- -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended November 30, 1995 Commission File No. 0-3488 H. B. FULLER COMPANY A Minnesota Corporation IRS Employer Identification No. 41-0268370 2400 Energy Park Drive, St. Paul, Minnesota 55108 Telephone - (612) 645-3401 Securities registered pursuant to Section 12(b) of the Act: None Securities registered pursuant to Section 12(g) of the Act: Common Stock (par value of $1.00 per share) Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ____ Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 of 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- As of January 31, 1996, 14,008,156 Common Shares were outstanding and the aggregate market value of the Common Shares held by non-affiliates of the Registrant on that date was approximately $469,276,000. DOCUMENTS INCORPORATED BY REFERENCE Parts I, II and IV incorporate information by reference from the H. B. Fuller Company 1995 Annual Report to Stockholders. Part III incorporates information by reference from the Registrant's Proxy Statement dated March 3, 1996. - -------------------------------------------------------------------------------- -1-
H. B. FULLER COMPANY 1995 Form 10-K Annual Report Table of Contents <TABLE> <CAPTION> Page ---- PART I ------ <S> <C> <C> Item 1. Business 3 Item 2. Properties 6 Item 3. Legal Proceedings 7 Item 4. Submission of Matters to a Vote of Security Holders 11 Executive Officers of the Registrant 12 PART II ------- Item 5. Market for the Registrant's Common Stock and Related Stockholder Matters 13 Item 6. Selected Financial Data 13 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 8. Financial Statements and Supplementary Data 13 Item 9. Change in and Disagreements with Accountants on Accounting and Financial Disclosure 13 PART III -------- Item 10. Directors and Executive Officers of the Registrant 13 Item 11. Executive Compensation 13 Item 12. Security Ownership of Certain Beneficial Owners and Management 13 Item 13. Certain Relationships and Related Transactions 13 PART IV ------- Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K 14 Signatures 17 </TABLE> -2-
PART I Item 1. Business - -------- Founded in 1887 and incorporated as a Minnesota corporation in 1915, H.B. Fuller Company today is a worldwide manufacturer and marketer of adhesives, sealants, coatings, paints and other specialty chemical products. The Company currently employs approximately 6,400 people and has sales operations in 42 countries in North America, Europe, Latin America and the Asia/Pacific region. The Company's largest worldwide business category is adhesives, sealants and coatings, which generated more than 85 percent of 1995 sales. These products, in thousands of formulations, are sold to customers in a wide range of industries, including packaging, woodworking, automotive, aerospace, graphic arts (books/magazines), appliances, filtration, windows, sporting goods, nonwovens, shoes and ceramic tile. H.B. Fuller also is a quality producer and supplier of powder coatings to metal finishing industries; commercial and industrial paints in Latin American markets; specialty waxes in European markets, as well as mastics and coatings for thermal insulation, indoor air quality and asbestos abatement applications and sanitation chemicals to the dairy, beverage and food processing industries in the U.S. Segment Information - ------------------- For financial information relating to major geographic areas of H. B. Fuller, see Note 14, "Business Segment Information", on page 46 of the Company's 1995 Annual Report to Stockholders, incorporated herein by reference. Line of Business and Classes of Similar Products - ------------------------------------------------ The Company is engaged in one line of business, the manufacturing of specialty chemical products which includes formulating, compounding and marketing adhesives, sealants and coatings, paints, sanitizing chemicals, specialty waxes and related chemicals. The following tabulation sets forth information concerning the approximate contribution to consolidated sales of the Company's classes of products: <TABLE> <CAPTION> Class of Product Sales ------------------ 1995 1994 1993 ---- ---- ---- <S> <C> <C> <C> Adhesives, sealants and coatings 87% 86% 84% Paints 7 7 8 Sanitation chemicals 3 3 3 Other 3 4 5 ---- ---- ---- 100% 100% 100% ==== ==== ==== </TABLE> -3-
