<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
X ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
- --- EXCHANGE ACT OF 1934 [FEE REQUIRED]
for the fiscal year ended October 31, 1993
----------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
for the transition period from __________ to __________
Commission file number 0-7977
------
NORDSON CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Ohio 34-0590250
- ------------------------------- --------------------
(State of incorporation) (I.R.S. Employer
Identification No.)
28601 Clemens Road, Westlake, Ohio 44145 (216) 892-1580
- ----------------------------------------- --------------------
(Address of principal executive offices) (Telephone Number)
</TABLE>
Securities registered pursuant to Section 12(b) of the Act:
None
----
Securities registered pursuant to Section 12(g) of the Act:
Common Shares with no par value
-------------------------------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. X
---
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No _____
---
State the aggregate market value of the voting stock held by nonaffiliates
of the Registrant. The aggregate market value shall be computed by reference
to the price at which the stock was sold, or the average bid and asked prices
of such stock, as of a specified date within 60 days prior to the date of
filing. $741,449,000 as of December 31, 1993
------------------------------------
Indicate the number of shares outstanding of each of the Registrant's
classes of common stock, as of the latest practicable date.
18,712,497 Common Shares as of December 31, 1993
- ------------------------------------------------
Documents incorporated by reference: list the following documents if
incorporated by reference and the part of the Form 10-K into which the
document is incorporated: (1) any annual report to security holders; (2) any
proxy or information statement; and (3) any prospectus filed pursuant to Rule
424(b) or (c) under the Securities Act of 1933.
Portions of the 1993 Annual Report - Parts I, II and IV
-------------------------------------------------------
Portions of the Proxy Statement for the 1994 Annual Meeting - Part III
----------------------------------------------------------------------
1
<PAGE> 2
PART I
Item 1. Business.
GENERAL DEVELOPMENT OF BUSINESS
General Description of Business
Nordson Corporation (the "Company") was formed in 1954. The
Company engineers, manufactures and markets sophisticated systems that
apply liquid and powder coatings, sealants and adhesives to consumer and
industrial products during manufacturing processes. In the foreseeable
future, the Company expects to continue to operate primarily within the
industrial application systems business.
Corporate Purpose
The Company strives to be a vital, self-renewing, worldwide
organization which, within the framework of ethical behavior and enlightened
citizenship, grows and produces wealth for its customers, employees,
shareholders and communities.
Overall Strategy
The Company offers its customers a Package of Values(TM) which
includes carefully engineered, durable products, strong service support,
the backing of a well-established worldwide company with financial and
technical strengths, and a commitment to deliver what was promised. These
features provide genuine customer satisfaction, the foundation of continued
growth.
Growth is achieved by seizing opportunities to sell existing
products into new markets, developing new products and investing in
systems to maximize productivity. This strategy is augmented through
engineering, research and development, product-line additions, and business
acquisitions that can serve multi-national industrial markets.
Complementing the Company's business strategy is the objective to
provide opportunities for employee self-fulfillment, growth, security,
recognition and equitable compensation.
Finally, the Company is committed to contributing an average of 5
percent of domestic pretax earnings to human services, health, education and
other charitable activities, particularly in communities where the Company has
major facilities.
Share Repurchase Program
The share repurchase program, which commenced in 1984, continued
through 1993. The primary purpose of this program is to provide shares for
the Company's Long-Term Performance Plan which provides for the granting of
stock options, stock appreciation rights, restricted stock, stock purchase
rights, stock equivalent units, cash awards, and other stock or
performance-based incentives. During fiscal 1993, the Company repurchased
299,149 common shares and issued 272,873 common shares from treasury under
company stock and employee benefit programs.
2
<PAGE> 3
FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENT,
FOREIGN AND DOMESTIC OPERATIONS, AND EXPORT SALES
Pursuant to the Financial Accounting Standards Board Statement
No. 14, "Financial Reporting for Segments of a Business Enterprise", the
Company has reported in Note 12 of Notes to Consolidated Financial Statements
on pages 34 and 35 of the 1993 Annual Report, incorporated herein by
reference thereto, information about the Company's single industry segment
and its foreign and domestic operations. Export sales amounted to
$109,371,000, $104,646,000, and $103,947,000 in 1993, 1992, and 1991,
respectively.
NARRATIVE DESCRIPTION OF BUSINESS
Principal Products, Markets, and Methods of Distribution
The Company offers a full range of industrial equipment to apply
liquid and powder coatings, thermo-plastic adhesives and sealants, as
well as special "performance compounds" and other technology-oriented
materials. Equipment ranges from low-volume, manually-operated systems to
sophisticated programmable automated systems. The following presents the
Company's various products and their uses, arranged by the markets which they
serve:
Packaging - Automated adhesive dispensing systems for sealing
corrugated cases and paperboard cartons and stabilizing pallets in the
food, beverage, agriculture, cosmetics, and pharmaceuticals industries.
Product Assembly - Adhesive and sealant dispensing systems for
bonding or sealing plastic, metal and wood products in the appliance,
automotive, book binding, building/construction, cosmetics, electronics,
furniture, and telecommunications industries.
Nonwovens - Automated equipment for applying adhesives,
superabsorbent powders, liquids and fibers to assemble baby diapers,
feminine hygiene products, adult incontinence products, and bedpads.
Converting - Coating and laminating systems for applying hot melt
adhesives onto continuous webs such as paper and film label stocks, board
stocks, surgical drapes, fabrics, interlinings, and automotive textiles.
Advanced Gasketing - Automated equipment for dispensing foamed
adhesives and sealants to make form-in-place gaskets for automotive
components, appliances and electrical enclosures.
Powder Coating - Electrostatic spray equipment for applying powder
paints and coatings to appliances, automotive components, metal office
furniture/storage shelving, electrical transformers, and recreational
equipment.
Liquid Finishing - Electrostatic spray systems for applying liquid
paints and coatings to plastic, metal and wood products such as automotive
components, furniture, kitchen and bath cabinets, doors and frames, and pipes
and tubing.
3
<PAGE> 4
Automotive - Liquid and powder finishing systems for spraying
powder primers and anti-chip coatings to automobile body panels and applying
basecoats and clearcoats; adhesive and sealant dispensing systems for bonding
and sealing glass and interior seams.
Container Coating - Automated equipment for applying liquid and
powder coatings to the interiors and ends of metal containers in the food
and beverage industries.
Electronics - Automated conformal coating equipment for applying
protective materials to printed circuit boards and electronic assemblies
in the appliance, automotive, avionics, defense, electrical/electronics,
and telecommunications industries.
The Company markets its products in the United States and forty-nine
other countries, primarily through a direct sales force, and in nine
countries through qualified distributors. With approximately sixty percent of
the Company's business attributable to international sales, the Company has
built a worldwide reputation for its creativity and expertise in the
design and engineering of high-technology application equipment which meets
the specific needs of its customers.
