the Performance Unit Plan.
19
<PAGE>
STOCK OPTION EXERCISES IN 1996 AND VALUE AT END OF 1996
The following table summarizes information with respect to stock option
exercises during fiscal year 1996 by the Chief Executive Officer and the
executive officers named in the Summary Compensation Table, options held by such
persons, and the value of the options held by such persons at the end of fiscal
year 1996. Neither the Chief Executive Officer nor the named executive officers
received stock option grants in fiscal year 1996.
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED VALUE OPTIONS AT END OPTIONS AT END
NAME ON EXERCISE REALIZED OF 1996(1) OF 1996
- ---------------- --------------- ------------- -------------- --------------
<S> <C> <C> <C> <C>
Mr. Andersen -0- -0- 15,750 $ 518,490
Mr. Kissling -0- -0- 27,000 855,840
Mr. Ray -0- -0- 10,500 345,660
Mr. Scott -0- -0- 10,500 345,660
Dr. Lagally -0- -0- 500 15,560
</TABLE>
- ------------------------
(1)All options are currently exercisable.
20
<PAGE>
SHAREHOLDER RETURN PERFORMANCE PRESENTATION
Set forth below are two graphs: the first comparing the yearly cumulative
total shareholder return on the Company's common stock against the cumulative
total return of the S&P 500 Stock Index and the S&P Specialty Chemicals Index,
and the second comparing cumulative total return on the Company's common stock
against the cumulative total return of the S&P 400 Midcap Index and the Domini
Social Index, both of which include the Company.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
5 YEAR CUMULATIVE TOTAL RETURN*
AMONG H.B. FULLER, S&P 500-R- INDEX & S&P-R- SPECIALTY CHEMICALS
H.B. FULLER S&P 500-R- S&P-R- SPEC. CHEM.
<S> <C> <C> <C>
Nov-91 $100 $100 $100
Nov-92 $117 $118 $121
Nov-93 $102 $130 $137
Nov-94 $100 $132 $116
Nov-95 $102 $181 $157
Nov-96 $153 $231 $170
Fiscal Years Ended November 30
</TABLE>
Assumes $100 invested on November *Total return assumes reinvestment
30, 1991 of dividends
in H.B. Fuller Common Stock, S&P
500 Index &
S&P Specialty Chemicals
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
5 YEAR CUMULATIVE TOTAL RETURN*
AMONG H.B. FULLER, S&P 400 MIDCAP INDEX-R- & DOMINI SOCIAL INDEX
H.B. FULLER COMPANY S&P-R- MIDCAP 400 INDEX
<S> <C> <C>
Nov-91 $100 $100
Nov-92 $117 $121
Nov-93 $102 $136
Nov-94 $100 $136
Nov-95 $102 $180
Nov-96 $153 $214
Fiscal Years Ended November 30
<CAPTION>
5 YEAR CUMULATIVE TOTAL RETURN*
AMONG H.B. FULLER, S&P 400 MIDCAP INDEX-R- & DOMINI SOCIAL INDEX
DOMINI SOCIAL INDEX
<S> <C>
Nov-91 $100
Nov-92 $124
Nov-93 $136
Nov-94 $137
Nov-95 $189
Nov-96 $240
Fiscal Years Ended November 30
</TABLE>
Assumes $100 invested on November *Total return assumes reinvestment
30, 1991 of dividends
in H.B. Fuller Common Stock, S&P
400 Midcap
Index & Domini Social Index
21
<PAGE>
RETIREMENT PLANS
The Company's Retirement Plan (the "United States Plan") provides
noncontributory benefits for U.S. employees. The amount of plan benefits is
determined by a formula based on the employee's highest average compensation,
including commissions and variable compensation awards, during five of the final
ten years of credited service. The formula was modified in 1989 to conform to
new federal requirements, but benefits accrued under the old formula as of
November 30, 1989, were preserved to the extent they exceed the new formula
benefits. Rather than offset the formula benefit by Social Security payments,
the United States Plan now takes the Company's Social Security contributions
into account in the benefit formula. The new formula limits the amount of
compensation that can be taken into account each year. The Company also has
adopted a Supplemental Executive Retirement Plan (the "Supplemental Plan"), that
provides benefits to certain participants, including the Chief Executive Officer
and certain of the individuals named in the Summary Compensation Table. In
addition to providing benefits to certain employees who do not participate in
the United States Plan (including Mr. Kissling), the Supplemental Plan
supplements the benefits that are provided under the United States Plan since
the benefits provided under this plan are restricted by certain Internal Revenue
Service requirements. The Supplemental Plan is an unfunded plan; however, the
Company has placed funds in a trust that remain subject to claims of the
Company's creditors but otherwise are intended to provide Supplemental Plan
benefits. The Supplemental Plan provides a specified level of retirement income
based on a participant's length of service with the Company, final average
compensation (as defined in the Supplemental Plan) and retirement income from
certain other sources.
