Exhibit 10.2

H.B. FULLER COMPANY

NON-QUALIFIED STOCK OPTION AGREEMENT

(Under the H.B. Fuller Company 2016 Master Incentive Plan)

THIS AGREEMENT, dated as of                             , 20     is entered into
between H.B. Fuller Company, a Minnesota corporation (the “Company”), and
                                    , an employee of the Company or an Affiliate
of the Company (“Participant”).

WHEREAS, the Company, pursuant to the H.B. Fuller Company 2016 Master Incentive
Plan (the “Plan”), wishes to grant stock options for the purchase of Common
Stock, par value $1.00 per share, of the Company (“Common Stock”), to
Participant on the terms and conditions contained in this Agreement and the
Plan;

WHEREAS, Participant’s rights to receive options for the purchase of Common
Stock hereunder are sometimes referred to as the “Option(s)” in this Agreement.

NOW, THEREFORE, in consideration of the premises and agreements set forth
herein, the parties hereto hereby agree as follows:

1.       Grant of Option. The Company, effective as of [CLOSING DATE OF
ACQUISITION] (the “Grant Date”), hereby grants to Participant, as a matter of
separate agreement and not in lieu of salary or other compensation for services
rendered, the right and option (the “Option”) to purchase all or any part of an
aggregate of [ENTER MAX PERFORMANCE SHARES] shares of Common Stock (the
“Shares”) at the price of $[CLOSING PRICE ON GRANT DATE] per share on the terms
and conditions set forth in this Agreement. The Option is not intended to be an
incentive stock option within the meaning of the Internal Revenue Code of 1986
(the “Code”), as amended.

2.       Vesting and Term of Option.

(a) If Participant remains continuously employed by the Company or an Affiliate
through January 31, 2021 (the “Measurement Date”), the Option Shares that vest
and become exercisable pursuant to this Section 2 will be determined by
reference to the Company’s 2020 Fiscal Year Adjusted EBITDA, as provided in the
table below:

 

2020 Fiscal Year Adjusted EBITDA

  

% of Option Shares Vested

Below $       million

   0%

$       million (threshold)

   50%

$       million (mid-target)

   75%

$       million (target)

   100%

$       million or above (superior maximum)

   150%

Note: There is no interpolation between points in the table above. Fractional
vested Shares will be rounded down to the nearest whole Share.

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For purposes of this Section 2(a), “Adjusted EBITDA” means Adjusted Operating
Income + Depreciation + Amortization. Operating Income adjustments include items
as publicly disclosed in the Company’s quarterly earnings release.

The Option shall in all events terminate on                             , 20    
or such earlier date as prescribed herein.

(b) Notwithstanding the vesting provision contained in Section 2(a) above, upon
the occurrence of a Change in Control of the Company prior to the Measurement
Date while Participant is employed with the Company or an Affiliate, the date of
the Change in Control shall become the Measurement Date, and all Option Shares
shall vest and become exercisable at target performance level. For the purposes
of this Agreement, a “Change in Control” shall be deemed to have occurred upon
any of the following events:

(i) a public announcement (which, for purposes hereof, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) that
any individual, corporation, partnership, association, trust or other entity
becomes the beneficial owner (as defined in Rule 13(d)(3) promulgated under the
Exchange Act), directly or indirectly, of securities of the Company representing
30% or more of the Voting Power of the Company then outstanding;

(ii) the individuals who, as of the date of this Agreement, are members of the
Board of Directors of the Company (the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board (provided, however, that if the
election or nomination for election by the Company’s shareholders of any new
director was approved by a vote of at least a majority of the Incumbent Board,
such new director shall be considered to be a member of the Incumbent Board);

(iii) the approval of the shareholders of the Company, and consummation, of
(A) any consolidation, merger or statutory share exchange of the Company with
any person in which the surviving entity would not have as its directors at
least 60% of the Incumbent Board and as a result of which those persons who were
shareholders of the Company immediately prior to such transaction would not
hold, immediately after such transaction, at least 60% of the Voting Power of
the Company then outstanding or the combined voting power of the surviving
entity’s then outstanding voting securities; (B) any sale, lease, exchange or
other transfer in one transaction or series of related transactions
substantially all of the assets of the Company; or (C) the adoption of any plan
or proposal for the complete or partial liquidation or dissolution of the
Company; or

(iv) a determination by a majority of the members of the Incumbent Board, in
their sole and absolute discretion, that there has been a Change in Control of
the Company.

