<PAGE>
FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE, SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 1998
-----------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from ____________________________ to
____________________________
Commission file number 0-3488
------
H.B. FULLER COMPANY THRIFT PLAN
H.B. FULLER COMPANY
1200 Willow Lake Boulevard, P.O. Box 64683
St. Paul, Minnesota 55164-0683
<PAGE>
H.B. Fuller Company
Thrift Plan
Report on Audit of Financial Statements
as of December 31, 1998 and 1997
and for the Year Ended December 31, 1998
And Supplemental Schedules
as of and for the Year Ended December 31, 1998
<PAGE>
H.B. Fuller Company
Index to Financial Statements
and Supplemental Schedules
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
Page(s)
<S> <C>
Report of Independent Accountants F-1
Financial Statements:
Statements of Net Assets Available for Benefits, With Fund Information
as of December 31, 1998 and 1997 F-2 - F-3
Statement of Changes in Net Assets Available for Benefits, With Fund
Information for the Year Ended December 31, 1998 F-4
Notes to Financial Statements F-5 - F-7
Supplemental Schedules:
Line 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998 F-8
Line 27d - Schedule of Reportable Transactions for the Year Ended
December 31, 1998 F-9
</TABLE>
<PAGE>
Report of Independent Accountants
To the Participants and Administrator
of the H.B. Fuller Company Thrift Plan
In our opinion, the accompanying statements of net assets available for benefits
and related statement of changes in net assets available for benefits presents
fairly, in all material respects, the net assets available for benefits of the
H.B. Fuller Company Thrift Plan at December 31, 1998 and 1997, and the changes
in net assets available for benefits for the year ended December 31, 1998, in
conformity with generally accepted accounting principles. These financial
statements are the responsibility of the Plan's management; our responsibility
is to express an opinion on these financial statements based on our audits. We
conducted our audits of these statements in accordance with generally accepted
auditing standards which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The Supplemental Schedules of H.B.
Fuller Company Thrift Plan are presented for purposes of additional analysis and
are not a required part of the basic financial statements but are supplementary
information required by the Department of Labor's Rules and Regulation for
Reporting and Disclosure under the Employee Retirement Income Act of 1974. The
Fund Information in the statements of net assets available for benefits and the
statement of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for plan benefits and changes in net assets available for benefits of each fund.
The Supplemental Schedules and the Fund Information have been subjected to the
auditing procedures applied in the audits of the basic financial statements and,
in our opinion, are fairly stated in all material respects in relation to the
basic financial statements taken as a whole.
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 18, 1999
F-1
<PAGE>
H.B. Fuller Company Thrift Plan
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1998
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Fund Information
----------------------------------------------------------------------------
Company Money Stable Small
Common Market Return Index Balanced Company
ASSETS Stock Fund Fund Fund Fund Fund Growth Fund Total
------------ ------------ ------------ ------------ ------------ ----------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Investments at Fair Value:
Securities of Participating Employer -
Common Stock of H. B. Fuller Company
(1,534,719 shares; cost $43,978,724) $ 73,858,373 $ 73,858,373
Securities of unaffiliated issuers -
Norwest Stable Return Fund
Norwest Bank (41,390 units;
cost $1,092,790) $ 1,107,045 1,107,045
Norwest Index Stock Fund
Norwest Bank (639,458 units;
cost $21,640,438) $ 33,027,992 33,027,992
Norwest Growth Balanced Fund
Norwest Bank (502,257 units;
cost $12,156,277) $ 14,987,335 14,987,335
Norwest Small Company Growth Fund
Norwest Bank (245,269 units;
cost $7,822,631) $ 6,595,277 6,595,277
Norwest Short-Term Investment Fund
(13,475,155 units; cost $13,475,155) 327,312 $ 13,273,834 192,959 (259,585) (31,167) (28,198) 13,475,155
------------ ------------ ------------ ------------ ------------ ----------- ------------
Total Investments 74,185,685 13,273,834 1,300,004 32,768,407 14,956,168 6,567,079 143,051,177
Other Assets 1,412 61,209 62,621
Accrued Liabilities (92,000) (92,000)
------------ ------------ ------------ ------------ ------------ ----------- ------------
