Change in Control Agreement

Change in Control Agreement - Amendment

Severance Agreement

Amendment to Severance Agreement - Owens

 

 

 

FORM OF CHANGE IN CONTROL AGREEMENT

Exhibit 10.1

CHANGE IN CONTROL AGREEMENT

THIS AGREEMENT (the “Agreement”) is made this          day of                     , 20    , by and between H.B. Fuller Company, a Minnesota corporation (the “Company”) and [Executive] (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Company considers the recruitment and maintenance of sound and vital management to be essential to protecting and enhancing its best interests and those of its shareholders; and

WHEREAS, the Company recognizes that the potential for a change in control may make it difficult to hire and retain strong management personnel; and

WHEREAS, the Company recognizes that the possibility of a change in control of the Company may exist and that, in the event negotiations are commenced to bring about such a change in control, uncertainty and questions may arise among management that could result in the distraction or departure of management personnel to the detriment of the Company and the shareholders; and

WHEREAS, the Company has determined that appropriate steps should be taken to reinforce and encourage the Executive’s continued attention and dedication as an executive officer to his or her assigned duties without distraction in the face of potentially disruptive circumstances arising from the possibility of a change in control of the Company;

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein contained, the Company and the Executive hereby agree as follows:

1. Definitions. For the purposes of this Agreement:

(a) “Affiliated Organization” means any corporation that would be a member of a controlled group of corporations (within the meaning of section 414(b) of the Code) that includes the Company, and any trade or business (whether or not incorporated) that would be controlled (within the meaning of section 414(c) of the Code) by the Company, if the phrase “at least 70%” were substituted for the phrase “at least 80%” each place it appears in section 1563(a)(1) of the Code and in regulations under section 414(c) of the Code.

(a) “Cause” means any act by the Executive that is materially inimical to the best interests of the Company and that constitutes common law fraud, a felony or other gross malfeasance of duty on the part of the Executive.

(b) “Change in Control” means:

(i) a public announcement (which, for purposes hereof, shall include, without limitation, a report filed pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (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 15% 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 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 of 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.

The Company shall notify the Executive promptly of the occurrence of a Change in Control.

(c) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code will include a reference to such provision as it may be amended from time to time and to any successor provision.

(d) “Company” means the Company as hereinbefore defined and any successor or assign to its business and/or assets which executes and delivers the agreement provided for in Section 8 or which otherwise becomes bound by all the terms and provisions of this Agreement by operation of law. If at any time during the term of this Agreement the Executive is employed by an Affiliated Organization, the term “Company” as used in this Agreement (other than in Sections 1(b) and 8(a) hereof) shall in addition include such Affiliated Organization. In such event, the Company agrees that it shall pay or provide, or shall cause such Affiliated Organization to pay or provide, any amounts or benefits due the Executive pursuant to this Agreement.

(e) “Date of Termination” means the date of the Executive’s Separation from Service.


(f) “Disability” or “Disabled” means leaving active employment and qualifying for and receiving disability benefits under the Company’s long-term disability plan as in effect from time to time.

(g) “Good Reason” means:

(i) a material change in the Executive’s pay consisting of a 10% or more reduction in total cash compensation opportunity as in effect immediately prior to the Change in Control (unless such reduction is part of an across-the-board uniformly applied reduction affecting all senior executives of the Company); or

(ii) a significant diminution in the Executive’s authority and duties as in effect immediately prior to the Change of Control (excluding an isolated, insubstantial or inadvertent action not taken in bad faith that is remedied promptly by the Company after receiving notice); provided, however, that a change of the individual or officer to whom the Executive reports, in and of itself, would not constitute diminution; or

(iii) a change of the Executive’s principal work location of 50 or more miles from that immediately prior to the Change in Control.

The Executive shall not be deemed to have terminated employment for Good Reason unless the termination occurs within 180 days after the Executive is notified by the Company of the event constituting Good Reason or, if later, within 180 days after the occurrence of such event.

(h) “Present Value” shall be determined based on the actuarial assumptions in use for the purpose of determining the amount of lump sum distributions under the H.B. Fuller Company Retirement Plan, as in effect at the time Present Value is determined for the purposes of this Agreement.

(i) “Protected Period” means the 24-month period immediately following each and every Change in Control.

(j) The Executive shall be deemed to have had a “Separation from Service,” or to have “Separated from Service,” when the employment relationship between the Executive and all of the Affiliated Organizations has terminated for reasons other than the Executive’s death. For such purpose, the employment relationship will be treated as continuing while the Executive is on military leave, sick leave, or other bona fide leave of absence (such as temporary employment by the government) if the period of such leave does not exceed six months, or any longer period during which the Executive’s right to reemployment is provided for by statute or contract. If the period of a leave exceeds six months and the Executive’s right to reemployment is not provided for by statute or contract, the employment relationship will be deemed to have terminated on the first date immediately following such six month period. Notwithstanding the foregoing, if the Executive ceases to be an employee of any Affiliated Organization, but continues to perform services for such Affiliated Organization or another Affiliated Organization that


would cause the termination of employment not to constitute a separation from service for the purposes of section 409A of the Code, the later date on which such a separation from service occurs shall be the date of the Executive’s Separation from Service. Conversely, if the Executive continues to be an employee of an Affiliated Organization, but fails to perform sufficient services to prevent a separation from service from occurring for the purposes of section 409A of the Code, the earlier date on which such a separation from service occurs shall be the date of the Executive’s Separation from Service.

(k) “Termination Benefits” means those benefits described in Sections 3 and 6 of this Agreement.

2. Term. The term of this Agreement shall commence on the date hereof and shall end on the third anniversary of such date; provided, that on each anniversary of the date on which the term begins, the term shall be extended for one additional year unless, prior to an anniversary date, the Company gives written notice to the Executive that the term shall not be so extended, whereupon the term shall end on the date which is three years after the date of such notice. Notwithstanding the foregoing, the expiration of the term shall not relieve the Company of its obligation to provide any Termination Benefits that become payable as a result of the Executive’s Separation from Service during the term.

3. Benefits Upon Termination of Employment. If, during the term of this Agreement, the Executive Separates from Service during a Protected Period because: (A) the Executive’s employment is terminated by the Company other than for Cause or Disability, or (B) because the Executive’s employment is terminated by the Executive for Good Reason, the Executive shall be entitled to the following payments and benefits:

(a) Base Salary and Bonus Through Date of Termination. The Company shall promptly pay to the Executive his or her full base salary through the Date of Termination at the rate in effect at the time notice of termination is given. In addition, the Company shall pay to the Executive the amount of any bonus or incentive for the year in which the Date of Termination occurs (based on the target bonus for the Executive for the year) prorated to the Date of Termination (without application of any denial provisions based on unsatisfactory personal performance or any other reason). Such bonus or incentive shall be paid promptly (and in no event more than 2 1/2 months) after the Executive’s Date of Termination; provided, that if the bonus or incentive:

(i) is payable for a performance period that began before the first day of the calendar year or the first day of the corporate fiscal year (whichever is earlier) in which the Date of Termination occurs; or

(ii) was awarded to the Executive before the first day of the calendar year or the first day of the corporate fiscal year (whichever is earlier) in which the Date of Termination occurs;

such payment, together with interest thereon, shall be made on the earlier of: (A) the date that is six months after the Executive’s Date of Termination, or (B) the date of the Executive’s death. Interest shall be calculated from the Executive’s Date of Termination to the date of payment at the rate used for the purpose of determining Present Value.


