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, 1999
----------------------
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
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H.B. FULLER COMPANY THRIFT PLAN
H.B. FULLER COMPANY
1200 Willow Lake Boulevard, P.O. Box 64683
St. Paul, Minnesota 55164-0683
H.B. Fuller Company
Thrift Plan
Report on Audit of Financial Statements
as of December 31, 1999 and 1998
and for the Year Ended December 31, 1999
And Supplemental Schedules
as of and for the Year Ended December 31, 1999
H.B. Fuller Company
Index to Financial Statements and Supplemental Schedules
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Page(s)
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Report of Independent Accountants F-1
Financial Statements:
Statements of Net Assets Available for Benefits as of
December 31, 1999 and 1998 F-2
Statement of Changes in Net Assets Available for
Benefits for the Year Ended December 31, 1999 F-3
Notes to Financial Statements F-4 - F-7
Supplemental Schedules:
Line 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1999 F-8
Line 27d - Schedule of Reportable Transactions for the
Year Ended December 31, 1999 F-9
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, 1999 and 1998, and the changes
in net assets available for benefits for the year ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
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
auditing standards generally accepted in the United States, 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 Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The supplemental schedules have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 19, 2000
F-1
H.B. Fuller Company Thrift Plan
Statement of Net Assets Available for Benefits
December 31, 1999 and 1998
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ASSETS 1999 1998
- --------------------------------- ------------- -------------
Investments at fair value $ 158,151,628 $ 143,051,177
Other assets 69,482 62,621
Accrued liabilities - (92,000)
------------- -------------
Net assets available for benefits $ 158,221,110 $ 143,021,798
============= =============
The accompanying notes are an integral part of the financial statements.
F-2
H.B. Fuller Company Thrift Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 1999
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Total
-------------
Additions:
Investment income:
Dividends $ 1,860,950
Interest 771,680
-------------
Total investment income 2,632,630
Realized gain on the sale and distribution of investments 10,333,598
Changes in unrealized appreciation/(depreciation) of investments 11,996,569
-------------
Total fund income 24,962,797
-------------
Contributions:
Participants 6,448,519
Employer 2,569,129
Employee rollovers 650,918
-------------
Total contributions 9,668,566
-------------
Total additions 34,631,363
Deductions:
Withdrawals (19,432,051)
-------------
Net increase/(decrease) 15,199,312
Net assets available for benefits:
Beginning of year 143,021,798
-------------
End of year $ 158,221,110
=============
F-3
H.B. Fuller Company Thrift Plan
Notes to Financial Statements
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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 1999, 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, or retirement, a
participant may elect to receive either a lump-sum amount equal to the
value of the participant's vested interest in his or her account or
installments as defined in the Plan agreement. For termination of
service due to 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-4
H.B. Fuller Company Thrift Plan
Notes to Financial Statements
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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.
There were no forfeitures for the year ended December 31, 1999.
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 accounting principles generally
accepted in the United States.
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-5
H.B. Fuller Company Thrift Plan
Notes to Financial Statements
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Recently Issued Accounting Pronouncement
On September 15, 1999, the Accounting Standards Executive Committee of
the American Institute of Certified Public Accountants issued Statement
of Position 99-3 (SOP 99-3), "Accounting for and Reporting on Certain
Defined Contribution Benefit Investments and Other Disclosure Matters."
SOP 99-3 is effective for financial statements of plan years ending
after December 15, 1999, with earlier application encouraged. The SOP
99-3 revised the requirements for disclosure of separate fund
information for individual investment options and other investment
related disclosure, but had no effect on net assets available for plan
benefits. The Plan adopted such requirements for the year ended
December 31, 1999.
3. Investments
Unrealized Appreciation/(Depreciation) of Investments
The unrealized appreciation/(depreciation) of investments was as
follows:
Company
Common Stable Small Co.
Stock Return Index Balanced Growth
Fund Fund Fund Fund Fund Total
------------ -------- ------------ ----------- ----------- ------------
Unrealized appreciation/
(depreciation) at
December 31, 1998 $ 29,879,649 $ 14,255 $ 11,387,554 $ 2,831,058 $(1,227,354) $ 42,885,162
Change during the year
ended December 31, 1999 8,463,246 80,649 2,232,561 (249,574) 1,469,687 11,996,569
------------ -------- ------------ ----------- ----------- ------------
Unrealized appreciation/
(depreciation) at
December 31, 1999 $ 38,342,895 $ 94,904 $ 13,620,115 $ 2,581,484 $ 242,333 $ 54,881,731
============ ======== ============ =========== =========== ============
Realized Gains
During the year ended December 31, 1999, realized gains resulting from
the sale and distribution of investments were as follows:
Company
Common Stable Small Co.