The following table shows the estimated annual benefits on a straight line
annuity basis payable to certain employees with 15 or more years of service upon
normal retirement under the United States Plan and the Supplemental Retirement
Plan in specified compensation classifications.
<TABLE>
<CAPTION>
FINAL AVERAGE ANNUAL
COMPENSATION BENEFITS
- ------------- --------------
<S> <C>
$ 225,000 $ 97,513
300,000 135,013
375,000 172,513
450,000 210,013
525,000 247,513
600,000 285,013
675,000 322,513
750,000 360,013
825,000 397,513
</TABLE>
The maximum number of years of service for which pension benefits accrue is
15. Mr. Andersen, Mr. Kissling, Mr. Ray and Mr. Scott each had more than 15
years of service as of November 30, 1996, and their covered compensation under
the plans for the fiscal year ended November 30, 1996 was equal to the base
salary and variable compensation set forth in the Summary Compensation Table.
Dr. Hermann Lagally participates in a personal retirement plan. The benefits
formula is based upon 1% of the monthly base salary, averaged from the last five
years, and multiplied by the number of years of service. The following table
presents an
22
<PAGE>
estimate of benefits payable to Dr. Lagally assuming 32 years of service at
retirement. In the table, the estimated benefits are computed with the foreign
exchange rate as of December 2, 1996.
<TABLE>
<CAPTION>
FINAL BASE SALARY ANNUAL BENEFIT
- ------------------ --------------
<S> <C>
$ 300,000 $ 88,387
375,000 110,542
450,000 132,695
</TABLE>
EMPLOYMENT AGREEMENTS
The Company currently has employment agreements with Mr. Andersen, Mr.
Kissling, Mr. Ray and Mr. Scott prohibiting disclosure of confidential
information, prohibiting the employee from engaging in certain competitive
activities for a specified period up to 36 months after termination of
employment, and requiring the assignment of certain discoveries and inventions
developed by the employee to the Company. The employment agreements have
indefinite terms. The employment agreements also provide that under certain
circumstances the Company will compensate the employee during the
non-competition period in an amount equal to the difference between (i) the
amount of monthly compensation subsequently earned and (ii) monthly basic
compensation (as defined in the agreement) from the Company at the time of
termination of employment. The present monthly basic compensation for Mr.
Andersen, Mr. Kissling, Mr. Ray, and Mr. Scott which would be offset by the
amount of monthly compensation subsequently earned is $36,479, $42,917, $28,342
and $23,487 respectively.
Dr. Hermann Lagally has an employment agreement with a Company subsidiary
prohibiting disclosure of confidential information both during and subsequent to
employment and prohibiting Dr. Lagally from engaging in any competitive activity
within a period of 24 months after temination of employment. The employment
agreement may be terminated upon 6 months notice given after May 30, 1998.
During the notice period and the non-competition period, Dr. Lagally will
continue to receive his monthly base salary. Dr. Lagally's present monthly base
salary is $23,229 (based on the exchange rate as of February 18, 1997).
Mr. Kissling is currently on international assignment and has entered into
an international service agreement with the Company setting forth the expected
duration of the international assignment, the position and salary for that
assignment, the international service premium, if any, the goods and services
and housing equalization reimbursement, relocation expense and tax equalization.
The international service agreement is terminable upon 30 days notice by either
party. The provisions of the international service agreement do not affect the
provisions of the employment agreement described above. See the Compensation
Committee Report on Executive Compensation contained elsewhere herein for a
further discussion of the Company's policy with respect to international service
compensation.
Additionally, the Company has agreed to indemnify Mr. Kissling's estate
against any U.S. estate tax liability up to $8,500,000 incurred in the event Mr.