(b) Severance Pay. The Company shall pay to the Executive a severance payment in an amount equal to three times the sum of: (A) the Executive’s highest base salary, on an annualized basis, established by the Company during the period commencing three months prior to the occurrence of the Change in Control and ending on the Date of Termination; plus (B) the Executive’s target annual incentive compensation established by the Company and in effect immediately prior to the Change in Control. Such payment, together with interest thereon, shall be made in a lump sum on the earlier of: (i) the date that is six months after the Executive’s Date of Termination, or (ii) the date of the Executive’s death. Interest shall be calculated from the tenth day following the Executive’s Date of Termination to the date of payment at the rate used for the purpose of determining Present Value. If the Executive is also entitled to severance payments which would be made in the absence of a change in control under any plan or program of, or contract with, the Company, or under the laws of any federal, state, local or foreign jurisdiction, the amount payable to the Executive pursuant to this paragraph (b) (prior to the crediting of interest) shall be reduced (but not below zero) by the Present Value of such other severance payments. Payments under this paragraph (b) shall not be considered in determining the amount of the Executive’s benefits under any pension, profit sharing, stock bonus or other employee benefit plan of the Company or any Affiliated Organization.

(c) Medical and Dental Coverage. The Executive shall be entitled to continued coverage under any medical or dental plan (but not under other Company benefit plans) maintained by the Company in which the Executive was participating at the time of the Executive’s termination of employment, for a period of three years following the Executive’s Date of Termination. Rules comparable to those governing the provision of continuation coverage under section 602 of ERISA shall apply to the coverage provided under this paragraph, except that:

(i) the coverage may not be discontinued prior to the expiration of the period specified in this paragraph (c), except for the Executive’s failure to make a required contribution;

(ii) the contributions required of the Executive for such coverage may not exceed the contributions required for the same coverage from a similarly situated active employee; and

(iii) if the Company discontinues the plan or plans in which the Executive was participating prior to the expiration of such three year period, the Company shall substitute equivalent coverage under one or more other plans or, if there are no other plans, under one or more individual insurance policies.

It is the intent of the Company that neither the coverage provided pursuant to this paragraph (c), nor the benefits received as a result of such coverage, shall be subject to U.S. income taxation to the Executive. Accordingly, if the Company determines that the


coverage to be provided under this paragraph (c) would cause a self-insured plan maintained by the Company or an Affiliated Organization to be in violation of the nondiscrimination requirements of section 105(h) of the Code, it shall substitute insured coverage providing equivalent benefits, at no greater cost to the Executive, to the extent necessary to avoid such discrimination.

(d) Outplacement Services. The Company shall pay for any outplacement services provided to the Executive that directly relate to the termination of services for the Company; provided, that the total amount paid for such services shall not exceed $25,000 and, provided further, that such expenses are incurred no later than the last day of the Executive’s second taxable year following the taxable year in which the Executive’s Separation from Service occurred. The Employer shall pay (or, at its option, reimburse the Executive) for such services within ten days after its receipt of a statement from the service provider; provided, that in no event shall reimbursements be paid to the Executive after the last day of the Executive’s third taxable year following the taxable year in which the Executive’s Separation from Service occurs.

4. Terminations That Do Not Require Payment of Benefits. No Termination Benefits will be provided to the Executive pursuant to this Agreement if the Executive’s employment is terminated by the Executive for any reason other than for Good Reason, by the Company for Cause or Disability, by death, or by either the Executive or the Company for any reason at any time other than during a Protected Period.

5. No Mitigation. The Executive’s benefits hereunder shall be in consideration of the Executive’s past service and the Executive’s continued service from the date of this Agreement, and the Executive’s entitlement thereto shall not be governed by any duty to mitigate damages by seeking further employment nor offset by any compensation which the Executive may receive from future employment.

6. Limitation; Gross-Up Payment.

(a) In the event it shall be determined that any payment or distribution by the Company to or for the benefit of the Executive, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, but determined without regard to any additional payments required under this Section 6, (a “Payment”) would be subject to the tax imposed by section 4999 of the Code (which tax, together with any interest and penalties thereon, is referred to herein as the “Excise Tax”), and if the amount of the Executive’s total “parachute payments” (as defined in section 280G(b)(2) of the Code) with respect to the same Change in Control does not exceed 330% of the Executive’s “base amount” (as defined in section 280G(b)(3) of the Code), then the Payment shall be adjusted until the amount of the Executive’s parachute payments equals 299% of such base amount. The adjustments shall be made in such manner, and to such payments or other benefits, as the Executive and the Company shall mutually agree.

(b) In the event it shall be determined that a Payment would be subject to the Excise Tax and the amount of the Executive’s total parachute payments with respect to the same Change in Control exceeds 330% of the base amount, or in the event an Excise Tax is actually


assessed with respect to a Payment, then the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all taxes, net of any tax benefits that result from the deductibility by the Executive of such taxes, (including, in each case, any interest or penalties imposed with respect to such taxes), including, without limitation, any income taxes (and any interest and penalties imposed on them) and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments.

(c) Subject to the provisions of paragraph (d) of this Section 6, all determinations required to be made under this Section 6, including whether and when a Gross-Up Payment is required and the amount of such Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be made by a nationally recognized public accounting firm as may be designated by the Company (the “Accounting Firm”) which shall provide detailed supporting calculations both to the Company and the Executive within 15 business days of the receipt of notice from the Executive that there has been a Payment, or such earlier time as is requested by the Company. All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to this Section 6, shall be paid by the Company to or for the benefit of the Executive within five days of the receipt of the Accounting Firm’s determination. Any determination by the Accounting Firm shall be binding upon the Company and the Executive. Notwithstanding any other provision of this Section 6, the Company may withhold and pay over to the Internal Revenue Service, for the benefit of the Executive, all or any portion of the Gross-Up Payment that it determines in good faith it is required to withhold. Executive consents to such withholding. As a result of the uncertainty in the application of section 4999 of the Code at the time of the initial determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will not have been made by the Company should have been made (“Underpayment”), consistent with the calculations required to be made. In the event that the Company exhausts its remedies pursuant to paragraph (d) of this Section 6 and the Executive is required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any such Underpayment shall promptly be paid by the Company to or for the benefit of the Executive.

(d) The Executive shall notify the Company in writing of any claim by the Internal Revenue Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such notification shall be given as soon as practicable but no later than ten business days after the Executive is informed in writing of such claim and shall apprise the Company of the nature of such claim and the date on which such claim is requested to be paid. The Executive shall not pay such claim prior to the expiration of the 30-day period following the date on which it gives such notice to the Company (or such shorter period ending on the date that any payment of taxes with respect to such claim is due). If the Company notifies the Executive in writing prior to the expiration of such period that it desires to contest such claim, the Executive shall:

(i) give the Company any information reasonably requested by the Company relating to such claim;


(ii) take such action in connection with contesting such claim as the Company shall reasonably request in writing from time to time, including, without limitation, accepting legal representation with respect to such claim by an attorney reasonably selected by the Company;

(iii) cooperate with the Company in good faith in order effectively to contest such claim; and

(iv) permit the Company to participate in any proceedings relating to such claim;

provided, however, that the Company shall bear and pay directly all costs and expenses (including additional interest and penalties) incurred in connection with such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a result of such representation and payment of costs and expenses. Without limitation on the foregoing provisions of this paragraph (d), the Company shall control all proceedings taken in connection with such contest and, at its sole option, may pursue or forgo any and all administrative appeals, proceedings, hearings and conferences with the taxing authority in respect of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and sue for a refund or contest the claim in any permissible manner, and the Executive agrees to prosecute such contest to a determination before an administrative tribunal, in a court of initial jurisdiction and in one or more appellate courts, as the Company shall determine; provided, however, that if the Company directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount of such payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties with respect thereto) imposed with respect to such advance or with respect to any imputed income with respect to such advance; and further provided that any extension of the statute of limitations relating to payment of taxes for the taxable year of the Executive with respect to which such contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.

