SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
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:
[X] Preliminary Proxy Statement [_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(e)(2))
[_] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
Commission File No. 1-09225
H.B. Fuller Company
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(Name of Registrant as Specified In Its Charter)
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(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)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(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):
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[_] 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:
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Notes:
[H.B. FULLER LOGO]
Office: 1200 Willow Lake Boulevard
St. Paul, Minnesota 55110-5101
Mail: P.O. Box 64683
St. Paul, Minnesota 55164-0683
Phone: (651) 236-5150
Dear Shareholder:
I am pleased to invite you to the H.B. Fuller Company 2002 Annual Meeting of
Shareholders to be held beginning at 2:00 p.m. on Thursday, April 18, 2002, at
the Science Museum of Minnesota, 120 West Kellogg Boulevard, Saint Paul,
Minnesota.
The Notice of Annual Meeting of Shareholders and the Proxy Statement that
follow describe the business to be conducted at the meeting. I will also report
on the current activities of H.B. Fuller, and there will be an opportunity to
discuss matters of interest to you as a shareholder.
Your vote is important. Please sign and return the enclosed proxy card in the
postage-paid envelope or instruct us by telephone or via the Internet as to how
you would like your shares voted. Instructions on how to vote your shares by
telephone or via the Internet are on the proxy card.
Thank you for your continuing support of the Company.
Sincerely,
/s/ Albert P.L. Stroucken
ALBERT P.L. STROUCKEN
Chairman of the Board, President and
Chief Executive Officer
March 8, 2002
Table of Contents
Directions to the Science Museum of Minnesota..................................
Notice of Annual Meeting of Shareholders.......................................
Proxy Statement................................................................ 1
Questions and Answers About the Annual Meeting and Voting.................... 1
What is the purpose of the meeting?........................................ 1
How does the Board recommend that I vote?.................................. 1
Who is entitled to vote at the meeting?.................................... 1
What are the voting rights of the holders of Common Stock and
Series A Preferred Stock?................................................. 1
How many shares must be present to hold the meeting?....................... 2
What is the difference between a shareholder of record and
a "street name" holder?................................................... 2
How do I vote my shares?................................................... 2
What does it mean if I receive more than one proxy card?................... 3
Can I vote my shares in person at the meeting?............................. 3
What vote is required for the election of directors or for the proposals
to be approved?........................................................... 3
How are votes counted?..................................................... 3
What if I do not specify how I want my shares voted?....................... 3
Can I change my vote?...................................................... 4
Who pays for the cost of proxy preparation and solicitation?............... 4
Security Ownership of Certain Beneficial Owners and Management............... 4
Section 16(a) Beneficial Ownership Reporting Compliance...................... 7
Proposal 1--Election of Directors............................................ 7
Nominees................................................................... 8
Continuing Directors....................................................... 9
Board Meetings and Committees.............................................. 12
Compensation of Directors.................................................. 14
Proposal 2--Ratification of Appointment of Auditors.......................... 16
Audit Committee Report and Payment of Fees to Auditors..................... 16
Proposal................................................................... 17
Proposal 3--Redemption of Series A Preferred Stock........................... 17
Other Matters................................................................ 19
Executive Compensation....................................................... 20
Total Shareholder Return Graphs.............................................. 32
Shareholder Proposals for the 2003 Annual Meeting............................ 33
i
Directions to the Science Museum of Minnesota
120 West Kellogg Boulevard
St. Paul, Minnesota
East on I-94: If you are going east on I-94, take the Kellogg Blvd. exit. Go
right and follow Kellogg Blvd., staying in the right lane. Continue east on
Kellogg Blvd. to the upper ramp entrance (just past the museum, on your right).
North on I-35E: If you are northbound on I-35E, take the Kellogg Blvd. exit. Go
right and follow Kellogg Blvd., staying in the right lane. Continue east on
Kellogg Blvd. to the upper ramp entrance (just past the museum, on your right).
West on I-94: If you are going west on I-94, take the 12th Street exit and
follow to Jackson Street. Turn left and go south to Kellogg Blvd. Turn right
onto Kellogg Blvd., and continue six blocks to the parking ramp entrance (just
before the museum, on your left).
South on I-35E: If you are going southbound on I-35E, take the 10th Street exit
to Jackson Street, turn left and go south to Kellogg Blvd. Turn right onto
Kellogg Blvd., and continue six blocks to the parking ramp entrance (just
before the museum, on your left).
H.B. FULLER COMPANY
1200 Willow Lake Boulevard
P.O. Box 64683
St. Paul, Minnesota 55164-0683
(651) 236-5150
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
Date and Time: Thursday, April 18, 2002, at 2:00 p.m. Central
Daylight Time
Place: Science Museum of Minnesota 120 West Kellogg
Boulevard St. Paul, Minnesota
Items of Business: 1. The election of three directors for a three-year
term.
2. The approval of the appointment of
PricewaterhouseCoopers LLP as H.B. Fuller's
independent auditors for the fiscal year ending
November 30, 2002.
3. The approval of the redemption of all the
outstanding shares of Series A Preferred Stock.
4. Any other business that may properly be
considered at the meeting or any adjournment
thereof.
Record Date: You may vote at the meeting if you were a shareholder
of record at the close of business on February 21,
2002.
Voting by Proxy: 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. As an alternative to completing the proxy
card, you may enter your voting instructions by
telephone at 1-800-240-6326 or via the Internet at
www.eproxy.com/full.
Annual Report: H.B. Fuller's 2001 Annual Report on Form 10-K, which
is not part of the proxy soliciting material, is
enclosed.
By Order of the Board of Directors
/s/ Richard C. Baker
Richard C. Baker
Vice President, General Counsel and
Corporate Secretary
March 8, 2002
H.B. FULLER COMPANY
1200 Willow Lake Boulevard
P.O. Box 64683
St. Paul, Minnesota 55164-0683
(651) 236-5150
PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS
APRIL 18, 2002
The Board of Directors of H.B. Fuller Company is soliciting proxies to be
used at the Annual Meeting of Shareholders to be held on April 18, 2002, and at
any adjournment of the meeting. We mailed this Proxy Statement and the enclosed
form of proxy on March 8, 2002.
QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND VOTING
What is the purpose of the meeting?
At our annual meeting, shareholders will elect three directors, consider
approval of the appointment of our independent auditors, consider a proposal to
redeem all the outstanding shares of Series A Preferred Stock and consider any
other business that may properly be presented to the meeting. Also, management
will report on H.B. Fuller's performance during the last fiscal year and
respond to questions from shareholders.
How does the Board recommend that I vote?
The Board of Directors recommends a vote:
. FOR all of the nominees for director;
. FOR the approval of the appointment of PricewaterhouseCoopers LLP as
H.B. Fuller's independent auditors for the fiscal year ending November
30, 2002; and
. FOR the approval of the redemption of all outstanding shares of Series
A Preferred Stock.
Who is entitled to vote at the meeting?
The Board has set February 21, 2002, as the record date for the meeting. If
you were a shareholder of record at the close of business on February 21, 2002,
you are entitled to vote at the meeting.
As of the record date, shares of Common Stock and 45,900
shares of Series A Preferred Stock were outstanding and eligible to vote.
What are the voting rights of the holders of Common Stock and Series A
Preferred Stock?
Holders of Common Stock and Series A Preferred Stock vote together on the
election of directors and on all other matters submitted for approval to the
shareholders at the meeting.
1
Holders of Common Stock are entitled to one vote per share. The holder of
the Series A Preferred Stock is entitled to 80 votes per share. Thus, a total
of votes are entitled to be cast at the meeting.
There is no cumulative voting.
How many shares must be present to hold the meeting?
Shares equal to at least a majority of the voting power of the outstanding
shares of Common Stock and Series A Preferred Stock combined, as of the record
date on February 21, 2002, must be present at the meeting in order to hold the
meeting and conduct business. This is called a quorum. Shares are counted as
present at the meeting if:
. you are present and vote in person at the meeting; or
. you have properly submitted a proxy or voted by telephone or via the
Internet.
What is the difference between a shareholder of record and a "street name"
holder?
If your shares are registered directly in your name, you are considered the
shareholder of record with respect to those shares.
If your shares are held in a stock brokerage account or by a bank or other
nominee, such as the H.B. Fuller Thrift Plan, you are considered the beneficial
owner of those shares, and your shares are held in "street name."
How do I vote my shares?
If you are a shareholder of record, you can give a proxy to be voted at the
meeting either:
. over the telephone by calling 1-800-240-6326;
. electronically, using the Internet at www.eproxy.com/full; or
. by mailing in the enclosed proxy card.
The telephone and Internet voting procedures have been set up for your
convenience. The procedures have been designed to authenticate your identity,
to allow you to give voting instructions, and to confirm that those
instructions have been recorded properly. If you are a shareholder of record
and you would like to vote by telephone or by using the Internet, please refer
to the specific instructions on the enclosed proxy card. If you wish to vote
using the paper proxy enclosed with this proxy statement, please return your
signed proxy to us before the meeting.
If you hold your shares in street name, you must vote your shares following
the procedures indicated to you by your broker or nominee. Accordingly, your
broker or nominee has enclosed or provided a voting instruction card for you to
use in directing the broker or nominee how to vote your shares.
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What does it mean if I receive more than one proxy card?
It means you hold shares registered in more than one account. To ensure
that all of your shares are voted, sign and return each proxy card or, if you
vote by telephone or via the Internet, vote once for each proxy card you
receive.
Can I vote my shares in person at the meeting?