Manufacturing and Raw Materials
The manufacturing operations of the Company consist of
machining and finishing specially designed parts and assembling components
into finished equipment. Many of the components are manufactured in standard
modules, to permit one component to be used interchangeably in more than one
product and to permit the ready assembly of components in different
combinations for a variety of equipment models. Manufacturing
operations are located in Amherst, Ohio; Elyria, Ohio; Norcross, Georgia;
Sand City, California; Luneberg, Germany and Stenungsund, Sweden.
The principal raw materials used in the manufacture of the
Company's products include metals and plastics in the form of sheets, bar
stock, castings, forgings and tubing. The Company also purchases many
electrical and electronic components, fabricated and semi-fabricated metal
parts, high-pressure fluid hoses, packings, seals and other items.
The Company's policy is to select suppliers based on the competitive
value offered in terms of total cost and quality. Substantially all of its
materials are available through multiple sources.
The Company maintains an extensive quality control program for
all its equipment and machinery. This program is supervised by the Company's
Vice President, Manufacturing.
Because of varying degrees of availability of natural gas and other
fuels, the Company has developed standby capacity to utilize other energy
sources as an alternative. No material adverse effect on its business
has resulted or is anticipated to result from energy shortages.
4
<PAGE> 5
Patents and Trademarks
The Company follows the practice of maintaining trademark and patent
protection both domestically and internationally. No aspect of the Company's
business is materially dependent upon any one or more of the patents or on
patent protection in general.
Seasonal Variation in Business
There is no significant seasonal variation in the Company's business.
Working Capital Practices
The Company has no special or unusual practices affecting working
capital items. However, for customized equipment and systems, the Company
generally requires substantial advance payments as deposits and, in certain
cases, progress payments during the manufacturing process. A significant
part of the Company's Package of Values(TM) is service, including service in
the form of a very high level of product availability at the time of order
entry, which requires a relatively high investment in inventory.
Customers
The Company has a large number of customers representing a wide
variety of industries and geographic regions. The loss of a single or a few
customers would not have a materially adverse effect on the Company's
business. No single customer accounted for 5 percent or more of sales in the
year ended October 31, 1993.
Backlog
The Company's backlog of orders has increased to $43,213,000 at
October 31, 1993 as compared to $40,751,000 at November 1, 1992. All
orders included in the October 1993 backlog are expected to be shipped to
customers in fiscal 1994.
Government Contracts
The Company's business does not include, and does not depend
upon, a significant amount of governmental contracts or sub-contracts.
Therefore, no material part of the Company's business is subject to
renegotiation or termination at the option of the government.
Competitive Conditions
The Company maintains competitive advantage through leadership in the
areas of product innovation, quality, delivery and performance as well as
customer service. Although material applications vary, all Nordson systems
provide one or more customer benefits in terms of: ease of application;
increased productivity; labor, material and energy savings; reduced space
requirements; improved plant environmental conditions; greater operating
efficiencies; lower maintenance costs; and stronger, more attractive
products.
5
<PAGE> 6
The industrial application systems business is highly
competitive. The Company's equipment is sold in competition with a wide
variety of alternative bonding, sealing, caulking, assembly, finishing
and coating techniques. Any production process involving the application
of a material to a substrate or surface represents a potential use of the
Company's equipment. The Company is a leading producer of powder coating
systems as well as equipment for applying hot melt adhesives. The
Company depends upon the quality and features of its equipment and its
marketing techniques to maintain its market position.
Research and Development
The Company places strong emphasis on the development of new
products and improvement of existing products through its own research
staff. The Company's expenditures for research and development were
approximately $19,655,000 in fiscal 1993 as compared to approximately
$18,431,000 in fiscal 1992 and $17,999,000 in fiscal 1991, and as a
percentage of net sales were approximately 4.3 percent for fiscal 1993, 4.3
percent for fiscal 1992 and 4.6 percent for fiscal 1992.
Environmental Compliance
Compliance by the Company with federal, state and local
environmental protection laws during fiscal 1993 had no material effect on
capital expenditures, earnings or the competitive position of the
Company. No material effect is anticipated for fiscal 1994.
Employees
As of October 31, 1993, the Company has approximately 3,102
employees, which includes each person employed on a full-time basis as one
unit and all part- time personnel (the number of which is not material) stated
in equivalent units.
6
<PAGE> 7
Item 2. Properties.
The following table summarizes the principal properties of the
Company.
<TABLE>
<CAPTION>
Description Approximate
Location of Property Square Feet
- -------- ----------- -----------
<S> <C> <C>
Amherst, Ohio A manufacturing, laboratory 474,000
and office complex located
on 52 acres of land
Westlake, Ohio An office and laboratory 65,000
building located on 25 acres
of land
Elyria, Ohio A manufacturing and warehouse 20,000
building
Duluth, Georgia An office and laboratory 91,000
building (leased)
Norcross, Georgia A manufacturing, laboratory 112,000
and office building located
on 10 acres of land
A manufacturing and office 27,000
building (leased)
Sand City, Five manufacturing, laboratory 27,000
California and office buildings (leased)
Albertslund, An office and warehouse 16,000
Denmark building
Luneberg, A manufacturing, laboratory 120,000
Germany and office complex
Stenungsund, A manufacturing and office 13,000
Sweden building
</TABLE>
Several of these properties are pledged as security for industrial
revenue bonds and mortgage notes payable.
Other properties at international subsidiary locations and at
branch locations within the United States are leased. Lease terms do not
exceed twenty-five years and generally contain a provision for cancellation
with some penalty at an earlier date.
In addition, the Company leases equipment under various
operating and capitalized leases. Information about leases is reported in
Note 13 of Notes to Consolidated Financial Statements on page 36 of the 1993
Annual Report, incorporated herein by reference thereto.
7
<PAGE> 8
Item 3. Legal Proceedings.
The Company is involved in legal proceedings incidental to its
business, none of which is material to the results of operations in the opinion
of management.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
8
<PAGE> 9
Executive Officers of the Company.
The executive officers of the Company as of December 31, 1993 were as
follows:
<TABLE>
<CAPTION>
Name Position
- ---- --------
<S> <C>
Eric T. Nord Chairman of the Board
William P. Madar President and Chief Executive Officer
Werner Bohm Vice President
Drexel R. Bunch Vice President, Manufacturing
Edward P. Campbell Vice President
Bruce H. Fields Vice President, Human Resources
John E. Jackson Vice President
Dr. Richard G. Klein Vice President, Corporate Research and Technology
Donald J. McLane Vice President
Yoshihiko Miyahara Vice President
Thomas L. Moorhead Vice President, Law and Assistant Secretary
Nicholas D. Pellecchia Vice President, Finance and Treasurer
Robert E. Thayer Vice President
William D. Ginn Secretary
</TABLE>
9
<PAGE> 10
Mr. Eric T. Nord, age 76, joined the predecessor of the Company in
1939 and was Chairman of the Board and Chief Executive Officer prior to his
retirement in 1982. He has continued to serve as Chairman of the Board after
his retirement.
Mr. Madar, age 54, joined the Company in 1986 as President and
Chief Executive Officer. From 1986 until 1989, he also served as Treasurer.
Mr. Bohm, age 54, has been employed by the Company for 22 years.
