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
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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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EFTEC Savings Plan
H.B. FULLER COMPANY
1200 Willow Lake Boulevard, P.O. Box 64683
St. Paul, Minnesota 55164-0683
EFTEC Savings 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
EFTEC Savings Plan
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-8
Supplemental Schedules:
Line 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1999 F-9
Line 27d - Schedule of Reportable Transactions for the
Year Ended December 31, 1999 F-10
Report of Independent Accountants
To the Participants and Administrator of the EFTEC Savings 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
EFTEC Savings Plan at December 31, 1999 and 1998, and the changes in net assets
available for benefits for the period 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 EFTEC
Savings 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 Regulations 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
EFTEC Savings Plan
Statement of Net Assets Available for Benefits
December 31, 1999 and 1998
- --------------------------------------------------------------------------------
ASSETS 1999 1998
- ---------------------------------------- ------------ -----------
Investments at fair value $ 10,519,278 $ 8,653,708
Other assets 6,384 3,527
------------ -----------
Net assets available for benefits $ 10,525,662 $ 8,657,235
============ ===========
The accompanying notes are an integral part of the financial statements.
F-2
EFTEC Savings Plan
Statement of Changes in Net Assets Available for Benefits
Year Ended December 31, 1999
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Total
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Additions:
Investment income:
Dividends $ 121,113
Interest 45,594
------------
Total investment income 166,707
Realized gain on the sale and distribution of investments 319,681
Changes in unrealized appreciation/(depreciation) of investments 1,151,689
------------
Total fund income 1,638,077
------------
Contributions:
Participants 512,793
Employer 244,848
Employee rollovers 10,087
------------
Total contributions 767,728
------------
Total additions 2,405,805
Deductions:
Withdrawals (536,184)
Administrative expenses (1,194)
------------
Total deductions (537,378)
------------
Net increase before transfers 1,868,427
Cash transferred between funds -
------------
Net increase 1,868,427
Net assets available for benefits:
Beginning of year 8,657,235
------------
End of year $ 10,525,662
============
F-3
EFTEC Savings Plan
Notes to Financial Statements
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1. Description of the Plan
The following brief description of the EFTEC Savings 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. EFTEC is
a joint venture owned 70% by H.B. Fuller Company and 30% by EMS Chemie.
General
The Plan, which is a defined contribution plan, was established
February 13, 1997 and became effective April 1, 1997. The Plan merged
assets from separate plans formerly sponsored by H.B. Fuller Company
and EMS-TOGO Corporation. Former plans included the H.B. Fuller Company
Thrift Plan, the H.B. Fuller Profit Share Plus Plan and the EMS-TOGO
Corporation 401(k) Investment Plan. Assets transferred from the
respective plans were $5,858,118, $464,119, and $640,820 on April 1,
1997. The Plan receives pre-tax contributions from participant payroll
deductions with discretionary Employer matching and discretionary
Employer profit sharing.
It is subject to the provisions of the Employee Retirement Income
Security Act of 1974 (ERISA).
Contributions
Pre-Tax and Matching Contributions
----------------------------------
All United States EFTEC employees, excluding members of collective
bargaining units whose contracts do not provide for participation, are
eligible to make pre-tax contributions to the Plan after six months of
employment. Regular part-time employees are eligible to participate
after twelve months.
The Employer matches 100% of an employees pre-tax contribution, up to
3% of the employee's compensation. To participate, an employee must
agree to make contributions equal to 1% of pre-tax compensation up to a
maximum of 10% 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.
A participant's contribution, and the allowable employer match, may be
invested in any combination of the following investment funds: H.B.
Fuller Common Stock Fund, Money Market Fund, Index Fund (S & P 500),
Balanced Fund, and Small Company Growth Fund. A participant's
investment option for past and future contributions can be changed
daily, by calling the Trustee's on-line customer services.
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.
Profit Share Plus Contributions
-------------------------------
All United States EFTEC employees, excluding members of collective
bargaining units whose contracts do not provide for participation, are
eligible to receive an annual discretionary contribution based on the
profitability of H.B. Fuller Company. Full time employees are eligible
to participate upon commencement of their employment with the Company.
Regular part-time employees are eligible to participate after twelve
months of continuous employment. A participant must be employed by the
Company or an affiliated organization on the last day of the Company's
fiscal year end.
F-4
EFTEC Savings Plan
Notes to Financial Statements
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The Company's contribution to a participant's account for the year is
determined by H.B. Fuller Company's world-wide return on sales, the
participant's pay classification and performance rating. Contributions
may range from 0 to 3.5% of the participant's compensation.
Participants have the same investment options that are available for
their pre-tax contributions.
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 may receive value in the
vested interest in his or her account as a lump-sum distribution. The
investment in the H.B. Fuller 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's 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.
Forfeitures
Participants who terminate employment with EFTEC forfeit the non-vested
portion of the Company's contribution to their accounts. Amounts
forfeited are used to reduce subsequent Employer contributions. There
were no forfeitures for the year ended December 31, 1999.