Yes. If you are a shareholder of record, you may vote your shares at the
meeting by completing a ballot at the meeting. However, even if you currently
plan to attend the meeting, we recommend that you submit your proxy as
described above so that your vote will be counted if, for whatever reason, you
later decide to not attend the meeting.
If you are a street name holder, you may vote your shares in person at the
meeting only if you obtain a signed proxy from your broker or nominee giving
you the right to vote such shares at the meeting.
What vote is required for the election of directors or for the proposals to be
approved?
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 each director and for the approval
of the appointment of PricewaterhouseCoopers LLP. The affirmative vote of a
majority of the combined voting power of the Common Stock and the Series A
Preferred Stock outstanding as of the record date is required to redeem all the
outstanding shares of Series A Preferred Stock.
How are votes counted?
You may either vote "FOR" or "WITHHOLD" authority to vote for each nominee
for the Board of Directors. You may vote "FOR," "AGAINST" or "ABSTAIN" on the
other proposals.
If you vote ABSTAIN or WITHHOLD, your shares will be counted as present at
the meeting for the purposes of determining a quorum.
If you ABSTAIN from voting on the proposals, your abstention has the same
effect as a vote against those proposals. If you WITHHOLD authority to vote for
one or more of the directors, this has the same effect as a vote against the
directors.
If you hold your shares in "street name" and do not provide voting
instructions to your broker, your shares may not be voted. In this situation, a
"broker non-vote" may occur. Shares that constitute broker non-votes will be
present at the meeting for the purpose of determining a quorum, but are not
considered as entitled to vote on the proposal in question. This effectively
reduces the number of shares needed to elect a director or ratify the
appointment of PricewaterhouseCoopers LLP.
What if I do not specify how I want my shares voted?
If you do not specify on your returned proxy card (or when giving your
proxy by telephone or via the Internet) how you want to vote your shares, we
will vote them:
. FOR all of the nominees for director;
3
. FOR the approval of the appointment of PricewaterhouseCoopers LLP as
H.B. Fuller's independent auditors for the 2002 fiscal year; and
. FOR the redemption of all outstanding shares of Series A Preferred
Stock.
Can I change my vote?
Yes. You may change your vote and revoke your proxy at any time before it
is voted at the meeting in any of the following ways:
. by sending a written notice of revocation to Richard C. Baker, Vice
President, General Counsel and Corporate Secretary of the Company;
. by submitting another properly signed proxy card at a later date to
Mr. Baker;
. by submitting another proxy by telephone or via the Internet at a
later date; or
. by voting in person at the meeting.
Who pays for the cost of proxy preparation and solicitation?
The Company pays for 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. We have retained Morrow & Co.,
Inc. to assist in the solicitation of proxies for the meeting for a fee of
approximately $6,000 plus associated costs and expenses.
We are soliciting proxies primarily by mail. In addition, proxies may be
solicited by telephone or facsimile, or personally by directors, officers and
regular employees of the Company. These individuals will receive no additional
compensation (other than their regular salaries) for these services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table shows how much H.B. Fuller Common Stock each director,
nominee, and executive officer listed in the Summary Compensation Table in this
Proxy Statement beneficially owned as of January 31, 2002 (unless otherwise
noted). The table also shows the beneficial ownership of H.B. Fuller Common
Stock by all directors and executive officers of H.B. Fuller as a group. In
addition to the shares listed in this table, certain directors hold phantom
stock units that will be paid out in shares of H.B. Fuller Common Stock. These
units are subject to the same economic risk as a direct investment in
H.B. Fuller Common Stock. As of January 31, 2002, in addition to the amounts
shown below, the directors, as a group, held phantom stock units representing
96,796 shares of H.B. Fuller Common Stock.
To the best of H.B. Fuller's knowledge, no shareholder, director or officer
beneficially owned more than 5% of H.B. Fuller's Common Stock as of January 31,
2002.
Unless otherwise noted, the shareholders listed in the table have sole
voting and investment powers with respect to the shares of Common Stock owned
by them.
4
Amount and Percent of
Nature of Common
Beneficial Stock
Name of Beneficial Owner Ownership Outstanding
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Norbert R. Berg.................................. 5,982(1)(2)
Edward L. Bronstien, Jr.......................... 19,383(1)(2)
Freeman A. Ford.................................. 9,539(1)(2)
Gail D. Fosler................................... 7,809(1)(2)
Reatha Clark King................................ 11,759(1)(2)
Knut Kleedehn.................................... 2,817(1)
J. Michael Losh.................................. 4,817(1)
John J. Mauriel, Jr.............................. 21,539(1)(2)
Lee R. Mitau..................................... 12,817(1)(2)
R. William Van Sant.............................. 2,825(1)
Albert P.L. Stroucken............................ 381,867(3)
Raymond A. Tucker................................ 88,835(4)
Alan R. Longstreet............................... 45,757(5)
Linda J. Welty................................... 78,662(6)
Peter M. Koxholt................................. 48,946(7)
All directors and executive officers as a group
(24 people)..................................... 1,128,568(8)
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* Indicates less than 1%.
(1) Includes the following shares of Common Stock that were awarded under the
1998 Directors' Stock Incentive Plan, including shares acquired upon
reinvestment of dividends:
Norbert R. Berg......... 4,539
Freeman A. Ford......... 4,539
Reatha Clark King....... 4,539
J. Michael Losh......... 2,817
Lee R. Mitau............ 11,817
Edward L. Bronstien, Jr... 4,539
Gail D. Fosler............ 4,539
Knut Kleedehn............. 2,817
John J. Mauriel, Jr....... 4,539
R. William Van Sant....... 2,825
(2) Excludes Common Stock units credited to the accounts of directors who
participate in the Directors' Deferred Compensation Plan, described under
the heading "Compensation of Directors." These Common Stock units are not
entitled to vote at the meeting. The number of units credited to each
director participating in this plan is as follows:
Norbert R. Berg......... 26,365
Freeman A. Ford......... 595
Reatha Clark King....... 11,433
Lee R. Mitau............ 8,798
Edward L. Bronstien, Jr... 19,618
Gail D. Fosler............ 1,583
John J. Mauriel, Jr....... 28,404
(3) Includes 21,437 shares of restricted Common Stock subject to forfeiture,
888 shares held in trust under H.B. Fuller's Thrift Plan (a 401(k) plan),
and 103,918 shares that could be issued pursuant to stock options which
are currently exercisable. Excludes 22,208 Common Stock units credited to
Mr. Stroucken's H.B. Fuller Common Stock
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account under the Key Employee Deferred Compensation Plan described in the
"Executive Compensation" section of this proxy statement. These units are
not entitled to vote at the meeting.
(4) Includes 314 shares held in trust under H.B. Fuller's Thrift Plan and
24,661 shares that could be issued pursuant to stock options which are
currently exercisable. Excludes 2,908 Common Stock units credited to Mr.
Tucker's H.B. Fuller Common Stock account under the Key Employee Deferred
Compensation Plan. These units are not entitled to vote at the meeting.
(5) Includes 10,195 shares of restricted Common Stock subject to forfeiture,
7,104 shares held in trust under H. B. Fuller's Thrift Plan, and 28,458
shares that could be issued pursuant to stock options which are currently
exercisable. Excludes 9,737 restricted stock units which are subject to
forfeiture, and 902 Common Stock units credited to Mr. Longstreet's H.B.
Fuller Common Stock account under the Key Employee Deferred Compensation
Plan. Neither the restricted stock units nor Common Stock units are
entitled to vote at the meeting.
(6) Includes 2,122 shares of restricted Common Stock subject to forfeiture,
642 shares held in trust under H.B. Fuller's Thrift Plan, and 23,498
shares that could be issued pursuant to stock options which are currently
exercisable. Excludes 2,887 Common Stock units credited to Ms. Welty's
H.B. Fuller Common Stock account under the Key Employee Deferred
Compensation Plan. These units are not entitled to vote at the meeting.
(7) Includes 16,208 shares that could be issued pursuant to stock options
which are currently exercisable. Excludes 2,101 restricted stock units
which are subject to forfeiture and are not entitled to vote at the
meeting.
(8) Includes 47,510 shares of stock that were awarded under the 1998
Directors' Stock Incentive Plan, 91,281 shares of restricted Common Stock
subject to forfeiture, 40,207 shares held in trust under H.B. Fuller's
Thrift Plan, and 314,145 shares that could be issued pursuant to stock
options which are currently exercisable. Excludes restricted stock
units which are subject to forfeiture, and Common Stock units
credited to the directors and executive officers as a group under the
Directors' Deferred Compensation Plan and the Key Employee Deferred
Compensation Plan. Neither the restricted stock units nor Common Stock
units are entitled to vote at the meeting.
Elmer L. Andersen, 1483 Bussard Court, Arden Hills, Minnesota 55112, owns
45,900 shares of Series A Preferred Stock, representing 100% of this class.
Each share of Series A Preferred Stock is entitled to 80 votes at the meeting.
Based on the Series A Preferred Stock and shares of Common Stock beneficially
owned by Mr. Andersen, he controls % of the voting power of H.B. Fuller.
6
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires H.B. Fuller's
directors and executive officers to file initial reports of ownership and
reports of changes in ownership of H.B. Fuller's securities with the Securities
and Exchange Commission. Executive officers and directors are required to
furnish H.B. Fuller with copies of these reports. Based solely on a review of
these reports and written representations from the executive officers and
directors, we believe that the executive officers and directors complied with
all Section 16(a) filing requirements for fiscal year 2001, except that Stephen
Large filed one late report.
PROPOSAL 1--ELECTION OF DIRECTORS
The Board of Directors is currently composed of 11 directors and divided
into three classes. Each year one class of directors stands for election for a
three-year term. The term of office for Class III directors, consisting of
Edward L. Bronstien, Jr., J. Michael Losh, Lee R. Mitau and R. William Van
Sant, will expire at the meeting.