(e) If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph (b) or (d) of this Section 6, the Executive becomes entitled to receive any refund with respect to such claim, the Executive shall (subject to the Company’s complying with the requirements of paragraph (d) of this Section 6) promptly pay to the Company the amount of such refund (together with any interest paid or credited thereon after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by the Company pursuant to paragraph (d) of this Section 6, a determination is made that the Executive shall not be entitled to any refund with respect to such claim and the Company does not notify the Executive in writing of its intent to contest such denial of refund prior to the expiration of 30 days after such determination, then such advance shall be forgiven and shall not be required to be repaid and the amount of such advance shall offset the amount of Gross-Up Payment required to be paid.


(f) Notwithstanding the foregoing provisions of this Section 6:

(i) No payments shall be made to or on behalf of the Executive pursuant to this Section 6 until the earlier of: (A) the date that is six months after the Executive’s Date of Termination, or (B) the date of the Executive’s death.

(ii) A Gross-Up Payment shall be paid no later than the last day of the Executive’s taxable year next following the taxable year in which the related taxes are remitted to the taxing authority.

(iii) Any reimbursement of expenses incurred by the Executive due to a tax audit or litigation addressing the existence or amount of a tax liability shall be paid no later than the last day of the Executive’s taxable year following the taxable year in which the taxes that are the subject of the audit or litigation are remitted to the taxing authority or, where as a result of such audit or litigation no taxes are remitted, no later than the last day of the Executive’s taxable year following the taxable year in which the audit is completed or there is a final and nonappealable settlement or other resolution of the litigation.

7. Notice of Termination. During the Protected Period, any purported termination by the Company of the Executive’s employment for Cause or Disability, or by the Executive for Good Reason, shall be communicated by notice of termination to the other party. A notice of termination shall include the specific reason for termination relied upon and shall set forth in reasonable detail, the facts and circumstances claimed to provide a basis for termination of employment. Any dispute by a party hereto regarding a notice of termination delivered to such party must be conveyed to the other party within 30 days after the notice of termination is given. If the particulars of the dispute are not conveyed within the 30-day period, then the disputing party’s claims regarding the termination shall be deemed forever waived.

8. Successors; Binding Agreement.

(a) The Company will require any successor or assign (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to the Executive, expressly, absolutely and unconditionally to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession or assignment had taken place. Any failure of the Company to obtain such agreement prior to the effectiveness of any such succession or assignment shall be a material breach of this Agreement and shall entitle the Executive to terminate the Executive’s employment for Good Reason, whereupon the Executive shall be entitled to receive the payments and other benefits described in this Agreement as though such termination had occurred upon or after the occurrence of a Change in Control.

(b) This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive should die while any amounts are still payable to the Executive hereunder, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the Executive’s devisee, legatee, or other designee or, if there be no such designee, to the Executive’s estate.


9. Notice. For purposes of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail (or its equivalent for overseas delivery), return receipt requested, postage prepaid, and addressed as follows:

If to the Company:

H.B. Fuller Company

P.O. Box 64683

St. Paul, MN 55164-0683

Attention: General Counsel; or

If to the Executive, to the Executive’s

most recent address on file with the Company;

or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

10. Modifications; Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

11. Legal Expenses. If the Executive institutes or defends any legal action to enforce the Executive’s rights under, or to defend the validity of, this Agreement, and if the Executive prevails in such legal action, the Executive shall be entitled to recover from the Company any actual expenses for attorney’s fees and disbursements incurred by the Executive during the period commencing on the Executive’s Date of Termination and ending on the date of the Executive’s death. Any reimbursement of expenses incurred by the Executive for such purposes shall be paid no later than the last day of the Executive’s taxable year following the taxable year in which the expenses are incurred, and no earlier than: (i) the date that is six months after the Executive’s Date of Termination, or (ii) the date of the Executive’s death, whichever first occurs.

12. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Minnesota.

13. Severability; Code Section 409A. If any provision of this Agreement is held by a court of competent jurisdiction to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. This Agreement is intended to satisfy the requirements for nonqualified deferred compensation plans set forth in Section 409A of the Code, and it shall be interpreted, administered and construed consistent with said intent.


14. Restrictive Covenants. In consideration of the payments and benefits provided to the Executive pursuant to this Agreement, the Executive agrees as follows:

(a) The Executive agrees that he or she will not make statements, publicly or otherwise, which disparage or are adverse to the interests of the Company.

(b) The Executive agrees that all information, facts or occurrences relating to: (i) all negotiations leading to any Change in Control; (ii) the existence and contents of this Agreement; and (iii) all formulas, processes, customer lists, computer user identifiers and passwords, and all purchasing, engineering, accounting, marketing and other information, not generally known and proprietary to the Company, including but not limited to, information relating to research, development, manufacturing, marketing or sale of the Company’s products shall be and are hereby deemed to be confidential information (“Confidential Information”) of the Company. The Executive agrees not to use or disclose any Confidential Information except by written consent of the Company.

If the Executive breaches this provision, the Company retains the right to seek equitable or other legal relief, including an immediate refund of moneys paid hereunder.

15. Other Benefits. The specific arrangements referred to in this Agreement are not intended to exclude Executive’s participation in other benefits available to executive personnel generally, or to preclude other compensation or benefits as may be authorized by the Company from time to time; provided, that:

(a) any benefits provided to the Executive under this Agreement will be in lieu of any contingent termination payments payable pursuant to any non-competition agreement between the Company and the Executive; and

(b) severance pay provided to the Executive pursuant to Section 3(b) is subject to offset for other severance benefits, as provided therein.

16. Entire Agreement. This Agreement contains all of the representations, agreements, and understandings between the Company and the Executive pertaining to the payment of Termination Benefits in the event of a change in control, and supersedes any other agreements regarding the provision of Termination Benefits.

* * * * *


IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

H.B. FULLER COMPANY

By:

 

 

As its:

 

 

 

[Executive]

 

 

Top of Document

 

AMENDMENT TO FORM OF CHANGE IN CONTROL AGREEMENT

Exhibit 10.15

 

AMENDMENT TO CHANGE IN CONTROL AGREEMENT

 

THIS AMENDMENT is made this         day of                  , 20         by and between H.B. FULLER COMPANY, a Minnesota corporation (the “Company”), and                  (the “Executive”).

 

W I T N E S S E T H:

 

WHEREAS, the Company and the Executive have heretofore entered into a Change In Control Agreement, dated                , 2007 (the “Agreement”);

 

WHEREAS, the Company and the Executive wish to amend the Agreement as set forth in this Amendment;

 

NOW, THEREFORE, in consideration of the premises, and of the mutual covenants hereinafter set forth, the parties agree that the Agreement is hereby amended as follows:

 

1.    DEFINITION OF CHANGE IN CONTROL. Effective as of the date of this Amendment, Section 1(b)(i) of the Agreement is amended by replacing the number “15%” with the number “30%.”

 

2.    SAVINGS CLAUSE. Save and except as hereinabove expressly amended, the Agreement shall continue in full force and effect.

 

IN WITNESS WHEREOF, the Company and the Executive have executed this instrument as of the date first written above.