In 1986 he was elected a Vice President, responsible for directing activities
of the European Division.
Mr. Bunch, age 49, joined the Company in 1983. Since 1986, he has
served as Vice President, Manufacturing.
Mr. Campbell, age 44, joined the Company in 1988 as a Vice
President, responsible for overseeing corporate research and business
development activities, along with information service operations. In
1989 he assumed additional responsibilities for overseeing the
manufacturing and human resources functions.
Mr. Fields, age 42, joined the Company in 1988 as Human Resources
Manager for the Application Equipment Division. He was appointed Director,
Human Resources in 1989 and was elected Vice President, Human Resources in
1992.
Mr. Jackson, age 48, joined the Company as Vice President -
Operations in 1986 and was later elected Vice President, responsible for the
Application Equipment Division. During 1989, he assumed responsibility for
the operations of the North American Division.
Dr. Klein, age 51, has been employed by the Company for thirteen
years. He has served as Vice President, Corporate Research & Technology since
1986.
Mr. McLane, age 50, has been employed by the Company for 19 years.
Since 1986, he has served as Vice President, responsible for directing the
activities of the Pacific South Division.
Mr. Miyahara, age 56, has been employed by the Nordson
organization for over 20 years and served as Managing Director of
Nordson K.K. (a wholly-owned Japanese subsidiary). In 1987, he was
appointed President of the Japanese Division and Chief Executive Office of
Nordson K.K. In 1989 he was elected a Vice President of the Company with
continuing responsibility to direct the activities of the Japanese
Division.
Mr. Moorhead, age 57, joined the Company in 1969, and has served
as Vice President - Law and Assistant Secretary since 1981.
10
<PAGE> 11
Mr. Pellecchia, age 48, joined the Company in 1981 and was elected
Vice President - Finance in 1986. In 1989, he assumed the additional
responsibilities of Treasurer.
Mr. Thayer, age 62, has been employed by the Company for 29 years.
He was elected a Vice President in 1978. In 1986, he assumed responsibility
for directing activities of the North American Division. In 1989, he
assumed responsibility for overseeing product development and sales activities
of Nordson's businesses directed toward the nonwovens and converting markets.
In 1989 and 1990, he also directed the operations and integration of the
German-based Meltex business, acquired in 1989.
Mr. Ginn, age 70, has been Of Counsel to the law firm of Thompson,
Hine and Flory, Cleveland, Ohio since January 1993. Prior to that time, he had
been a Partner with Thompson, Hine and Flory since 1959. He has been Secretary
of the Company since 1966.
Messrs. Eric T. Nord and Evan W. Nord (director and retired
officer) are brothers. No other directors and officers are related.
11
<PAGE> 12
PART II
Item 5. Market for the Company's Common Equity and Related Stockholder
Matters.
Market Information and Dividends.
The Company's common shares are listed on the NASDAQ National
Market System. The information appearing under the caption "Investor
Information" on page 44 of the 1993 Annual Report is incorporated herein by
reference thereto.
Holders.
The approximate number of holders of record of each class of
equity securities of the Company as of December 31, 1993 was as follows:
<TABLE>
<CAPTION>
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Common shares with no
par value 2,845
</TABLE>
Item 6. Selected Financial Data.
The Company incorporates herein by reference the information as to
each of the Company's last five fiscal years appearing under the caption
"Eleven-Year Summary" on pages 40 and 41 of the 1993 Annual Report.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
The Company incorporates herein by reference the information
appearing under the caption "Management's Discussion and Analysis" on pages
18 and 19 of the 1993 Annual Report.
Item 8. Financial Statements and Supplementary Data.
The information required by this item appears on pages 20 through
38 of the 1993 Annual Report, incorporated herein by reference thereto.
Item 9. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure.
None.
12
<PAGE> 13
PART III
Item 10. Directors and Executive Officers of the Company.
The Company incorporates herein by reference the information
appearing under the caption "Election of Directors" on pages 1 through 5
of the Company's definitive Proxy Statement to be filed with the Securities
and Exchange Commission by January 31, 1994.
Executive officers of the Company serve for a term of one year from
date of election to the next organizational meeting of the Board of Directors
and until their respective successors are elected and qualified, except in
the case of death, resignation or removal. Information concerning executive
officers of the Company is contained in Part I of this report under the
caption "Executive Officers of the Company."
Item 11. Executive Compensation.
The Company incorporates herein by reference the information
appearing under the caption "Compensation of Directors" located on
page 5 and information pertaining to compensation of officers
located on pages 8 through 25 of the Company's definitive Proxy Statement
to be filed with the Securities and Exchange Commission by January 31, 1994.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
The Company incorporates herein by reference the information
appearing under the caption "Ownership of Nordson Common Shares" on pages 6
through 8 of the Company's definitive Proxy Statement to be filed with the
Securities and Exchange Commission by January 31, 1994.
Item 13. Certain Relationships and Related Transactions.
William D. Ginn, a director and Secretary of the Company, is Of
Counsel to Thompson, Hine and Flory, a law firm which has in the past provided
and continues to provide legal services to the Company.
13
<PAGE> 14
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a)(1), (a)(2) and (d). Financial Statements and Financial Statement
Schedules.
The financial statements and financial statement schedules listed
in the accompanying index to financial statements and financial statement
schedules are filed as part of this Annual Report on Form 10-K.
(a)(3) and (c). Exhibits.
The exhibits listed on the accompanying index to exhibits are filed
as part of this Annual Report on Form 10-K.
(b) Reports on Form 8-K.
None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this report to
be signed on its behalf by the undersigned, thereunto duly authorized.