International Operations - ------------------------ The international business of H. B. Fuller is conducted primarily by subsidiaries manufacturing in countries outside of North America. Wherever feasible, H. B. Fuller's practice has been to establish manufacturing units outside of North America to service the local markets. The principal markets, products and methods of distribution in the international business vary with the country or business practices of the country. The products sold include not only those developed by the local manufacturing plants but also those developed within North America and elsewhere in the world. The Company's operations overseas face varying degrees of economic and political risk. At year-end 1995, the Company had plants in 31 countries outside the United States and satellite sales offices in another ten countries and license agreements used to maintain a worldwide manufacturing network. In the opinion of management, there are several countries where the Company has operating facilities which have political risks higher than in North America. Where possible, the Company insures its physical assets against damage from civil unrest. Competition - ----------- The Company encounters a high degree of competition in the marketing of its products. Because of the large number and variety of its products, the Company does not compete directly with any one competitor in all of its markets. The Company competes with several large firms as well as many smaller local, independent firms. In North America there are a large number of competitors. Since adhesives of all types are widely used, it is not possible to identify a few competitors who would represent the major competition. In Latin America, the Company experiences substantial competition in marketing its plastics, printing inks and industrial adhesives. In Central America, it is a major factor in the industrial adhesives market and, along with several other large paint manufacturing firms, in the residential paint market. In Europe, the Company is a large manufacturer of adhesives and specialty waxes and competes in certain areas of this market with several large companies. The principal competitive factors in the sale of adhesives, paints, coatings and sealants are product performance, customer and technical service, quality, and price. Customers - --------- Of the Company's $1,243,818,000 total sales to unaffiliated customers in 1995, $692,099,000 was sold through North American operations. The Company's largest customer accounts for less than 4% of consolidated sales. Backlog - ------- Orders for the Company's products are generally processed within one week. Therefore, the Company had no significant backlog of unfilled orders at November 30, 1995, 1994 or 1993. -4-
Raw Materials - ------------- The Company purchases from large chemical suppliers raw materials including solvents, plasticizers, waxes, resins, polymers and vinyl acetate monomer which the Company uses to manufacture its principal products. Natural raw materials are also purchased from outside suppliers and include starch, dextrines, natural latex and resins. The Company attempts to find multiple sources for all of its raw materials and alternate sources of supply are generally available. An adequate supply of the raw materials used by the Company is presently available in the open market. The Company's Latin American operations import many of their raw materials. Extended delivery schedules of these materials are common, thereby requiring maintenance of higher inventory levels than those maintained in North America and Europe. A significant portion of the Company's raw materials are derived from petroleum- based products and this is common to all adhesive manufacturers. The Company is not a large consumer of energy and, therefore, has not experienced any difficulties in obtaining energy for its manufacturing operations. It anticipates it will be able to obtain needed energy supplies in the future. Patents, Trademarks and Licenses - -------------------------------- Much of the technology used in the manufacturing of adhesives, coatings and other specialty chemicals is in the public domain. To the extent that it is not, the Company relies on trade secrets and patents to protect its know-how. The Company has agreements with many of its employees for the purpose of protecting the Company's rights to technology and intellectual property. The Company also routinely obtains confidentiality commitments from customers, suppliers and others to safeguard its proprietary information. Company trademarks such as HB Fuller(R), Kativo(R), Rakoll(R), and Monarch(R) are of continuing importance in marketing its products. Research and Development - ------------------------ The Company conducts research and development activities in an effort to improve existing products and to design new products and processes. The Company's research and development expenses during 1995, 1994 and 1993 aggregated $26,541,000, $23,624,000, and $21,826,000, respectively. Environmental - ------------- The Company regularly reviews and upgrades its environmental policies, practices and procedures and seeks improved production methods that reduce waste, particularly toxic waste, coming out of its facilities, based upon evolving societal standards and increased environmental understanding. The Company's high standards of environmental consciousness are supported by an organizational program supervised by environmental professionals and the Worldwide Environment, Health and Safety Committee, a committee with management membership from around the world which proactively monitors practices at all facilities. Company practices are often more stringent than local government standards. The Company integrates environmental programs into operating objectives, thereby translating philosophy into every day practice. The Company believes that as a general matter its current policies, practices and procedures in the areas of environmental regulations and the handling of hazardous waste are designed to substantially reduce risks of -5-