At the meeting, three persons are to be elected as Class III directors to
hold a three-year term of office from the date of their election until the 2005
Annual Meeting and until their successors are duly elected and qualified. The
three nominees for election as Class III directors are J. Michael Losh, Lee R.
Mitau and R. William Van Sant, all of whom are currently directors.
After 30 years of dedicated service, Mr. Bronstien will retire from the
Board and not stand for reelection.
Following the meeting, the Board will be composed of ten directors. Each of
the nominees has agreed to serve as a director if elected.
The term of office for Class I directors, consisting of Gail D. Fosler,
Reatha Clark King, and Albert P.L. Stroucken, will expire at the 2003 Annual
Meeting. The term of office for Class II directors, consisting of Norbert R.
Berg, Freeman A. Ford, Knut Kleedehn and John J. Mauriel, Jr., will expire at
the 2004 Annual Meeting.
We will vote your shares as you specify when providing your proxy. You may
either vote FOR or WITHHOLD authority to vote for each nominee for the Board of
Directors. If you submit your proxy without voting instructions, we will vote
your shares FOR the election of the three nominees. If, for any reason, any
nominee becomes unable to serve before the election, we will vote your shares
for a substitute nominee selected by the Board of Directors. Alternatively, the
Board of Directors, at its option, may reduce the number of directors
constituting Class III directors.
The election of each director requires an 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.
The Board of Directors recommends a vote FOR election of each of the
nominees.
7
The nominees and directors provided the following information about
themselves as of January 1, 2002.
Nominees
Class III (Term Ending in 2005)
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J. Michael Losh
Age: 55
Director Since: 2001
Principal Occupation: Chairman of Metaldyne Corporation, a global designer
and supplier of high quality, metal-formed
components, assemblies and modules for the
transportation industry headquartered in Plymouth,
Michigan.
Business Experience: Mr. Losh began with General Motors Corporation in
1964. He served in a variety of operating and
financial posts in the U.S., Mexico and Brazil,
including general manager of both the Pontiac and
Oldsmobile divisions. From 1994 to 2000, Mr. Losh was
Chief Financial Officer of General Motors.
Other Directorships: Cardinal Health, Inc.; Metaldyne Corporation
- --------------------------------------------------------------------------------
Lee R. Mitau
Age: 53
Director Since: 1996
Principal Occupation: Executive Vice President and General Counsel, U.S.
Bancorp, a bank holding company headquartered in
Minneapolis, Minnesota.
Business Experience: Mr. Mitau has been Executive Vice President of U.S.
Bancorp since 1995. He was a partner in the Corporate
Department of the law firm of Dorsey & Whitney LLP
from 1983 to 1995. Mr. Mitau was Secretary of H.B.
Fuller from 1990 to 1995.
Other Directorships: Graco, Inc.
8
- --------------------------------------------------------------------------------
R. William Van Sant
Age: 63
Director Since: 2001
Principal Occupation: Operating Partner at Norwest Equity Partners, a
venture capital firm headquartered in Minneapolis,
Minnesota.
Business Experience: Mr. Van Sant was Chairman, Director and Chief
Executive Officer of Nortrax, Inc., a distributor of
John Deere construction equipment in Minneapolis,
Minnesota, from 1999 to March, 2001. He was Chairman,
Director and Chief Executive Officer of Lukens, Inc.,
a specialty steel producer from 1991 to 1998.
Other Directorships: Philip Services Corporation; Amcast Industrial
Corporation
Continuing Directors
Class I (Term Ending in 2003)
- --------------------------------------------------------------------------------
Gail D. Fosler
Age: 54
Director Since: 1992
Principal Occupation: Senior Vice President and Chief Economist, The
Conference Board, a non-profit, business sponsored
research and membership organization in New York, New
York.
Business Experience: Since 1998, Ms. Fosler has been Senior Vice President
and Chief Economist of The Conference Board. From
1989 to 1997, she was Vice President, Chief Economist
and Executive Director of The Conference Board. Ms.
Fosler is also a director of the National Bureau of
Economic Research.
Other Directorships: Unisys Corporation; DBS Holdings (Singapore);
Baxter International Inc.
9
- --------------------------------------------------------------------------------
Reatha Clark King
Age: 63
Director Since: 1978
Principal Occupation: President and Executive Director of the General Mills
Foundation and Vice President of General Mills, Inc.
a diversified food company headquartered in
Minneapolis, Minnesota.
Business Experience: Dr. King has been President and Executive Director of
the General Mills Foundation and Vice President of
General Mills since 1988. She served as President of
Metropolitan State University, St. Paul, Minnesota,
from 1977 to 1988. Dr. King is also a trustee of the
H.B. Fuller Company Foundation.
Other Directorships: Wells Fargo & Company; Exxon Mobil Corporation;
Minnesota Mutual Companies, Inc.
- --------------------------------------------------------------------------------
Albert P.L. Stroucken
Age: 54
Director Since: 1998
Principal Occupation: Chairman of the Board, President and Chief Executive
Officer, H.B. Fuller Company
Business Experience: Mr. Stroucken was elected Chairman of the Board in
October, 1999. He has been President and Chief
Executive Officer of H.B. Fuller since April, 1998.
He was General Manager, Inorganics Division of Bayer
AG from 1997 to 1998. Prior to that he was Executive
Vice President and President of Industrial Chemicals
Division, Bayer Corporation from 1992 to 1997.
Class II (Term Ending in 2004)
- --------------------------------------------------------------------------------
Norbert R. Berg
Age: 69
Director Since: 1976
Principal Occupation: President of Boyer Creek Ranch located in Barronett,
Wisconsin.
Business Experience: Mr. Berg was Deputy Chairman of the Board of Control
Data Corporation, a computer manufacturing and data
services company headquartered in Minneapolis,
Minnesota, from 1980 to 1988. He was a director of
First Trust National Association from 1970 to 1996
and a director of Control Data Corporation from 1977
to 1990.
10
- --------------------------------------------------------------------------------
Freeman A. Ford
Age: 60
Director Since: 1975
Principal Occupation: Chairman and Chief Executive Officer, Fafco, Inc.
Chico, California, a manufacturer of energy
conservation equipment.
Business Experience: Mr. Ford has been Chairman and Chief Executive
Officer of Fafco, Inc., since 1972.
- --------------------------------------------------------------------------------
John J. Mauriel, Jr.
Age: 69
Director Since: 1968
Principal Occupation: Faculty Member, The Carlson School of Management,
University of Minnesota, Minneapolis, Minnesota
Business Experience: Professor Mauriel has been a member of the faculty of
the Carlson School since 1965. Dr. Mauriel has also
served on the faculty of the Harvard Business School,
the North European Management Institute, and the
Warsaw Executive MBA Program and was the founder of
the Carlson School's Executive Development Center,
which he directed from 1972 to 1984. He was also
Director of The Bush Educator Program from 1975 to
2000.
- --------------------------------------------------------------------------------
Knut Kleedehn
Age: 64
Director Since: 2001
Principal Occupation: Private investor
Business Experience: Mr. Kleedehn was with Bayer A.G. from 1960 to 2001.
At Bayer, he served in a series of senior management
roles as President and Senior Country Representative
of Bayer for Japan and Korea, co-chair of Bayer Do
Brasil, General Manager of Bayer's Pigments and
Ceramics Division, and CEO of three Bayer chemical
divisions and several subsidiaries.
11
Board Meetings and Committees
The Board of Directors is responsible for the overall affairs of H.B.
Fuller. The Board conducts its business through meetings of the Board and four
standing committees: Audit, Compensation, Corporate Governance and
Responsibility, and Finance. The Board has adopted a written charter for each
committee. When necessary, the Board also establishes ad hoc committees to
address specific issues.
The Board held seven scheduled meetings during the 2001 fiscal year. Each
director attended at least 75% of the total meetings of the Board and Board
committees on which the director served during the fiscal year.
Audit Committee
Members: John J. Mauriel, Jr.
(Chair)
Freeman A. Ford Gail D. Fosler
Knut Kleedehn J. Michael Losh
R. William Van Sant
Number of Meetings in Six
2001:
Functions: Recommends independent public auditors to audit the
Company's consolidated financial statements.
Reviews scope of audit and reviews the independence
and performance of independent public auditors.
Reviews annual audited consolidated financial
statements, accounting principles and practices, and
the adequacy of internal controls.
Reviews risk management policies and procedures, and
monitors compliance with policies, procedures and
codes of conduct.
All of the Audit Committee members meet the independence and experience
requirements of the National Association of Securities Dealers, Inc. for
companies listed on the Nasdaq Stock Market. The report of the Audit Committee
for fiscal year 2001 is included in this Proxy Statement. A copy of the Audit
Committee's charter was included in the proxy statement for last year's
meeting.
12
Compensation Committee
Members: Lee R. Mitau (Chair)
Norbert R. Berg Edward L. Bronstein, Jr.
Gail D. Fosler Knut Kleedehn
Number of Meetings in Six
2001:
Functions: Establishes overall compensation programs and
practices for executives and directors.
Reviews and approves compensation, including salary,
incentive programs, stock-based awards, perquisites
and supplemental benefits for executives and
directors.
Monitors the competitiveness, fairness and equity of
retirement plans.
Authority to administer stock-based compensation
plans and individual awards.
All of the Compensation Committee members are non-employee directors.