 

H.B. FULLER COMPANY

By:

 

 

 

President and Chief Executive Officer

 

[Executive]

 

 

 

 

 

 

 

 

 

 

FORM OF SEVERANCE AGREEMENT H.B.FULLER COMPANY

Exhibit 10.2

SEVERANCE AGREEMENT

THIS SEVERANCE AGREEMENT (the “Agreement”) is made this          day of                     , 2008 (the “Effective Date”), by and between H.B. Fuller Company, a Minnesota corporation (the “Company”), and                      (the “Executive”).

W I T N E S S E T H:

WHEREAS, the Company desires to continue to employ the Executive in accordance with the terms and conditions stated in this Agreement;

WHEREAS, the Executive is a key member of the management of the Company and is expected to devote substantial skill and effort to the affairs of the Company, and the Company desires to recognize the significant personal contribution that the Executive makes, and is expected to continue to make, to further the best interests of the Company and its shareholders;

WHEREAS, it is desirable and in the best interests of the Company and its shareholders to continue to obtain the benefits of the Executive’s services and attention to the affairs of the Company;

WHEREAS, the Company and the Executive are parties to a Change in Control Agreement dated as of                     , and as may be amended from time to time (the “Change in Control Agreement”), which provides the Executive the opportunity to receive certain benefits upon termination of the Executive’s employment under certain conditions during a limited period following a change in control;

WHEREAS, the Company desires to provide the Executive the opportunity to receive certain benefits when, in the absence of a Change in Control, Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, according to the terms, conditions and obligations set forth below;

WHEREAS, the Executive understands that the Executive’s receipt of the benefits provided for in this Agreement depends on, among other things, the Executive’s willingness to agree to and abide by the non-disclosure, non-competition, non-solicitation, and other covenants contained in Exhibit A attached to this Agreement (the “Non-Disclosure Agreement”) and Executive’s execution of a release of claims in favor of the Company upon termination;

WHEREAS, it is desirable and in the best interests of the Company and its shareholders to protect confidential, proprietary and trade secret information of the Company, to prevent unfair competition by former Executives of the Company following separation of their employment with the Company and to secure cooperation from former Executives with respect to matters related to their employment with the Company; and

WHEREAS, the Executive understands that nothing in this Agreement limits the Company’s right to terminate the Executive’s employment at any time and for any reason,


NOW, THEREFORE, in consideration of the Executive’s employment with the Company, the compensation and benefits payable in connection with such employment, and the foregoing premises and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Executive and the Company agree as follows:

1. Definitions. The capitalized terms used in this Agreement have the following meanings:

(a) “Affiliated Organization” means a business entity that is treated as a single employer with the Company under the rules of section 414(b) and (c) of the Code, including the eighty percent (80%) standard therein.

(b) “Annual Cash Compensation” means an amount equal to the sum of: (A) the Executive’s annual base salary in effect as of the Date of Termination plus (B) the amount of the annual target bonus opportunity of the Executive, pursuant to the bonus plan described in Section 3(b) below, for the fiscal year of the Company in which the Date of Termination occurs.

(c) “Board” means the Board of Directors of the Company, including any authorized committee of the Board.

(d) “Cause” means:

(i) any act by the Executive that is materially inimical to the best interests of the Company and that constitutes common law fraud, a felony or other gross malfeasance of duty on the part of the Executive;

(ii) any material disloyalty or dishonesty by the Executive related to or connected with the Executive’s employment by the Company or otherwise likely to cause material harm to the Company or its reputation;

(iii) a willful and material violation by the Executive of the Company’s written policies or codes of conduct;

(iv) wrongful appropriation by the Executive of Company funds or property or other material breach of the Executive’s fiduciary duties to the Company; or

(v) the willful and material breach by the Executive of this Agreement, the Non-Disclosure Agreement, or any other written agreement between the Company and the Executive.

(e) “Change in Control” has the meaning prescribed for such term in the Change in Control Agreement.

(f) “Code” means the Internal Revenue Code of 1986, as amended. Any reference to a specific provision of the Code will include a reference to such provision as it may be amended from time to time and to any successor provision.

 

- 2 -


(g) “Company” means the Company as defined in the first sentence of this Agreement and any successor to its business and/or assets which assumes or agrees to perform this Agreement by operation of law, assignment or otherwise. If at any time during the Term of this Agreement the Executive is employed by an Affiliated Organization, the term “Company” as used in this Agreement shall in addition include such Affiliated Organization. In such event, the Company agrees that it shall pay or provide, or shall cause such Affiliated Organization to pay or provide, any amounts or benefits due the Executive pursuant to this Agreement.

(h) “Date of Termination” means the date of the Executive’s “separation from service” with the Company (including all Affiliated Organizations, as applicable), within the meaning of section 409A(a)(2)(A)(i) of the Code.

(i) “Disability” or “Disabled” means leaving active employment and qualifying for and receiving disability benefits under the Company’s long-term disability plan as in effect from time to time.

(j) “Good Reason” means the occurrence of any of the following without the Executive’s consent:

(i) A material reduction of the Executive’s base salary (unless such reduction is part of an across-the-board uniformly applied reduction affecting all senior executives of the Company);

(ii) A material diminution in the Executive’s authority and duties; provided, however, that a change of the individual or officer to whom the Executive reports, in and of itself, would not constitute diminution; or

(iii) a required change of the Executive’s principal work location of fifty (50) or more miles.

Notwithstanding the above, the occurrence of any of the events described above will not constitute Good Reason unless (A) the Executive gives the Company written notice within ninety (90) days after the initial occurrence of any of such event that the Executive believes that such event constitutes Good Reason and describing the details of such event, (B) the Company thereafter fails to cure any such event within thirty (30) days after receipt of such notice, and (C) the Executive’s Date of Termination as a result of such event occurs within 180 days after the initial occurrence of such event.

(k) “Protected Period” has the meaning prescribed for such term in the Change in Control Agreement.

(l) “Term” means the period commencing on the Effective Date and ending on the last business day of the Company’s fiscal year ending in 2009, provided that such period will be automatically extended for successive one-year periods ending on the last business day of each subsequent fiscal year, unless either party gives written notice of non-renewal to the other party at least six (6) months prior to the last business day of the Company’s fiscal year 2009, or the last business day of each subsequent fiscal year, as the case may be, that such party elects not to extend the Term under this Agreement.

 

- 3 -


2. Position and Duties. During employment with the Company, the Executive will perform such duties and responsibilities as the Company may assign from time to time. Executive will serve the Company faithfully and to the best of the Executive’s ability and will devote full working time, attention, and efforts to the business and affairs of the Company. Executive will follow and comply with applicable policies and procedures adopted by the Company from time to time, including without limitation policies relating to business ethics, conflict of interest, non-discrimination, confidentiality and protection of trade secrets, and insider trading. Executive will not engage in other employment or other material business activity, except as approved in writing by the Board. It shall not be a violation of this Agreement for the Executive to (i) serve on corporate, civic or charitable boards or committees or (ii) manage personal investments, so long as such activities do not materially interfere with the performance of the Executive’s responsibilities to the Company. Executive hereby represents and confirms that the Executive is under no contractual or legal commitments that would prevent the Executive from fulfilling Executive’s duties and responsibilities as set forth in this Agreement.

3. Compensation. During employment with the Company, the Executive will be provided with the following compensation and benefits:

(a) Base Salary. The Company will pay to the Executive for services provided hereunder a base salary at a rate determined from time to time by the Board, which base salary will be paid in accordance with the Company’s normal payroll policies and procedures.

(b) Incentive Compensation. Executive will be eligible to participate in an annual cash bonus plan of the Company as designated by the Board, in accordance with the terms and conditions of such plan as may be in effect from time to time.