environmental and other damage that would result in litigation and financial liability. Some risk of environmental and other damage is, however, inherent in particular operations and products of the Company, as it is with other companies engaged in similar businesses. The Company is and has been engaged in the handling, manufacture, use, sale and/or disposal of substances, some of which are considered by federal or state environmental agencies to be hazardous. The Company believes that its manufacture, handling, use, sale and disposal of such substances are generally in accord with current applicable environmental regulations. Increasingly strict environmental laws, standards, and enforcement policies may increase the risk of liability and compliance costs associated with such substances. Environmental expenditures, reasonably known to management, to comply with environmental regulations over the Company's next two fiscal years are estimated to be approximately $11.0 million. The effects of compliance with environmental laws and regulations are not expected to be material to the Company's consolidated capital expenditures, earnings, or competitive position. See additional disclosure under Item 3, Legal Proceedings. Employees - --------- H. B. Fuller Company and consolidated subsidiaries employed approximately 6,400 persons on November 30, 1995, of which approximately 2,400 persons were employed in the United States. Item 2. Properties - ---------- The principal manufacturing plants and other properties are located in 32 countries: U.S. Locations -------------- California Michigan Los Angeles (1 owned, 1 leased) Grand Rapids Roseville Warren (1 owned, 1 leased) Tulare Minnesota Florida Minneapolis and St. Paul Gainesville (7 owned, 1 leased) Pompano Beach New Jersey - Edison Georgia (1 owned, 1 leased) Conyers* New York - Geneva Covington North Carolina Forest Park Greensboro Tucker Charlotte* Illinois Ohio Palatine Cincinnati* Tinley Park Dayton Indiana - Elkhart Oregon - Portland Kansas - Kansas City Tennessee - Memphis* Kentucky - Paducah Texas Maryland - Baltimore Dallas Massachusetts Fort Worth Marlboro* Houston Wilmington Washington - Vancouver *Leased properties -6-
Other Locations --------------- <TABLE> <CAPTION> <S> <C> Argentina - Buenos Aires Honduras Australia San Pedro Sula (2 owned) Melbourne Tegucigalpa Sydney* Italy - Borgolavezzaro Austria - Wels Japan - Hamamatsu Brazil - Sao Paulo Mexico - Mexico City* Canada Netherlands - Amerongen St. Andre est New Zealand - Auckland (2 owned) Montreal Nicaragua - Managua Toronto People's Republic of Chile - Santiago China - Guangzhou* Colombia - Itagui* Peru - Lima Costa Rica - San Jose (6 owned) Philippines - Manila* Dominican Republic - Santo Domingo Puerto Rico - Bayamon Ecuador - Guayaquil (2 owned) Republic of Panama - Panama City El Salvador - San Salvador (1 owned, 1 leased) (2 owned, 1 leased) Federal Republic of Germany Spain - Alicante Luneburg Switzerland - Basel* Munich* Taiwan - Taipei Nienburg* United Kingdom France - Le Trait Birmingham* Guatemala - Guatemala City (2 leased) Derbyshire* Venezuela - Caracas </TABLE> *Leased properties The Company's principal executive offices and central research facilities are Company owned and located in the St. Paul, Minnesota metropolitan area. The Company has facilities for the manufacture of various products with total floor space of approximately 1,683,000 square feet, including 183,000 square feet of leased space. In addition, the Company has approximately 2,105,000 square feet of warehouse, including 371,000 square feet of leased space. Offices and other facilities total 1,784,000 square feet, including 446,000 square feet of leased space. The Company believes that the properties owned or leased are suitable and adequate for its business. Item 3. Legal Proceedings. - ----------------- ENVIRONMENTAL REMEDIATION. - ------------------------- The Company currently is deemed a potentially responsible party ("PRP"), in conjunction with numerous other parties, in a number of government enforcement and private actions associated with hazardous waste sites ("Sites"). As a PRP or defendant, the Company may be required to pay a share of the cost of investigation and cleanup of these Sites. In some cases, the Company may have rights of indemnification from other parties. The Company's future liability for such claims is difficult to predict because of uncertainty as to the cost of investigation and cleanup of the Sites, the Company's responsibility for such hazardous wastes and the number or financial condition of other PRPs or defendants. Reserves for future liabilities at the Sites are established as soon as an estimate of potential cleanup costs and allocation can be determined. The reserves are reviewed and revised quarterly in light of currently available technical and legal information. -7-
