FULLER H B CO (Form: 8-K, Received: 07/14/2015 15:26:20)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

Current Report

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): July 9, 2015

H.B. FULLER COMPANY

(Exact name of registrant as specified in its charter)

Minnesota

001-09225

41-0268370

(State or other jurisdiction

of incorporation)

(Commission

file number)

(I.R.S. Employer

Identification No.)

1200 Willow Lake Boulevard

P.O. Box 64683

St. Paul, MN 55164-0683

(Address of principal executive offices, including zip code)

(651) 236-5900

(Registrant’s telephone number, including area code)

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On July 9, 2015, the Compensation Committee of the Board of Directors of H.B. Fuller Company (the “Company”) approved changes to the design of the H.B. Fuller Company Management Short-Term Incentive Plan (the “STIP”) applicable to certain executive officers as attached to this Current Report on Form 8-K as Exhibit 10.1. The changes made include:

(a)

The addition of metrics for a new position titled “VP, Sr Emerging Markets” including EPS, Emerging Markets Organic Revenue, Emerging Markets Contribution Margin, Hygiene Revenue and Hygiene Gross Margin; and

(b)

The clarification of metrics for two positions with changed responsibilities:

VP, Sr, Americas Adhesives to include Construction Products Organic Revenue and Construction Products Operating Income;

VP, Sr, Market Development to remove Construction Products Organic Revenue and Construction Products EBITDA and to include H.B. Fuller Operating Income.

The changes to the STIP will be effective for any short-term incentive awards related to the Company’s 2015 fiscal year (or portion thereof, as applicable) and thereafter. The STIP provides an annual performance-based cash incentive opportunity for eligible employees. In general, the STIP design is based on financial metrics. The metrics will vary based on position and will generally include (i) operating income, (ii) organic revenue and (iii) earnings per share. Each metric will have a target level of performance. Threshold, superior, and superior stretch performance levels will be set for each metric. Payout will be determined for each metric based on performance relative to target. The target, threshold, superior and superior stretch levels of performance will be established at the beginning of each fiscal year. The foregoing description is qualified in its entirety by reference to the STIP, a copy of which is filed as Exhibit 10.1 to this Current Report on Form 8-K and is incorporated herein by reference.

Item 9.01.

Financial Statements and Exhibits.

(d)

Exhibits.


10.1		H.B. Fuller Management Short-Term Incentive – Executive Officers

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.

Date: July 14, 2015


H.B. FULLER COMPANY

By:		/s/ Timothy J. Keenan
		Timothy J. Keenan
		Vice President, General Counsel and Corporate Secretary

EXHIBIT INDEX


Exhibit No.		Description

10.1		H.B. Fuller Management Short-Term Incentive – Executive Officers

Exhibit 10.1



				Rewards - Compensation
				Management Short-Term Incentive –
				Executive Officers
				(STI) Plan


Purpose	The STI plan provides an annual performance-based cash bonus opportunity for eligible employees. This is intended to achieve a number of goals including:

	•	Emphasizing the Company’s commitment to competitive compensation practices;

	•	Driving a high performance culture;

	•	Assuring accountability;

	•	Focusing on results, not activity; and

	•	Reinforcing the importance of measurable and aligned goals and objectives.

Eligibility	These guidelines apply to Executive Officers. To receive payment under the STI Plan, the participant must be actively employed as of fiscal year-end.

Plan Design	The plan design is based on the following financial metrics.

	•	Operating Income/EBITDA

	•	Organic Revenue

	•	Earnings Per Share

	•	Gross Margin

	•	Contribution Margin

	Each participant’s plan design will be based on the participant’s position. Details of the design are as follows:

	•	Region Standard


Metric & Weighting Per Metric
EPS	Region Organic Revenue	Region Operating Income ($)
30%	30%	40%


		•		Corporate/Global


Metric & Weighting Per Metric
EPS	HBF Organic Revenue	HBF Operating Income ($)
30%	30%	40%

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				Rewards - Compensation
				Management Short-Term Incentive –
				Executive Officers
				(STI) Plan