(c) Employee Benefits. Executive will be entitled to participate in all employee benefit plans and programs generally available to executive employees of the Company, as determined by the Company and to the extent that the Executive meets the eligibility requirements for each individual plan or program. Executive’s participation in any plan or program will be subject to the provisions, rules, and regulations of, or applicable to, the plan or program. The Company provides no assurance as to the adoption or continuation of any particular employee benefit plan or program.

(d) Expenses. The Company will reimburse the Executive for all reasonable and necessary out-of-pocket business, travel, and entertainment expenses incurred by the Executive in the performance of duties and responsibilities to the Company during the Executive’s employment. Such reimbursement shall be subject to the Company’s normal policies and procedures for expense verification, documentation, and reimbursement.

4. Termination of Employment. Executive shall at all times be an employee at will, and either the Company or the Executive may terminate Executive’s employment with or without Cause at any time, with or without advance notice, subject to the obligations of the parties under this Agreement.

 

- 4 -


5. Payments Upon Involuntary Termination. If the Executive’s Date of Termination occurs during the Term, and if such separation from service (A) is involuntary at the initiative of the Company for any reason other than Cause or Disability or at the initiative of the Executive for Good Reason, and (B) does not occur during a Protected Period, then, in addition to such compensation that has been earned but not paid to the Executive as of the Date of Termination, the Company will provide to the Executive the severance benefits set forth in this Section 5, subject to the conditions in Section 6.

(a) Separation Pay.

(i) The Company will pay to the Executive an amount equal to [for CEO add: two times] the Executive’s Annual Cash Compensation, payable to the Executive in equal installments in accordance with the Company’s regular payroll practices and schedule over the [twelve (12)] [for CEO: twenty-four (24)] month period following the Date of Termination, but in no event shall such amount paid under this Section 5(a)(i) exceed the lesser of (A) $460,000.00 or (B) two (2) times the Executive’s annualized compensation based upon the annual rate of pay for services to the Company for the calendar year prior to the calendar year in which the Date of Termination occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service). The separation pay under this Section 5(a)(i) is intended to constitute a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii).

(ii) In the event that the amount payable to the Executive under Section 5(a)(i) is limited by Section 5(a)(i)(A) or (B) above, then the Company will also pay to the Executive a lump sum payment equal to the difference between (A) [for CEO add: two times] the Executive’s Annual Cash Compensation and (B) the amount payable under Section 5(a)(i). Such payment will be paid to the Executive in a lump sum on the earlier of: (x) the date that is six (6) months after the Date of Termination, or (y) the date of Executive’s death.

(b) Continued Benefits. If the Executive (and/or the Executive’s covered dependents) is eligible and properly elects to continue group medical and/or dental insurance coverage, as in place immediately prior to the Date of Termination, the Company will continue to pay the Company’s portion of any such premiums or costs of coverage until the earlier of (A) [twelve (12)] [for CEO: eighteen (18)] months after the Date of Termination, or (B) the date the Executive (and the Executive’s covered dependents) is provided such form of coverage by a subsequent employer. All such Company-provided medical and/or dental insurance premiums, or costs of coverage, will be paid directly to the insurance carrier or other provider by the Company and the Executive shall make arrangements with the Company to pay the Executive’s portion of such coverage in an amount equal to such portion that the Executive would pay if actively employed by the Company.

(c) Outplacement Services. For a period of up to one year following the Date of Termination, the Company will provide to the Executive executive-level outplacement services from a provider selected by the Company, with a total cost not to exceed

 

- 5 -


$20,000.00. The Company shall pay (or, at its option, reimburse the Executive) for such services within ten days after its receipt of a statement from the service provider; provided that in no event shall reimbursements be paid to the Executive after the last day of the Executive’s third taxable year following the taxable year in which the Date of Termination occurs. The Executive shall not be eligible to receive cash in lieu of outplacement services.

6. Termination Payment Conditions. Notwithstanding anything above to the contrary, the Company will not be obligated to provide any benefits to the Executive under Section 5 hereof unless: (a) the Executive has signed a release of claims in favor of the Company and its affiliates and related entities, and their directors, officers, insurers, employees and agents, in a form prescribed by the Company (which release will not include any claims the Executive may have to indemnification or advancement of expenses with respect to the Executive’s actions as an officer or director of the Company); (b) all applicable rescission periods provided by law for releases of claims have expired and the Executive has not rescinded the release of claims; and (c) the Executive is in strict compliance with the terms of this Agreement, the Non-Disclosure Agreement and any other written agreements between the Company and the Executive as of the dates of such payments.

7. Other Terminations. If Executive’s Date of Termination occurs:

(a) by reason of Executive’s abandonment of employment or resignation from employment for any reason other than Good Reason;

(b) by reason of termination of Executive’s employment by the Company for Cause;

(c) because of Executive’s death or Disability;

(d) upon or following expiration of the Term; or

(e) during a Protected Period,

then the Company will pay to Executive, or Executive’s beneficiary or Executive’s estate, as the case may be, such compensation that has been earned but not paid to Executive as of the Date of Termination, payable pursuant to the Company’s normal payroll practices and procedures, and the Executive shall not be entitled to any additional compensation or benefits provided under this Agreement. In no event shall the Executive be entitled to payments in connection with any separation from service under both this Agreement and under the Change in Control Agreement.

8. Restrictive Covenants. At the same time as the Executive signs this Agreement, the Executive will sign the Non-Disclosure Agreement attached hereto as Exhibit A, among other things in consideration of the payments and benefits provided to the Executive pursuant to this Agreement.

9. Successors. This Agreement shall not be assignable, in whole or in party, by either party without the written consent of the other party, except that the Company may, without the consent of the Executive, assign or delegate all or any portion of its rights and obligations

 

- 6 -


under this Agreement to any corporation or other business entity (i) with which the Company may merge or consolidate, (ii) to which the Company may sell or transfer all or substantially all of its assets or capital stock, or (iii) that is or becomes an Affiliated Organization. Any such current or future successor to which any right or obligation has been assigned or delegated shall be deemed to be the “Company” for purposes of such rights or obligations of this Agreement. In the event of the Executive’s death after the Executive has become eligible for any payments under Section 5 of this Agreement, all amounts payable to the Executive thereunder shall be paid to a beneficiary designated by the Executive in the form established by the Company or, if no such beneficiary is designated, then to the Executive’s estate, heirs or representatives.

10. Miscellaneous.

(a) Tax Withholding. The Company may withhold from any amounts payable under this Agreement such federal, state and local income and employment taxes as the Company shall determine are required or authorized to be withheld pursuant to any applicable law or regulation.

(b) Section 409A. This Agreement is intended to satisfy the requirements of sections 409A(a)(2), (3) and (4) of the Code, including current and future guidance and regulations interpreting such provisions, and should be interpreted accordingly.

(c) Governing Law. All matters relating to the interpretation, construction, application, validity, and enforcement of this Agreement will be governed by the laws of the State of Minnesota without giving effect to any choice or conflict of law provision or rule, whether of the State of Minnesota or any other jurisdiction, that would cause the application of laws of any jurisdiction other than the State of Minnesota.

(d) Jurisdiction and Venue. The Executive and the Company consent to jurisdiction of the courts of the State of Minnesota and/or the United States District Court, District of Minnesota, for the purpose of resolving all issues of law, equity, or fact arising out of or in connection with this Agreement. Any action involving claims of a breach of this Agreement must be brought in such courts. Each party consents to personal jurisdiction over such party in the state and/or federal courts of Minnesota and hereby waives any defense of lack of personal jurisdiction. Venue, for the purpose of all such suits, will be in Ramsey County, State of Minnesota.