Corporate Governance and Responsibility Committee
Members: Norbert R. Berg (Chair)
Edward L. Bronstein, Jr. Reatha Clark King
Lee R. Mitau Albert P.L. Stroucken
Number of Meetings in Five
2001:
Functions: Reviews matters of corporate governance and policies
and practices relating to significant issues of
corporate, social and public concern.
Reviews organizational structure and succession
planning.
Evaluates the performance of the Chairman of the
Board, President and Chief Executive Officer, and
directors.
Makes recommendations to the Board regarding any
shareholder proposals.
Recommends and evaluates new director nominees.
This committee also considers shareholder recommendations for potential
director nominees. Suggestions may be sent to the Corporate Governance and
Responsibility Committee in care of the Corporate Secretary of H.B. Fuller.
13
Finance Committee
Members: Freeman A. Ford (Chair)
Reatha Clark King J. Michael Losh
John J. Mauriel, Jr. Albert P.L. Stroucken
R. William Van Sant
Number of Meetings in Seven
2001:
Functions: Reviews and makes recommendations to the Board
regarding H.B. Fuller's financial performance, plans
and organization, including:
. long-range financial strategic plan and asset
allocations,
. financial aspects of acquisitions and
divestitures,
. major financing programs,
. dividend policy,
. capital and operating budgets and policy,
. the purchase and sale of H.B. Fuller's
securities,
. third-party guarantees,
. the level of overall borrowing authority,
. information systems, and
. funding level and performance of retirement
plans.
Compensation of Directors
Fees. The following fees are paid to all directors who are not employees of
the Company:
Annual Board retainer............................................... $30,000
Daily attendance fee for each Board meeting......................... $ 1,000
Attendance fee for each Committee meeting........................... $ 1,000
Mr. Stroucken, as the Company's President and Chief Executive Officer, does
not receive separate compensation for serving as Chairman of the Board of
Directors or for attendance at any meeting.
Directors' Deferred Compensation Plan. Under this plan, directors may elect
to defer all or a percentage of their retainer, attendance fees or meeting
fees. Deferred amounts are credited with gains and losses based on the
performance of certain mutual funds or H.B. Fuller Common Stock as selected by
the director prior to deferring any retainer or fees. Directors who select H.B.
Fuller Common Stock as an investment are credited with phantom stock units that
will be paid out in shares of Common Stock. Phantom stock units are credited
with dividend equivalents equal to the amount of dividends paid on an equal
14
number of shares of H.B. Fuller Common Stock. The dividend equivalents are
converted into additional phantom stock units based on the fair market value of
H.B. Fuller Common Stock on the dividend payment date. If a participant elects
to defer amounts to the H.B. Fuller Common Stock account, H.B. Fuller makes a
10% matching contribution of additional phantom stock units. The phantom stock
units credited to the directors' accounts do not have voting rights.
Any amounts deferred under this plan are paid in shares of Common Stock or
cash at the earliest to occur of:
. the last date on which the director serves as a director (that is, the
date of resignation or removal from the Board or the end of the
director's elected term) or on the first, second, third, fourth or
fifth anniversary of such date, as may be selected by the director in
advance;
. disability;
. death; or
. the date of a change in control of the Company.
Directors' Retirement Plan. In fiscal year 1997, the Compensation Committee
terminated the Directors' Retirement Plan for any director elected to the Board
after October 16, 1997 and replaced it with the 1998 Directors' Stock Incentive
Plan. The retirement plan remains in effect for all eligible non-employee
directors as of October 16, 1997. This plan provides for payment of a
retirement benefit to each director with a minimum of ten years service.
Payments begin on the later of the director's retirement from the Board or the
director's 60th birthday. The retirement benefit is paid each year for the
lesser of 15 years or the number of years the director served on the Board. The
amount of the annual retirement benefit equals the amount of the director's
last annual retainer. This retirement plan is unfunded, but H.B. Fuller has
placed funds in a trust to provide benefits under this plan. These funds are,
however, subject to the claims of H.B. Fuller's creditors.
Directors Berg, Bronstien, Ford, Fosler, King and Mauriel are eligible to
receive retirement benefits under this plan.
Directors' Stock Incentive Plan. The Board believes that awards of stock-
based compensation provide an effective means of linking director and
shareholder interests. Under this plan, the Company may issue restricted stock,
restricted stock units, options, stock appreciation rights, performance awards
or other stock-based instruments. In fiscal year 2001, the Compensation
Committee granted to each non-employee director 1,400 shares of restricted
stock, which will vest on the earlier of four years from the date of grant or
the date on which the director reaches the Board's mandatory retirement age
(age 72). In addition, Mr. Van Sant was granted 1,408 shares of restricted
stock and Mr. Losh and Mr. Kleedehn were each granted 1,406 shares of
restricted stock in connection with their election to the Board during 2001.
Restricted stock represents shares of Common Stock held by H.B. Fuller on
behalf of the participant. Dividends are paid on the shares of restricted stock
and reinvested in additional shares of restricted stock.
15
Physical Examinations. Non-employee directors are reimbursed for an annual
physical examination. During the 2001 fiscal year, H.B. Fuller paid
reimbursements of $16,900 for director physical examinations and related
expenses.
Matching Gifts to Education Program. Under this program, H.B. Fuller
matches a non-employee director's contributions (up to $1,000) to eligible
educational institutions. During the 2001 fiscal year, H.B. Fuller matched
$4,150 of eligible contributions.
PROPOSAL 2--RATIFICATION OF APPOINTMENT OF AUDITORS
Audit Committee Report and Payment of Fees to Auditors
Audit Committee Report
The Audit Committee of the Board is composed of non-employee directors who
meet the independence and experience requirements for listing on the Nasdaq
Stock Market. We recommend to the Board of Directors, subject to shareholder
ratification, the appointment of H.B. Fuller's independent auditors.
Management is responsible for H.B. Fuller's internal controls and the
financial reporting process. PricewaterhouseCoopers LLP, as the Company's
independent auditors for 2001, 2000 and 1999 were responsible for performing an
independent audit of the consolidated financial statements in accordance with
auditing standards generally accepted in the United States of America and to
issue a report. We monitor and oversee these processes.
Management represented to us that H.B. Fuller's consolidated financial
statements were prepared in accordance with accounting principles generally
accepted in the United States of America. We reviewed and discussed the
consolidated financial statements with management and PricewaterhouseCoopers
LLP. We also discussed with PricewaterhouseCoopers the matters required to be
discussed by Statement on Auditing Standards No. 61 (Communications with Audit
Committees), and they discussed with us their independence and provided to us
the written disclosure required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees). We also considered whether
non-audit services provided by PricewaterhouseCoopers LLP during the 2001
fiscal year were compatible with their maintaining their independence.
Based upon our discussions and our review of the representations of
management and the report of the independent auditors, we recommended to the
Board of Directors that the audited consolidated financial statements be
included in H.B. Fuller's Annual Report on Form 10-K for the fiscal year ended
December 1, 2001 filed with the SEC.
John J. Mauriel, Jr. (Chair)
Freeman A. Ford Gail D. Fosler
Knut Kleedehn J. Michael Losh
R. William Van Sant
16
Audit Fees
Audit fees billed or expected to be billed to H.B. Fuller by
PricewaterhouseCoopers LLP for the audit of H.B. Fuller's consolidated
financial statements for the fiscal year ended December 1, 2001 and for reviews
of H.B. Fuller's financial statements included in H.B. Fuller's quarterly
reports on Form 10-Q for the last fiscal year totaled $944,846.
Financial Information Systems Design and Implementation Fees
There were no services provided by PricewaterhouseCoopers LLP for the
design and implementation of financial information systems during fiscal year
2001.
All Other Fees
Fees billed or expected to be billed to H.B. Fuller by
PricewaterhouseCoopers LLP for all other non-audit services (primarily tax-
related services) provided during the last fiscal year totaled $2,105,000.
Proposal
The Board of Directors has appointed PricewaterhouseCoopers LLP,
independent certified public accountants, to be H.B. Fuller's auditors for the
fiscal year ending November 30, 2002. PricewaterhouseCoopers LLP served as H.B.
Fuller's auditors for the fiscal year ended December 1, 2001. If the Board of
Directors' appointment of auditors is not ratified by the shareholders, the
Board of Directors intends to reconsider that appointment. A representative of
PricewaterhouseCoopers LLP is expected to be present at the meeting and will
have the opportunity to make a statement if he or she desires to do so and to
respond to appropriate questions from shareholders.
We will vote your shares as you specify when providing your proxy. If you
submit your proxy without voting instructions, we will vote your shares FOR the
ratification of the appointment of the auditors.
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 proposal.
The Board of Directors recommends a vote FOR
ratification of the appointment of PricewaterhouseCoopers LLP.
PROPOSAL 3--REDEMPTION OF THE SERIES A PREFERRED STOCK
Currently, in addition to Common Stock, there are 45,900 shares of Series A
Preferred Stock issued and outstanding. Elmer L. Andersen owns all these
shares. As long as a majority of the Series A Preferred Stock is held by Mr.
Andersen, his wife or a descendant,
17
each share is entitled to 80 votes at any shareholder meeting. Each share of
Series A Preferred Stock is also entitled to cumulative dividends of $.3333 per
year, payable quarterly ($15,298.47 per year in total). In the event of the
Company's liquidation, each share of Series A Preferred Stock would be eligible
to receive, in preference to the Common Stock, $6.6667 per share ($306,001.53
in total) plus unpaid accumulated dividends, if any. Pursuant to the original
terms of the Series A Preferred Stock, all of these shares may be redeemed for
$6.6667 per share ($306,001.53 in total) when authorized by holders of a
majority of the voting power of all the Company's outstanding shares.
