Directors Benefit Trust

Exhibit 10(w)
H.B. FULLER COMPANY


DIRECTORS BENEFIT TRUST


THIS AGREEMENT is made by and between H.B. Fuller Company (the "Company") and U.S. Bank National Association, a national banking association (the "Trustee").


W I T N E S S E T H:


WHEREAS, the Company has established a plan for Directors and may establish one or more other such plans, each of which is listed on Exhibit A to this Agreement and is referred to in this Agreement as the "Plan" or collectively as the "Plans;" and


WHEREAS, the Company desires to establish a trust for the purpose of implementing the provisions of the Plans;


NOW, THEREFORE, in order to establish a trust under the Plans and in consideration of the mutual undertakings of the parties, it is agreed as follows.


ARTICLE 1


RULES OF CONSTRUCTION


.1 General Definitions. Unless the context otherwise indicates, the
------------------- terms used in this Agreement are given the meanings ascribed to them by the Plan with respect to which they are being applied.


.2 Grantor Trust. The Trust is intended to be a grantor trust described
------------- in section 671 of the Internal Revenue Code, and shall be construed accordingly.


.3 "Change in Control." A Change in Control shall be deemed to have
----------------- occurred upon any of the following events:


(a) a change in the control of the Company of a nature that
would be required to be reported in accordance with Regulation 14A
promulgated under the Securities Exchange Act of 1934 (the "Exchange Act"),
whether or not the Company is then subject to such reporting requirement;


(b) a public announcement (which, for purposes hereof, shall
include, without limitation, a report filed pursuant to Section 13(d) of
the Exchange Act) that any individual, corporation, partnership,
association, trust or other entity becomes the "beneficial owner" (as
defined in Rule 13d-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;


(c) 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);


(d) the approval of the shareholders of the Company of: (i) 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; (ii) 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
(iii) the adoption of any plan or proposal for the complete or partial
liquidation or dissolution of the Company; or


(e) 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.


.4 "Administrator" shall mean the Plan Administrator designated by the
------------- Plan or, if not designated by the Plan, the Compensation Committee of the Company's Board of Directors or the person to whom the Compensation Committee has delegated the Administrator's duties under the Plan.


.5 "Trustee" shall mean the banking organization that has executed this
------- Agreement, or its successor in trust, who is at the relevant time acting as the Trustee under this Agreement.


.6 "Voting Power," when used with reference to the Company, shall mean
------------ the voting power of all classes and series of capital stock of the Company now or hereafter authorized other than the voting power of any of the shares of Series A preferred stock outstanding as of the date of this Agreement.


ARTICLE 2


APPLICATION OF FUNDS


.1 Segregation of Trust Funds. The Trustee agrees to hold and manage all
-------------------------- contributions received from the Company or any other source and the income and increment of such contributions. The Trust estate shall be held separate and apart from other funds of the Company and shall be used exclusively for the purposes set forth in this Agreement.


.2 Payment of Benefits. Subject to the provisions of Sections 2.3, 3.1,
------------------- and 4.1, the Trustee shall distribute Trust funds to the Plan participants and their beneficiaries as directed by the Administrator. If the assets of the Trust are not sufficient to make payments of benefits pursuant to the Plan to participants and their beneficiaries, the Company shall make the balance of each such payment as it becomes due.


.3 Reversion of Excess Assets. If, prior to a Change in Control, the
-------------------------- Company determines, on the basis of reasonable actuarial assumptions selected by an independent actuary appointed by the Company, that a portion of the Trust's assets or future earnings allocated to an account for a Plan will not be required to pay benefits to participants and their beneficiaries under the terms of the Plan in effect at the time of the determination, all or any part of such portion of assets or future Trust earnings shall be returned to the Company upon the direction of the Company; provided that no part of any assets or future Trust earnings shall be paid to the Company after the occurrence of a Change in Control except as provided in Section 5.2 or 10.3.


ARTICLE 3


INSOLVENCY


.1 Creditors' Claims. At all times during the term of this Trust, the
----------------- principal and income of the Trust shall be subject to the claims of general creditors of the Company, and at any time the Trustee has actual knowledge, or has determined, that the Company is insolvent, the Trustee shall deliver any undistributed principal and income in the Trust to satisfy such claims as a court of competent jurisdiction or a person appointed by the court may direct. The Board of Directors and the Chief Executive Officer of the Company shall have the duty to inform the Trustee of the Company's insolvency. If the Company or a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become insolvent, the Trustee shall independently determine, within thirty days after receipt of such notice, whether the Company is insolvent and, pending such determination, the Trustee shall discontinue payments of benefits under the Plans, shall hold the Trust assets for the benefit of the Company's general creditors, and shall resume payments of benefits under the terms of the Plans only after the Trustee has determined that the Company is not insolvent (or is no longer insolvent, if the Trustee initially determined the Company to be insolvent). Unless the Trustee has actual knowledge of the Company's insolvency, the Trustee shall have no duty to inquire whether the Company is insolvent. The Trustee may in all cases