<TABLE>
<S> <C>
NORDSON CORPORATION
Date: January 28, 1994 By: /s/ Nicholas D. Pellecchia
-------------------------------
Nicholas D. Pellecchia
Vice President, Finance
and Treasurer
</TABLE>
14
<PAGE> 15
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C>
/s/ Eric T. Nord January 28, 1994
- -----------------------------
Eric T. Nord
Director and Chairman of the Board
/s/ William P. Madar January 28, 1994
- ----------------------------
William P. Madar
Director, President and Chief Executive Officer
(Principal Executive Officer)
/s/ Nicholas D. Pellecchia January 28, 1994
- ----------------------------
Nicholas D. Pellecchia
Vice President-Finance and Treasurer
(Principal Accounting Officer and
Principal Financial Officer)
/s/ William D. Ginn January 28, 1994
- ----------------------------
William D. Ginn
Director and Secretary
/s/ Dr. Glenn R. Brown January 28, 1994
- ----------------------------
Dr. Glenn R. Brown
Director
/s/ William W. Colville January 28, 1994
- ----------------------------
William W. Colville
Director
/s/ Stephen R. Hardis January 28, 1994
- ----------------------------
Stephen R. Hardis
Director
/s/ Dr. Jacob O. Kamm January 28, 1994
- ----------------------------
Dr. Jacob O. Kamm
Director
/s/ Dr. Anne O. Krueger January 28, 1994
- ----------------------------
Dr. Anne O. Krueger
Director
/s/ Evan W. Nord January 28, 1994
- ----------------------------
Evan W. Nord
Director
</TABLE>
15
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NORDSON CORPORATION
ANNUAL REPORT ON FORM 10-K
ITEM 14(a)(1), (2) and (3), (c) and (d)
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
FINANCIAL STATEMENT SCHEDULES
INDEX TO EXHIBITS
CERTAIN EXHIBITS
FISCAL YEAR ENDED OCTOBER 31, 1993
16
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NORDSON CORPORATION
INDEX TO FINANCIAL STATEMENTS
AND FINANCIAL STATEMENT SCHEDULES
(Item 14(a)(1) AND (2))
<TABLE>
<CAPTION>
Page Reference
----------------------------
Form 10-K Annual Report
--------- ---------------
<S> <C> <C>
Data incorporated by reference from
the 1993 Annual Report:
Consolidated statement of income for
the years ended October 31, 1993,
November 1, 1992 and November 3, 1991 20
Consolidated balance sheet at
October 31, 1993 and November 1, 1992 21
Consolidated statement of cash flows
for the years ended October 31, 1993,
November 1, 1992 and November 3, 1991 22
Consolidated statement of shareholders'
equity for the years ended October 31,
1993, November 1, 1992 and November 3,
1991 23
Notes to consolidated financial statements 24-38
Report of independent auditors 39
Consolidated financial statement schedules:
Schedule V - Property, plant and equipment 18-20
Schedule VI - Accumulated depreciation and
amortization of property,
plant and equipment 21-23
Schedule IX - Short-term borrowings 24
Schedule X - Supplementary income
statement information 25
Report of independent auditors 26
</TABLE>
All other schedules for the Registrant have been omitted since the
required information is not present or not present in amounts sufficient to
require submission of the schedule, or because the information required is
included in the financial statements, including the notes thereto.
The consolidated financial statements of the Registrant listed
in the preceding index, which are included in the 1993 Annual Report, are
incorporated herein by reference. With the exception of the pages listed in
the above index and information incorporated by reference elsewhere herein,
the 1993 Annual Report is not to be deemed filed as part of this report.
17
<PAGE> 18
<TABLE>
NORDSON CORPORATION
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Year ended October 31, 1993
(In Thousands)
<CAPTION>
Balance Balance
beginning Additions Retire- Other end of
Classification of period at cost ments activity period
- -------------- --------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Land $ 3,748 $ 2 $ - $ (95)CE $ 3,655
Land improvements 2,363 35 - (56)CE 2,342
Buildings and
improvements 50,538 2,532 1,648 (1,458)CE 49,964
Machinery and
equipment 65,266 7,981 2,535 (2,152)CE 68,560
Construction in
progress 4,327 5,284 - (5)CE 9,606
Property under
capital leases 12,860 4,670 3,987 (731)CE 12,812
-------- ------- ------ ------- --------
$139,102 $20,504 $8,170 $(4,497) $146,939
======== ======= ====== ======= ========
<FN>
CE - Impact of currency exchange rate fluctuations on foreign operations.
</TABLE>
18
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<TABLE>
NORDSON CORPORATION
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Year ended November 1, 1992
(In Thousands)
<CAPTION>
Balance Balance
beginning Additions Retire- Other end of
Classification of period at cost ments activity period
- -------------- --------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Land $ 3,739 $ 3 $ 92 $ 98 CE $ 3,748
Land improvements 2,311 9 14 57 CE 2,363
Buildings and 187 A
improvements 48,094 1,917 1,324 1,664 CE 50,538
Machinery and 1,041 A
equipment 58,440 6,916 3,000 1,869 CE 65,266
Construction in
progress 2,899 1,426 2 4 CE 4,327
Property under 274 A
capital leases 9,398 5,787 3,221 622 CE 12,860
-------- ------- ------ ------- --------
$124,881 $16,058 $7,653 $ 5,816 $139,102
======== ======= ====== ======= ========
<FN>
A - Property, plant and equipment of acquired business.
CE - Impact of currency exchange rate fluctuations on foreign operations.
</TABLE>
19
<PAGE> 20
<TABLE>
NORDSON CORPORATION
SCHEDULE V - PROPERTY, PLANT AND EQUIPMENT
Year ended November 3, 1991
(In Thousands)
<CAPTION>
Balance Balance
beginning Additions Retire- Other end of
Classification of period at cost ments activity period
- -------------- --------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Land $ 3,628 $ 138 $ - $ (27)CE $ 3,739
Land improvements 2,301 29 - (19)CE 2,311
Buildings and
improvements 47,396 1,560 342 (520)CE 48,094
Machinery and 702 A
equipment 52,827 8,413 2,883 (619)CE 58,440
Construction in
progress 3,254 (355) - - 2,899
Property under
capital leases 8,636 3,666 2,766 (138)CE 9,398
-------- ------- ------ ------- --------
$118,042 $13,451 $5,991 $ (621) $124,881
======== ======= ====== ======= ========
<FN>
A - Property, plant and equipment of acquired business.
CE - Impact of currency exchange rate fluctuations on foreign operations.
</TABLE>
20
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<TABLE>
NORDSON CORPORATION
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Year ended October 31, 1993
(In Thousands)
<CAPTION>
Additions
Balance Charged To Balance
beginning Costs and Retire- Other end of
Classification of period Expenses ments activity period
- -------------- --------- --------- ------- --------- -------
<S> <C> <C> <C> <C> <C>
Land improvements $ 1,374 $ 116 $ - $ (20)CE $ 1,470
Buildings and
improvements 15,922 2,215 862 (336)CE 16,939
Machinery and
equipment 39,547 8,165 1,773 (1,301)CE 44,638
Property under
capital leases 4,887 3,285 2,737 (232)CE 5,203
------- ------- ------ ------- -------
$61,730 $13,781 $5,372 $(1,889) $68,250
======= ======= ====== ======= =======
<FN>
CE - Impact of currency exchange rate fluctuations on foreign operations.
Notes:
(1) The ranges of estimated useful lives used in computing
depreciation for financial reporting are: land improvements - 12
to 20 years, buildings - 20 to 50 years, machinery and equipment - 3
to 12 years.
(2) Amortization of leased property under capital leases is calculated
on the straight-line method over the terms of the lease.
</TABLE>
21
<PAGE> 22
<TABLE>
NORDSON CORPORATION
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Year ended November 1, 1992
(In Thousands)
<CAPTION>
Additions
Balance Charged To Balance
beginning Costs and Retire- Other end of
Classification of period Expenses ments activity period
- -------------- --------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
Land improvements $ 1,236 $ 122 $ 4 $ 20 CE $ 1,374
Buildings and 185 A
improvements 13,834 1,993 520 430 CE 15,922
Machinery and 789 A
equipment 31,769 7,717 1,861 1,133 CE 39,547
Property under 125 A
capital leases 3,602 3,160 2,276 276 CE 4,887
------- ------- ------ ------ -------
$50,441 $12,992 $4,661 $2,958 $61,730
======= ======= ====== ====== =======
<FN>
A - Property, plant and equipment of acquired business.
CE - Impact of currency exchange rate fluctuations on foreign operations.