Net Assets Available for Benefits $ 74,095,097 $ 13,335,043 $ 1,300,004 $ 32,768,407 $ 14,956,168 $ 6,567,079 $143,021,798
============ ============ ============ ============ ============ =========== ============
</TABLE>
See accompanying notes to financial statements
F-2
<PAGE>
H. B. Fuller Company Thrift Plan
Statement of Net Assets Available for Benefits, With Fund Information
December 31, 1997
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Fund Information
----------------------------------------------------------------------
Company Money
Common Market Index Balanced
ASSETS Stock Fund Fund Fund Fund
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Investments at Fair Value:
Securities of Participating Employer -
Common Stock of H. B. Fuller Company
(1,594,083 shares; cost $42,097,042) $ 78,907,090
Securities of unaffiliated issuers -
Norwest Index Stock Fund
Norwest Bank (656,799 units;
cost $19,142,159) $ 26,948,480
Norwest Growth Balanced Fund
Norwest Bank (476,355 units;
cost $10,669,094) $ 12,256,619
Norwest Small Company Growth Fund
Norwest Bank (194,438 units;
cost $6,360,926)
Norwest Short-Term Investment Fund
(10,249,279 units; cost $10,249,279)
368,678 $ 9,956,463 (37,327) 58
--------------- --------------- --------------- ---------------
Total Investments 79,275,768 9,956,463 26,911,153 12,256,677
Other Assets 1,754 48,362
Accrued Liabilities (123,219)
--------------- --------------- --------------- ---------------
Net Assets Available for Benefits $ 79,154,303 $ 10,004,825 $ 26,911,153 $ 12,256,677
=============== =============== =============== ===============
<CAPTION>
Small
Company
ASSETS Growth Fund Total
--------------- -------------------
<S> <C> <C>
Investments at Fair Value:
Securities of Participating Employer -
Common Stock of H. B. Fuller Company
(1,594,083 shares; cost $42,097,042) $ 78,907,090
Securities of unaffiliated issuers -
Norwest Index Stock Fund
Norwest Bank (656,799 units;
cost $19,142,159) 26,948,480
Norwest Growth Balanced Fund
Norwest Bank (476,355 units;
cost $10,669,094) 12,256,619
Norwest Small Company Growth Fund
Norwest Bank (194,438 units;
cost $6,360,926) $ 6,305,637 6,305,637
Norwest Short-Term Investment Fund
(10,249,279 units; cost $10,249,279)
(38,593) 10,249,279
--------------- -------------------
Total Investments 6,267,044 134,667,105
Other Assets 50,116
Accrued Liabilities (123,219)
--------------- -------------------
Net Assets Available for Benefits $ 6,267,044 $ 134,594,002
=============== ===================
</TABLE>
See accompanying notes to financial statements
F-3
<PAGE>
H.B. Fuller Company Thrift Plan
Statement of Changes in Net Assets Available for Benefits, With Fund Information
Year Ended December 31, 1998
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Fund Information
------------------------------------------------------------------------------
Company Money Stable Small
Common Market Return Index Balanced Company
Additions: Stock Fund Fund Fund Fund Fund Growth Fund
------------ ----------- ------------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Investment Income:
Dividends $ 1,191,140 $ 355,474 $ 278,606
Interest 20,575 $ 716,212 37
------------ ----------- ----------- -----------
Total Investment Income 1,211,715 716,212 355,511 278,606
Realized Gain on the Sale and
Distribution of Investments 6,517,307 $ 13,479 3,471,527 1,332,530 $ 465,460
Changes in Unrealized Appreciation /
(Depreciation) of Investments (6,930,399) 14,255 3,581,233 1,243,533 (1,172,065)
------------ ----------- ------------ ----------- ----------- -----------
Total Fund Income 798,623 716,212 27,734 7,408,271 2,854,669 (706,605)
------------ ----------- ------------ ----------- ----------- -----------
Contributions:
Participants 2,327,536 469,564 8,450 2,033,229 983,123 887,719
Employer, Net of Forfeitures of $92,000 2,636,135
Employee Rollovers 81,354 25,494 9,636 311,019 47,362 66,200
------------ ----------- ------------ ----------- ----------- -----------
Total Contributions 5,045,025 495,058 18,086 2,344,248 1,030,485 953,919
------------ ----------- ------------ ----------- ----------- -----------
Total Additions 5,843,648 1,211,270 45,820 9,752,519 3,885,154 247,314
Deductions:
Withdrawals (4,967,613) (4,054,013) (7,158) (1,910,455) (1,323,513) (295,177)
------------ ----------- ------------ ----------- ----------- -----------
Net Increase/(Decrease) Before Transfers 876,035 (2,842,743) 38,662 7,842,064 2,561,641 (47,863)
Cash Transferred Between Funds (5,935,241) 6,172,961 1,261,342 (1,984,810) 137,850 347,898
------------ ----------- ------------ ----------- ----------- -----------
Net Increase/(Decrease) (5,059,206) 3,330,218 1,300,004 5,857,254 2,699,491 300,035
