FULLER H B CO (Form: 8-K, Received: 01/30/2017 16:13:51)

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): January 26, 2017

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)

Registrant's telephone number, including area code: (651) 236-5900

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.

(e) (i) On January 26, 2017, 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 executive officers as attached to this Current Report on Form 8-K as Exhibit 10.1. The changes made relating to executive officers were:

a. to eliminate the Superior Stretch performance level and revise the Superior performance level for all metrics in the STIP.

The changes to the STIP will be effective for any short-term incentive awards related to the Company’s 2017 fiscal year 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 and superior performance levels will be set for each metric. Payout will be determined for each metric based on performance relative to target. The target, threshold and superior 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 7 .0 1 Regulation FD Disclosure.

On January 27, 2017, the Company purchased the industrial adhesives business of Wisdom Worldwide Adhesives. A copy of the press release that discusses this matter is furnished as Exhibit 99.1 to, and incorporated by reference in, this report.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

10.1	H.B. Fuller Company Short-Term Incentive Plan for Executive Officers

99.1	Press Release, dated January 30, 2017, issued by H.B. Fuller Company

SIGNATURE

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

Date: January 30, 2017

	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 Company Short-Term Incentive Plan for Executive Officers
99.1		Press Release, dated January 30, 2017, issued by H.B. Fuller Company

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 November 30.

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:

● Corporate/Global

Weighting Per Metric

EPS

HBF Organic Revenue

HBF Operating

Income

30%

40%

● Operating Segment

Weighting Per Metric
EPS	Operating Segment Organic Revenue	Operating Segment Operating Income*
30%	30%	40%

*EBITDA for Construction Products

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● Operating Segment with key global market responsibility (includes SVP, Emerging Markets)

Weighting Per Metric

EPS

Operating

Segment Organic

Revenue

Operating Segment

Operating Income*

Key Market

Revenue

Key Market

Gross Margin

30%

20%

25%

15%

10%

*Contribution Margin for Emerging Markets

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:

o Sales, Organic Revenue: 90% of target

o Operating Income/EBITDA: 80% of target

o EPS: 80% of target

o Gross Margin, Contribution Margin: 80% of target

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

Superior

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

o Sales, Organic Revenue: 110% of target

o Operating Income/EBITDA: 120% of target

o EPS: 120% of target

o Gross Margin, Contribution Margin: 120% of target

● Payout at the superior level of performance will be 200% of the target allocated to that metric.

See Appendix for payout schedule.

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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; provided, however, that neither the Board nor the Compensation Committee shall take any action that would cause the Section 162(m) exemption for qualified performance-based compensation to become unavailable with respect to the STI plan.

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 –prior to November 30. Company - H.B. Fuller Company and its wholly owned subsidiaries. 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”.

Page 3 of 6

Appendix	*STIP Payment Schedule for EPS,*
	*Operating Income/EBITDA, Gross*		*STIP Payment schedule for*
	*Margin, Contribution Margin*		*Organic Revenue*
	Metric Performance	Payout (as % of target)	Metric Performance	Payout (as % of target)
	120%	200.0%	110%	200%
	119%	195.0%	109%	190%
	118%	190.0%	108%	180%
	117%	185.0%	107%	170%
	116%	180.0%	106%	160%
	115%	175.0%	105%	150%
	114%	170.0%	104%	140%
	113%	165.0%	103%	130%
	112%	160.0%	102%	120%
	111%	155.0%	101%	110%
	110%	150.0%	100%	100%
	109%	145.0%	99%	95%
	108%	140.0%	98%	90%
	107%	135.0%	97%	85%
	106%	130.0%	96%	80%
	105%	125.0%	95%	75%
	104%	120.0%	94%	70%
	103%	115.0%	93%	65%
	102%	110.0%	92%	60%
	101%	105.0%	91%	55%
	100%	100.0%	90%	50%
	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%

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

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Calculation Guidelines

Total Company Metrics

Company EPS

The adjusted EPS as disclosed in the Company’s quarterly earnings release.

HBF Organic Revenue

	●	The adjusted reported revenue as disclosed in the Company’s quarterly earnings release is adjusted for currency impact compared to budgeted exchange rates.

	●	Unbudgeted acquisitions and divestitures are excluded from the calculation.

HBF Operating Income

	●	The adjusted gross profit minus adjusted SG&A expenses as disclosed in the Company’s quarterly earnings release adjusted for currency impact compared to budgeted exchange rates.

	●	Unbudgeted acquisitions and divestitures are excluded from the calculation.

Region/Operating Segment Metrics

Organic Revenue

	●	Total company adjustments are transferred down to the region/operating segment revenue which is impacted by the adjustments, unless not approved by the CEO.

	●	Basis of targets is US dollars. The budgeted exchange rates will be used to assess performance.

	●	Unbudgeted acquisitions and divestitures are excluded from the calculation.