Notes:
(1) The ranges of estimated useful lives used in computing
depreciation for financial reporting are: land improvements - 12
to 20 years, buildings - 20 to 50 years, machinery and equipment - 3
to 12 years.
(2) Amortization of leased property under capital leases is calculated
on the straight-line method over the terms of the lease.
</TABLE>
22
<PAGE> 23
<TABLE>
NORDSON CORPORATION
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, PLANT AND EQUIPMENT
Year ended November 3, 1991
(In Thousands)
<CAPTION>
Additions
Balance Charged To Balance
beginning Costs and Retire- Other end of
Classification of period Expenses ments activity period
- -------------- --------- --------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
$ (3)CE
Land improvements $ 1,390 $ 142 $ - (293)R $ 1,236
Buildings and (81)CE
improvements 12,441 1,856 165 (217)R 13,834
6 A
Machinery and (319)CE
equipment 26,283 7,582 2,293 510 R 31,769
Property under
capital leases 3,239 2,360 1,942 (55) 3,602
------- ------- ------ ------ -------
$43,353 $11,940 $4,400 $ (452) $50,441
======= ======= ====== ====== =======
<FN>
A - Property, plant and equipment of acquired business.
CE - Impact of currency exchange rate fluctuations on foreign operations.
R - Reclasses between categories of accumulated depreciation and
amortization with a net effect of zero.
Notes:
(1) The ranges of estimated useful lives used in computing
depreciation for financial reporting are: land improvements - 12
to 20 years, buildings - 20 to 50 years, machinery and equipment - 3
to 12 years.
(2) Amortization of leased property under capital leases is calculated
on the straight-line method over the terms of the lease.
</TABLE>
23
<PAGE> 24
<TABLE>
NORDSON CORPORATION
SCHEDULE IX - SHORT-TERM BORROWINGS
Years Ended October 31, 1993, November 1, 1992 and November 3, 1991
(In Thousands Except Percentages)
<CAPTION>
Weighted
Maximum Average Average
Category of Weighted Amount Amount Interest
Aggregate Balance Average Outstanding Outstanding Rate
Short-Term at End of Interest During During During
Borrowings (1) Period Rate Period Period (2) Period (3)
- -------------- --------- -------- ----------- ----------- ----------
<S> <C> <C> <C> <C>
Year Ended October 31, 1993:
Domestic notes payable-banks $ - - $ 2,850 $ 1,628 3.5%
International notes payable-
banks $19,050 8.7% $38,966 $28,984 9.7%
Year Ended November 1, 1992:
Domestic notes payable-banks $ - - $ 8,651 $ 2,087 4.2%
International notes payable-
banks $39,743 9.7% $39,749 $38,222 10.8%
Year Ended November 3, 1991:
Domestic notes payable-banks $ - - $ 9,200 $ 3,358 8.0%
International notes payable-
banks $34,285 10.4% $44,053 $30,802 11.8%
<FN>
Notes:
(1) Represents borrowings against lines of credit with several banks.
(2) The average amount outstanding during the period was calculated by
dividing the total of borrowings outstanding at the end of each day by 365
days.
(3) The weighted average interest rate during the period was calculated by
dividing the actual interest expense on short-term borrowings by the
average amount outstanding during the period.
</TABLE>
24
<PAGE> 25
NORDSON CORPORATION
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
Years Ended October 31, 1993, November 1, 1992 and November 3, 1991
(In Thousands)
<TABLE>
<CAPTION>
Item Charged To Costs and Expenses
---- -----------------------------
Year Ended
----------
1993 1992 1991
------ ------ ------
<S> <C> <C> <C>
Advertising Expense $4,448 $3,482 $3,411
</TABLE>
Note: Information regarding maintenance and repairs, amortization of
intangible assets, taxes other than payroll and income taxes, and royalties
are not presented because each item does not exceed one percent of total sales.
25
<PAGE> 26
REPORT OF INDEPENDENT AUDITORS
We have audited the consolidated financial statements of Nordson Corporation
as of October 31, 1993 and November 1, 1992 and for each of the three years
in the period ended October 31, 1993 and have issued our report thereon
dated December 7, 1993 [incorporated by reference elsewhere in this Annual
Report (Form 10-K)]. Our audits also included the consolidated financial
statement schedules of Nordson Corporation as of October 31, 1993 and
November 1, 1992 and for each of the three years in the period ended October
31, 1993, listed in item 14(a) of this Annual Report (Form 10-K). These
schedules are the responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, the consolidated financial statement schedules referred to
above, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.
<TABLE>
<S> <C>
/s/ Ernst & Young
Ernst & Young
Cleveland, Ohio
December 7, 1993
</TABLE>
26
<PAGE> 27
<TABLE>
NORDSON CORPORATION
INDEX TO EXHIBITS
(Item 14(a)(3))
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
(3) Articles of Incorporation and By-Laws
3-a 1989 Amended Articles of Incorporation
(incorporated herein by reference to
Exhibit 3-a to Registrant's Annual Report
on Form 10-K for the year ended
October 29, 1989)
3-b Amendment to 1984 Regulations, adopted
February 22, 1989, and 1984 Amended
Regulations, as amended (incorporated
herein by reference to Exhibit 3-b to
Registrant's Annual Report on Form 10-K for
the year ended October 29, 1989)
(4) Instruments Defining the Rights of Security
Holders, including indentures
4-a Instruments related to Industrial Revenue Bonds
(These instruments are not being filed as
exhibits to this Annual Report on Form 10-K.
The Registrant agrees to furnish a copy of
such instruments to the Commission upon request.)