Mr. Andersen owned a controlling interest in and managed the Company at the
time of its initial public offering in 1968. The Series A Preferred Stock was
originally issued to protect the Company and its shareholders if an unsolicited
takeover was attempted that the Board of Directors did not believe was in the
best interests of the Company's shareholders. Initially, based upon the special
voting rights of the Series A Preferred Stock, these shares represented 63% of
the votes that could be cast at any meeting of shareholders. However, this
percentage has been reduced by stock issuances (public offerings, stock
dividends and splits, acquisitions and benefit plans) over the years. As of the
record date for the meeting, the Series A Preferred Stock represented
approximately 11% of the total votes eligible to be cast.
Although the overwhelming percentage of the value of the Company's equity
is held by the Common shareholders, the Series A Preferred Stock permits Mr.
Andersen (and his descendants) to exercise disproportionate voting power. The
reason for retaining this disparity in voting power no longer applies. Changes
in Minnesota law since 1968 provide the Board with the ability to address
unsolicited takeover proposals that are not in the best interests of our
shareholders. In addition, Mr. Andersen and his descendants are no longer
active in the management of the Company. Given these changes, the Board
believes in fairness to the holders of the Common Stock that the Series A
Preferred Stock should be redeemed to eliminate the disparate treatment of the
Common Stock created by the special voting rights of the Series A Preferred
Stock. The Board therefore recommends that the shareholders approve the
redemption of all the outstanding shares of Series A Preferred Stock for
$6.6667 per share ($306,001.53 in total).
We will vote your shares as you specify when providing your proxy. If you
submit your proxy without voting instructions, we will vote your shares FOR the
redemption of all the outstanding shares of Series A Preferred Stock.
The affirmative vote of a majority of the combined voting power of the
Common Stock and the Series A Preferred Stock outstanding as of the record date
is required to approve this proposal.
The Board of Directors recommends a vote FOR
the redemption of all outstanding shares of Series A Preferred Stock.
18
OTHER MATTERS
We do not know of any other business to be presented for consideration at
the meeting. If any other business does properly come before the meeting, the
persons named as proxies on the enclosed proxy card will vote in accordance
with their best judgment as to the best interests of H.B. Fuller and its
shareholders.
19
EXECUTIVE COMPENSATION
Compensation Committee Report on Executive Compensation
In accordance with our charter, and as part of our overall
responsibilities, the Compensation Committee of the Board of Directors reviews,
modifies and approves the Company's compensation programs and practices,
including base salaries, incentive programs, stock-based awards, perquisites,
supplemental benefits, and other executive compensation items to appropriately
attract, retain, and motivate the Company's executives on a worldwide basis.
Our strategy for achieving this objective includes establishing targets for
executive base pay, short-term incentives and long-term incentives, including
stock-based awards, at or above competitive levels. Generally, compensation is
based on an executive's pay grade, which takes into consideration the job's
internal value, based on overall complexity and responsibility, and external
value based on market pay for similar positions. We review national and
regional compensation surveys annually to determine and establish competitive
levels of compensation. Certain of these surveys include comparable companies
from the specialty chemical peer group referred to in the Total Shareholder
Return Graphs. From time to time, we hire experienced outside consultants to
analyze and review H.B. Fuller's compensation programs. The purpose of these
reviews is to satisfy ourselves that H.B. Fuller's compensation programs meet
the stated objectives.
We believe that ownership of H.B. Fuller Common Stock by executives
encourages long-term, strategic decision-making that is in the balanced best
interests of H.B. Fuller's constituents. We have, therefore, established
guidelines for recommended levels of executive stock ownership. An executive's
stock ownership goal ranges in dollar amount from one to five times their
annual salary, depending on pay grade.
The Compensation Committee is composed solely of directors who are not
current or former employees of the Company.
Compensation of the Chief Executive Officer. Mr. Stroucken's total
compensation package is designed to be competitive with compensation provided
to chief executive officers at chemical manufacturing and allied products
companies with total revenues comparable to H.B. Fuller's net revenues. Mr.
Stroucken's employment compensation is governed by his employment agreement,
described under the heading, "Executive Compensation--Employment Agreements."
Since the components of Mr. Stroucken's total compensation package (base
salary, short-term incentives, and long-term incentives, including stock-based
awards), are the same as those for all other executives, the specifics of his
fiscal year 2001 compensation are discussed under each heading.
Compensation for Fiscal Year 2001.
Base Salary. Generally, base salary is based upon an executive's pay
grade. Merit increases in base salary are tied to annual performance
reviews and are generally subject to salary ranges based on market surveys
of companies with total revenues comparable to H.B. Fuller's net revenues.
We review and consider the annual performance of and proposed merit
increase for each executive annually. For the most
20
recent fiscal year, the budget guideline for base salary merit increases
was 4.0%. Base salary increases due to promotions, as well as merit
increases, for executives (other than the CEO) averaged 6.5% for fiscal
year 2001. The CEO's salary for 2001 and 2000 was the same.
Short-Term Incentive Awards. Short-term cash incentive awards for
executives are weighted two-thirds on consolidated financial results
(total company and business unit) and one-third on achievement of
individual objectives. Consistent with our overall philosophy and
objectives, aggregate short-term incentive awards are set for each
executive so that the expected pay-out at "target" performance levels,
together with the executive's base salary, would result in a salary and
short-term incentive compensation at least equal to the compensation for
similar positions at comparable companies.
The financial performance components of the short-term incentive award are
based on H.B. Fuller's budgeted "Value Creation" (H.B. Fuller's
measurement of economic profit) as approved annually by the Board of
Directors. For fiscal year 2001, the target financial performance bonus
opportunity for H.B. Fuller's executives (other than the CEO) ranged from
23% to 37% of base salary.
Target individual achievement award opportunities for executives (other
than the CEO) ranged from 11% to 19% of base salary. For fiscal year 2001,
the executives (other than the CEO) received individual achievement awards
ranging from 13% to 24% of base salary. We granted these individual
achievement awards based on a subjective evaluation of each executive's
performance.
Mr. Stroucken had the opportunity to earn up to an aggregate of 113% of
his base salary under the two components of the short-term incentive. For
fiscal year 2001, Mr. Stroucken was eligible to earn an incentive award of
50% of his base salary if H.B. Fuller achieved the "target" Value Creation
improvement goal or an incentive award of 75% of his base salary if H.B.
Fuller achieved a "superior" Value Creation improvement goal. If H.B.
Fuller achieved the "threshold" Value Creation improvement goal, then Mr.
Stroucken was eligible to receive an award of 25% of his base salary.
Since the Company did not meet the threshold performance level of Value
Creation for fiscal year 2001, no payment was made to Mr. Stroucken for
the financial component of the short-term incentive award. Mr. Stroucken
also was eligible to earn an award of up to 38% of his base salary under
the individual achievement component of the short-term incentive plan. For
fiscal year 2001, Mr. Stroucken received 35% of his base salary for his
individual achievement.
Long-Term Incentive Awards. Consistent with our overall philosophy and
objectives, the aggregate amount of long-term incentive awards is set for
each executive so that the expected pay-out would result in compensation
at least equal to the market rate of such compensation for similar
positions at comparable companies.
Performance Units. 50% of the targeted level of long-term incentive award
is provided pursuant to the Company's Performance Unit Plan. The CEO
recommended and we reviewed and approved an assignment of 13,875
performance units in fiscal
21
year 2001 for executives (other than the CEO). These performance units
accrue value based on the cumulative achievement of Value Creation over a
three-year period covering fiscal years 2001-2003. Annual awards of
performance units result in a series of overlapping three-year performance
periods.
At the end of each three-year cycle the value of each performance unit is
determined and appropriate awards are made in cash. No cash awards were
paid to executives for the three-year performance cycle covering fiscal
years 1999-2001 since the target level for Value Creation over this
performance period was not achieved.
During fiscal 2001, Mr. Stroucken as CEO received an assignment of 6,000
performance units, which will accrue value based on the cumulative
achievement of Value Creation over the three-year period covering fiscal
years 2001-2003. Mr. Stroucken did not receive a cash payment for the
three year cycle starting in fiscal year 1999 and ending in fiscal year
2001 since, as discussed above, H.B. Fuller did not achieve the target
level for Value Creation over the three year performance period.
Stock-Based Programs. To foster stock ownership by executives, 50% of each
executive's long-term incentive award is provided through the grant of
nonqualified stock options. During fiscal year 2001, options exercisable
for up to 240,262 shares of Common Stock were granted to all executives
(other than the CEO) pursuant to shareholder approved plans with exercise
prices not less than the fair market value of the Company's Common Stock
on the date of grant. Based on this exercise price, the option does not
provide any value to the executive unless the Company's Common Stock price
increases after the grants are made. The options vest in four annual
installments (25% vesting each year) and have a ten-year term.
On December 7, 2000, Mr. Stroucken was granted an option to purchase
103,896 shares of H.B. Fuller Common Stock at $18.625 per share, the
market price of a share of H.B. Fuller Common Stock on that date.
In addition to stock options, in order to encourage and facilitate stock
ownership by executives, the Board of Directors adopted in 2000 the
Executive Stock Purchase Loan Program. The Stock Purchase Program was
designed to facilitate immediate and significant stock ownership by
executives, especially new management employees. Under the Stock Purchase
Program, eligible managers could purchase shares of H.B. Fuller Common
Stock in the open market with the proceeds from full recourse, personal
loans from a commercial bank. H.B. Fuller guaranteed the loans only in the
event of an employee's default. No new loans under the Stock Purchase
Program could be made after July 2001.