Based upon such available information, it is the Company's opinion that these environmental claims will not result in material liability to the Company. Following is a list of Sites where the Company has or expects to have more than a de minimis share of liability for remedial investigation and/or remediation costs or which are too new to make an assessment. The expected or anticipated costs for these Sites are included in the current reserves of the Company. HELEN KRAMER, MANTUA, NEW JERSEY. ---------------------------------- The Company is named as a third-party defendant by both the EPA and the New Jersey EPA for remediation at this Federal Superfund Site. Currently, the Company is participating in an allocation process for third-party generators. An outside waste accountant has found no evidence of any of the Company's waste at the Site. Negotiations for a settlement proposal between third-party defendants and the EPA continue. Because the waste accountant has found no evidence that any Company waste was disposed of at the Site, the Company does not believe that any liability allocated to it will materially affect its business or financial condition. GLOUCESTER ENVIRONMENTAL MANAGEMENT SERVICES, INC., GLOUCESTER TOWNSHIP., ------------------------------------------------------------------------- NEW JERSEY. ---------- The Company has received notice from the EPA that it may be a PRP at this landfill. The New Jersey EPA served the Company with a complaint and named Paisley Products, Inc., from which the Company acquired certain assets, as the PRP. The predecessor in interest has agreed to indemnify and hold the Company harmless pursuant to the asset purchase agreement. The Company has paid approximately $149,000 as its portion of the allocation for the time period that the Company operated the acquired facility. It is estimated that the Company has a remaining contribution of approximately $20,000 for future cleanup costs. WAUCONDA SAND & GRAVEL, WAUCONDA, ILLINOIS. ------------------------------------------ The Company and other PRPs signed a consent decree with the EPA that provides for payment of remedial work at this Site. The Company has paid assessments of approximately $440,000. The Company believes that any future costs will be minimal, and will not materially affect its business or financial condition. BAY DRUMS, TAMPA, FLORIDA. ------------------------- The Company has been identified as a PRP at this Site. The Company has joined a PRP Group which has retained an outside waste accountant for allocating cleanup costs amongst the PRPs. The Company is allocated 175 drums or .673% of the Group's total. Based on this allocation, the Company's estimated share is approximately $47,188. While the allocation may change due to the ability or willingness of additional PRPs to share in the cleanup costs, the Company believes that its final cost will be minimal, and will not materially affect its business or financial condition. -8-
SEABOARD CHEMICAL, JAMESTOWN, NORTH CAROLINA. -------------------------------------------- In September of 1991, the Company's Pompano Beach, Florida and Covington, Georgia facilities were identified as having contributed 40,590 pounds of waste to the Site. The Company joined a PRP and de minimis Group and signed the Consent Order and the Buy-Out Agreement for the Phase I remediation. The North Carolina Department of Natural Resources asserts that additional response costs are necessary to complete the remediation of the Site. Because of its de minimis status, the Company believes that any future costs will be minimal, and will not materially affect its business or financial condition. SOLVENTS RECOVERY SERVICES, SOUTHINGTON, CONNECTICUT. ---------------------------------------------------- The Company has been named a PRP (ranked 325 out of 885) as a result of allegedly generating 12,240 gallons of hazardous waste disposed of through Solvents Recovery Service. The Company at issue was acquired from the Terrell Corp. in July, 1986. The EPA offered a de minimis settlement to PRPs who have been allocated less than 10,000 gallons at the Site. The Company accepted the de minimis settlement and paid $61,635.89 for a full and final settlement of this Site. The EPA subsequently rejected the Company as a de minimis party. The Company has requested the EPA to clarify its status, and objected to the EPA's determination that the Company is not a de minimis party. Although the Company's allocation may change due to the ability or willingness of additional PRPs to share in the cleanup costs, the Company believes that its future costs will be