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rely on such evidence concerning the Company's solvency as may be furnished to the Trustee which will give the Trustee a reasonable basis for making a determination concerning the Company's solvency. Nothing in this Trust Agreement shall in any way diminish any rights of a participant to pursue his rights as a general creditor of the Company with respect to the benefits to which he is entitled under the Plan, but the Trustee shall not, except upon direction of a court of competent jurisdiction or a person appointed by the court, pay to any participant any amounts representing the participant's priority claim for wages or employee benefits.


.2 Restoration of Benefits. If the Trustee discontinues payments of
----------------------- benefits from the Trust pursuant to the provisions of Section 3.1, and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments that would have been made to the participant during the period of such discontinuance, less the aggregate amount of payments made to the participant by the Company in lieu of the payments that would have been provided from this Trust during any such period of discontinuance.


.3 "Insolvency." The Company shall be considered "insolvent" for
---------- purposes of this Trust Agreement if (a) the Company is unable to pay its debts as they mature, or (b) the Company is subject to a pending proceeding as a debtor under the Bankruptcy Code.


ARTICLE 4


CHANGE IN CONTROL


.1 Administration after Change in Control. Upon and after the Trustee
-------------------------------------- receives notice of the occurrence of a Change in Control, the Trustee shall administer the Trust as follows:


(a) The Trustee shall segregate in a separate share of the Trust
the assets of the Trust held to provide benefits for all participants who
were participants in the Plans immediately prior to the Change in Control,
including any contributions received for such participants following the
Change in Control. A separate share of the Trust shall be created for
assets held to provide benefits for persons who become participants in the
Plans after the Change in Control. The assets of the separate shares shall
not be commingled, and in no event shall assets of such a share be used to
provide benefits under another share unless all benefits to participants
under the first share have been paid.


(b) The provisions of Section 3.1, relating to payments to
general creditors of the Company in the event of insolvency, shall not
apply to the separate share of the Trust that includes assets held prior to
the Change in Control until each other separate share has been exhausted by
such payments.


(c) The provisions of Section 2.2 ("Payment of Benefits") shall
cease to apply, and the Trustee shall distribute the Trust fund to Plan
participants and their beneficiaries in accordance with the provisions of
the Plan. If the Administrator fails to provide the Trustee with
information sufficient for it to determine the amount or timing of any
distribution within thirty days after the Trustee's receipt of notice of
the occurrence of the event entitling the participant or beneficiary to
receive such distribution, the Trustee shall be entitled to conclusively
rely upon information provided by the participant or beneficiary. If the
assets of the Trust are not sufficient to make payments of benefits
pursuant to the Plan to participants and their beneficiaries, the Company
shall make the balance of each such payment as it becomes due.


.2 Notice. The Trustee shall be deemed to have received notice of the
------ occurrence of a Change in Control only upon actual delivery to the Trustee of a written notice of such occurrence signed by an officer of the Company, member of the Board of Directors of the Company or a participant in any Plan. If, following its receipt of such a notice, the Trustee determines that no Change in Control has in fact occurred, it shall continue to administer the Trust as if such notice had not been received.


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.3 Investments. Upon and after the occurrence of a Change in Control,
----------- the Trustee shall not be subject to the direction of the Company in the acquisition, investment and disposition of the Trust's assets, and the Trustee shall thereafter acquire, invest and dispose of Trust assets in such manner as it deems prudent and in the best interests of the Plans' participants and their beneficiaries.


.4 Contributions. Within ten business days following the occurrence of a
------------- Change in Control, the Company shall make an irrevocable cash contribution to the Trust in an amount which, when added to the then fair market value of the Trust's assets, is not less than the present value of the payments which are then due or which may thereafter become due to participants or beneficiaries pursuant to the terms of each Plan. The amount of such contribution shall be determined by assuming that each Plan participant who is a Director of the Company at the time of the Change in Control will become entitled to receive benefit payments on the earliest date as of which the participant could receive his benefits without reductions based on the participant's age or length of service. Present value shall be determined using the following actuarial assumptions:


Interest: The average interest rate on 30-year U.S. Treasury obligations
--------
as of the last day of the second month preceding the month in
which the Change in Control occurs.


Mortality: Postretirement: 1983 Group Annuity Mortality Table.
---------


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