Deductibility of Executive Compensation. Section 162(m) of the Internal
Revenue Code generally limits to $1 million the tax deductibility of
compensation paid by a public company, like H.B. Fuller, to its chief executive
and other executives. Certain performance-based compensation, including awards
under the Company's 2000 Stock Incentive Plan, are intended to be excluded from
this limit.
22
We consider the deductibility of compensation arrangements in executive
compensation decisions, but deductibility is not the sole factor used in
determining the appropriate level of compensation. Since corporate objectives
may not always be consistent with the requirements for full deductibility, the
Company could pay compensation that would not be deductible under Section
162(m). We believe that discretionary control over certain aspects of executive
compensation is critical to the overall compensation purposes of H.B. Fuller,
which is to attract, retain and motivate qualified executives on a worldwide
basis. We will continue to review as circumstances change the effects of this
limit on the deductibility of amounts paid under H.B. Fuller's compensation
programs and will do whatever we consider to be in the best interests of the
Company.
Conclusion. We believe that the policies and programs described in the
report maintain an appropriate balance between motivating achievement of short-
term goals and strategically leading the Company in a direction to provide
long-term success and therefore serve the interests of stockholders and the
Company.
Lee R. Mitau, Chair
Norbert R. Berg Edward L. Bronstien, Jr.
Gail D. Fosler Knut Kleedehn
23
Summary Compensation Table
The following table shows, in the format required by the SEC, the cash and
non-cash compensation for each of the last three fiscal years awarded to or
earned by Mr. Stroucken, as CEO of the Company, and each of the other four most
highly compensated executives at the end of fiscal year 2001.
Long-Term
Annual Compensation Compensation Awards
---------------------------------- ---------------------
Restricted Securities
Other Annual Stock Underlying All Other
Name and Principal Fiscal Salary(1) Bonus(2) Compensation(3) Awards(4) Options Compensation(5)
Position Year ($) ($) ($) ($) (#) ($)
- ------------------ ------ --------- -------- --------------- ---------- ---------- ---------------
Albert P.L. Stroucken 2001 648,945 225,000 16,223 0 103,896
Chairman of the Board, 2000 648,945 0 14,755 0 56,684 143,702(6)
President and Chief 1999 621,000 497,674 0 0 66,138 4,800
Executive Officer
Raymond A. Tucker 2001 292,263 70,922 5,358 0 30,304
Senior Vice President 2000 283,750 42,563 0 0 14,170 0
and Chief Financial 1999 109,936 49,995 118,750(7) 0 20,000 0
Officer
Alan R. Longstreet 2001 283,426 83,823 625 0 25,974
Group President, 2000 275,171 41,276 344 0 14,170 16,307
General Manager 1999 263,322 155,455 50,017(8) 0 19,842 4,800
North America
Linda J. Welty 2001 287,555 54,764 1,434 0 25,974
Group President 2000 269,610 47,182 1,236 0 14,170 21,825
General Manager 1999 232,917 119,267 0 0 13,228 4,338
Full Valu/Specialty
Peter M. Koxholt(9) 2001 250,905 35,457 159,614(10) 0 19,480
Group President, 2000 249,027 22,051 0 0 9,448 0
General Manager 1999 230,218 130,598 0 42,500 13,228 0
Global Adhesives
- --------
(1) Includes cash compensation deferred at the election of the executive under
H.B. Fuller's Thrift Plan and Key Employee Deferred Compensation Plan.
(2) The bonus amounts were paid pursuant to H.B. Fuller's short-term incentive
plans described in the Compensation Committee Report on Executive
Compensation. Amounts for fiscal year 1999 include payments under the
Company's Performance Unit Plan. Includes cash compensation deferred at
the election of the executive under the Key Employee Deferred Compensation
Plan.
(3) Includes the dollar value of H.B. Fuller's 10% matching contribution
relating to Common Stock units credited to the executive's account under
the Key Employee Deferred Compensation Plan. The amounts for fiscal year
2001 were as follows:
Albert P.L. Stroucken............................................... $16,223
Raymond A. Tucker................................................... $ 5,358
Linda J. Welty...................................................... $ 1,434
For Mr. Longstreet, this includes the amount of interest accrued during
fiscal year 2001 on his account in the Key Employee Deferred Compensation
Plan that exceeded 120% of the applicable federal long-term rate.
(4) H.B. Fuller issued restricted stock and restricted stock units under its
1992 Stock Incentive Plan. Each restricted stock unit represents the right
to receive one share of H.B. Fuller Common Stock. Dividends are paid on
restricted stock and then reinvested in additional shares of restricted
stock. Dividend equivalents accrue with respect to restricted stock units
at the same rate as dividends are paid on Common Stock, and the dividend
equivalents are then credited as additional restricted stock units. Shares
of restricted stock are entitled to vote at the meeting. Restricted stock
units are not entitled to vote at the meeting.
24
Listed below are the total numbers of shares of restricted stock and
restricted stock units held by each executive as of December 3, 2001.
Amounts shown include accrued dividend shares or dividend equivalents.
Restricted
Restricted Market Stock Market
Stock Value Units Value
---------- -------- ---------- --------
Albert P.L. Stroucken............... 21,437 $640,323
Alan R. Longstreet.................. 10,195 $304,525 9,737 $290,844
Linda J. Welty...................... 2,122 $ 63,384
Peter M. Koxholt.................... 2,101 $ 62,757
The executives may also hold Common Stock units through the Key Employee
Deferred Compensation Plan.
(5) Amounts include H.B. Fuller's matching contributions for fiscal year 2001
under the terms of H.B. Fuller's Thrift Plan (a 401(k) plan):
Albert P.L. Stroucken................................................ $4,011
Raymond A. Tucker.................................................... $3,507
Alan R. Longstreet................................................... $3.611
Linda J. Welty....................................................... $5,077
A participant's account in the Thrift Plan is fully vested upon the
occurrence of certain specified circumstances, including a change in
control of H.B. Fuller or after three years of credited service. The
account balances for each of the executives listed in the Summary
Compensation Table are fully vested. Distribution of a participant's
vested account balance is made only upon the termination of employment.
For fiscal year 2001, the amounts also include certain matching
contributions under the Key Employee Deferred Compensation Plan as
follows:
Albert P.L. Stroucken............................................... $21,947
Raymond A. Tucker................................................... $ 8,522
Alan R. Longstreet.................................................. $ 9,211
Linda J. Welty...................................................... $ 7,965
Amounts also include premiums paid for fiscal year 2001, on a tax-
protected basis, on term life insurance covering each executive as
follows:
Albert P.L. Stroucken............................................... $39,859
Raymond A. Tucker................................................... $11,211
Alan R. Longstreet.................................................. $21,038
Linda J. Welty...................................................... $ 3,119
Peter M. Koxholt.................................................... $15,105
The term life insurance covers the amount of the executive's outstanding
loan under the Executive Stock Loan Purchase Program.
(6) This amount includes a $100,000 contribution to Mr. Stroucken's H.B. Fuller
Common Stock account under the Key Employee Deferred Compensation Plan.
(7) This amount includes a $118,750 transition allowance paid to Mr. Tucker.
(8) This amount includes $33,542 paid to Mr. Longstreet under H.B. Fuller's
international service assignment policy.
(9) Mr. Koxholt's salary and bonus reflect the average of the foreign exchange
rates in effect during the period when the salary and bonus were paid.
(10) This amount includes payments made to Mr. Koxholt under H.B. Fuller's
international service assignment policy.
25
Option Grants in Last Fiscal Year
H.B. Fuller provides long-term incentive compensation to its executives in
the form of stock options. The following table provides information on the
stock options granted during fiscal year 2001 to the executives listed in the
Summary Compensation Table.
Potential
Realizable Value at
Assumed Annual
Rates of Stock
Price Appreciation
Individual Grants for Option Term
-------------------------------- -------------------
Number of
Securities % of Total
Underlying Options Exercise
Options Granted to or Base
Granted Employees in Price Expiration 5%(2) 10%(2)
Name (#)(1) Fiscal Year ($/Sh) Date ($) ($)
- ---- ---------- ------------ -------- ---------- --------- ---------
Albert P.L. Stroucken... 103,896 17.3% $18.625 12/07/10 1,216,951 3,083,992
Raymond A. Tucker....... 30,304 5.0% $18.625 12/07/10 354,956 899,527
Alan R. Longstreet...... 25,974 4.3% $18.625 12/07/10 304,238 770,998
Linda J. Welty.......... 25,974 4.3% $18.625 12/07/10 304,238 770,998
Peter M. Koxholt........ 19,480 3.2% $18.625 12/07/10 228,172 578,234
- --------
(1) The options have an exercise price equal to the market price of H.B.
Fuller Common Stock on the date of grant. Beginning one year after the
date of grant, 25% of the annual grant can be exercised. An additional 25%
of the annual grant vests each year. The options vest earlier upon a
change in control of H.B. Fuller. Change in control circumstances are
defined as certain changes in H.B. Fuller's Board of Directors, certain
concentrations of voting power, certain mergers, sales of corporate
assets, statutory share exchanges or similar transactions, or a
liquidation or dissolution of the Company.
(2) The assumed 5% and 10% annual rates of appreciation over the terms of the
options are shown in accordance with rules and regulations of the SEC and
do not represent H.B. Fuller's estimates of stock price appreciation.
Aggregated Option Exercises in Fiscal Year 2001 and Fiscal Year End Option
Values
The following table summarizes information with respect to stock option
exercises by the executives listed in the Summary Compensation Table during
fiscal year 2001 and the value of stock options held by such executives at the
end of fiscal year 2001.