Net Assets Available for Benefits:
Beginning of Year 79,154,303 10,004,825 26,911,153 12,256,677 6,267,044
------------ ----------- ------------ ----------- ----------- -----------
End of Year $74,095,097 $13,335,043 $ 1,300,004 $32,768,407 $14,956,168 $ 6,567,079
============ =========== =========== =========== =========== ===========
<CAPTION>
Additions: Total
-------------
<S> <C>
Investment Income:
Dividends $ 1,825,220
Interest 736,824
-------------
Total Investment Income 2,562,044
Realized Gain on the Sale and
Distribution of Investments 11,800,303
Changes in Unrealized Appreciation /
(Depreciation) of Investments (3,263,443)
-------------
Total Fund Income 11,098,904
-------------
Contributions:
Participants 6,709,621
Employer, Net of Forfeitures of $92,000 2,636,135
Employee Rollovers 541,065
-------------
Total Contributions 9,886,821
-------------
Total Additions 20,985,725
Deductions:
Withdrawals (12,557,929)
-------------
Net Increase/(Decrease) Before Transfers 8,427,796
Cash Transferred Between Funds
-------------
Net Increase/(Decrease) 8,427,796
Net Assets Available for Benefits:
Beginning of Year 134,594,002
-------------
End of Year $ 143,021,798
=============
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
H.B. Fuller Company Thrift Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
1. Description of the Plan
The following brief description of the H.B. Fuller Company Thrift Plan (the
Plan) is provided for general information purposes only. Participants should
refer to the Plan document for more complete information regarding the Plan's
definitions, benefits, eligibility and other matters.
General
The plan is a defined contribution plan covering all eligible employees of
H.B. Fuller Company (the Employer). The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended (ERISA).
Under the terms of the Plan, employees are eligible to participate after six
months of employment; part-time employees are eligible after twelve months.
Contributions
To become a participant in the Plan, an employee must agree to make
contributions equal to 1% of pre-tax compensation up to a maximum of 9% of
pre-tax compensation for highly compensated participants and 15% for non-
highly compensated participants. In 1998, a participant could elect to
contribute up to a limit of $10,000.
The Company makes contributions to employees' accounts by matching 100% of an
employee's contributions, up to 3% of the employee's compensation. A
participant's contribution may be invested in any combination of the
following investment funds: Company Common Stock Fund, Money Market Fund,
Stable Return Fund, Index Fund (S&P 500), Small Company Growth Fund and
Balanced Fund. A participant's investment option for past and future
contributions can be changed daily, by calling the Trustee's on-line customer
services. All Employer matching contributions are invested in the Company
Stock Fund.
A participant's voluntary contribution percentage amount can be changed or
suspended once a month, by calling the Trustee's on-line service prior to
month-end. Suspensions must be made for a minimum of six months. Employer
contributions to the Plan cease during the suspension period.
Participant Accounts
Each participant's account is credited with (a) the participant's
contribution, (b) the Employer's contribution, and (c) an allocation of the
Plan's investment income. Allocations of interest income are based on
account balances, as defined in the Plan document. (Any income realized from
short-term investments will be allocated in a uniform and equitable manner
among the investment funds in which such contributions are invested.)
Payment of Benefits
On termination of service due to death, disability, retirement, or other
reasons, a participant will receive a lump sum amount equal to the value of
the participant's vested interest in his or her account. The investment in
the Company Common Stock Fund can be withdrawn in the form of stock at the
option of Plan participants.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company' matching and discretionary
contribution portion of their accounts plus actual earnings thereon is based
on years of continuous service. A participant is 100 percent vested after
five years of credited service to the Company, or upon age 65, disability, or
death.
F-5
<PAGE>
H.B. Fuller Company Thrift Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
Forfeitures
Participants who terminate employment with H.B. Fuller Company forfeit the
non-vested portion of the Company's contribution to their accounts. Amounts
forfeited are used to reduce subsequent Company contributions. Forfeitures
for the year ended December 31, 1998 were $92,000.