Plan Termination
Although it has no intention to do so, EFTEC may, at any time, by
action of its Board of Directors, terminate the Plan or discontinue
contributions. Upon termination or discontinuance of contributions, all
participants' accounts will become fully vested and nonforfeitable.
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 H.B.
Fuller Company 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.
F-5
EFTEC Savings Plan
Notes to Financial Statements
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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 accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amount of
assets, 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
EFTEC North America, L.L.C. pays for administrative costs of the Plan.
Investment management fees are allocated to participant accounts.
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 and Reporting of Certain
Defined Contribution Benefit Plan 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 disclosures, but had no effect on net assets available for plan
benefits. The Plan adopted such requirements for the year ended
December 31, 1999.
F-6
EFTEC Savings Plan
Notes to Financial Statements
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3. Investments
Unrealized Appreciation/(Depreciation) of Investments
The unrealized appreciation/(depreciation) of investments was as
follows:
H.B. Fuller
Common Small Co.
Stock Index Balanced Growth
Fund Fund Fund Fund Total
------------ ----------- --------- --------- -----------
Unrealized appreciation/
(depreciation) at
December 31, 1998 $(371,512) $ 682,018 $ 189,990 $ (55,242) $ 445,254
Change during the year ended
December 31, 1999 572,783 473,247 22,994 82,665 1,151,689
--------- ----------- --------- --------- -----------
Unrealized appreciation/
(depreciation) at
December 31, 1999 $ 201,271 $ 1,155,265 $ 212,984 $ 27,423 $ 1,596,943
========= =========== ========= ========= ===========
Realized Gains
During the year ended December 31, 1999, realized gains resulting from
the sale and distribution of investments were as follows:
H.B. Fuller
Common Small Co.
Stock Index Balanced Growth
Fund Fund Fund Fund Total
------------ ----------- --------- --------- -----------
Aggregate proceeds $ 1,360,173 $ 367,595 $ 190,150 $ 77,234 $ 1,995,152
Aggregate average cost (1,262,692) (227,889) (97,893) (86,997) (1,675,471)
----------- --------- --------- -------- -----------
Realized gain $ 97,481 $ 139,706 $ 92,257 $ (9,763) $ 319,681
=========== ========= ========= ======== ===========
4. Tax Status
The Internal Revenue Service has determined and informed the Company by
a letter dated January 19, 1999 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-7
EFTEC Savings 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
represents invested amounts in stock of the parent company of EFTEC.
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 $885,842 and $1,360,173 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 $1,607,176 and $767,893, respectively.
F-8
EFTEC Savings 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 68,381 $3,623,792 $ 3,825,062
H.B. Fuller Company H.B. Fuller Common Stock Fund
Investment Fund 33,798 33,798 33,798
----------- -------------- ----------------
102,179 3,657,590 3,858,860
----------- -------------- ----------------
Norwest Bank Money Market Fund Investment Fund 874,098 874,098 874,098
----------- -------------- ----------------
Norwest Bank Index Fund Common Stock 66,767 2,892,132 4,047,397
Norwest Bank Index Fund Cash - Non-Interest Bearing 8,424 8,424 8,424
----------- -------------- ----------------
74,191 2,900,556 4,055,821
----------- -------------- ----------------
Norwest Bank Balanced Fund Common Stock 40,446 1,043,279 1,256,263
Norwest Bank Balanced Fund Cash - Non-Interest
Bearing 3,952 3,952 3,952
----------- -------------- ----------------
44,398 1,047,231 1,260,215
----------- -------------- ----------------
Norwest Bank Small Company Growth Fund Common
Stock 14,551 438,630 466,053
Norwest Bank Small Company Growth Fund Cash -
Non-Interest Bearing 4,231 4,231 4,231
----------- -------------- ----------------
18,782 442,861 470,284
----------- -------------- ----------------
Total investments at end of plan year $8,922,336 $10,519,278
============== ================
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; EFTEC - Administrator; H.B. Fuller
Company.
F-9
EFTEC Savings Plan
Line 27d - Schedule of Reportable Transactions*
Year Ended December 31, 1999
- --------------------------------------------------------------------------------
5% of series of transactions by security issue:
Number of Total Dollar Amount
---------------------- -------------------------------- Net Gain
Security Issue Purchases Sales Purchases Sales or (Loss)
- ------------------------------------------ ---------------------- ------------- ---------------- -------------
H.B. Fuller Common Stock Fund,
Investment Fund 93 39 $ 885,844 $ 1,360,170 $ 97,481
Index Fund, Common Stock 77 16 917,643 305,988 78,101
* Transactions or series of transactions in excess of 5% of the current
value of the Plan's assets as of December 31, 1999, 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; EFTEC - Administrator; H.B. Fuller
Company.
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.
EFTEC Savings Plan
EFTEC North America, L.L.C.
Dated: June 28, 2000 By: /s/ Todd Mestad
------------------------------
Todd Mestad
Director of Benefits