Kissling dies while he is Chief Executive Officer of the Company. The Company
intends to purchase key employee term life insurance at a cost of approximately
$80,000 per year to cover this contingency.
23
<PAGE>
RATIFICATION OF APPOINTMENT OF AUDITORS
The Board of Directors has appointed Price Waterhouse, independent certified
public accountants, to be the Company's auditors for the fiscal year ending
November 29, 1997. Price Waterhouse served as the Company's auditors for the
fiscal year ended November 30, 1996. Approximately $773,000 in auditing fees
during fiscal 1996 were paid to Price Waterhouse. If the Board of Directors'
appointment of auditors is not approved by the shareholders, the Board of
Directors intends to reconsider that appointment. A representative of Price
Waterhouse is expected to be present at the meeting with the opportunity to make
a statement if he or she desires to do so and to be available to respond to
appropriate questions. Proxies will be voted in favor of ratification of the
appointment of the auditors unless otherwise specified.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR
RATIFICATION OF THE APPOINTMENT OF PRICE WATERHOUSE
STOCKHOLDER PROPOSAL
The Domini Social Equity Fund has stated its intention to submit the
following proposal at the Annual Meeting of Stockholders. The Company will
promptly furnish the address and the number of shares held by the proponent to
each person requesting such information orally or in writing.
The Board of Directors opposes the stockholder proposal. Proxies solicited
by management will be voted AGAINST the stockholder proposal unless stockholders
specify a contrary choice on their proxies. The affirmative vote of a majority
of the combined voting power of the common stock and the Series A preferred
stock represented and entitled to vote at the meeting is required to approve the
stockholder proposal.
THE STOCKHOLDER PROPOSAL
"WHEREAS: H.B. Fuller has been acknowledged to be at the forefront among
corporations in the U.S. which act in a socially responsible manner;
H.B. Fuller has been lauded in particular for its community involvement and
endorsement of the CERES Principles, a ten-point code for corporate
environmental performance and accountability;
We believe this strong reputation is undermined by Fuller's involvement in
the tobacco industry. Our company sells adhesives which glue the filter to the
cigarette and the paper together thus making the manufacture of cigarettes
possible. Our Company profits from a product that endangers global health.
Our Company boasts in tobacco industry journals that "In the world of
cigarettes, we speak many languages," and markets its product worldwide under
the slogan, "However you say 'cigarette adhesives,' H.B. Fuller understands.
Scientists have raised concerns about the safety of certain additives
claiming that some could produce cancer-causing agents when burned and inhaled.
Our company says it is not aware of what happens when its adhesives are
combusted thus exposing the company to potential litigation.
24
<PAGE>
The net of liability related to tobacco manufactures is being extended to
manufacturers of intermediate goods sold to the industry. For instance,
Kimberly-Clark, although not a cigarette manufacturer, was sued by West Virginia
for its participation in the tobacco chain. In response to shareholder concerns
and because it felt that its involvement in tobacco was "not compatible" with
the rest of its operations, Kimberly Clark spun off its tobacco-related
entities;
Pfizer has made a decision not to sell its products (ranging from herbicides
for tobacco plant to additives for cigarettes) to any tobacco-related entity;
BE IT RESOLVED: the shareholders request the Board of Directors to make
available to requesting shareholders within six months of the annual meeting a
report addressing the company's involvement in the tobacco industry. Withholding
proprietary information this report shall include, but not be limited to:
1. our company's sales to the tobacco industry as a percent of total
company sales;
2. the percent of the worldwide adhesives market for tobacco products
which our company controls;
3. a review of the possible health risks involved when the company's
cigarette adhesives are combusted;
4. a comprehensive study of the legal issues related to our Company's
continued participation in producing essential elements for the
manufacturing of cigarettes.
Supporting Statement
With plants in 41 countries, H.B. Fuller plays an important role in the
worldwide tobacco industry. Until this time it has refused to make public the
extent of its involvement in the tobacco industry nor address the potential
risks involved. If you believe our company should address its participation in
the tobacco chain including the potential health, legal and financial risks
involved, please support this resolution by voting "YES."
THE RESPONSE OF THE BOARD OF DIRECTORS
On a continuing basis, the Company is faced with making decisions that
balance differing and often conflicting values and objectives.
