Exhibit 10.1

 

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Rewards - Compensation

Management Short-Term Incentive

(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  

To participate in the STI Plan, an employee must:

 

•   Be a regular full-time or part-time employee of the Company in job grades 25
or higher. Consultants and temporary agency employees performing services at
Company facilities are not eligible to participate;

 

•   Not qualify as a participant in any other Company variable compensation
program (such as sales or unit performance bonus programs).

 

To receive payment under the STI Plan, the participant must:

 

•   Be actively employed as of fiscal year-end;

 

•   Have been rated at least “good” through the pay-for-performance program, as
demonstrated by a PPA rating of ‘3’ or higher.

Plan Design  

The plan design is based on financial metrics. The metrics will vary based on
position and will generally include the following:

 

•   EBITDA*

 

•   ROGI

 

•   Organic Sales

 

•   Earnings Per Share

                                       
                                         
                                         
                                                                        

*       For administrative purposes, operating income may be used as a proxy for
EBITDA

 

There will be 5 design standards, as follows:

 

•   Region

 

•   Region – Operations or Sales Management

 

•   Corporate/Global

 

•   Business Unit, Country, Sub Region

 

•   Global Accounts, Industry, Program

 

 

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LOGO [g11661logo.jpg]  

Rewards - Compensation

Management Short-Term Incentive

(STI) Plan

   

 

 

 

 

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

 

•   Region Standard

 

•   Applies generally to region roles, with the exception of sales and
operations.

 

     Metric & Weighting Per Metric    EPS   Region Organic Revenue  
Region EBITDA ($)   Region ROGI

EC Member

   30%   20%   35%   15%

Standard

   25%   25%   40%   10%

 

 

•   Region – Operations or Region Sales Management

 

     Metric & Weighting Per Metric    EPS   Organic Revenue or
Operations metric   Region EBITDA ($)   Region ROGI

Standard

   25%   25%   40%   10%

 

 

•   Corporate/Global

 

•   Applies to corporate functions such as Finance, HR, Legal, Marketing,
Technology, and Strategy

 

 

     Metric & Weighting Per Metric    EPS   NA Composite   EU Composite  
AP Composite   LA Composite

Standard

   30%   25%   20%   12.5%   12.5%

 

 

•   Region composite is the combination of Region Organic Revenue, EBITDA, and
ROGI results

 

•   Business Unit, Country, Sub Region

 

     Metric & Weighting Per Metric    EPS   Region
Composite   BU/Country/Sub Region
Organic Revenue or
Operations metric   BU/Country/Sub
Region EBITDA   BU/Country/Sub
Region ROGI or Net
Working Capital

Standard

   15%   20%   20%   35%   10%

 

 

•   Global Accounts, Global Industry, Global Program

 

     Metric & Weighting Per Metric    EPS   Global Account, Industry
or Program Sales   NA Composite   EU Composite   AP Composite   LA Composite

Standard

   15%   30%   20%   15%   10%   10% CEO Plan Design:

Metric & Weighting Per Metric

EPS

   HBF Organic Revenue   HBF EBITDA ($)   HBF ROGI

30%

   20%   35%   15%

 

 

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LOGO [g11661logo.jpg]  

Rewards - Compensation

Management Short-Term Incentive

(STI) Plan

   

 

 

 

 

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: 80% of target

 

•   EBITDA: 80% of target

 

•   ROGI: 80% of target

 

•   EPS: 80% of target

 

•   Operations Metrics: 80-90% of target, varies by metric

 

•   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:

 

•   Sales, Organic Revenue: 115% of target

 

•   EBITDA: 115% of target

 

•   ROGI: 115% of target

 

•   EPS: 115% of target

 

•   Operations Metrics: 110-120% of target, varies by metric

 

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

 

See Appendix for payout schedule.

 

Superior Stretch Goal – EC

 

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

 

•   Organic Revenue: 125% of target

 

•   EBITDA: 125% of target

 

•   ROGI: 125% of target

 

•   EPS: 125% of target

 

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

Payment  

Payment will be made in cash, subject to taxes and deductions as applicable.

Payment will be made in, or as close to possible to, January following the
conclusion of the relevant Plan Year, but will be made no later than March 15th
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.

 

 

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LOGO [g11661logo.jpg]  

Rewards - Compensation

Management Short-Term Incentive

(STI) Plan

   

 

 

 

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.

 

Eligible Earnings - Varies by region and 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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LOGO [g11661logo.jpg]  

Rewards - Compensation

Management Short-Term Incentive

(STI) Plan

   

 

 

 

Appendix

 

Payout Schedule

   

Metric Performance

 

Payout (as % of target)

    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%  

 

 

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

 

•   EC members have an additional stretch superior goal as follows:

 

•   Payout is calculated at an additional 5% for each incremental increase in
performance up to 125% of metric performance (straight line interpolation).

 

 

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