4-b Rights Agreement between Nordson Corporation and
Ameritrust Company National Association
(10) Material Contracts
10-a Management Incentive Compensation Plan (incorporated
herein by reference to Exhibit 10-a to Registrant's
Annual Report on Form 10-K for the year ended
November 1, 1992)*
10-a-1 Management Incentive Compensation Plan - 1994
Revisions to Exhibits A, B and C*
10-b Supplemental retirement benefit agreement between
the Registrant and Kenneth H. Daly (incorporated
herein by reference to Exhibit 10-b to Registrant's
Annual Report on Form 10-K for the year ended
October 29, 1989)
</TABLE>
27
<PAGE> 28
<TABLE>
NORDSON CORPORATION
INDEX TO EXHIBITS
(Item 14(a)(3))
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
10-c 1979 Employees Stock Option Plan of the Registrant,
as amended October 27, 1980 (incorporated herein
by reference to Exhibit 10-c to Registrant's
Annual Report on Form 10-K for the year ended
October 29, 1989)*
10-c-1 Amendment to 1979 Employees Stock Option Plan of
the Registrant, adopted April 20, 1982
(incorporated herein by reference to Exhibit
10-c-1 to Registrant's Annual Report on Form
10-K for the year ended October 29, 1989)*
10-c-2 Amendments to 1979 Employee Stock Option Plan
of the Registrant, adopted October 27, 1988*
10-d 1982 Incentive Stock Option Plan of the
Registrant, as adopted January 18, 1982
(incorporated herein by reference to Exhibit
10-e to Registrant's Annual Report on Form
10-K for the year ended October 29, 1989)*
10-d-1 Amendment to 1982 Incentive Stock Option Plan
of the Registrant, adopted April 20, 1982
(incorporated herein by reference to Exhibit
10-e-1 to Registrant's Annual Report on Form
10-K for the year ended October 29, 1989)*
10-d-2 Amendments to the 1982 Incentive Stock Option
Plan of the Registrant, adopted January 30, 1987
(incorporated herein by reference to Exhibit
10-e-2 to Registrant's Annual Report on Form 10-K
for the year ended November 1, 1992)*
10-d-3 Amendment to 1982 Incentive Stock Option Plan of
the Registrant, adopted October 27, 1988*
10-e Employment Agreement between the Registrant and
William P. Madar (incorporated herein by
reference to Exhibit 10-g to Registrant's
Annual Report on Form 10-K for the year
ended October 28, 1990)*
</TABLE>
28
<PAGE> 29
<TABLE>
NORDSON CORPORATION
INDEX TO EXHIBITS
(Item 14(a)(3))
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
10-e-1 Amendment to Employment Agreement between the
Registrant and William P. Madar*
10-f Board of Directors Deferred Compensation Plan, as
amended October 27, 1988 (incorporated herein
by reference to Exhibit 10-h to Registrant's
Annual Report on Form 10-K for the year ended
October 29, 1989)*
10-g Employment Agreement between the Registrant and
John E. Jackson (incorporated herein by reference
to Exhibit 10-i to Registrant's Annual Report
on Form 10-K for the year ended November 3, 1991)*
10-h Indemnity Agreement (incorporated herein by reference
to Exhibit 10-j to Registrant's Annual Report
on Form 10-K for the year ended November 3, 1991)*
10-i Restated Nordson Corporation Excess Defined
Contribution Retirement Plan (incorporated herein
by reference to Exhibit 10-k to Registrant's
Annual Report on Form 10-K for the year ended
November 1, 1992)*
10-i-1 First Amendment to Nordson Corporation Excess
Defined Contribution Retirement Plan (incorporated
herein by reference to Exhibit 10-l-1 to
Registrant's Annual Report on Form 10-K for the
year ended October 28, 1990)*
10-j Nordson Corporation Excess Defined Benefit Pension
Plan (incorporated herein by reference to Exhibit
10-l to Registrant's Annual Report on Form 10-K
for the year ended November 1, 1992)*
10-j-1 First Amendment to Nordson Corporation Excess
Defined Benefit Pension Plan (incorporated
herein by reference to Exhibit 10-m-1 to
Registrant's Annual Report on Form 10-K for the
year ended October 28, 1990)*
</TABLE>
29
<PAGE> 30
<TABLE>
NORDSON CORPORATION
INDEX TO EXHIBITS
(Item 14(a)(3))
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
10-k Officers' Deferred Compensation Plan (incorporated
herein by reference to Exhibit 10-m to
Registrant's Annual Report on Form 10-K for the
year ended November 1, 1992)*
10-l Employment Agreement between the Registrant and
Edward P. Campbell*
10-m 1989 Stock Option Plan, as amended
December 20, 1991 (incorporated herein by
reference to Exhibit 10-q to Registrant's
Annual Report on Form 10-K for the year ended
November 3, 1991)*
10-n 1992 Restricted Stock Plan (incorporated herein
by reference to Exhibit 10-p to Registrant's
Annual Report on Form 10-K for the year ended
November 1, 1992)*
10-o Nordson Corporation 1993 Long-Term Performance
Plan (incorporated herein by reference to
Exhibit 10-q to Registrant's Annual Report
on Form 10-K for the year ended
November 1, 1992)*
(11) Calculation of Earnings per Share
(13) Selected portions of the 1993 Annual Report
13-a Management's Discussion and Analysis (pages
18 and 19 of the 1993 Annual Report)
13-b Consolidated Statement of Income (page 20
of the 1993 Annual Report)
13-c Consolidated Balance Sheet (page 21 of the
1993 Annual Report)
13-d Consolidated Statement of Cash Flows (page 22
of the 1993 Annual Report)
13-e Consolidated Statement of Shareholders'
Equity (page 23 of the 1993 Annual Report)
13-f Notes to Consolidated Financial Statements
(pages 24 through 38 of the 1993 Annual
Report)
</TABLE>
30
<PAGE> 31
<TABLE>
NORDSON CORPORATION
INDEX TO EXHIBITS
(Item 14(a)(3))
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
13-g Report of Independent Auditors (page 39 of
the 1993 Annual Report)
13-h Eleven-Year Summary (pages 40 and 41 of the
1993 Annual Report)
13-i Investor Information (page 44 of the 1993
Annual Report)
(21) Subsidiaries of the Registrant
(23) Consent of Independent Auditors
(99) Additional Exhibits
99-a Form S-8 Undertakings (Nos. 33-32201, 2-82915,
33-18279, 33-20451, 33-20452, 33-18309 and
33-33481) (incorporated herein by reference
to Exhibit 28-a to Registrant's Annual Report
on Form 10-K for the year ended October 28, 1990)
99-b Form S-8 Undertakings (No. 2-66776) (incorporated
herein by reference to Exhibit 28-b to
Registrant's Annual Report on Form 10-K for the
year ended October 28, 1990)
99-c Annual Report on Form 11-K of the Nordson
Corporation 1988 Employees Stock Purchase Plan
for its fiscal year ended December 31, 1993
99-d Annual Report on Form 11-K of the Nordson
Corporation 1988 International Employees Stock
Purchase Plan for its fiscal year ended
December 31, 1993
99-e Annual Report on Form 11-K of the Nordson
Employees' Savings Trust Plan for its fiscal
year ended December 31, 1993
99-f Annual Report on Form 11-K of the Nordson
Hourly-Rated Employees' Savings Trust Plan
for its fiscal year ended December 31, 1993
</TABLE>
*Indicates management contract or compensatory plan,
contract or arrangement in which one or more
directors and/or executive officers of Nordson
Corporation may be participants.