Plan Termination
Although it has no intention to do so, H.B. Fuller Company may, at any time,
by action of its Board of Directors, terminate the Plan or discontinue
contributions. Upon termination or discontinuance of contributions, all
Employer contribution amounts in participant accounts will become fully
vested.
2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are presented on the accrual basis of
accounting in accordance with generally accepted accounting principles.
Investment Valuation
The fair values of the Plan's investments in common stock of the
participating Employer are based on published quotations. The fair values of
investments in securities of unaffiliated issuers are based on fair values
supplied by the Trustee (Norwest Bank). Realized gains or losses reflect all
differences between sales proceeds and historical cost of units sold, on an
average cost basis. Securities transactions are recorded on the trade date.
Interest and Dividends
Interest income is recorded as earned on an accrual basis and dividend income
is recorded on the ex-dividend date.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amount of assets and liabilities and changes
therein, and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of investment earnings and
expenses during the reporting period. Actual results could differ from those
estimates.
Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds and other investment securities. Investment securities are
exposed to various risks, such as interest rate, market and credit. Due to
the level of risk associated with certain investment securities and the level
of uncertainty related to changes in the value of investment securities, it
is at least reasonably possible that changes in risks in the near term would
materially affect participants' account balances and the amounts reported in
the statement of assets available for plan benefits and the statement of
changes in assets available for plan benefits.
Plan Expenses
H.B. Fuller Company pays or reimburses participants for all administrative
costs and investment fees.
F-6
<PAGE>
H.B. Fuller Company Thrift Plan
Notes to Financial Statements
- --------------------------------------------------------------------------------
3. Investments
Unrealized Appreciation/(Depreciation) of Investments
The unrealized appreciation/(depreciation) of investments was as follows:
<TABLE>
<CAPTION>
Company Stable Small Co.
Common Return Balanced Growth
Stock Fund Fund Index Fund Fund Fund Total
------------ ------- ----------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Unrealized appreciation/
(depreciation) at
December 31, 1997 $36,810,048 $ 7,806,321 $1,587,525 $ (55,289) $46,148,605
Change during the year
ended December 31, 1998 (6,930,399) $14,255 3,581,233 1,243,533 (1,172,065) (3,263,443)
----------- ------- ----------- ---------- ----------- -----------
Unrealized appreciation/
(depreciation) at
December 31, 1998 $29,879,649 $14,255 $11,387,554 $2,831,058 $(1,227,354) $42,885,162
=========== ======= =========== ========== =========== ===========
</TABLE>
Realized Gains
During the year ended December 31, 1998, realized gains resulting from the
sale and distribution of investments were as follows:
<TABLE>
<CAPTION>
Company Stable Small Co.
Common Return Balanced Growth
Stock Fund Fund Index Fund Fund Fund Total
----------- ---------- ----------- ---------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C>
Aggregate proceeds $11,656,369 $2,938,824 $10,700,415 $5,176,092 $2,511,578 $32,983,278
Aggregate average
cost 5,139,062 2,925,345 7,228,888 3,843,562 2,046,118 21,182,975
----------- ---------- ----------- ---------- ---------- -----------
Realized gain $ 6,517,307 $ 13,479 $ 3,471,527 $1,332,530 $ 465,460 $11,800,303
=========== ========== =========== ========== ========== ===========
</TABLE>
4. Tax Status
The Internal Revenue Service has determined and informed the Company by a
letter dated November 14, 1995 that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code (IRC). The Plan's
administrator believes the Plan is designed and is currently being operated
in compliance with the applicable requirements of the IRC.
5. Related Party and Party-in-Interest Transactions
Plan investments include H.B. Fuller Company Common Stock which is invested
primarily in the stock of the employer. H.B. Fuller Company is the holding
company of the Plan sponsor and, therefore, these transactions qualify as
party-in-interest. Purchases and sales of H.B. Fuller Company Common Stock
for the year ended December 31, 1998, amounted to $7,820,054 and $11,656,369,
respectively.
The Plan also invests in various funds managed by Norwest Bank Minnesota,
N.A. Norwest Bank Minnesota, N.A. is the trustee as defined by the Plan and,
therefore, the related transactions qualify as party-in-interest. The Trustee
is authorized to invest in securities under its management and control on
behalf of the Plan. For the year ended December 31, 1998, the Trustee made
purchases and sales of such securities amounting to $51,465,382 and
$39,960,661, respectively.