Stock Return Index Balanced Growth
Fund Fund Fund Fund Fund Total
----------- ----------- ----------- ----------- ----------- ------------
Aggregate proceeds $ 9,321,938 $ 3,695,395 $ 9,807,104 $ 5,131,973 $ 3,174,381 $ 31,130,791
Aggregate average cost (4,225,173) (3,624,837) (5,967,600) (3,353,307) (3,626,276) (20,797,193)
----------- ----------- ----------- ----------- ----------- ------------
Realized gain $ 5,096,765 $ 70,558 $ 3,839,504 $ 1,778,666 $ (451,895) $ 10,333,598
=========== =========== =========== =========== =========== ============
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.
F-6
H.B. Fuller Company Thrift Plan
Notes to Financial Statements
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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, 1999,
amounted to $7,397,966 and $9,321,938, 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, 1999, the Trustee made purchases and sales of such
securities amounting to $42,947,302 and $47,204,921, respectively.
F-7
H.B. Fuller Company Thrift Plan
Line 27a - Schedule of Assets Held for Investment Purposes
December 31, 1999
- --------------------------------------------------------------------------------
Identity of Issuer,
Borrower or Units/ Fair
Similar Party Description Shares Cost Value
- ----------------------- --------------------------------------- ------------- ------------- --------------
H.B. Fuller Company H.B. Fuller Common Stock Fund
Common Stock 1,504,948 $ 46,406,781 $ 84,183,012
H.B. Fuller Company H.B. Fuller Common Stock Fund
Investment Fund 143,270 143,270 143,270
H.B. Fuller Company H.B. Fuller Common Stock Fund
Cash - Non-Interest Bearing 191,739 191,739 191,739
----------- ------------- -------------
1,839,957 46,741,790 84,518,021
----------- ------------- -------------
Norwest Bank Money Market Fund, Investment
Fund 13,314,786 13,314,786 13,314,786
----------- ------------- -------------
Norwest Bank Stable Return Fund Bonds 88,643 2,423,807 2,518,711
Norwest Bank Stable Return Fund Cash -
Non-Interest Bearing 22,614 22,614 22,614
----------- ------------- -------------
111,257 2,446,421 2,541,325
----------- ------------- -------------
Norwest Bank Index Fund Common Stock 605,846 23,106,240 36,726,355
Norwest Bank Index Fund Cash - Non-Interest
Bearing (113,522) (113,522) (113,522)
----------- ------------- -------------
492,324 22,992,718 36,612,833
----------- ------------- -------------
Norwest Bank Balanced Fund Common Stock 478,991 12,295,975 14,877,459
Norwest Bank Balanced Fund Cash - Non-Interest
Bearing 74,719 74,719 74,719
----------- ------------- -------------
553,710 12,370,694 14,952,178
----------- ------------- -------------
Norwest Bank Small Company Growth Fund
Common Stock 194,039 5,972,727 6,215,061
Norwest Bank Small Company Growth Fund Cash -
Non-Interest Bearing (2,576) (2,576) (2,576)
----------- ------------- -------------
191,463 5,970,151 6,212,485
----------- ------------- -------------
Total investments at end of plan year $ 103,836,560 $ 158,151,628
============= =============
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-8
H.B. Fuller Company Thrift Plan
Line 27d - Schedule of Reportable Transactions*
Year Ended December 31, 1999
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5% of series of tranactions by security issue:
Number of Total Dollar Amount
---------------------- ----------------------------- Net Gain
Security Issue Purchases Sales Purchases Sales or (Loss)
- ----------------------------------------- ----------- --------- ------------ ------------ ------------
H.B. Fuller Common Stock Fund,
Common Stock 35 29 $ 7,397,966 $ 9,321,938 $ 5,077,340
H.B. Fuller Common Stock Fund,
Investment Fund 156 154 $ 13,210,995 $ 13,456,904 $ -
Money Market Fund, Investment
Fund 137 141 $ 11,850,417 $ 11,842,686 $ -
Stable Return Fund, Bonds 107 54 $ 4,956,715 $ 3,695,395 $ 69,697
Index Fund, Common Stock 125 109 $ 7,434,547 $ 9,227,099 $ 3,258,355
Balanced Fund, Common Stock 105 96 $ 3,576,786 $ 4,322,789 $ 885,707
* Transactions or series of transactions in excess of 5% of the current
value of the Plan's assets as of December 31, 1998, as defined in
Section 2520.103-6 of the Department of Labor's 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
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, 2000 By: /s/ Todd Mestad
-----------------------------------
Todd Mestad
Director of Benefits
F-10