(e) Waiver of Jury Trial. To the extent permitted by law, the Executive and the Company waive any and all rights to a jury trial with respect to any dispute arising out of or relating to this Agreement.

(f) Notice. Notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when personally delivered, sent by reliable overnight courier or mailed by United States registered mail (or its equivalent for overseas delivery), return receipt requested, postage prepaid, and addressed as follows:

If to the Company:

H.B. Fuller Company

P.O. Box 64683

St. Paul, MN 55164-0683

Attention: General Counsel

If to the Executive, to the Executive’s most recent address on file with the Company

 

- 7 -


or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

(g) Modifications; Waiver. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing signed by the Executive and the Company. No waiver by either party hereto at any time of any breach by the other party of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.

(h) Entire Agreement. This Agreement, the Change in Control Agreement, and the Non-Disclosure Agreement constitute the entire understandings and agreements between the Company and the Executive with regard to payments and benefits upon a termination of the Executive’s employment or other separation from service with the Company. This Agreement supersedes and renders null and void all prior agreements, offer letters, plans, programs or other undertakings between the parties with regard to such subject matter (other than those specifically referenced herein), whether written or oral.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.

 

H.B. FULLER COMPANY

By:

 

 

As its:

 

 

[The Executive]

 

- 8 -


EXHIBIT A

TO SEVERANCE AGREEMENT

NON-DISCLOSURE AND NON-COMPETITION

H.B. Fuller Company

H.B. Fuller’s continuing growth offers opportunity and security to all employees. This growth is dependent on specialized knowledge not generally known to other companies in the areas of research, technical service, production, marketing and management.

H.B. Fuller spends great amounts of money to obtain and use this specialized knowledge in the form of equipment, study and personnel. By far the largest contribution to this knowledge comes from our people.

This knowledge is only useful, obviously, when it remains with H.B. Fuller. Once the specialized information is generally known it eliminates any advantage to the company or to H.B. Fuller employees.

In other words, all H.B. Fuller employees have a common interest and responsibility in seeing that no one single employee uses this specialized information outside of the company to the detriment of the rest of the employees.

To help protect you and other employees, this Non-Disclosure and Non-Competition Agreement points out our common responsibility.

We ask that you read it very carefully before signing.

 

By:

 

 

 

President and Chief Executive Officer


H.B. Fuller Company

NON-DISCLOSURE AND NON-COMPETITION AGREEMENT

I am employed by or desire to be employed by H.B. Fuller in a capacity in which I may receive or contribute Confidential Information. To protect such Confidential Information, as well as H.B. Fuller’s other legitimate business interests, and in consideration of such employment or continued employment, the wages and benefits provided to me, being given access to Confidential Information, my rights under the Severance Agreement dated                     , 2008, and the other consideration set forth in this Agreement, H.B. Fuller and I agree as follows:

 

A.

DEFINITIONS

In this Agreement the following definitions shall apply:

 

1.

“H.B. Fuller” means H.B. Fuller Company and any of its existing or future subsidiaries, partnerships, joint ventures and affiliates.

 

2.

“CONFIDENTIAL INFORMATION” means all confidential information of H.B. Fuller including, but not limited to, the following:

 

 

 

Product formulas, designs and specifications

 

 

 

Product and production know how, technologies and concepts

 

 

 

new Product ideas

 

 

 

testing methods, know how, techniques, concepts and results

 

 

 

customer lists including identities of existing and potential customers, identities of contacts or possible contacts at customers and prospective customers regardless of who at H.B. Fuller compiled such information

 

 

 

customer purchasing histories, pricing and other contract terms, product preferences, buying habits, business plans, Product plans and expectations

 

 

 

other information disclosed by customers and prospective customers to H.B. Fuller a) where disclosure of such information may be harmful to a customer or prospective customer; b) that the customer or prospective customer has informed H.B. Fuller is not to be disclosed to third parties; or c) where there is an expectation created through any means that H.B. Fuller will keep such information confidential

 

 

 

marketing studies, methods, plans and strategies

 

 

 

business relationships, contracts, methods, models, analyses, plans and strategies

 

 

 

new business ideas

 

- 2 -


 

 

financial and accounting information including budgets, forecasts, projections, costs, prices, margins, profits and sales

 

 

 

supplier and potential supplier identity, sales history, pricing and other contract terms, business plans, and production plans

 

 

 

other information disclosed by suppliers and prospective suppliers to H.B. Fuller a) where disclosure of such information may be harmful to a supplier or prospective supplier; b) that the supplier or prospective supplier has informed H.B. Fuller is not to be disclosed to third parties; or c) where there is an expectation of confidentiality created through any means that H.B. Fuller will keep such information confidential

 

 

 

software ideas and programs

 

 

 

computer user identifiers, access codes and passwords and the like

 

 

 

personnel files and other information specific to individual H.B. Fuller employees

 

 

 

any other information which H.B. Fuller has an obligation to keep confidential

Information shall be considered Confidential Information regardless of the means, media or format in which it is maintained or communicated. Confidential Information shall not include information the entirety of which is now or subsequently becomes generally and publicly known, other than as a direct or indirect result of the breach of this Agreement by me or a breach of a confidentiality obligation owed to H.B. Fuller by any third party.

 

3.

“INVENTIONS” means all formulas, processes, practices, methods, discoveries, improvements, ideas, devices, designs, apparatuses and works of authorship, whether or not patentable or copyrightable.

 

4.

“PRODUCT” means any product, process, equipment, concept or service (in existence or under development).

 

5.

“CONFLICTING PRODUCT” means any Product of any person or organization (other than H.B. Fuller), that resembles or competes with an H.B. Fuller Product.

 

B.

EMPLOYEE’S OBLIGATIONS TO H.B. FULLER

 

1.

FULL-TIME COMMITMENT. I will devote my full-time and energy to furthering H.B. Fuller’s business. I will not pursue any other business activity without H.B. Fuller’s written consent if such business activity would otherwise violate this Agreement or any of H.B. Fuller’s policies on conflicts of interest or outside employment including H.B. Fuller’s Code of Ethics.

 

- 3 -


2.

WORK PRODUCT AND INVENTIONS.

(a) I agree that H.B. Fuller owns and shall continue to be the sole proprietor, in all countries, of all Inventions that I may learn of, have access to, have a part in developing, first conceive, or first reduce to practice (alone or jointly with others) (i) during my work with H.B. Fuller, whether or not during normal work time or at H.B. Fuller’s premises; (ii) at any time after termination of my employment with H.B. Fuller that relate directly to H.B. Fuller’s business or actual or anticipated research about which I became aware at anytime; (iii) at any time after termination of my H.B. Fuller employment if based on Confidential Information; and/or (iv) at any time after termination of my H.B. Fuller employment that result from any of my work for H.B. Fuller. I agree to promptly disclose such Inventions to H.B. Fuller, and I hereby assign all right, title, and interest I may have in such Inventions to H.B. Fuller without charge to H.B. Fuller. In the absence of clear and convincing proof to the contrary, all Inventions conceived by me or first reduced to practice within one year after termination of H.B. Fuller employment that directly relate to H.B. Fuller business or demonstrably anticipated research will be considered to be Inventions to be disclosed to and owned by H.B. Fuller.