 

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For purposes of this Section 2(b), “Voting Power” when used with reference to
the Company shall mean the voting power of all classes and series of capital
stock of the Company now or hereafter authorized.

3.       Effect of Termination of Employment. The Option shall terminate and may
no longer be exercised if Participant ceases to be employed by the Company or an
Affiliate of the Company, except that:

(a) Termination of Employment other than for Death, Disability or Retirement.

(i) If, on or after the second anniversary of the Grant Date but prior to the
Measurement Date, Participant voluntarily terminates Participant’s employment or
if the Company or an Affiliate of the Company terminates Participant’s
employment for any reason other than gross and willful misconduct, disability,
retirement or death, the Option shall remain outstanding but unexercisable until
the Measurement Date. Upon the Measurement Date, the Option Shares earned in
accordance with Section 2 shall vest pro rata. The pro rata number of Option
Shares that vests shall be determined by multiplying the total number of earned
Option Shares by a fraction, the numerator of which is the number of days of
Participant’s employment with the Company or an Affiliate from the Grant Date to
the date of Participant’s termination of employment, and the denominator of
which is [NUMBER OF DAYS FROM GRANT DATE TO MEASUREMENT DATE]. Participant may
exercise the Option at any time within ninety (90) days after the Measurement
Date to the extent that the Option has become exercisable, but not after the
expiration of the term of the Option.

(ii) If, on or after the Measurement Date, Participant voluntarily terminates
Participant’s employment or if the Company or an Affiliate of the Company
terminates Participant’s employment for any reason other than gross and willful
misconduct, disability, retirement or death, Participant may exercise the Option
at any time within ninety (90) days after Participant’s termination of
employment to the extent that the Option has become exercisable, but not after
the expiration of the term of the Option.

(iii) Notwithstanding the foregoing, if the Company or an Affiliate of the
Company terminates Participant’s employment by reason of gross and willful
misconduct during the course of employment, including, but not limited to,
wrongful appropriation of funds or the commission of a gross misdemeanor or
felony, the Option, whether vested or not vested, shall be terminated as of the
date of termination of Participant’s employment.

(b) Termination of Employment for Retirement.

(i) If, prior to the Measurement Date, Participant Retires, the Option shall
remain outstanding but unexercisable until the Measurement Date. Upon the
Measurement Date, the Option Shares earned in accordance with Section 2 shall
vest

 

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as if Participant has remained employed until the Measurement Date. Participant
may exercise the Option at any time after the Measurement Date to the extent
that the Option has become exercisable, but not after the expiration of the term
of the Option. For purposes of this Section 3, “Retire” or “Retirement” shall
mean the voluntary or involuntary termination of Participant’s employment for
any reason other than gross and willful misconduct, disability or death, after
Participant has completed at least ten years of service as an employee of the
Company and/or an Affiliate of the Company and has attained age 55.

(ii) If, on or after the Measurement Date, Participant Retires, Participant may
exercise the Option at any time after Participant’s termination of employment to
the extent that the Option has become exercisable, but not after the expiration
of the term of the Option.

(c) Termination of Employment for Death or Disability.

(i) If, prior to the Measurement Date, Participant’s employment is terminated by
reason of death or disability (within the meaning of Section 22(e)(3) of the
Code), the Option Shares shall vest and become exercisable at target performance
level.

(ii) Participant may exercise the Option at any time within three (3) years
after Participant’s termination of employment due to disability to the extent
that the Option has become exercisable, but not after the expiration of the term
of the Option.

