FORM 11-K
FOR ANNUAL REPORTS OF EMPLOYEE STOCK PURCHASE,
SAVINGS
AND SIMILAR PLANS PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the fiscal year ended December 31, 2002
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OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from _______________ to ______________
Commission file number 001-09225
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EFTEC Savings Plan
H.B. FULLER COMPANY
1200 Willow Lake Boulevard, P.O. Box 64683
St. Paul, Minnesota 55164-0683
EFTEC Savings Plan
Financial Statements and Supplemental Schedule
December 31, 2002 and 2001
EFTEC Savings Plan
Index
December 31, 2002 and 2001
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Page(s)
Report of Independent Auditors ..............................................F-1
Financial Statements
Statement of Assets Available for Benefits ..................................F-2
Statement of Changes in Assets Available for Benefits .......................F-3
Notes to Financial Statements ...........................................F-4-F-9
Supplemental Schedule
Schedule I: Schedule of Assets (Held at End of Year) .......................F-10
Note: Other schedules required by 29 CFR 2520.103-10 of the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974 have been omitted because
they are not applicable.
Report of Independent Auditors
To the Participants and Administrator
of the EFTEC Savings Plan
In our opinion, the accompanying statement of assets available for benefits and
the related statement of changes in assets available for benefits present
fairly, in all material respects, the assets available for benefits of the EFTEC
Savings Plan (the "Plan") at December 31, 2002 and 2001, and the changes in
assets available for benefits for the year ended December 31, 2002, in
conformity with accounting principles generally accepted in the United States of
America. These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits of these statements in
accordance with auditing standards generally accepted in the United States of
America, which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule of the EFTEC
Savings Plan, as listed in the accompanying index, is presented for the purpose
of additional analysis and is not a required part of the basic financial
statements, but is supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. This supplemental schedule is the
responsibility of the Plan's management. The supplemental schedule has been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, is fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
By: /s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
June 20, 2003
F-1
EFTEC Savings Plan
Statement of Changes in Assets Available for Benefits
Year Ended December 31, 2002
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2002 2001
Assets
Cash $ 130,050 $ 116,762
Investments, at fair value 8,656,963 9,509,685
Receivables
Participant contributions receivable 24,939 16,190
Employer contributions receivable 11,548 7,915
Other receivables 13,197
Accrued income 168 914
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Total assets available for benefits $8,823,668 $9,664,663
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The Accompanying notes are an integral part of these financial statements
F-2
EFTEC Savings Plan
Statement of Changes in Assets Available for Benefits
Year Ended December 31, 2002
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Additions
Contributions
Participant contributions $ 512,434
Employer contributions 232,664
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Total contributions 745,098
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Investment income (loss)
Interest 9,327
Dividends 86,832
Net depreciation in fair value of investments (1,310,001)
Other income 36,155
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Total investment loss (1,177,687)
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Deductions
Distributions paid to participants (404,909)
Administrative expense (3,497)
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Total deductions (408,406)
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Net decrease (840,995)
Assets available for benefits
Beginning of year 9,664,663
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End of year $8,823,668
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The Accompanying notes are an integral part of these financial statements
F-3
EFTEC Savings Plan
Notes to Financial Statements
December 31, 2002 and 2001
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1. Description of the Plan
The following brief description of the EFTEC Savings Plan (the "Plan") is
provided for general information purposes only. Participants should refer
to the Plan document for more complete information regarding the Plan's
definitions, benefits, eligibility and other matters.
General
EFTEC (the "Employer") is a joint venture owned 70 percent by H.B. Fuller
Company and 30 percent by EMS Chemie. The Plan is a contributory defined
contribution plan established February 13, 1997, and became effective
April 1, 1997. The Plan merged assets from separate plans formerly
sponsored by H.B. Fuller Company and EMS-TOGO Corporation. Former plans
included the H.B. Fuller Company Thrift Plan, the H.B. Fuller Profit
Share Plus Plan and the EMS-TOGO Corporation, a subsidiary of EMS Chemie,
401(k) Investment Plan. The Plan receives pre-tax contributions from
participant payroll deductions with discretionary Employer matching and
discretionary Employer profit sharing contributions.