After thoughtfully and carefully considering the implications of the
proponent's resolution, the Board of Directors believes that the preparation and
public dissemination of a report containing the information requested by the
proponent would not be appropriate. The Board of Directors believes that such a
report would not be in the best interests of the Company and its
constituencies--its customers, employees, stockholders and the communities in
which it operates--and that the proposed resolution should not be adopted.
THE BOARD OF DIRECTORS RECOMMENDS
A VOTE AGAINST THE STOCKHOLDER PROPOSAL
25
<PAGE>
OTHER INFORMATION
EXCHANGE AGREEMENT
On July 17, 1996, the Company and Elmer L. Andersen, the holder of 45,900
shares of the Company's Series A preferred stock (which constitute all of the
outstanding shares of Series A preferred stock), entered into an Exchange
Agreement (the "Exchange Agreement"). Pursuant to the Exchange Agreement, the
Company has agreed, in the event any rights to purchase common stock (the
"Rights") issued pursuant to the Company's shareholder rights plan (the "Rights
Plan") are distributed under the Rights Plan, to issue 45,900 shares of Series B
preferred stock in exchange for the 45,900 shares of Series A preferred stock.
The Series B preferred stock, which was authorized by the Company's Board of
Directors on July 18, 1996, has the same rights and preferences as the Series A
preferred stock, except for the voting rights provisions. As in the case of the
Series A preferred stock, the Series B preferred stock initially has 80 votes
per share (as compared to the Company's common stock which has one vote per
share). However, upon exercise or exchange of any Rights pursuant to the Rights
Plan, the voting power of the Series B preferred stock will be increased such
that the issuance of common stock pursuant to the exercise or exchange of Rights
pursuant to the Rights Plan will not diminish the voting power of the Series B
preferred stock. The Exchange Agreement will terminate at such time as Mr.
Andersen, his spouse and his children, his more remote issue and their spouses
(collectively, "Andersen Family Members") do not own a majority of the
outstanding shares of the Series A preferred stock. In addition, any shares of
Series B preferred stock held by a person who is not an Andersen Family Member
will be entitled to only one vote per share.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
executive officers and directors to file initial reports of ownership, and
reports of changes in ownership, of securities of the Company with the
Securities and Exchange Commission (the "SEC"). Executive officers and directors
are required by SEC regulations to furnish the Company with copies of all such
forms. Based solely on a review of the copies of such forms received by it and
written representations from the Company's executive officers and directors, the
Company believes that, during the fiscal year ended November 30, 1996, its
executive officers and directors complied with all Section 16(a) filing
requirements, except for (i) one filing by Freeman Ford, a director, relating to
a sale of common stock by his son, who was a dependent of Mr. Ford's at the time
his son bought the shares but was no longer a dependent at the time of such
sale; and (ii) one filing by John Ray, an officer of the Company, relating to
the sale of common stock by his son who was a dependent at the time of such
sale.
OTHER MATTERS
The Board of Directors does not know of any other business to be presented
for consideration at the meeting. If any other business does properly come
before the meeting, proxies will be voted in accordance with the best judgment
of the person or persons acting under them.
26
<PAGE>
1998 STOCKHOLDER PROPOSALS
Proposals of shareholders intended to be presented at the Company's Annual
Meeting to be held in 1998 must be received at the principal executive offices
of the Company by the close of business on November 6, 1997, in order to be
included in the Company's Proxy Statement and proxy.
[SIGNATURE]
Richard C. Baker
Secretary
Dated: March 6, 1997
27
<PAGE>
[LOGO] RECYCLED PAPER WITH A MINIMUM
OF 10% POST CONSUMER WASTE
<PAGE>
H.B. FULLER COMPANY PROXY
1200 Willow Lake Boulevard
P.O. Box 64683
St. Paul, MN 55164-0683
1997 ANNUAL MEETING OF SHAREHOLDERS
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
The undersigned, revoking all prior proxies, appoints Anthony L. Andersen,
Walter Kissling and Richard C. Baker, or any one or more of them, as proxies,
with full power of substitution and revocation, to represent the undersigned and
to vote, as checked below and otherwise in their discretion, upon such other
matters as may properly come before the meeting, all shares of the common stock
of H.B. Fuller Company which the undersigned is entitled to vote at the Annual
Meeting of the Shareholders of the Company to be held at Bandana Square, 1021
Bandana Blvd. East, St. Paul, Minnesota on Thursday, April 17, 1997, at 3:00
p.m. and at any adjournment thereof.