(iii) If Participant shall die, either while employed or following any
termination of employment, the Option may be exercised, to the extent that the
Option has become exercisable, at any time within 12 months after the date of
Participant’s death by the personal representatives or administrators of
Participant or by any beneficiary designated in a manner established by the
Committee or person or persons to whom the Option has been transferred by will
or the applicable laws of descent and distribution, subject to the condition
that the Option shall not be exercisable after the expiration of the term of the
Option.

(d) For avoidance of doubt, if Participant is employed by an Affiliate that is
sold or otherwise ceases to be an Affiliate of the Company, Participant shall
incur a termination of employment by the Company and all Affiliates of the
Company under this Agreement.

4.       Method of Exercising Option.

(a) Subject to the terms and conditions of this Agreement, the Option shall be
exercised by following the procedures established by the Company from time to
time, which may require the delivery of a written or electronic notice of
exercise (the “Notice”) to the Company (to the attention of the Equity
Compensation Specialist) or its agent.

 

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The Notice shall be in such form as the Company may prescribe and shall state
the election to exercise the Option, the number of Shares as to which the Option
is being exercised and the manner of payment and shall be signed by the person
or persons so exercising the Option. The Notice shall be accompanied by payment
in full of the exercise price for all Shares designated in the notice. The
Notice shall also be accompanied by such other information and documents as the
Company, in its discretion, may request. To the extent that the Option is
exercised after Participant’s death, the Notice shall also be accompanied by
appropriate proof of the right of such person or persons to exercise the Option.

(b) Payment of the exercise price shall be made to the Company through one or a
combination of the following methods:

(i) delivery of a certified or cashier’s check, or a wire transfer, payable to
the Company or cash, in United States currency;

(ii) delivery of shares of Common Stock acquired by Participant more than six
months prior to the date of exercise having a Fair Market Value on the date of
exercise equal to the Option exercise price. Participant shall duly endorse all
certificates delivered to the Company in blank and shall represent and warrant
in writing that Participant is the owner of the shares so delivered, free and
clear of all liens, encumbrances, security interests and restrictions;

(iii) if permitted by the Company in its sole discretion, by executing a
“cashless exercise” through the Company’s designated broker; or

(iv) delivery of an attestation from Participant that Participant owns a number
of shares of Common Stock acquired by Participant more than six months prior to
the date of exercise having a Fair Market Value on the date of exercise equal to
the Option exercise price (the “Exercise Price Shares”). In such attestation,
Participant shall represent and warrant that Participant is the owner of the
Exercise Price Shares. In the event Participant exercises the Option in this
manner, the number of shares of Common Stock issued to Participant upon exercise
of the Option shall be (A) the number of shares subject to the Option exercise,
less (B) the number of Exercise Price Shares.

5.       Income Tax Withholding. In order to provide the Company with the
opportunity to claim the benefit of any income tax deduction which may be
available to it upon the exercise of the Option, and in order to comply with all
applicable federal, state, local and foreign income tax laws or regulations, the
Company may take such action as it deems appropriate to ensure that all
applicable federal, state, local or foreign payroll, withholding, income or
other taxes, which are the sole and absolute responsibility of Participant, are
withheld or collected from Participant. Participant may, at Participant’s

 

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election (the “Tax Election”), satisfy applicable tax withholding obligations by
(a) electing to have the Company withhold a portion of the Shares of Common
Stock otherwise to be delivered upon exercise of the Option having a Fair Market
Value equal to the amount of such taxes (subject to any limitations imposed by
the Company to avoid adverse accounting treatment) or (b) delivering to the
Company shares of Common Stock having a Fair Market Value equal to the amount of
such taxes. The Tax Election must be made on or before the date that the amount
of tax to be withheld is determined.