(b) I agree to deliver to H.B. Fuller accounts and records of all such Inventions set forth above in Section 2(a), and to execute all documents and oaths and to do such other acts as may be necessary or desirable in H.B. Fuller’s opinion to obtain, maintain, reissue, extend, or enforce patents or copyrights (including without limitation design patents or other applicable registrations) and to vest, perfect, affirm, and record the entire right, title, and interest in H.B. Fuller to such patents, copyrights and Inventions in all countries. I agree to assist in these regards without any obligation by H.B. Fuller to provide me with further compensation, royalties or payments (without charge but at no expense to myself).

(c) This Agreement does not obligate me to assign to H.B. Fuller any Invention developed entirely on my own time without the use of any H.B. Fuller equipment, supplies, facility or Confidential Information and (1) which does not relate (i) directly to H.B. Fuller business or (ii) to H.B. Fuller’s actual or demonstrably anticipated research or development; or (2) which does not result from any work performed by me for H.B. Fuller.

(d) I will promptly document all research according to H.B. Fuller policy, including H.B. Fuller’s policy in the laboratory notebooks assigned to me.

 

3.

CONFIDENTIAL INFORMATION.

All Confidential Information disclosed to me or to which I have access during the period of my employment, which I have a reasonable basis to believe is Confidential Information, or which is treated or designated by H.B. Fuller as being Confidential Information, shall be presumed to be Confidential Information.

 

- 4 -


(a) I acknowledge that H.B. Fuller has taken reasonable measures to preserve the secrecy of its Confidential Information, including, but not limited to, requiring me to execute this Agreement.

(b) I acknowledge that all of the items comprising Confidential Information are confidential, whether or not H.B. Fuller specifically labels such information as confidential or internally restricts access to such information. I acknowledge that H.B. Fuller may have separate policies in effect from time to time regarding protection of its Confidential Information. I agree to abide by these policies even if they more broadly define Confidential Information than this Agreement otherwise does or provide additional instructions on my use or disclosure of Confidential Information.

(c) I agree that Confidential Information, even though it may have been or may be developed or otherwise acquired by me, is the exclusive property of H.B. Fuller to be held by me in fiduciary capacity and solely for H.B. Fuller’s benefit. I agree that I will not at any time, either during or after my employment with H.B. Fuller, reveal, report, publish, transfer or otherwise disclose to any person or entity, or use, any Confidential Information, without the written consent of H.B. Fuller, except for the benefit of H.B. Fuller in connection with my employment consistent with H.B. Fuller’s policies. I agree to stop using any Confidential Information after the termination of my H.B. Fuller employment. I also agree to refrain from any acts or omissions that would reduce the value of any Confidential Information, and to take and comply with reasonable security measures to prevent any accidental or intentional disclosure or misappropriation.

 

4.

NON-COMPETITION AND NON-SOLICITATION

In consideration of my employment (including future employment) by H.B. Fuller and the payments and benefits provided to me in compensation for my services, all increases in payments and benefits and promotions over the course of my employment by H.B. Fuller, my rights under the Severance Agreement, and in further consideration of my being given access to Confidential Information and H.B. Fuller’s other obligations as set forth in this Agreement, I agree that:

(a) During the term of my employment and for twenty-four (24) months after termination (for any reason and by either party) of my employment with H.B. Fuller:

(1) Before accepting employment with a potential employer or beginning work as a consultant or independent contractor (i) in an industry in which H.B. Fuller competes, (ii) with an entity that uses H.B. Fuller Products, or (iii) with an entity that supplies Products to H.B. Fuller, I will provide the potential employer or party engaging my services with a copy of this Agreement and will promptly notify H.B. Fuller in writing of my intention to accept work with such party;

(2) I will not directly or indirectly identify, contact, make sales calls on, make introductions to, accept business from, provide services, assistance or

 

- 5 -


consulting to, with respect to any Conflicting Product, any entity or person who at any time within the two (2) year period prior to my employment termination (i) was a customer of H.B. Fuller with whom I had direct or indirect contact; (ii) was identified as a prospective customer of H.B. Fuller by me, at my direction or by another H.B. Fuller employee or contractor; (iii) was a customer or prospective customer to whom I directly or indirectly rendered assistance of any kind; or (iv) was a customer whose account I supervised or serviced for H.B. Fuller;

(3) I will not encourage any H.B. Fuller customer or prospective customer to divert, terminate, limit, adversely modify, or fail to enter into any actual or potential business with H.B. Fuller;

(4) I will not make statements, publicly or otherwise, that disparage H.B. Fuller, its Products or its conduct or that are otherwise adverse to H.B. Fuller’s interests;

(5) I will not serve in any capacity with, provide services to or have any interest in, whether as an owner, employee, consultant, or otherwise, any entity, organization or person engaged in the development, production or sale of any Conflicting Product, provided that ownership by me as a passive investment of less than 2% of the outstanding shares of capital stock of any corporation listed on a national securities exchange or publicly traded in the over-the-counter market shall not constitute a breach of this paragraph.

(b) During the term of my employment and for twenty-four (24) months after termination (for any reason and by either party) of my employment with H.B. Fuller I will not hire or induce, attempt to induce, or in any way assist or act in concert with any other person or organization in hiring, inducing or attempting to induce any employee, agent or consultant of H.B. Fuller to terminate such employee’s, agent’s or consultant’s relationship with H.B. Fuller.

 

5.

RETURN OF H.B. FULLER PROPERTY

I agree that no later than termination of my H.B. Fuller employment, I will return all Confidential Information, any other information related to H.B. Fuller’s business or my H.B. Fuller work and all other H.B. Fuller property to H.B. Fuller that is in my possession or control, regardless of the format or location of such information. This includes all documents, computers and electronic storage devices such as flash drives, pdas, cds, dvds, floppy discs, keys, credit cards and software that belong to H.B. Fuller. Prior to the termination of my employment, I will advise H.B. Fuller as to whether I have used any computers or other electronic storage device in my possession or control (other than those belonging to H.B. Fuller) to access, store or transmit Confidential Information or H.B. Fuller property and will make such computers or other electronic storage devices available to H.B. Fuller to allow H.B. Fuller to search for and permanently delete any such Confidential Information and other H.B. Fuller property that may still exist on such devices.

 

- 6 -


I further agree that I will cooperate with H.B. Fuller in the transition of my duties and responsibilities for H.B. Fuller, and will participate in interviews or other meetings or proceedings without subpoena, at the request of H.B. Fuller, with any investigations or litigation relating to matters about which I have knowledge by virture of my employment by or service to H.B. Fuller.

 

C.

OTHER PROVISIONS

 

1.

I understand that I am free at any time to leave the employment of H.B. Fuller and, subject to the limitations set forth in this Agreement, to accept any job that utilizes my general education and skills.

 

2.

I understand that these covenants are not intended to limit my post-termination employment in any industry or for any employer producing a product or providing a service different from H.B. Fuller’s. I acknowledge and represent that I have substantial experience and knowledge such that I can readily obtain employment that does not violate these covenants.

 

3.

I represent and agree that I am aware of my right to discuss any and all aspects of this Agreement with my own attorney, that I have carefully read and fully understand all the provisions of this Agreement, and that I am voluntarily entering into this Agreement.

 

4.

I acknowledge that H.B. Fuller has not asked or required me to, and I agree that I will not, violate the terms of any prior employment, confidentiality, non-competition or similar agreements to which I have been a party. The only such agreements to which I have been a party are as follows (copies of which I agree to provide H.B. Fuller as available):

 

 

(If none, please specify)

 

 

 

 

5.

I agree not to disclose to H.B. Fuller, directly or indirectly, confidential information I have obtained from a third party under an obligation of secrecy, except with the specific consent of that third party.

 

6.