PLEASE MARK THIS PROXY AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY ITEM.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE.)
(PLEASE DETACH HERE)
- --------------------------------------------------------------------------------
H.B. FULLER COMPANY
ANNUAL MEETING OF
SHAREHOLDERS
THURSDAY, APRIL 17, 1997
3:00 P.M.
1021 BANDANA BLVD. EAST
ST. PAUL, MINNESOTA
From I-94 take the Lexington [MAP]
Avenue Exit and go North
approximately 1-1/2 miles.
Turn left at Energy Park
Drive; go West approximately
1/4 mile and Bandana Square
will be on your right.
<PAGE>
IF SHARES ARE HELD IN THE DIVIDEND REINVESTMENT PLAN, SUCH SHARES ARE INCLUDED
IN THIS TOTAL AND WILL BE VOTED AS DIRECTED HEREON.
THE BOARD OF DIRECTORS RECOMMENDS A THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE NOMINEES FOR ELECTION OF VOTE AGAINST THE FOLLOWING PROPOSAL
DIRECTORS AND FOR THE PROPOSAL IN #2. IN #3.
1. Election of the FOR WITHHELD 3. To act on a FOR AGAINST ABSTAIN
following four director- ALL FOR ALL stockholder / / / / / /
nominees as Class I / / / / proposal
Directors for a three-year regarding
term and until their tobacco-related
successors are duly business of the
elected and qualified: Company.
Robert J. Carlson, Gail D.
Fosler, Reatha Clark King
and Rolf Schubert.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY 4. To vote with discretionary
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S authority upon such other
NAME IN THE SPACE PROVIDED BELOW: matters as may properly
come before the meeting.
- -----------------------------------------
IF NOT OTHERWISE SPECIFIED
2. To ratify the FOR AGAINST ABSTAIN ABOVE, THIS PROXY WILL BE
appointment of / / / / / / VOTED FOR ITEMS 1 AND 2,
Price Waterhouse AGAINST ITEM 3 AND IN THE
as auditors for DISCRETION OF THE PROXIES,
the fiscal year ON OTHER MATTERS THAT MAY
ending November PROPERLY COME BEFORE THE MEETING.
29, 1997.
Receipt of Notice of Meeting and
Proxy Statement and Annual Report
is Hereby Acknowledged.
Dated _____________________, 1997
Signature(s)_____________________
_________________________________
Please sign proxy as name appears.
JOINT OWNERS SHOULD EACH SIGN
PERSONALLY. Trustees and others
signing in a representative
capacity should indicate the
capacity in which they sign.
<PAGE>
H.B. FULLER INTERNATIONAL PROFIT SHARE PLUS,
H.B. FULLER CANADIAN PROFIT SHARE PLUS AND
H.B. FULLER NEW ZEALAND PROFIT SHARE PLUS TRUSTS
VOTING INSTRUCTIONS TO TRUSTEE
I hereby request ABN AMRO Trust Company (Jersey) Limited as Trustee of
the H.B. Fuller International Profit Share Plus Trust, the H.B. Fuller
Canadian Profit Share Plus Trust and the H.B. Fuller New Zealand Profit Share
Plus Trust to vote at the Annual Meeting of the Shareholders of H.B. Fuller
Company ("the Company") to be held on April 17, 1997, and at any and all
adjournments of said meeting, the common stock of the Company allocated to my
accounts.
I understand this card must be returned to the Trustee if my voting
instructions are to be honored. If it is not received by the Trustee, or if
it is received but the voting instructions are invalid, the stock with
respect to which I could have directed the Trustee shall be voted by the
Trustee in accordance with the terms of the plans. The Trustee is hereby
directed to vote as indicated on the following proposals which are more fully
described in the Company's Notice of Annual Meeting of Shareholders and Proxy
Statement.
PLEASE MARK THIS CARD AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY ITEM.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE.)