31
<PAGE> 1
Exhibit 4-b
- ----------------------------------------------------------------------------
NORDSON CORPORATION
and
AMERITRUST COMPANY NATIONAL ASSOCIATION, Rights Agent
RIGHTS AGREEMENT
Dated as of
August 26, 1988
- ----------------------------------------------------------------------------
<PAGE> 2
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
INDEX OF DEFINED TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
RIGHTS AGREEMENT
Section 1. Certain Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 2. Appointment of Rights Agent . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 3. Issue of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4. Form of Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 5. Countersignature and Registration . . . . . . . . . . . . . . . . . . . . . . 16
Section 6. Transfer, Split Up, Combination,
and Exchange of Right Certificates;
Mutilated, Destroyed, Lost, or
Stolen Right Certificates . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 7. Exercise of Rights: Purchase Price;
Expiration Date of Rights . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 8. Cancellation and Destruction of Right
Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 9. Reservation and Availability of Shares . . . . . . . . . . . . . . . . . . . . 25
Section 10. Common Share Record Date . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 11. Adjustment of Purchase Price and
Exercise Price, Number and Type of
Shares, or Number of Rights . . . . . . . . . . . . . . . . . . . . . . . . 31
Section 12. Certificates of Adjusted Purchase Price
or Number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Section 13. Consolidation, Merger, or Sale or
Transfer of Assets or Earning
Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Section 14. Fractional Rights and Fractional
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Section 15. Rights of Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Section 16. Agreement of Rights Holders . . . . . . . . . . . . . . . . . . . . . . . . . 60
Section 17. Right Certificate Holder Not Deemed a
Shareholder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
</TABLE>
-i-
<PAGE> 3
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
Section 18. Concerning the Rights Agent . . . . . . . . . . . . . 62
Section 19. Merger or Consolidation or Change of
Name of Rights Agent . . . . . . . . . . . . . . . . 63
Section 20. Duties of Rights Agent . . . . . . . . . . . . . . . . 64
Section 21. Change of Rights Agent . . . . . . . . . . . . . . . . 69
Section 22. Issuance of New Right Certificates . . . . . . . . . . 71
Section 23. Redemption . . . . . . . . . . . . . . . . . . . . . . 71
Section 24. Notice of Certain Events . . . . . . . . . . . . . . . 74
Section 25. Notices . . . . . . . . . . . . . . . . . . . . . . . 75
Section 26. Supplements and Amendments . . . . . . . . . . . . . . 76
Section 27. Successors . . . . . . . . . . . . . . . . . . . . . . 78
Section 28. Determinations and Actions by the
Board of Directors, etc. . . . . . . . . . . . . . . 78
Section 29. Benefits of this Agreement . . . . . . . . . . . . . . 79
Section 30. Severability . . . . . . . . . . . . . . . . . . . . . 80
Section 31. Governing Law . . . . . . . . . . . . . . . . . . . . 80
Section 32. Counterparts . . . . . . . . . . . . . . . . . . . . . 81
Section 33. Descriptive Headings . . . . . . . . . . . . . . . . . 81
Exhibit A "Express" Terms of Series B Convertible
Preferred Shares . . . . . . . . . . . . . . . . . . A-1
Exhibit B Form of Right Certificate . . . . . . . . . . . . . . B-1
- Form of Assignment . . . . . . . . . . . . . . . . B-6
- Certificate . . . . . . . . . . . . . . . . . . . . B-7
- Notice . . . . . . . . . . . . . . . . . . . . . . B-7
- Form of Election to Purchase . . . . . . . . . . . B-8
- Certificate . . . . . . . . . . . . . . . . . . . . B-9
- Notice . . . . . . . . . . . . . . . . . . . . . . B-9
Exhibit C Summary of Rights to Purchase
Preferred Stock . . . . . . . . . . . . . . . . . . C-1
</TABLE>
-ii-
<PAGE> 4
INDEX OF DEFINED TERMS
<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C> <C>
Acquiring Person 1(a) 2
Act 9(d) 28
Adverse Person 1(b) 3
Affiliate 1(c) 4
Associate 1(c) 4
Beneficial Owner and to
Beneficially Own 1(d) 5
Business Day 1(e) 7
Close of Business 1(e) 7
Common Shares 1(g) 7
Continuing Director 1(h) 8
Company Preamble 1
Control Share Acquisition 1(i) 8
Distribution Date 3(a) 11
Equivalent Common Shares 11(b) 38
Exercise Price 1(j) 8
Expiration Date 7(a) 20
Fair Market Value 11(a)ii(D) 35
Final Expiration Date 7(a) 19,20
Flip-in Event 1(k), 11(a)ii 8,32-36
Flip-over Event 1(l), 13(a) 9,50
Issuance 1(m) 9
Market Price 11(d) 42
NASDAQ 9(b) 27
NYSE 2 10
Person 1(n) 9
</TABLE>
-iii-
<PAGE> 5
<TABLE>
<CAPTION>
Section Page
------- ----
<S> <C> <C>
Preferred Shares 1(o) 9
Principal Party 13(b) 52
Purchase Price 1(p) 9
Record Date Preamble 1
Redemption Certificate 3(a) 11
Redemption Price 23(a) 70
Right Preamble 1
Right Certificate 3(a) 11
Section 1701.831 1(q) 9
Shares Acquisition Date 1(r) 9
Subsidiary 1(s) 9
Summary of Rights 3(b) C-1
Trading Day 11(d) 44
Triggering Event 1(t) 10
</TABLE>
-iv-
<PAGE> 6
RIGHTS AGREEMENT
This Agreement, dated as of August 26, 1988, is
between Nordson Corporation, an Ohio corporation (the "Company"), and
AmeriTrust Company National Association, a national banking association
organized and existing under the laws of the United States (the "Rights
Agent").
The Board of Directors of the Company has authorized
and declared a dividend consisting of one right (a "Right") for each Common
Share with a par value of $1.00 of the Company outstanding on September 9, 1988
(the "Record Date"), and has authorized the issuance of one Right in respect of
each Common Share of the Company issued between the Record Date and the earlier
of the occurrence of a Triggering Event, the Expiration Date, or the Final
Expiration Date (as such terms are hereinafter defined), including Common
Shares that are treasury shares as of the Record Date and subsequently become
outstanding. Each Right initially represents the right to purchase one Common
Share of the Company.
NOW, THEREFORE, in consideration of the premises and
the mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this
Agreement, the following terms have the meanings indicated:
<PAGE> 7
(a) An "Acquiring Person" means (i) any Person who
or that, together with all Affiliates and Associates of such Person, is the
Beneficial Owner of 20% or more of the Common Shares of the Company then
outstanding or (ii) any Adverse Person (as hereinafter defined); PROVIDED,
HOWEVER, that (x) an Acquiring Person shall not include the Company, any
Subsidiary, any employee benefit plan or employee stock ownership plan of the
Company or of any Subsidiary, or any Person organized, appointed, or
established by the Company or any Subsidiary for or pursuant to the terms of
any such plan, (y) a Person shall not be deemed to have become an Acquiring
Person solely as a result of a reduction in the number of Common Shares
outstanding, unless subsequent to such reduction such Person, or any Affiliate
or Associate of such Person, becomes the Beneficial Owner of any additional
Common Shares other than as a result of a stock dividend, stock split, or
similar transaction effected by the Company in which all shareholders are
treated equally, and (z), for purposes of determining whether Eric T. Nord or
Evan W. Nord, together with each of their Affiliates or Associates, is the
Beneficial Owner of 20% or more of the Common Shares then outstanding, the
Common Shares then held by the Walter G. Nord Trust and by the Nordson
Foundation shall be excluded, and, for purposes of determining whether the
-2-
<PAGE> 8
Walter G. Nord Trust or the Nordson Foundation, together with each of their
Affiliates and Associates, is the Beneficial Owner of 20% or more of the Common
Shares then outstanding, the Common Shares then held by Eric T. Nord and by
Evan W. Nord shall be excluded.