minimal, and will not materially affect its business or financial condition. SUNRISE, WAYLAND, MICHIGAN. -------------------------- The Company has received a notice of demand for payment and response activities from the Michigan Department of Natural Resources ("DNR") requesting that the Company participate in the cleanup of the Sunrise Landfill. At this time, the DNR has estimated that clean-up may cost in excess of $17 million. The Company has joined a PRP Group, which has submitted a good faith proposal to the DNR for a Remedial Investigation and Feasibility Study, the cost of which is expected to range from $337,000 to $471,000. In addition, the State has incurred $3,744,744 in response costs to date. The Company has paid $30,000 for a remedial investigation. It is expected that numerous additional PRPs will be located to participate in these costs, as well as final remediation. Because of the participation of other financially viable PRPs, it is the Company's opinion that its future costs will not materially affect its business or financial condition. WASTE OIL TANK SERVICE, HOUSTON, TEXAS. -------------------------------------- The Texas Water Commission ("Commission") notified the Company that it is a PRP at the Waste Oil Tank Service Site. The Site was used as a waste oil and collection facility from 1975 to 1984, and has been included on the State's Superfund registry. Although the Site is relatively small, approximately 1/2 acre, it has a high priority for cleanup by the Commission because its investigation has shown hydrocarbon and heavy metal contamination in the soil and surface water. The Commission's investigation indicated that on one occasion in April of 1982, one of the Company's facilities arranged for 2,600 gallons of hazardous waste to be disposed of at the Site. The Company has joined a PRP Group which has submitted a good faith proposal to the Commission for a Remedial Investigation and Feasibility Study, the cost of which may range from $105,000 to $236,000. Because of the participation of numerous other financially -9-
viable PRPs, it is the Company's opinion that its allocation at this Site will not materially affect its business or financial condition. SCHNITZER IRON & METAL, ST. PAUL, MINNESOTA. ------------------------------------------- The Company recently received a Request for Information from the Minnesota Pollution Control Agency with respect to the Company's use of this Site. Records indicate that the Company disposed of a small amount of material at this Site on two occasions in the early-1980's. Because of the Company's limited use of this Site, it is the Company's opinion that any future costs at this Site will be minimal, and will not materially affect its business or financial condition. ARCHEM COMPANY, HOUSTON, TEXAS. ------------------------------ The Company has received notice from the Texas Water Commission that it is a PRP concerning remediation of the ArChem property in Houston, Texas. The Company acquired the property in June of 1976, and in 1978, the property was sold. The Commission's focus is on the companies that sent chemicals to the Site pursuant to tolling agreements or otherwise had specialty products manufactured by ArChem. The materials at issue were not generated by or attributable to the Company. Because of an indemnification agreement with a financially able indemnitor, and because the materials at issue were not generated by the Company, it is the Company's opinion that this Site will not have a material affect on the Company's business or financial condition. OTHER ENVIRONMENTAL MATTERS PREVIOUSLY DISCLOSED. - ------------------------------------------------ In 1994, the Minnesota Legislature enacted the Landfill Cleanup Act (the "Act") whereby potentially responsible parties ("PRP") that have expended funds for remediation at a Minnesota landfill may forego any future obligations for remediation and obtain reimbursement for remedial expenses incurred in exchange for a waiver of claims through participation in the Landfill Cleanup Program. The Company has applied for participation in this Program, through each Sites' respective PRP Group, for the following three Sites previously reported. EAST BETHEL LANDFILL, EAST BETHEL, MINNESOTA. -------------------------------------------- The Company was a defendant in a private cost recovery action brought by the owners and operators of the landfill, designated as a Federal Superfund Site. The defendants entered into a settlement with the plaintiffs. The Company has paid approximately $194,000 for its share of allocated cleanup costs. The Company, through the PRP Group at the Site, has applied for participation in Minnesota's Landfill Cleanup Program. The State has indicated that this Site qualifies for participation in the Program, and the Company expects that any further remediation and management of this Site has been assigned to the State. Accordingly, the Company has no further remediation liability at this Site. OAK GROVE LANDFILL, OAK GROVE, MINNESOTA. ---------------------------------------- The Company and other defendants have signed a consent decree with the EPA that provides for the implementation of remedial work at this Federal Superfund Site. The Company has paid approximately $128,000 as its portion of the cleanup cost. The Company, through the PRP Group at the Site, has applied for participation in Minnesota's Landfill Cleanup Program. The State has indicated that this Site qualifies for participation in the Program, and the Company expects that any further remediation and management of -10-