(PLEASE DETACH HERE)
- --------------------------------------------------------------------------------
To participants in the H.B. Fuller International Profit Share Plus Trust,
H.B. Fuller Canadian Profit Share Plus Trust and H.B. Fuller Company
New Zealand Profit Share Plus Trust
We are Trustee of the assets established in connection with the H.B. Fuller
International Profit Share Plus Trust, H.B. Fuller Canadian Profit Share Plus
Trust and H.B. Fuller Company New Zealand Profit Share Plus Trust. As
Trustee, we are the record owner of the shares of Common Stock of H.B. Fuller
Company ("the Company") held in the Trust Funds for the benefit of
Participants.
The Plans permit each participant to instruct the Trustee how to vote the
number of shares of the Company's Common Stock in the Trust Funds that are
allocated to the participant's accounts.
We enclose (1) a Notice of Annual Meeting of Shareholders of H.B. Fuller
Company to be held on April 17, 1997 and Proxy Statement, (2) H.B. Fuller
Company Annual Report, (3) a voting instructions card, and (4) a return
envelope. If you complete the card and return it to us in the enclosed
envelope by April 9, 1997, we will vote in accordance with your instructions,
the shares of the Company's Common Stock allocated to your accounts.
Although the Plans provide that you may give the Trustee voting instructions
with respect to such stock, it is important to note that the Trustee remains
the record owner of such stock. Therefore, the ability to instruct the
Trustee how to vote confers no right on Participants to directly vote at the
Annual Meeting of Shareholders.
As stated above, the enclosed instruction card must be properly completed if
voting instructions are to be honored. If the card is not received by April
9, 1997, or if the card is received but the voting instructions are invalid,
the shares with respect to which you could have directed us will be voted in
accordance to the terms of the Plans.
Your voting instructions are strictly confidential.
Please complete, date, sign and promptly return the enclosed voting instruction
card.
Sincerely,
ABN AMRO Trust Company
(Jersey) Limited
<PAGE>
THE BOARD OF DIRECTORS RECOMMENDS A THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE NOMINEES FOR ELECTION OF VOTE AGAINST THE FOLLOWING PROPOSAL
DIRECTORS AND FOR THE PROPOSAL IN #2. IN #3.
1. Election of the FOR WITHHELD 3. To act on a FOR AGAINST ABSTAIN
following four director- ALL FOR ALL stockholder / / / / / /
nominees as Class I / / / / proposal
Directors for a three-year regarding
term and until their tobacco-related
successors are duly business of the
elected and qualified: Company.
Robert J. Carlson, Gail D.
Fosler, Reatha Clark King
and Rolf Schubert.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY 4. To vote with discretionary
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S authority upon such other
NAME IN THE SPACE PROVIDED BELOW: matters as may properly
come before the meeting.
- -----------------------------------------
IF NOT OTHERWISE SPECIFIED
2. To ratify the FOR AGAINST ABSTAIN ABOVE, THIS VOTING CARD WILL
appointment of / / / / / / BE VOTED IN ACCORDANCE TO
Price Waterhouse THE TERMS OF THE PLANS.
as auditors for
the fiscal year
ending November
29, 1997.
Receipt of Notice of Meeting and
Proxy Statement and Annual Report
is Hereby Acknowledged.
Date ______________________, 1997
Signature(s)_____________________
_________________________________
Please sign card as name appears
at left.
H.B. FULLER COMPANY
ANNUAL MEETING OF
SHAREHOLDERS
THURSDAY, APRIL 17, 1997
3:00 P.M.
1021 BANDANA BLVD. EAST
ST. PAUL, MINNESOTA
From I-94 take the Lexington [MAP]
Avenue Exit and go North
approximately 1-1/2 miles.
Turn left at Energy Park
Drive; go West approximately
1/4 mile and Bandana Square
will be on your right.
<PAGE>
H.B. FULLER COMPANY THRIFT PLAN
AND PROFIT SHARE PLUS PLAN
VOTING INSTRUCTIONS TO TRUSTEE
I hereby direct Norwest Bank Minnesota, N.A., as Trustee of the H.B.
Fuller Company Thrift Plan Trust and the H.B. Fuller Company Profit Share
Plus Plan Trust to vote at the Annual Meeting of the Shareholders of H.B.
Fuller Company ("the Company") to be held on April 17, 1997, and at any and
all adjournments of said meeting, the common stock of the Company allocated
to my accounts.