		•		VP Sr, Emerging Markets


Metric & Weighting Per Metric
EPS	Emerging Markets Organic Revenue	Emerging Markets Contribution Margin	Hygiene Revenue	Hygiene Gross Margin
30%	20%	20%	15%	15%


		•		VP Sr, Americas Adhesives


Metric & Weighting Per Metric
EPS	Americas Adhesives + Construction Products Organic Revenue	Americas Adhesives + Construction Products Operating Income	Packaging Revenue	Packaging Gross Margin
30%	20%	20%	15%	15%


		•		VP Sr, Market Development


Metric & Weighting Per Metric
EPS	HBF Operating Income	Durable Assembly Revenue	Durable Assembly Gross Margin
30%	20%	25%	25%


Target

•	Each metric will have a target level of performance. Payout will be determined for each metric based on performance relative to target. The target levels of performance will be established at the beginning of each fiscal year.

Threshold

•	Threshold performance levels will be established for each metric as follows:

	•	Sales, Organic Revenue: 90% of target

	•	Operating Income/EBITDA: 80% of target

	•	EPS: 80% of target

	•	Gross Margin, Contribution Margin: 80% of target

•	Payout at the threshold level of performance will be 50% of the target allocated to that metric.

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				Rewards - Compensation
				Management Short-Term Incentive –
				Executive Officers
				(STI) Plan



Superior

•	Superior performance levels will be established for each metric as follows:

	•	Sales, Organic Revenue: 110% of target

	•	Operating Income/EBITDA: 115% of target

	•	EPS: 115% of target

	•	Gross Margin, Contribution Margin: 115% of target

•	Payout at the superior level of performance will be 150% of the target allocated to that metric.



Superior Stretch Goal – Executive Committee

•	Additional superior goals will be established for metrics for the EC members as follows:

	•	Organic Revenue: 115% of target

	•	Operating Income/EBITDA: 125% of target

	•	EPS: 125% of target

	•	Gross Margin, Contribution Margin: 125% of target

•	Payout at the superior stretch goal will be 200% of the target allocated to that metric


		See Appendix for payout schedule.

Payment		Payment will be made in cash, subject to taxes and deductions as applicable. Payment will be made as close as possible to January 31 following the conclusion of the relevant Plan Year, but will be made no later than March 15 ^th of the calendar year following the Plan Year.

Participant Status Changes		If a participant begins employment with the company during the Plan Year, bonus potential will be pro-rated for the time the participant was employed during the Plan Year. If a participant transfers jobs and changes plan design standards, potential bonus will be pro-rated for the time spent in each job.

Administration		Participants may direct questions about the STI Plan to their local management or human resources representatives. The Compensation Committee of the Board of Directors shall make a certification decision with respect to performance of financial metrics and consider extraordinary circumstances that may have positively or negatively impacted the achievement of the objectives. The Board or management in their discretion, reserves the right at any time to enhance, diminish or terminate all or any portion of any compensation plan or program, on a collective or individual basis.

Relevant Terms		Actively Employed - A full-time or part-time employee on the Company payroll. It excludes any employee who has been terminated from employment with the Company – voluntarily or involuntarily – in advance of fiscal year-end. Company - H.B. Fuller Company and its wholly owned subsidiaries.

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				Rewards - Compensation
				Management Short-Term Incentive –
				Executive Officers
				(STI) Plan

Eligible Earnings – To be determined by region/country.

Payment - The cash reward payable after conclusion of the Plan Year.

Plan Year – The relevant Company fiscal year.

Short Term Incentive (STI) Plan - The program described herein. May also be referred to as “STIP” or “STI Plan”.