Number of Securities
Underlying Unexercised Value of Unexercised
Options at Fiscal Year In-the-Money Options at
Shares Value End Fiscal Year End(1)
Acquired Realized ------------------------- -------------------------
Name on Exercise ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- ----------- -------- ----------- ------------- ----------- -------------
Albert P.L. Stroucken... 0 0 61,411 165,307 $560,066 $1,728,377
Raymond A. Tucker....... 0 0 17,085 47,389 $ 17,677 $ 358,445
Alan R. Longstreet...... 0 0 17,006 42,980 $100,716 $ 392,794
Linda J. Welty.......... 0 0 13,699 39,673 $ 73,036 $ 365,114
Peter M. Koxholt........ 0 0 11,338 30,818 $ 54,331 $ 273,384
- --------
(1) The value was determined by subtracting the exercise price per share from
$29.87 the closing market price per share of H.B. Fuller Common Stock on
December 3, 2001.
26
Long Term Incentive Plan--Awards in Last Fiscal Year
The following table shows awards under the H.B. Fuller Performance Unit
Plan made during fiscal year 2001 to the executives listed in the Summary
Compensation Table.
Performance of
Other Period Estimated Future Payouts
Until Maturation Under Non-Stock
or Payout Price-Based Plan
Number of ---------------- -------------------------
Name Units(1) Fiscal Years Target Maximum
- ---- --------- ---------------- ------------ ------------
Albert P.L. Stroucken...... 6,000 2001-2003 $ 600,000 $ 900,000
Raymond A. Tucker.......... 1,750 2001-2003 $ 175,000 $ 262,500
Alan R. Longstreet......... 1,500 2001-2003 $ 150,000 $ 225,000
Linda J. Welty............. 1,500 2001-2003 $ 150,000 $ 225,000
Peter M. Koxholt........... 1,125 2001-2003 $ 112,500 $ 168,750
- --------
(1) The performance units are denominated and payable in dollars. As of the
last day of the performance period, the participant's performance units are
converted to a dollar value and paid in cash.
Retirement Plans
H.B. Fuller's Retirement Plan is a defined benefit, tax qualified plan that
provides benefits for U.S. employees and is sometimes referred to as a pension
plan. Employees do not make contributions to this plan. The plan provides an
annual benefit equal to a percentage of the employee's average annual
compensation (including annual incentive compensation) during the highest five
years of compensation in the final ten years of an employee's service, based on
the employee's length of service with H.B. Fuller.
H.B. Fuller has established a Supplemental Executive Retirement Plan to
provide additional benefits to executives who may be affected by limits that
are imposed by the Internal Revenue Code and the Employee Retirement Income
Security Act of 1974 on the amount of benefits that may be paid from tax
qualified pension plans. This supplemental plan provides an annual benefit
equal to a percentage of the executive's average annual compensation (including
annual incentive compensation) during the highest five years of compensation in
the final ten years of an executive's service, based on the executive's length
of service with H.B. Fuller. This supplemental amount is offset by retirement
income from certain other sources. The supplemental plan is an unfunded plan.
However, the Company has placed funds in a trust that is intended to provide
plan benefits. The funds are subject to the claims of H.B. Fuller's creditors.
The following table shows the estimated annual benefits on a straight line
annuity basis payable to the executives listed in the Summary Compensation
Table who have 15 or more years of credited service upon normal retirement (age
65 or later) under the pension plan and the Supplemental Executive Retirement
Plan. The compensation considered in determining
27
the benefits payable under the plans is the compensation shown in the "Salary"
and "Bonus" columns of the Summary Compensation Table.
Final
Five-Year
Average
Annual Annual
Compensation Benefit
------------ --------
$225,000 $94,068
$300,000 $131,568
$375,000 $169,068
$450,000 $206,568
$525,000 $244,068
$600,000 $281,568
$675,000 $319,068
$750,000 $356,568
$825,000 $394,068
$900,000 $431,568
$975,000 $469,068
$1,050,000 $506,568
$1,125,000 $544,068
$1,200,000 $581,568
$1,275,000 $619,068
$1,350,000 $656,568
$1,425,000 $694,068
Mr. Longstreet had more than 15 years of service as of December 1, 2001.
Mr. Stroucken, Mr. Tucker, Ms. Welty, Mr. Longstreet and Mr. Koxholt
participate in the pension plan and the Supplemental Executive Retirement Plan.
At the time of their hiring, Mr. Stroucken, Mr. Tucker and Mr. Koxholt were
each credited with years of service under these plans for the number of years
served with their prior employer.
Mr. Koxholt, as a German employee, also participates in a German pension
plan. Benefits under the German plan will be set off against any benefits
payable under the pension plan in the United States.
Key Employee Deferred Compensation Plan
H.B. Fuller's Key Employee Deferred Compensation Plan permits eligible
employees to defer annually up to 25% of base salary and up to 100% of any
annual incentive payment or payments under H.B. Fuller's Performance Unit Plan.
Deferred compensation is payable on the earlier of the participant's
termination of employment, reaching age 65, disability, death or the date for
payment selected by the participant. Deferred amounts are credited with
interest based on the prime rate, or gains and losses based on the performance
of certain mutual funds or H.B. Fuller Common Stock, all as selected by the
participant.
H.B. Fuller also makes matching contributions to a participant's stock
account to restore certain matching contributions under the H.B. Fuller Thrift
Plan (a 401(k) plan) that are limited by tax regulations. In addition, the
Compensation Committee may make discretionary
28
contributions to a participant's Common Stock account under this plan.
Participants may not transfer amounts credited to this plan's H.B. Fuller
Common Stock account out of that account.
During fiscal year 2001, Mr. Stroucken, Mr. Tucker, Mr. Longstreet and Ms.
Welty participated in this plan. The number of phantom common stock units
credited to each as of December 1, 2001 was as follows:
Albert P.L. Stroucken.......................................... 22,208 units
Raymond A. Tucker.............................................. 2,908 units
Alan R. Longstreet............................................. 902 units
Linda J. Welty................................................. 2,887 units
Employment Agreements
Albert P.L. Stroucken. Mr. Stroucken's employment as President and Chief
Executive Officer of the Company is governed by the terms of an employment
agreement dated April 16, 1998.
This agreement addresses Mr. Stroucken's base salary, annual and long term
incentive compensation, specified perquisites and participation in the
Company's employee benefit plans. The employment agreement terminates on March
31, 2004.
In the event of Mr. Stroucken's death or disability during the term of this
agreement, the Company agrees to pay his spouse or estate for the following
three years an annual amount equal to the sum of his average base salary during
the two years preceding his death or disability plus his average annual bonus
during the preceding two years. The Company will pay a similar amount for three
years following his termination of employment if the Company terminates his
employment without cause, Mr. Stroucken terminates his employment for "good
reason" (as defined in the agreement), or his employment terminates on March
31, 2004. The Company will also provide him and/or his spouse with certain
benefits and perquisites during this three-year period. Pursuant to the terms
of his agreement, Mr. Stroucken is prohibited from disclosing confidential
information and engaging in certain activities competitive with H.B. Fuller for
a period following his employment with the Company.
Mr. Stroucken's employment agreement contains provisions which may trigger
a lump sum payment in the event of a change in control of the Company. This
payment is triggered if within one year after a change in control, Mr.
Stroucken terminates his employment or the Company terminates his employment
for any reason (other than cause), or if within three years after a change in
control, the Company terminates Mr. Stroucken's employment without cause, or he
terminates his employment due to a reduction in his position, responsibilities
or compensation from what existed prior to the change of control. The payment
is equal to three times the amount of Mr. Stroucken's base salary plus his
largest annual bonus in any of the three years before the change in control. In
addition, the Company will provide Mr. Stroucken with certain benefits and
perquisites for a three-year
29
period following the termination of employment. In the event that these
payments are subject to any excise tax, the Company will reimburse Mr.
Stroucken for the amount of the excise tax and for any taxes imposed upon such
reimbursement.
Other Executive Officers. The Company has agreements with Mr. Tucker,
Mr. Longstreet and Mr. Koxholt that prohibit disclosure of confidential
information. Mr. Longstreet's and Mr. Koxholt's agreements prohibit each of
them from competing with the Company for a period of time after termination of
employment. In certain circumstance the agreements with Mr. Longstreet and Mr.
Koxholt require the Company to pay the executive during any noncompetition
period the difference between the executive's current monthly income and his
monthly income immediately prior to leaving the Company.
Mr. Koxholt's employment is governed by the terms of an international
service agreement similar to that negotiated with any employee of H.B. Fuller
who undertakes an expatriate assignment (Mr. Koxholt is a German citizen and
employee). In connection with his international assignment, Mr. Koxholt's
agreement with the Company was amended to restrict the Company or Mr. Koxholt
from terminating his employment (except for cause) prior to 2004.
Change in Control Arrangements
H.B. Fuller has a change in control arrangement with each of the executives
listed in the Summary Compensation Table (Mr. Stroucken's arrangement is
described above). The one-year term of these agreements automatically extends
on a daily basis, so that the term continues to be one year, unless H.B. Fuller
gives notice that the term will not be extended. Upon the occurrence of a
change in control of the Company, the term of the agreement is automatically
extended to three years from the date of the change in control. If during this
three-year period, H.B. Fuller terminates the executive's employment for any
reason other than cause or disability, the executive terminates his or her
employment for good reason (as defined in the agreement), or the executive
terminates his or her employment for any reason during the 90-day period
following the first anniversary of the change in control, the executive is
entitled to receive a lump sum payment from H.B. Fuller. The payment is equal
to three times the amount of the executive's annual base salary plus the
executive's largest annual bonus in any of the three years before the change in
control. In addition, the executive is entitled to medical and dental benefits
for a three-year period following the termination of employment and certain
perquisites. H.B. Fuller will adjust the payments and benefits in the event
that they are subject to an excise tax imposed by the Internal Revenue Code and
do not exceed 330% of the executive's base amount. Under these circumstances,
the payments and benefit will be adjusted so that the amount of the payments
equals 299% of the base amount, which is the maximum amount that can be paid
without imposition of an excise tax. In the event that the payments and
benefits are subject to an excise tax and exceed 330% of the executive's base
amount, the Company has agreed to reimburse the executive for the amount of the
excise tax and for any taxes imposed upon the reimbursement.