The Plan is subject to the provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA").
Trustee
The trustee for the Plan is Wells Fargo Minnesota, N.A. (the "Trustee").
Eligibility and Contributions
All regular full-time and part-time United States EFTEC employees
(excluding members of collective bargaining units) may begin contributing
to the Plan as soon as administratively practicable after their date of
hire. To be eligible for the Company matching contribution, a full-time
employee must have six months of employment and a part-time employee must
have twelve months of service. To participate, an employee must agree to
make contributions equal to 1 percent of pre-tax compensation up to a
maximum of 12 percent of pre-tax compensation for highly compensated
participants and 15 percent for non-highly compensated participants, each
subject to a statutory annual maximum of $11,000 for 2002.
The Employer matches 100 percent of an employee's pre-tax contribution,
up to 4 percent of the employee's compensation in the form that matches
the employee investment option allocation.
A participant's contribution, and the allowable Employer match, may be
invested in any combination of the following participant directed Return
Fund, PIMCO Total Return Bond Fund, Wells Fargo Index Equity Fund
("S&P 500"), Wells Fargo Small Company Growth Equity Fund, Wells Fargo
Growth Balanced Fund, Janus Twenty Fund, Janus Overseas Fund, Wells Fargo
S&P Midcap Index Fund and Van Kampen Common Stock Fund. A participant's
investment option for past and future contributions can be changed daily.
A participant's voluntary contribution percentage amount can be changed
or suspended at anytime. Employer contributions to the Plan cease during
the suspension period.
F-4
EFTEC Savings Plan
Notes to Financial Statements
December 31,2002 and 2001
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Participant Accounts
Each participant's account is credited with (a) the participant's
contribution, (b) the Employer's contribution, (c) an allocation of the
Plan's investment income, and (d) discretionary Employer contributions.
Allocations of the Plan's investment income are based on account
balances, as defined in the Plan document.
Payment of Benefits
On termination of service due to death or retirement, a participant may
elect to receive a lump-sum amount equal to the value of the
participant's vested interest in his or her account as defined in the
Plan agreement. If the participant terminates employment at the age of 55
or older, he or she may elect to receive their distribution in
installment payments as defined by the Plan agreement. For termination of
service due to disability, a participant is eligible for distribution
after 12 months of permanent disability. For termination of service due
to other reasons, a participant will receive a lump-sum amount equal to
the value of the participant's vested interest in his or her account. The
investment in H.B. Fuller Company Common Stock may be withdrawn in the
form of shares of stock at the option of the Plan participant.
Vesting
Participants are immediately vested in their contributions plus actual
earnings thereon. Vesting in the Company's matching contribution portion
of their accounts plus actual earnings thereon is based on years of
eligible service. A participant is 100 percent vested after three years
of credited service to the Employer, or upon age 65, disability or death.
Participant Loans
Participants may borrow from their fund accounts a minimum of $1,000 up
to a maximum of $50,000 or 50 percent of their account balance, whichever
is less. The loans are secured by the balance in the participant's
account and bear interest at rates equal to the current Wells Fargo prime
rate at the time of the loan (4.25 percent at December 31, 2002). The
rate will remain fixed over the term of the loan, usually 5-15 years.
Participant loans are collateralized by a borrower's vested account
balance and are repaid through payroll deductions. Participant loans at
December 31, 2002, had interest rates ranging from 4.75 percent to 9.5
percent and mature at various dates through 2017. Principal and interest
are repaid ratably through payroll deductions.
Forfeitures
Participants who terminate employment with the Employer forfeit the
nonvested portion of the Employer's contribution to the participants'
accounts. Amounts forfeited are used to reduce future Employer
contributions. Forfeitures for the year ended December 31, 2002, were not
significant.
Plan Termination
Although it has no intention to do so, the Employer may, at any time, by
action of its Board of Directors, terminate the Plan or discontinue
contributions. Upon termination or discontinuance of contributions, all
participants' accounts will become fully vested.