I understand this card must be returned to the Trustee if my voting
instructions are to be honored. If it is not received by the Trustee, or if
it is received but the voting instructions are invalid, the stock with
respect to which I could have directed the Trustee shall be voted by the
Trustee in accordance with the terms of the plans. The Trustee is hereby
directed to vote as indicated on the following proposals which are more fully
described in the Company's Notice of Annual Meeting of Shareholders and Proxy
Statement.
PLEASE MARK THIS CARD AS INDICATED ON THE REVERSE SIDE TO VOTE ON ANY ITEM.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE.)
(PLEASE DETACH HERE)
- --------------------------------------------------------------------------------
To participants in the H.B. Fuller Company Thrift Plan and
H.B. Fuller Company Profit Share Plus Plan
We are Trustee of the Trusts established in connection with the H.B. Fuller
Company Thrift Plan and H.B. Fuller Company Profit Share Plus Plan. As
Trustee, we are the record owner of the shares of Common Stock of H.B. Fuller
Company ("the Company") held in the Trust Funds for the benefit of
Participants.
The Plans permit each participant to instruct the Trustee how to vote the
number of shares of the Company's Common Stock in the Trust Funds that are
allocated to the participant's accounts.
We enclose (1) a Notice of Annual Meeting of Shareholders of H.B. Fuller
Company to be held on April 17, 1997 and Proxy Statement, (2) H.B. Fuller
Company Annual Report, (3) a voting instructions card, and (4) a return
envelope. If you complete the card and return it to us in the enclosed
envelope by April 9, 1997, we will vote in accordance with your instructions,
the shares of the Company's Common Stock allocated to your accounts.
Although the Plans provide that you may give the Trustee voting instructions
with respect to such stock, it is important to note that the Trustee remains
the record owner of such stock. Therefore, the ability to instruct the
Trustee how to vote confers no right on Participants to directly vote at the
Annual Meeting of Shareholders.
As stated above, the enclosed instruction card must be properly completed if
voting instructions are to be honored. If the card is not received by April
9, 1997, or if the card is received but the voting instructions are invalid,
the shares with respect to which you could have directed us will be voted in
accordance to the terms of the Plans.
Your voting instructions are strictly confidential.
Please complete, date, sign and promptly return the enclosed voting instruction
card.
Sincerely,
George Scalia
Vice President
Norwest Bank Minnesota, N.A.
<PAGE>
THRIFT PROFIT SHARE PLUS
THE BOARD OF DIRECTORS RECOMMENDS A THE BOARD OF DIRECTORS RECOMMENDS A
VOTE FOR THE NOMINEES FOR ELECTION OF VOTE AGAINST THE FOLLOWING PROPOSAL
DIRECTORS AND FOR THE PROPOSAL IN #2. IN #3.
1. Election of the FOR WITHHELD 3. To act on a FOR AGAINST ABSTAIN
following four director- ALL FOR ALL stockholder / / / / / /
nominees as Class I / / / / proposal
Directors for a three-year regarding
term and until their tobacco-related
successors are duly business of the
elected and qualified: Company.
Robert J. Carlson, Gail D.
Fosler, Reatha Clark King
and Rolf Schubert.
TO WITHHOLD AUTHORITY TO VOTE FOR ANY 4. To vote with discretionary
INDIVIDUAL NOMINEE, WRITE THAT NOMINEE'S authority upon such other
NAME IN THE SPACE PROVIDED BELOW: matters as may properly
come before the meeting.
- -----------------------------------------
IF NOT OTHERWISE SPECIFIED
2. To ratify the FOR AGAINST ABSTAIN ABOVE, THIS VOTING CARD WILL BE
appointment of / / / / / / VOTED IN ACCORDANCE TO THE
Price Waterhouse TERMS OF THE PLANS.
as auditors for
the fiscal year
ending November
29, 1997.
Receipt of Notice of Meeting and
Proxy Statement and Annual Report
is Hereby Acknowledged.
Date ______________________, 1997
Signature(s)_____________________
_________________________________
Please sign card as name appears
at left.
H.B. FULLER COMPANY
ANNUAL MEETING OF
SHAREHOLDERS
THURSDAY, APRIL 17, 1997
3:00 P.M.
1021 BANDANA BLVD. EAST
ST. PAUL, MINNESOTA
From I-94 take the Lexington [MAP]
Avenue Exit and go North
approximately 1-1/2 miles.
Turn left at Energy Park
Drive; go West approximately
1/4 mile and Bandana Square
will be on your right.