30
H.B. Fuller has other compensatory arrangements with its executives which
will result from a change in control. H.B. Fuller's Supplemental Executive
Retirement Plan provides that if within three years after a change in control,
H.B. Fuller terminates a participant's employment without cause or the
participant terminates his or her employment for good reason (as defined in
this plan), or if the participant terminates his or her employment for any
reason during the 90-day period following the first anniversary of the change
in control, then five years shall be added to both the participant's age and
years of credited service for purposes of determining benefits under this plan.
If a participant's employment terminates as described above and the participant
is not entitled to a benefit under the supplemental retirement plan, then the
participant will be paid an annual benefit equal to 25% of his or her final
average compensation, regardless of age or years of credited service.
In addition, in the event of a change in control, all shares of restricted
stock, all restricted stock units and any unvested stock options outstanding
under H.B. Fuller's stock incentive plans immediately vest in full.
Executive Stock Purchase Loan Program
In July 2000, the Board of Directors adopted the Executive Stock Purchase
Loan Program. Under the program, H.B. Fuller arranged for U.S. Bank to provide
full-recourse, personal loans to eligible management employees to purchase
shares of H.B. Fuller Common Stock in the open market. Each eligible employee
was allowed to obtain a loan equal to the dollar amount of the participant's
stock ownership goal plus capitalization of interest for the term of the loan.
An executive's stock ownership goal ranges in dollar amount from one to five
times his or her annual salary, depending on the executive's position with H.B.
Fuller. The loans bear interest at the Applicable Federal Rate and mature in
five years, with principal and interest due at that time. The loans are
guaranteed by H.B. Fuller only in the event of the participant's default. The
Company pays the premiums on a term life insurance policy for each participant
in an amount necessary to repay the outstanding loan in the event of the
participant's death. H.B. Fuller also pays the administrative fees and expenses
of the program. During fiscal year 2001, 24 management employees participated
in the program. Borrowing totaled $11,081,243. As of December 1, 2001,
executives listed in the Summary Compensation Table participated in the
Executive Stock Purchase Loan Program as follows:
Loan Amount Shares Purchased
----------- ----------------
Albert P.L. Stroucken.......................... $3,360,499 212,926
Raymond A. Tucker.............................. $ 893,757 55,860
Alan R. Longstreet............................. $ 828,907 52,460
Linda J. Welty................................. $ 812,011 52,000
Peter M. Koxholt............................... $ 516,661 32,738
31
TOTAL SHAREHOLDER RETURN GRAPHS
Shown below are two shareholder return graphs required by SEC rules. The
first graph compares the yearly cumulative total shareholder return on H.B.
Fuller Common Stock with the cumulative total return of Standard & Poor's 500
Composite Stock Index and Standard & Poor's Specialty Chemicals Index. The
second graph compares the yearly cumulative total shareholder return on H.B.
Fuller Common Stock with the cumulative total return of Standard & Poor's
Midcap 400 Index, which includes H.B. Fuller. Both graphs assume an initial
investment of $100 and reinvestment of all dividends.
CUMULATIVE TOTAL RETURN
Based on reinvestment of $100 beginning November 30, 1996
Base INDEXED RETURNS
Period Years Ending
Company/Index Nov96 Nov97 Nov98 Nov99 Nov00 Nov01
- -----------------------------------------------------------------------
FULLER (H.B.) CO 100 105.19 94.80 120.49 78.40 137.34
S&P 500 INDEX 100 128.51 158.92 192.13 184.03 161.38
CHEMICALS
(SPECIALTY)-500 100 111.30 103.12 101.01 96.64 92.05
CUMULATIVE TOTAL RETURN
Based on reinvestment of $100 beginning November 30, 1996
Base INDEXED RETURNS
Period Years Ending
Company/Index Nov96 Nov97 Nov98 Nov99 Nov00 Nov01
- -----------------------------------------------------------------------
FULLER (H.B.) CO 100 105.19 94.80 120.49 76.99 134.87
S&P MIDCAP 400
INDEX 100 127.45 140.71 170.76 197.48 196.64
32
SHAREHOLDER PROPOSALS FOR 2003 ANNUAL MEETING
In order for a shareholder proposal to be considered for inclusion in H.B.
Fuller's proxy statement for the 2003 Annual Meeting, the written proposal must
be received at the principal executive offices of H.B. Fuller by the close of
business on November 8, 2002. The proposal must comply with SEC regulations
regarding the inclusion of shareholder proposals in company-sponsored proxy
materials.
H.B. Fuller's Bylaws provide that a shareholder may present a proposal at
the 2003 Annual Meeting that is not included in the proxy statement if proper
written notice is received by H.B. Fuller's Chief Executive Officer or Chief
Financial Officer at the principal executive offices of H.B. Fuller by the
close of business on November 8, 2002. The proposal must contain the specific
information required by H.B. Fuller's Bylaws. You may obtain a copy of the
Bylaws by writing to the Corporate Secretary of H.B. Fuller.
/s/ Richard C. Baker
Richard C. Baker
Vice President, General Counsel and
Corporate Secretary
Dated: March 8, 2002
33
[SCIENCE MUSEUM MAP]
[H.B. Fuller Company Logo]
Annual Meeting of Shareholders
Thursday, April 18, 2002
2:00 p.m.
Science Museum of Minnesota
120 West Kellogg Boulevard
Saint Paul, Minnesota
IMPORTANT NOTICE
----------------
If you would like to access
the proxy materials electronically
next year, you may do so by
giving your consent at the
following website:
www.econsent.com/full/
- --------------------------------------------------------------------------------
H.B. Fuller Company
[LOGO] P.O. Box 64683
St. Paul, MN 55164-0683 PROXY
- --------------------------------------------------------------------------------
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned, revoking all prior proxies, appoints Albert P.L. Stroucken,
Raymond A. Tucker, and Richard C. Baker, or any one or more of them, as
proxies, with full power of substitution, to represent the undersigned and to
vote, as indicated on the reverse side 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 Shareholders of the Company to be held at the Science
Museum of Minnesota, 120 West Kellogg Boulevard, Saint Paul, Minnesota on
Thursday, April 18, 2002, at 2:00 p.m. and at any adjournment thereof. The
undersigned hereby acknowledges receipt of the Proxy Statement for the Annual
Meeting.
See reverse for voting instructions.
-----------------------
COMPANY #
CONTROL #
-----------------------
There are three ways to vote your Proxy
Your telephone or Internet vote authorizes the Named Proxies to vote your
shares in the same manner as if you marked, signed and returned your proxy
card.
VOTE BY PHONE -- TOLL FREE -- 1-800-240-6326 -- QUICK --- EASY --- IMMEDIATE
o Use any touch-tone telephone to vote your proxy 24 hours a day, 7 days a
week.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above.
o Follow the simple instructions the voice provides you. Deadline for voting
by phone is 11:00 a.m., Central Time, on Wednesday, April 17, 2002.
VOTE BY INTERNET -- www.eproxy.com/full/ -- QUICK --- EASY --- IMMEDIATE
o Use the Internet to vote your proxy 24 hours a day, 7 days a week.
o You will be prompted to enter your 3-digit Company Number and your 7-digit
Control Number which are located above to obtain your records and create an
electronic ballot.
o Follow the simple instructions. Deadline for voting by Internet is 12:00
p.m., Central Time, on Wednesday, April 17, 2002.
VOTE BY MAIL
Mark, sign and date your proxy card and return it in the postage-paid envelope
we've provided or return it to H.B. Fuller Company c/o Shareowner Services(SM),
P.O. Box 64873, St. Paul, MN 55164-0873.
IF YOU VOTE BY PHONE OR INTERNET, PLEASE DO NOT MAIL YOUR PROXY CARD
\|/ Please detach here \|/
The Board of Directors recommends a vote FOR Items 1, 2 and 3
1. Election of directors: 01 J. Michael Losh 03 R. William Van Sant
02 Lee R. Mitau
[_] Vote FOR [_] Vote WITHHELD
all nominees from all nominees
(except as specified below)
(Instructions: To withhold authority to +--------------------------------+
vote for any indicated nominee, write the | |
number(s) of the nominee(s) in the box | |
provided to the right.) +--------------------------------+
2. To ratify the appointment of PricewaterhouseCoopers LLP as the Company's
independent auditors for the fiscal year ending November 30, 2002. [_] For [_] Against [_] Abstain
3. To approve the redemption of all the outstanding shares of Series A
Preferred Stock. [_] For [_] Against [_] Abstain
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED AS DIRECTED OR, IF NO DIRECTION
IS GIVEN, WILL BE VOTED FOR ITEMS 1, 2 AND 3.
Address Change? Mark Box [_]
Indicate changes below:
Date ____________________________________
+---------------------------------------+
| |
| |
+---------------------------------------+
Signature(s) in Box
Please sign exactly as your name(s)
appear on this Proxy. If held in joint
tenancy, all persons must sign. Trustees,
administrators, etc., should include
title and authority. Corporations should
provide full name of corporation and
title of authorized officer signing the
proxy.