Fully all ocated operating i ncome

	●	At the region/operating segment level, operating income targets include corporate governance allocation at budget. In determining performance, actual corporate governance allocations will be used at the region/operating segment level. Below the region/operating segment level, the corporate governance allocation will remain at budget for measuring performance, where applicable.

	●	Total company adjustments are transferred down to the region/operating segment operating income which is impacted by the adjustments, unless not approved by the CEO.

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	●	Basis of targets is US dollars. The budgeted exchange rates will be used to assess performance.

	●	Unbudgeted acquisitions and divestitures are excluded from the calculation.

Adjustments

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

	a.	Individual legal settlements (payments or receipts) with a value (net of insurance) of $3 million or greater will not be included in metric calculations.
	b.	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.
	c.	Any unbudgeted asset write-downs in excess of $2 million will not be included in metric calculations.
	d.	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) or (2) account for changes resulting from new accounting definitions, requirements or pronouncements.
	e.	Other items as publicly disclosed in the Company’s quarterly earnings release. However, the above adjustments (a-d) will not be made to the extent they are inconsistent with publicly disclosed earnings.

Any discretion related to total company adjustments transferred to the region/operating segment exercised by the CEO requires approval by the Compensation Committee of the Board of Directors.

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Exhibit 99.1

Corporate Headquarters

1200 Willow Lake Boulevard

St. Paul, Minnesota 55110-5101

USA

Kimberlee Sinclair

Global Communications

+1 651 236 5823

kimberlee.sinclair@hbfuller.com

Maximillian Marcy

Investor Relations

+1 651 236 5062

max.marcy@hbfuller.com

NEWS

For Immediate Release

January 30, 2017

H.B. Fuller Company Acquires Wisdom Worldwide Adhesives

New business supports 2020 strategic growth plan

ST. PAUL, Minn. - H.B. Fuller Company (NYSE: FUL) announced today that, on January 27, 2017, it purchased the industrial adhesives business of Wisdom Worldwide Adhesives, a provider of adhesives for the packaging, paper converting, and assembly markets.

“We are pleased to welcome the employees and customers of this 140 year old company to H.B. Fuller. Wisdom’s highly successful go-to-market strategy, based on a focused product line, ultra-fast delivery and virtual service, will complement H.B. Fuller’s full value solutions. The acquisition will strengthen our leading position in this market segment within the Americas adhesive business,” said Jim Owens, president and CEO, H.B. Fuller. “The combination of H.B. Fuller and Wisdom provides significant cost synergy opportunities combined with some growth opportunities related to the complementary operating model and customer bases of the two companies. This acquisition will enhance and strengthen the delivery of our 2020 strategic plan commitments.”

Founded in 1875, Wisdom has been privately owned and operated by five consecutive generations of the Wisdom family and is headquartered in Elgin, Illinois. The company generated revenue and EBITDA of approximately $100 million and $11 million, respectively, in fiscal 2016. The business was purchased for $122 million and is expected to generate annual run rate synergies of approximately $6 million starting in 2018, which would make the purchase price multiple equal to approximately seven times Wisdom’s fiscal 2016 EBITDA on a post-synergy basis. H.B. Fuller expects the transaction to be modestly accretive to earnings in the first year. The business will be included in H.B. Fuller’s Americas Adhesives operating segment.

###

About H.B. Fuller:

For 130 years, H.B. Fuller has been a leading global adhesives provider focusing on perfecting adhesives, sealants and other specialty chemical products to improve products and lives. With fiscal 2016 net revenue of $2.1 billion, H.B. Fuller’s commitment to innovation brings together people, products and processes that answer and solve some of the world’s biggest challenges. Our reliable, responsive service creates lasting, rewarding connections with customers in electronics, disposable hygiene, medical, transportation, clean energy, packaging, construction, woodworking, general industries and other consumer businesses. And our promise to our people connects them with opportunities to innovate and thrive. For more information, visit us at www.hbfuller.com and subscribe to our blog.

Safe Harbor for Forward-Looking Statements:
Certain statements in this document may be considered forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are subject to various risks and uncertainties, including but not limited to the following: the Company's ability to effectively integrate and operate acquired businesses; the ability to effectively implement Project ONE; political and economic conditions; product demand; competitive products and pricing; costs of and savings from restructuring initiatives; geographic and product mix; availability and price of raw materials; the Company's relationships with its major customers and suppliers; changes in tax laws and tariffs; devaluations and other foreign exchange rate fluctuations; the impact of litigation and environmental matters; the effect of new accounting pronouncements and accounting charges and credits; and similar matters. Further information about the various risks and uncertainties can be found in the Company's SEC 10-K filing for the fiscal year ended December 3, 2016. All forward-looking information represents management's best judgment as of this date based on information currently available that in the future may prove to have been inaccurate. Additionally, the variety of products sold by the Company and the regions where the Company does business make it difficult to determine with certainty the increases or decreases in net revenue resulting from changes in the volume of products sold, currency impact, changes in product mix, and selling prices. However, management's best estimates of these changes as well as changes in other factors have been included.