this Site will be assigned to the State in the near future. Accordingly, the Company does not believe that it will incur any further costs at this Site. WASTE DISPOSAL ENGINEERING, ANDOVER, MINNESOTA. ---------------------------------------------- The Company and other PRPs signed a consent decree with the Environmental Protection Agency ("EPA") that provides for payment of remedial work at the Site. The Company has paid assessments of approximately $84,000 for the remedial work. The Company, through the PRP Group at the Site, has applied for participation in Minnesota's Landfill Cleanup Program. The State has indicated that this Site qualifies for participation in the Program, and the Company expects that any further remediation and management of this Site has been assigned to the State. Accordingly, the Company has no further remediation liability at this Site. OTHER LEGAL PROCEEDINGS. - ----------------------- On August 30, 1995, the Company was named one of 94 defendants, including numerous other chemical companies, in a purported class action filed in Federal District Court for the District of Texas on behalf of approximately 114 plaintiffs that worked at the Army Depot in Corpus Christi, Texas. The plaintiffs seek $100 million in compensatory damages and $400 million in punitive damages for injuries allegedly resulting from exposure to various chemicals manufactured by the 94 defendants. On January 4, 1996, Ruth Linares Polanco filed a wrongful death action against the Company and two Central American subsidiaries in Federal District Court for the District of Minnesota. The plaintiff subsequently amended the complaint, dropping the two subsidiaries as defendants. The plaintiff alleges that her brother abused a solvent-based adhesive manufactured by the Company by inhaling fumes from the adhesive, and that the Company is substantially responsible for his death. The plaintiff seeks damages in excess of $50,000. The Company has filed a motion to dismiss the lawsuit on a number of legal grounds, including forum nonconveniens. The Company also has filed an answer to the plaintiff's complaint denying all liability. As with other types of litigation and proceedings to which the Company is a party, based upon currently available information, it is the Company's opinion that none of the matters will result in material liability to the Company. Item 4. Submission of Matters to a Vote of Security Holders - --------------------------------------------------- Not applicable. -11-
Executive Officers of the Registrant - ------------------------------------ The executive officers of the Company as of November 30, 1995, their ages and current offices are set forth below: <TABLE> <CAPTION> Name Age Position Period Served - ---- --- -------- ------------- <S> <C> <C> <C> Anthony L. Andersen 59 Chair, Board of Directors Since 1992 Director Since 1966 Walter Kissling 64 President Since 1992 Chief Executive Officer Since 1995 Director Since 1968 John T. Ray, Jr. 58 Senior Vice President Since 1984 Richard C. Johnson 66 Senior Vice President Since 1992 Chief Administrative Officer Since 1992 Wolfgang Weber 56 Senior Vice President Since 1992 Jorge Walter Bolanos 51 Chief Financial Officer and Treasurer Since 1992 Senior Vice President Since 1995 Lars T. Carlson 57 Vice President Since 1986 Sarah R. Coffin 43 Vice President Since 1994 Antonio Lobo 52 Vice President Since 1989 Rolf Schubert 57 Vice President Since 1982 Director Since 1972 Jerald L. Scott 54 Vice President Since 1980 David J. Maki 54 Vice President Since 1990 Controller Since 1987 Richard C. Baker 43 Vice President Since 1993 Corporate Secretary Since 1995 General Counsel Since 1990 </TABLE> Officers are elected by the Board of Directors or appointed by the Chief Executive Officer. Each of the Company's officers has served in various capacities with the Company for more than five years, except Sarah R. Coffin. Sarah R. Coffin joined the Company and was named Vice President/Specialty Group Manager in 1994. In her most recent position prior to joining the Company, Ms. Coffin served as Managing Director, Specialty Chemicals, General Electric Plastics, a position she had held since 1991. Prior to that she had been General Manager, Polymerland, Inc., a subsidiary of the General Electric Company. -12-