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				Rewards - Compensation
				Management Short-Term Incentive –
				Executive Officers
				(STI) Plan

Appendix


*STIP Payment Schedule for* *EPS, Operating Income/EBITDA,* *Gross Margin, Contribution Margin*

Metric Performance		Payout (as % of target)
125%		200.0%
124%		195.0%
123%		190.0%
122%		185.0%
121%		180.0%
120%		175.0%
119%		170.0%
118%		165.0%
117%		160.0%
116%		155.0%
115%		150.0%*
114%		146.7%
113%		143.3%
112%		140.0%
111%		136.7%
110%		133.3%
109%		130.0%
108%		126.7%
107%		123.3%
106%		120.0%
105%		116.7%
104%		113.3%
103%		110.0%
102%		106.7%
101%		103.3%
100%		100.0%
99%		97.5%
98%		95.0%
97%		92.5%
96%		90.0%
95%		87.5%
94%		85.0%
93%		82.5%
92%		80.0%
91%		77.5%
90%		75.0%
89%		72.5%
88%		70.0%
87%		67.5%
86%		65.0%
85%		62.5%
84%		60.0%
83%		57.5%
82%		55.0%
81%		52.5%
80%		50.0%


*STIP Payment schedule for* *Organic Revenue*

Metric Performance		Payout (as % of target)
115%		200.0%
114%		190.0%
113%		180.0%
112%		170.0%
111%		160.0%
110%		150.0%*
109%		145.0%
108%		140.0%
107%		135.0%
106%		130.0%
105%		125.0%
104%		120.0%
103%		115.0%
102%		110.0%
101%		105.0%
100%		100.0%
99%		95.0%
98%		90.0%
97%		85.0%
96%		80.0%
95%		75.0%
94%		70.0%
93%		65.0%
92%		60.0%
91%		55.0%
90%		50.0%

*	Executive Committee members have a maximum opportunity of 200%.


		•		Payout is calculated for each incremental increase in performance (straight line interpolation).

Page 5 of 7



				Rewards - Compensation
				Management Short-Term Incentive –
				Executive Officers
				(STI) Plan

Calculation Guidelines

Company EPS. As reported adjusted for STIP & UPB accruals (see below).

Organic Revenue. The reported revenue is adjusted for the following:

Currency impact compared to budgeted exchange rates for Europe and Asia Pacific regions.

HBF Operating Income. The reported operating income is adjusted for the following:

STIP & UPB accruals (see below).

Currency impact compared to budgeted exchange rates for the Europe and Asia Pacific regions.

Fully allocated regional operating income.

Regional operating income targets include corporate governance allocation at budget.

For evaluating performance against target, the actual corporate governance allocation is adjusted to reflect Corporate STIP and UPB accruals at target.

At the region level and one level below, corporate governance allocations will be included in determining targets and performance. Below these levels, the corporate governance allocation is not to be included in determining targets or performance.

Impact of STIP & UPB accruals. For income related metrics, performance is evaluated assuming the STIP and UPB accruals are at target.

North America. Basis of targets is US dollars. For purposes of determining performance against targets, there is to be no adjustment back to budgeted exchange rates for Canada.

Europe.

Revenue and operating income are in Euros.

The actual corporate governance allocation will be converted to Euros at the budgeted exchange rate for determining performance against the operating income target.

Latin America. Basis of targets is the US dollar. For purposes of determining performance against targets, there is to be no adjustment back to budgeted exchange rates for individual countries.

Asia Pacific. For revenue and income metrics expressed in US dollars, the budgeted exchange rates will be used to assess performance.

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				Rewards - Compensation
				Management Short-Term Incentive –
				Executive Officers
				(STI) Plan

10.

In calculating the results, the following adjustments will be made:

Individual legal settlements (payments or receipts) with a value (net of insurance) of $3 million or greater will not be included in metric calculations.

Any unbudgeted reorganization or restructuring-related items which cannot be offset by related benefits in the fiscal year will not be included in metric calculations.

Unbudgeted acquisitions and divestitures will be excluded from all actual and target metric calculations, as applicable.

Any unbudgeted asset write-downs in excess of $2 million will not be included in metric calculations.

Adjustments needed to (1) correct any inadvertent errors or miscalculations made in setting a performance target for our key markets (such as Hygiene, Packaging, or Durable Assembly) and Emerging Markets or (2) account for changes resulting from new accounting definitions, requirements or pronouncements.

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