My obligations under this Agreement shall be binding on my heirs, executors, administrators and assigns.

 

- 7 -


7.

If any dispute arises under this Agreement, I agree that this Agreement will be interpreted and construed under the laws of Minnesota. I also agree that all disputes arising out of or relating to this Agreement shall be brought, if at all, in a court located in Minnesota to the exclusion of the courts of any other state or jurisdiction. I agree that any court located in the Minnesota has jurisdiction over me in connection with any such disputes, regardless whether H.B. Fuller or I bring the claim or action.

 

8.

I acknowledge and agree that the scope of Sections B and C is reasonable as to both time and extent of customer and other restrictions, that the provisions of the Agreement are reasonable and necessary for the protection of H.B. Fuller in its employment of me and its furnishing to me Confidential Information, and that my violation of this Agreement may subject me to discipline under H.B. Fuller’s discipline policies and will cause H.B. Fuller irreparable harm for which it will be entitled to (a) temporary and permanent injunctive relief without the necessity of proving actual damages, (b) money damages insofar as they can be determined, and (c) all related costs and reasonable attorneys’ fees.

 

9.

The parties agree that if any provision of this Agreement is void or unenforceable for any reason, the remaining provisions will remain in full force and effect. If any particular provision of this Agreement adjudicated to be invalid or unenforceable, the parties specifically authorize the court making such determination to edit the invalid or unenforceable provision to allow this Agreement, and its provisions, to be valid and enforceable to the fullest extent allowed by law or public policy. I expressly stipulate that this Agreement shall be construed in a manner that renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

 

10.

The terms of this Agreement that relate to periods, activities, obligations, rights or remedies will survive termination of my employment with H.B. Fuller and will govern all rights, disputes, claims or causes of action arising out of or in any way related to this Agreement.

 

11.

This Agreement, the Severance Agreement to which it is an exhibit, and the other documents referenced and incorporated in the Severance Agreement (including without limitation the Change in Control Agreement) (a) replace any prior agreement between H.B. Fuller and me relating to these subjects; (b) is the entire agreement between us concerning these subjects; (c) applies during my entire tenure with H.B. Fuller regardless of subsequent changes in position or compensation; and (d) cannot be amended or altered, nor any portion waived, except in writing signed by both parties. This Agreement is ancillary to my employment with H.B. Fuller and is not intended to govern aspects of that employment relationship not covered herein. The obligations in this Agreement are unconditional and do not depend on the performance or non-performance by H.B. Fuller of any terms, duties or obligations not specifically set forth in this Agreement. Nothing in this Agreement changes the fact that I am an “at will” employee of H.B. Fuller and that my employment with H.B. Fuller may be terminated at any time with or without cause and with or without notice. I further understand that any employment policies or other such materials that may be distributed to me during the course of my employment shall not be construed as a contract.

 

- 8 -


12.

I understand that my rights and obligations under this Agreement are not assignable or delegable by me. I agree that this Agreement is fully assignable by H.B. Fuller.

 

13.

I will assert no patent or other rights against H.B. Fuller based on Inventions made by me prior to the date of this Agreement, except for rights under those Inventions described at the top of the next page:

 

- 9 -


DO NOT WRITE ANYTHING CONFIDENTIAL

(Provide only a general description of such Inventions. If this will require disclosure of information you believe is confidential, consult the H.B. Fuller Human Resources Department before completing.)

 

 

 

 

 

 

 

 

ACCEPTED at Vadnais Heights, Minnesota by H.B. Fuller Company.

 

 

 

By

 

 

Employee Name (please print)

 

 

 

 

 

 

Its

 

 

Employee Signature

 

 

 

Date

 

 

 

 

Date

 

 

 

- 10 -

 

 

 

 

EX-10.1 2 dex101.htm AMENDMENT TO SEVERANCE AGREEMENT

Exhibit 10.1

AMENDMENT TO SEVERANCE AGREEMENT

THIS AMENDMENT is made this 2nd day of December, 2010 by and between H.B. Fuller Company (the “Company”) and James J. Owens (the “Executive”).

W I T N E S S E T H:

WHEREAS, the parties have heretofore entered into a Severance Agreement dated August 25, 2008 (the “Severance Agreement”); and

WHEREAS, effective November 19, 2010, the Board of Directors of the Company promoted the Executive to the position of President and Chief Executive Office of the Company; and

WHEREAS, due to the Executive’s promotion to the position of President and Chief Executive Officer, the Company and the Executive have agreed to amend certain provisions of the Severance Agreement in order to modify certain benefits to be provided or paid to the Executive in the event his Date of Termination occurs during the Term as described under the provisions of Section 5 of the Severance Agreement;

NOW, THEREFORE, in consideration of the premises, and of the mutual covenants hereinafter set forth, the parties agree that the Severance Agreement is hereby amended as follows:

1. Payments Upon Involuntary Termination. Effective as of the date of this Amendment, Section 5(a) of the Severance Agreement is amended to read as follows:

“(a) Separation Pay.

(i) The Company will pay to the Executive an amount equal to two times the Executive’s Annual Cash Compensation, payable to the Executive in equal installments in accordance with the Company’s regular payroll practices and schedule over the twenty-four (24) month period following the Date of Termination, but in no event shall such amount paid under this Section 5(a)(i) exceed the lesser of (A) $460,000.00 or (B) two (2) times the Executive’s annualized compensation based upon the annual rate of pay for services to the Company for the calendar year prior to the calendar year in which the Date of Termination occurs (adjusted for any increase during that year that was expected to continue indefinitely if the Executive had not separated from service). The separation pay under this Section 5(a)(i) is intended to constitute a “separation pay plan due to involuntary separation from service” under Treas. Reg. § 1.409A-1(b)(9)(iii).”

(ii) In the event that the amount payable to the Executive under Section 5(a)(i) is limited by Section 5(a)(i)(A) or (B) above, then the Company will also pay to the Executive a lump sum payment equal to the difference between (A) two times the Executive’s Annual Cash Compensation and (B) the

 

1


amount payable under Section 5(a)(i). Such payment will be paid to the Executive in a lump sum on the earlier of: (x) the date that is six (6) months after the Date of Termination, or (y) the date of Executive’s death.

2. Continued Benefits. Effective as of the date of this Amendment, Section 5(b) of the Severance Agreement is amended to read as follows:

“(b) Continued Benefits. If the Executive (and/or the Executive’s covered dependents) is eligible and properly elects to continue group medical and/or dental insurance coverage, as in place immediately prior to the Date of Termination, the Company will continue to pay the Company’s portion of any such premiums or costs of coverage until the earlier of (A) eighteen (18) months after the Date of Termination, or (B) the date the Executive (and the Executive’s covered dependents) is provided such form of coverage by a subsequent employer. All such Company-provided medical and/or dental insurance premiums, or costs of coverage, will be paid directly to the insurance carrier or other provider by the Company and the Executive shall make arrangements with the Company to pay the Executive’s portion of such coverage in an amount equal to such portion that the Executive would pay if actively employed by the Company.”

3. Savings Clause. Save and except as hereinabove expressly amended, the Severance Agreement (including, but not limited to, the Non-Disclosure and Non-Competition Agreement attached as Exhibit A to the Severance Agreement) shall continue in full force and effect. All capitalized terms used in this Amendment shall have the meanings as defined in the Severance Agreement.

 

2


IN WITNESS WHEREOF, the parties have executed this Amendment as of the date first written above.

 

H.B. FULLER COMPANY

By:

 

/s/ Lee R. Mitau

Its:

 

Chairman of the Board

       /s/ James J. Owens

James J. Owens

 

3