PART II Information for Items 5 through 8 of this report appear in the 1995 H. B. Fuller Company Annual Report to Stockholders as indicated on the following table and are incorporated by reference to this Report: <TABLE> <CAPTION> Annual Report to Stockholders Item Page ---- --------------- <S> <C> Item 5. Market for Registrant's Common Stock and Related Stockholder Matters Trading Market 52 High and Low Market Value 52 Dividend Payments 52 Dividend Restrictions (Note 13) 44-45 Holders of Common Stock 53 Item 6. Selected Financial Data 1969 - 1995 in Review and Selected Financial Data 50-51 Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations Management's Analysis of Results of Operations and Financial Condition 29-32 Item 8. Financial Statements and Supplementary Data Consolidated Financial Statements 33-46 Quarterly Data (Unaudited)(Note 15) 47 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None </TABLE> PART III Items 10, 11, 12 and 13. Directors and Executive Officers of the Registrant; Executive Compensation; Security Ownership of Certain Beneficial Owners and Management; and Certain Relationships and Related Transactions The information required by these Items other than the information set forth in Part I, "Executive Officers of the Registrant", is omitted because the Company will file within 120 days after the close of the Company's last fiscal year a definitive proxy statement pursuant to Regulation 14A, which information, other than the sections entitled "Compensation Committee Report on Executive Compensation" and "Shareholder Return Performance Presentation" contained therein, is herein incorporated by reference as if set out in full. -13-
PART IV Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K <TABLE> <CAPTION> Reference -------------------------------- Form 10-K Annual Report Annual Report to Stockholders Page Page ------------- --------------- <S> <C> <C> (a)(1.) Index to Consolidated Financial Statements Incorporated by Reference to the 1995 Annual Report to Stockholders of H. B. Fuller Company: Consolidated Statements of Earnings for the Three Years Ended November 30, 1995 33 Consolidated Balance Sheets as of November 30, 1995 and 1994 34 Consolidated Statements of Stockholders' Equity for the Three Years Ended November 30, 1995 35 Consolidated Statements of Cash Flows for the Three Years Ended November 30, 1995 36 Notes to Consolidated Financial Statements 37-47 Report of Independent Accountants 49 (a)(2.) Index to Consolidated Financial Statement Schedules for the Three Years Ended November 30, 1995: Auditors' Report on Financial Statement Schedules 18 Schedule II Valuation and Qualifying Accounts 19 </TABLE> All other financial statement schedules are omitted as the required information is inapplicable or the information is given in the financial statements or related notes. -14-
(a)(3.) Exhibits Exhibit Number 3(a) Restated Articles of Incorporation - incorporated by reference to Exhibit 3(a) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1992. 3(b) By-Laws of H.B. Fuller Company - as amended to date. 4(a) Amended and Restated Shareholder Rights Plan - incorporated by reference to Exhibit 4(a) to the Registrant's Registration Statement on Form 8-A (Commission File No. 1-9225). 4(b) Restated Articles of Incorporation referring to rights of security holders, Articles III, VII - incorporated by reference to Exhibit 4(b) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1992. 4(c) Specimen Stock Certificate. *10(a) H.B. Fuller Company 1992 Stock Incentive Plan - incorporated by reference to Exhibit 10(a) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1992. *10(b) H.B. Fuller Company Restricted Stock Plan - incorporated by reference to Exhibit 10(c) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1993. *10(c) H.B. Fuller Company Restricted Stock Unit Plan - incorporated by reference to Exhibit 10(d) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1993. *10(d) Director's Stock Plan - incorporated by reference to Exhibit 10(d) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1994. *10(e) H.B. Fuller Company 1987 Stock Incentive Plan - incorporated by reference to Exhibit 4(a) to the Registrant's Registration Statement on Form S-8 (Commission File No. 33-16082). *10(f) H.B. Fuller Company Incentive Stock Option Plan of 1982 - incorporated by reference to the Registrant's Registration Statement on Form S-8 (Commission File No. 2-89810). *10(g) H.B. Fuller Company Nonqualified Retirement Plan for Costa Rica - incorporated by reference to Exhibit 10(f) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1988 (Commission File No. 0-3488). *10(h) Form of Employment Agreement signed by executive officers and certain other employees - incorporated by reference to Exhibit 10(e) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1990. *10(i) Managing Director Agreement with Wolfgang Weber signed March 23, 1990 - incorporated by reference to Exhibit 10(f) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1990. -15-