F-5
EFTEC Savings Plan
Notes to Financial Statements
December 31, 2002 and 2001
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2. Summary of Significant Accounting Policies
Basis of Accounting
The accompanying financial statements are presented on the accrual basis
of accounting in accordance with accounting principles generally accepted
in the United States of America.
Investment Valuation
The fair values of the Plan's investments in H.B. Fuller Company Common
Stock are based on published quotations. The fair values of investments
in securities of unaffiliated issuers are based on quoted market prices.
Securities transactions are recorded on the trade date.
Interest and Dividends
Interest income is recorded as earned on an accrual basis and dividend
income is recorded on the ex-dividend date.
Net Appreciation (Depreciation) in the Fair Value of Investments
The Plan presents in the Statement of Changes in Assets Available for
Benefits, the net appreciation (depreciation) in the fair value of
investments, which consists of the realized gains or losses and the
unrealized appreciation (depreciation) on those investments.
Contributions
Participant contributions are recorded in the period the Employer makes
the payroll deductions. Employer matching contributions are recorded
based on participant contributions.
Concentration of Market Risk
At December 31, 2002 and 2001, approximately 34 percent and 37 percent,
respectively, of the Plan's assets were invested in the common stock of
H.B. Fuller Company. The underlying value of the H.B. Fuller Common Stock
is entirely dependent upon the performance of H.B. Fuller Company and the
market's evaluation of such performance. It is at least reasonably
possible that changes in the fair value of H.B. Fuller Company Common
Stock in the near term could materially affect participants' account
balances and the amounts reported in the Statement of Assets Available
for Benefits and the Statement of Changes in Assets Available for
Benefits.
Distributions to Participants
Distributions to participants are recorded when the distribution is made.
Plan Expenses
The Company pays a portion of the administrative expenses of the Plan and
a portion is paid by Plan participants within the Plan. Certain asset
management and administrative fees of the Plan are charged against the
Plan's investment income.
Use of Estimates
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported
amount of assets, liabilities and changes therein, and disclosure of
contingent assets and liabilities at the date of the financial statements
and the reported amounts of
F-6
EFTEC Savings Plan
Notes to Financial Statements
December 31, 2002 and 2001
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investment earnings and expenses during the reporting period. Actual
results could differ from those estimates.
F-7
EFTEC Saving Plan
Notes to Financial Statements
December 31, 2002 and 2001
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Risks and Uncertainties
The Plan provides for various investment options in any combination of
stocks, bonds and other investment securities. Investment securities are
exposed to various risks, such as interest rate, market and credit. Due to
the level of risk associated with certain investment securities and the
level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in risks in the
near term would materially affect participants' account balances and the
amounts reported in the Statement of Assets Available for Benefits and the
Statement of Changes in Assets Available for Benefits.
Payment of Benefits
Benefits are recorded when paid.
3. Investments
The following represents the Plan's investments at fair value at December
31, 2002 and 2001:
2002 2001
H.B. Fuller Company Common Stock,
117,012 and 122,312 shares, respectively $3,028,271 * $3,518,916 *
Wells Fargo Stable Return Fund,
37,007 and 31,516 shares, respectively 1,262,943 * 1,015,844 *
Wells Fargo Index Equity Fund,
56,106 and 53,537 shares, respectively 1,977,184 * 2,457,887 *
Wells Fargo Growth Balanced Fund,
44,096 and 40,705 shares, respectively 1,034,945 * 1,155,606 *
Wells Fargo Small Company Growth Equity Fund,
19,031 and 17,227 shares, respectively 345,795 444,649 *
Janus Twenty Fund,
8,104 and 10,284 shares, respectively 235,090 395,523
PIMCO Total Return Bond Fund,
32,364 and 9,264 shares, respectively 345,325 96,717
Janus Overseas Fund,
8,740 and 9,527 shares, respectively 133,627 193,404
Van Kampen Common Stock Fund,
984 shares 12,144
Wells Fargo S&P Midcap Index Fund,
1,734 shares 55,331
Participant loans receivable 226,308 231,139
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$8,656,963 $9,509,685
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* Represents 5 percent or more of the Plan's assets at the beginning of the
Plan year.