6.       Securities Matters. No Shares shall be issued hereunder prior to such
time as counsel to the Company shall have determined that the issuance of the
Shares will not violate any federal or state securities or other laws, rules or
regulations. The Company shall not be required to deliver any Shares of Common
Stock until the requirements of any applicable securities or other laws, rules
or regulations (including the rules of any securities exchange) as may be
determined by the Company to be applicable are satisfied. In addition, the grant
of this Option and/or the delivery of any Shares of Common Stock under this
Agreement are subject to the Company’s Executive and Key Manager Compensation
Clawback Policy and any other clawback policies the Company may adopt in the
future to conform to the Dodd-Frank Wall Street Reform and Consumer Protection
Act of 2010 (or any other applicable law) and any applicable rules and
regulations of the Securities and Exchange Commission or applicable stock
exchange.

7.       Tax Consequences. Participant agrees that the Company does not have a
duty to design or administer the Plan or its other compensation programs in a
manner that minimize Participant’s tax liabilities. Participant will not make
any claim against the Company, or any of its officers, directors, employees or
Affiliates related to tax liabilities arising from the Option or Participant’s
other compensation.

8.       Adjustments. In the event that the Committee shall determine that any
dividend or other distribution (whether in the form of cash, shares, other
securities or other property), recapitalization, stock split, reverse stock
split, reorganization, merger, consolidation, split-up, spin-off, combination,
repurchase or exchange of shares or other securities of the Company, issuance of
warrants or other rights to purchase shares or other securities of the Company
or other similar corporate transaction or event affects the Shares covered by
the Option such that an adjustment is necessary to prevent dilution or
enlargement of the benefits or potential benefits intended to be made available
under this Agreement, then the Committee shall, in such manner as it may deem
equitable, in its sole discretion, adjust any or all of the number and type of
the Shares covered by the Option and the exercise price of the Option.

 

9.       General Provisions.

(a) Interpretations. This Agreement is subject in all respects to the terms of
the Plan. Terms used herein which are defined in the Plan shall have the
respective meanings given to such terms in the Plan, unless otherwise defined
herein. In the event

 

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that any provision of this Agreement is inconsistent with the terms of the Plan,
the terms of the Plan shall govern. Any question of administration or
interpretation arising under this Agreement shall be determined by the
Committee, and such determination shall be final, conclusive and binding upon
all parties in interest.

(b) No Rights as a Shareholder. Neither Participant nor Participant’s legal
representatives shall have any of the rights and privileges of a shareholder of
the Company with respect to the Shares of Common Stock subject to the Option
until such Shares shall have been issued upon exercise of the Option.

(c) No Right to Employment. Nothing in this Agreement or the Plan shall be
construed as giving Participant the right to be retained as an employee of the
Company or any Affiliate. In addition, the Company or an Affiliate may at any
time dismiss Participant from employment, free from any liability or any claim
under this Agreement, unless otherwise expressly provided in this Agreement or
the Plan.

(d) Option Not Transferable. The Option shall not be transferable other than
(i) by will or by the laws of descent and distribution, or (ii) by designating a
beneficiary or beneficiaries (in a manner established by the Committee) to
exercise the rights of Participant and receive any property distributable with
respect to any Option upon the death of Participant. During Participant’s
lifetime the Option shall be exercisable only by Participant or, if permissible
under applicable law, by Participant’s guardian or legal representative. The
Option may not be pledged, alienated, attached or otherwise encumbered, and any
purported pledge, alienation, attachment or encumbrance of the Option shall be
void and unenforceable against the Company.

(e) Reservation of Shares. The Company shall at all times during the term of the
Option reserve and keep available such number of shares of Common Stock as will
be sufficient to satisfy the requirements of this Agreement.

(f) Headings. Headings are given to the sections and subsections of this
Agreement solely as a convenience to facilitate reference. Such headings shall
not be deemed in any way material or relevant to the construction or
interpretation of this Agreement or any provision hereof.

(g) Governing Law. The internal law, and not the law of conflicts, of the State
of Minnesota will govern all questions concerning the validity, construction and
effect of this Agreement.

 

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be
effective as of the date first set forth above.

 

H.B. FULLER COMPANY

 

By:

   

       

Participant

 

Date:

   

 

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