Exhibit 10.1

 

LOGO [g239596g85t21.jpg]  

 

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

  •  

Organic Revenue

  •  

Earnings Per Share

 

  The following 2 design standards will apply, as follows:

 

  •  

Region

  •  

Corporate/Global

 

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

 

  •  

Region Standard

 

        

Metric & Weighting Per Metric

        

EPS

  

Region Organic

Revenue

  

Region Operating

Income ($)

 

                   EC Member

   30%    30%    40%

 

  •  

Corporate/Global

 

    

Metric & Weighting Per Metric

    

EPS

  

HBF Organic

Revenue

  

HBF Operating

Income ($)

   30%    30%    40%

 

Page 1 of 6

--------------------------------------------------------------------------------

LOGO [g239596g85t21.jpg]  

 

Rewards—Compensation

Management Short-Term Incentive—

Executive Officers

(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: 90% of target

  •  

Operating Income: 80% of target

  •  

EPS: 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:

  •  

Sales, Organic Revenue: 110% of target

  •  

Operating Income: 115% of target

  •  

EPS: 115% of target

 

  •  

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—Executive Committee

  •  

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

  •  

Organic Revenue: 115% of target

  •  

Operating Income: 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 as close as possible to January 31 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.

 

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.

 

Page 2 of 6

--------------------------------------------------------------------------------

LOGO [g239596g85t21.jpg]  

 

Rewards—Compensation

Management Short-Term Incentive—

Executive Officers

(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—in advance of fiscal year-end.

 

  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

--------------------------------------------------------------------------------

LOGO [g239596g85t21.jpg]  

 

Rewards—Compensation

Management Short-Term Incentive—

Executive Officers

(STI) Plan

 

Appendix

                            

STIP Payment Schedule for EPS,
Operating Income

  

STIP Payment schedule for
Organic Revenue

    

Metric
Performance

  

Payout (as % of
target)

  

Metric
Performance

  

Payout (as % of
target)

   125%    200.0%    115%    200.0%    124%    195.0%    114%    190.0%    123%
   190.0%    113%    180.0%    122%    185.0%    112%    170.0%    121%   
180.0%    111%    160.0%    120%    175.0%    110%    150.0%*    119%    170.0%
   109%    145.0%    118%    165.0%    108%    140.0%    117%    160.0%    107%
   135.0%    116%    155.0%    106%    130.0%    115%    150.0%*    105%   
125.0%    114%    146.7%    104%    120.0%    113%    143.3%    103%    115.0%
   112%    140.0%    102%    110.0%    111%    136.7%    101%    105.0%    110%
   133.3%    100%    100.0%    109%    130.0%    99%    95.0%    108%    126.7%
   98%    90.0%    107%    123.3%    97%    85.0%    106%    120.0%    96%   
80.0%    105%    116.7%    95%    75.0%    104%    113.3%    94%    70.0%   
103%    110.0%    93%    65.0%    102%    106.7%    92%    60.0%    101%   
103.3%    91%    55.0%    100%    100.0%    90%    50.0%    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%      

 

  * Executive Committee members have a maximum opportunity of 200%. The VP,
Corporate Controller has a maximum opportunity of 150%.

 

  •  

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

 

Page 4 of 6

--------------------------------------------------------------------------------

LOGO [g239596g85t21.jpg]  

 

Rewards—Compensation

Management Short-Term Incentive—

Executive Officers

(STI) Plan

 

Calculation Guidelines

 

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

 

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

 

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

 

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

 

  a. STIP & UPB accruals (see below).

 

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

 

  4. Fully allocated regional operating income.

 

  a. Regional operating income targets include corporate governance allocation
at budget.

 

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

 

  c. 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.

 

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

 

  6. 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.

 

  7. Europe.

 

  a. Revenue and operating income are in Euros.

 

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

 

  8. 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.

 

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

 

  10. Region/Business Composites. The region composite is the combined results
of Organic Revenue and Operating Income. Performance for each of these metrics
is assessed, and a payment percent is determined for each metric (per the
Payment Schedule). These payment percents are applied, based on the metric
weighting, to determine the overall payment percent for the composite.

 

Page 5 of 6

--------------------------------------------------------------------------------

LOGO [g239596g85t21.jpg]  

 

Rewards—Compensation

Management Short-Term Incentive—

Executive Officers

(STI) Plan

 

 

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

 

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

 

Page 6 of 6