F-8
EFTEC Saving Plan
Notes to Financial Statements
December 31, 2002 and 2001
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During 2002, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) depreciated in
value by $1,310,001 as follows:
Wells Fargo and Janus Mutual Funds $(1,072,496)
H.B. Fuller Company Common Stock (315,412)
Wells Fargo Stable Return Fund 66,699
PIMCO Total Return Bond Fund 11,218
Van Kampen Common Stock Fund (10)
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$(1,310,001)
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4. Tax Status
The Internal Revenue Service has determined and informed the Employer by a
letter dated January 19, 1999, that the Plan is designed in accordance with
applicable sections of the Internal Revenue Code ("IRC"). The Plan has been
amended since 1995; however, the Plan administrator believes the Plan is
designed and is currently being operated in compliance with the applicable
requirements of the IRC. Therefore, no provision for income taxes has been
included in the Plan's financial statements.
5. Related Party and Party-in-Interest Transactions
Plan investments include H.B. Fuller Company Common Stock which represents
invested amounts in shares of stock of the parent company of EFTEC. H.B.
Fuller Company is the holding company of the Plan sponsor and, therefore,
these transactions qualify as party-in-interest. Purchases and sales of H.B.
Fuller Company Common Stock for the year ended December 31, 2002, amounted
to $106,737 and $281,971, respectively.
The Plan also invests in various funds managed by Wells Fargo Bank
Minnesota, N.A. Wells Fargo Bank Minnesota, N.A. is the trustee as defined
by the Plan and, therefore, the related transactions qualify as
party-in-interest. The Trustee is authorized to invest in securities under
its management and control on behalf of the Plan. For the year ended
December 31, 2002, the Trustee made purchases and sales of such securities
amounting to $723,933 and $489,635, respectively.
F-9
EFTEC Savings Plan
Schedule of Assets (Held at End of Year)
December 31, 2002 Schedule I
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(a) (b) (c) (d) (e)
Identity of Issuer,
Borrower or Units/ Current
Similar Party Description Shares Cost** Value
* Wells Fargo H.B. Fuller Company Common
Minnesota, N.A. Stock 117,012 $ 3,028,271
* Wells Fargo Stable Return Fund
Minnesota, N.A. Pooled, Common & Collective 37,007 1,262,943
* Wells Fargo Index Equity Fund
Minnesota, N.A. Common Stock 56,106 1,977,184
* Wells Fargo Growth Balanced Fund
Minnesota, N.A. Mutual Fund - Balanced 44,096 1,034,945
* Wells Fargo Small Company Growth Equity Fund
Minnesota, N.A. Common Stock 19,031 345,795
* Wells Fargo PIMCO Total Return Bond Fund
Minnesota, N.A. Corporate Bonds 32,364 345,325
* Wells Fargo Janus Twenty Fund
Minnesota, N.A. Common Stock 8,104 235,090
* Wells Fargo Janus Overseas Fund
Minnesota, N.A. Common Stock 8,740 133,627
* Wells Fargo Van Kampen
Minnesota, N.A. Common Stock Fund 984 12,144
* Wells Fargo Common Stock Fund
Minnesota, N.A. S&P Midcap Index Fund 1,734 55,331
* Participant Loans Participant loans receivable,
interest at 4.75 percent to
9.5 percent, due at various
dates through 2017 226,308
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Total investments at end of
plan year $ 8,656,963
===========
* Represents party-in-interest.
** Historical cost information is not required for participant directed
investments.
F-10
EFTEC SAVINGS PLAN
EXHIBITS
The following documents are filed as exhibits to this Report:
Exhibit No. Document
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(23) Consent of Independent Auditors
(99) Certification pursuant to Section 906
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the employee benefit plan) have duly
caused this annual report to be signed on its behalf by the undersigned hereunto
duly authorized.
EFTEC SAVINGS PLAN
DATE June 30, 2003
By: /s/ Larry S. Morgan
Larry S. Morgan
Director of Compensation, Benefits and HRMS
H.B. Fuller Company
(Plan Administrator)
EXHIBIT INDEX
Exhibit No. Document Method of Filing
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(23) Consent of Independent Auditors Filed herewith electronically
(99) Certification pursuant to Section 906 Filed herewith electronically