(a)(3.) Exhibits (continued) *10(j) Supplement Agreement, dated March 10, 1993, to Managing Director Agreement with Wolfgang Weber - incorporated by reference to Exhibit 10(k) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1993. *10(k) Supplemental Agreement to Managing Director Agreement with Wolfgang Weber and Supplement Agreement. *10(l) H.B. Fuller GmbH Pension Plan (summary of plan in English) - incorporated by reference to Exhibit 10(g) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1990. *10(m) H.B. Fuller Company Supplemental Executive Retirement Plan - incorporated by reference to Exhibit 10(j) to the Registrant's Annual Report on Form 10-K for the year ended November 30, 1992. *10(n) Deferred Compensation Agreement with Walter Kissling - incorporated by reference to Exhibit 10(m) to the Registrant's Annual Report on Form 10-K405 for the year ended November 30, 1994. *10(o) Retirement Plan for Directors of H.B. Fuller Company - incorporated by reference to Exhibit 10(n) to the Registrant's Annual Report on Form 10-K405 for the year ended November 30, 1994. *10(p) Performance Units Plan as of January 17, 1995. *Asterisked items are management contracts or compensatory plans or arrangements required to be filed as an exhibit pursuant to Item 14(a) of this Form 10-K. 11 Statement re: Computation of Net Earnings Per Common Share 13 Pages 29-53 of the 1995 Annual Report to Shareholders. 21 Subsidiaries of the Registrant 23 Consent of Price Waterhouse LLP 24 Manually signed Powers of Attorney 27 Financial Data Schedule 99 Report on Form 11-K of H.B. Fuller Company Thrift Plan (b) Reports on Form 8-K No reports on Form 8-K were filed during the fourth quarter of the fiscal year ended November 30, 1995. -16-
S I G N A T U R E S ------------------- Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. H. B. FULLER COMPANY Dated: February 23, 1996 By /s/ Walter Kissling ------------------------------- WALTER KISSLING President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated: Signature Title --------- ----- /s/ Walter Kissling President and - ----------------------------- Chief Executive Officer and Director WALTER KISSLING (Principal Executive Officer) /s/ Jorge Walter Bolanos Senior Vice President, - ----------------------------- Chief Financial Officer and Treasurer JORGE WALTER BOLANOS (Principal Financial Officer) /s/ David J. Maki Vice President and Controller - ----------------------------- (Principal Accounting Officer) DAVID J. MAKI *ANTHONY L. ANDERSEN Chair, Board of Directors and Director *NORBERT R. BERG Director *EDWARD L. BRONSTIEN, JR. Director *ROBERT J. CARLSON Director *FREEMAN A. FORD Director *GAIL D. FOSLER Director *REATHA CLARK KING Director *JOHN J. MAURIEL, JR. Director *ROLF SCHUBERT Vice President and Director *LORNE C. WEBSTER Director By: /s/ Richard C. Baker Dated: February 23, 1996 -------------------------- RICHARD C. BAKER Attorney in Fact *Power of Attorney filed with this report as Exhibit 24 hereto. -17-
Price Waterhouse LLP REPORT OF INDEPENDENT ACCOUNTANTS --------------------------------- To the Board of Directors and Stockholders of H.B. Fuller Company In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of earnings, of stockholders' equity and of cash flows present fairly, in all material respects, the financial position of H.B. Fuller Company and its subsidiaries at November 30, 1995 and 1994, and the results of their operations and their cash flows for each of the three years in the period ended November 30, 1995, in conformity with generally accepted accounting principles. These financial statements are the responsibility of the Company's management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with generally accepted auditing standards which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for the opinion expressed above. As discussed in Notes 1 and 6 to the consolidated financial statements, the Company adopted the provisions of Statement of Financial Accounting Standards (SFAS) No. 112, "Employers' Accounting for Postemployment Benefits," in 1995 and the provisions of SFAS No. 109, "Accounting for Income Taxes," and No. 106, "Employers' Accounting for Postretirement Benefits Other Than Pensions," in 1993. /s/ Price Waterhouse LLP Price Waterhouse LLP Minneapolis, Minnesota January 9, 1996
Schedule II ----------- H.B. Fuller Company and Consolidated Subsidiaries Valuation and Qualifying Accounts Years Ended November 30, 1995, 1994, and 1993 (Dollars in thousands) <TABLE> <CAPTION> Allowance for doubtful receivables ------------------------------------------ 1995 1994 1993 ------ ------ ------ <S> <C> <C> <C> Balance at beginning of period $6,221 $5,519 $5,451 Additions(deductions): Charged to costs and expenses 1,954 1,391 1,740 Accounts charged off during year (2,073) (1,091) (1,409) Accounts of acquired businesses - 288 57 Effect of currency exchange rate changes on beginning of year balance 154 114 (320) ------ ------ ------ Balance at end of period $6,256 $6,221 $5,519 ====== ====== ====== </TABLE> -19-