F-7
<PAGE>
H.B. Fuller Company Thrift Plan
Line 27a - Schedule of Assets Held for Investments Purposes
December 31, 1998
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Identity of Issuer,
Borrower or Units/ Fair
Similar Party Description Shares Cost Value
- ------------------------ --------------------------------- -------------- ---------------- ---------------
<S> <C> <C> <C> <C>
H.B. Fuller Company H.B. Fuller Common Stock Fund
Common Stock 1,534,719 $ 43,978,724 $ 73,858,373
H.B. Fuller Company H.B. Fuller Common Stock Fund
Investment Fund 389,195 389,195 389,195
H.B. Fuller Company H.B. Fuller Common Stock Fund
Cash - Non-Interest Bearing (61,883) (61,883) (61,883)
-------------- -------------- ---------------
1,862,031 44,306,036 74,185,685
-------------- -------------- ---------------
Norwest Bank Money Market Fund
Investment Fund 13,273,834 13,273,834 13,273,834
-------------- -------------- ---------------
Norwest Bank Stable Return Fund Bonds 41,390 1,092,790 1,107,045
Norwest Bank Stable Return Fund
Cash - Non-Interest Bearing 192,959 192,959 192,959
-------------- -------------- ---------------
234,349 1,285,749 1,300,004
-------------- -------------- ---------------
Norwest Bank Index Fund Common Stock 639,458 21,640,438 33,027,992
Norwest Bank Index Fund
Cash - Non-Interest Bearing (259,585) (259,585) (259,585)
-------------- -------------- ---------------
379,873 21,380,853 32,768,407
-------------- -------------- ---------------
Norwest Bank Balanced Fund Common Stock 502,257 12,156,277 14,987,335
Norwest Bank Balanced Fund
Cash - Non-Interest Bearing (31,167) (31,167) (31,167)
-------------- -------------- ----------
471,090 12,125,110 14,956,168
-------------- -------------- ----------
Norwest Bank Small Company Growth Fund
Common Stock 245,269 7,822,631 6,595,277
Norwest Bank Small Company Growth Fund
Cash - Non-Interest Bearing (28,198) (28,198) (28,198)
-------------- -------------- ---------------
217,071 7,794,433 6,567,079
-------------- -------------- ---------------
Total Investments at End of
Plan Year $ 100,166,015 $143,051,177
============== ===============
</TABLE>
Note: The above data is based upon information which has been certified as
complete and accurate by Norwest Bank.
Parties in Interest: Norwest Bank - Trustee; H.B. Fuller Company -
Administration
F-8
<PAGE>
H.B. Fuller Company Thrift Plan
Line 27d - Schedule of Reportable Transactions*
Year Ended December 31, 1998
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
5% of series of transactions by security issue:
Number of Total Dollar Amount Net Gain
---------------------------- -------------------------------------
Security Issue Purchases Sales Purchases Sales or (Loss)
- --------------------------------------- ------------- ----------- ----------------- ----------------- -------------
<S> <C> <C> <C> <C> <C>
H.B. Fuller Common Stock Fund, 64 $ 7,820,054
Common Stock 58 $11,656,369 $ 6,545,763
H.B. Fuller Common Stock Fund, 130 14,026,018
Investment Fund 135 14,048,213
Money Market Fund, 133 14,642,755
Investment Fund 98 11,292,161
Stable Return Fund, 48 4,018,135
Bonds 20 2,938,824 13,479
Index Fund, 119 9,727,168
Common Stock 108 10,450,404 3,221,516
Balanced Fund, 112 5,403,460
Common Stock 98 4,681,255 765,801
</TABLE>
* Transactions or series of transactions in excess of 5% of the current value
of the Plan's assets as of December 31, 1997, as defined in Section 2520.103-
6 of the Department of Labor Rules and Regulations for Reporting and
Disclosure under ERISA.
Note: The above data is based upon information which has been certified as
complete and accurate by Norwest Bank.
Parties in Interest: Norwest Bank - Trustee; H.B. Fuller Company -
Administrator.
F-9
<PAGE>
SIGNATURE
Pursuant to the requirements 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 Thrift Plan
H.B. Fuller Company
Dated: June 28, 1999 By: /s/ Todd Mestad
---------------
Todd Mestad
Director of Benefits
F-10
<PAGE>
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 (No. 2-73650) of H.B. Fuller Company of our report dated
June 18, 1999 appearing on page F-1 of this Form 11-K.
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 28, 1999