(b) "Adverse Person" shall mean any Person declared
to be an Adverse Person by the Board of Directors of the Company upon (i) a
determination by the Board of Directors, at any time after the date of this
Agreement, that such Person, alone or together with its Affiliates and
Associates, has become, or has announced an intention to become, in one or more
transactions, the Beneficial Owner of an amount of Common Shares that the Board
of Directors determines to be substantial (which amount shall in no event be
less than 15% of the Common Shares then outstanding) and (ii) a determination
by at least a majority of the Board of Directors who are not officers of the
Company, after reasonable inquiry and investigation, that (A) such Beneficial
Ownership by such Person (1) is intended to cause the Company to repurchase the
Common Shares beneficially owned by such Person, (2) is intended or may
reasonably be anticipated to cause pressure on the Company to take action or
enter into a transaction or series of transactions that would provide such
Person with short-term financial gain under circumstances in which the
-3-
<PAGE> 9
Board of Directors determines that the best long-term interests of the Company
and its shareholders would not be served by taking such action or entering into
such transactions or series of transactions at that time, or (3) is intended or
may reasonably be anticipated to permit such Person to acquire control of or a
controlling influence over the Company, as a result of such Beneficial
Ownership or one of more subsequent actions or transactions, in a manner or
pursuant to one or more actions or transactions that the Board determines to be
unfair or coercive to shareholders, or (B) such Beneficial Ownership by such
Person is causing or may reasonably be anticipated to cause a material adverse
impact (including, without limitation, impairment of relationships between the
Company and its customers, suppliers, creditors, or employees or impairment of
the Company's ability to maintain its competitive position) on the business,
financial condition, or prospects of the Company.
(c) An "Affiliate" and "Associate" have the
respective meanings given them in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof.
-4-
<PAGE> 10
(d) A Person is deemed to be the "Beneficial Owner"
of, and is deemed to "beneficially own," any securities:
(i) that such Person, or any of such Person's
Affiliates or Associates, beneficially owns, directly or indirectly;
(ii) that such Person, or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to
acquire (whether such right is exercisable immediately or only after
the passage of time) pursuant to any agreement, arrangement, or
understanding (whether or not in writing), upon the exercise of any
conversion right, exchange right, other right, warrant, or option, or
otherwise, except that a Person is not deemed to be the "Beneficial
Owner" of, or to "beneficially own," (A) securities tendered pursuant
to a tender offer made by such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or (B) securities issuable upon exercise of these Rights;
(iii) that such Person or any of such Person's
Affiliates or Associates has the right, directly or indirectly, to
vote or dispose of pursuant to any agreement, arrangement, or
understanding
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(whether or not in writing), except that a Person is not deemed to be
the Beneficial Owner of, or to "beneficially own," any security under
this subparagraph (iii) if the agreement, arrangement, or
understanding to vote such security (A) arises solely from a revocable
proxy given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (B) is not then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iv) that are beneficially owned, directly or
indirectly, by any other Person with whom or which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement, or understanding (whether or not in writing) for the
purpose of acquiring, holding, voting (except pursuant to a revocable
proxy as described in subparagraph (iii) of this paragraph (c)), or
disposing of any securities of the Company.
Notwithstanding the foregoing, (x) a Person shall not be deemed to be the
Beneficial Owner of, or to "beneficially own," any security if such beneficial
ownership arises solely as a result of such Person's status as a "clearing
agency," as defined in Section 3(a)(23) of the Exchange
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<PAGE> 12
Act, and (y) a Person engaged in business as an underwriter of securities shall
not be deemed to be the Beneficial Owner of, or to "beneficially own," any
securities acquired through such Person's participation in good faith in an
underwriting syndicate pursuant to an agreement to which the Company is a party
until expiration of 40 calendar days after the date on which such securities
are acquired.
(e) A "Business Day" means any day other than a
Saturday, Sunday, or a day on which banking institutions in the State of Ohio
are authorized or obligated by law or executive order to close.
(f) The "close of business" on any given date means
5:00 P.M., Cleveland time, on such date.
(g) "Common Shares" when used with reference to the
Company means the Common Shares with a par value of $1.00 of the Company,
except that, if the Company is the continuing or surviving corporation in a
transaction described in Section 13, "Common Shares" when used with reference
to the Company means the shares with the greatest aggregate voting power of the
Company or, if the Company is ultimately controlled by another corporation,
business trust, limited partnership, joint venture, or other organization, the
shares or other equity interests of such organization that have the greatest
aggregate voting power and do not generally subject the holder thereof to
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<PAGE> 13
liability for the liabilities of such organization. "Common Shares" when used
with reference to any corporation, business trust, limited partnership, joint
venture, or other organization other than the Company means the shares or other
equity interest of such organization that have the greatest aggregate voting
power and do not generally subject the holder thereof to liability for the
liabilities of such organization.
(h) A "Continuing Director" means any individual
who is a member of the Board of Directors of the Company, who is not an
Acquiring Person, an Affiliate or Associate of an Acquiring Person, or a
representative or nominee of an Acquiring Person or of any such Affiliate or
Associate and who was a member of the Board prior to the Shares Acquisition
Date or was recommended or elected to succeed a Continuing Director by a
majority of the Continuing Directors.
(i) A "Control Share Acquisition" has the meaning
ascribed to it in Section 1701.01(Z) (1) of the Ohio General Corporation Law.
(j) "Exercise Price" means the exercise price per
share set forth in Section 11(a)(ii).
(k) "Flip-in Event" means any event described in
paragraphs (A) through (E) of Section 11(a)(ii).
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(l) "Flip-over Event" means any event described in
clauses (x) through (z) of Section 13(a).
(m) "Issuance" includes the issuance of authorized
but unissued shares and the transfer of treasury shares.
(n) A "Person" means any individual, corporation,
business trust, partnership, or other organization.
(o) "Preferred Shares" means Series B Convertible
Preferred Shares of the Company with the express terms set forth in Exhibit A
to this Agreement.
(p) "Purchase Price" means the purchase price per
share set forth in Section 7(b).
(q) "Section 1701.831" means Section 1701.831 of the
Ohio General Corporation Law, as amended from time to time.
(r) The "Shares Acquisition Date" means the first
date of public announcement by the Company or an Acquiring Person (by press
release, filing made with the Securities and Exchange Commission, or otherwise)
that a Person has become an Acquiring Person.
(s) A "Subsidiary" means any corporation or other
entity of which a majority of the voting power of the voting equity securities
or other equity interests is owned, directly or indirectly, by the Company.
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(t) A "Triggering Event" is deemed to occur upon (i)
the passage of 20 calendar days following the occurrence of a Flip-in Event or
(ii) the occurrence of a Flip-over Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company
hereby appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts such
appointment and hereby certifies that it complies with the requirements of the
National Association of Securities Dealers Inc. and the New York Stock
Exchange, Inc. (the "NYSE") governing transfer agents and registrars. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. Any actions that may be taken by the Rights Agent
pursuant to the terms of this Agreement may be taken by any such Co-Rights
Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES. (a) Until
the earlier of (i) the close of business on the 20th calendar day after the
Shares Acquisition Date or (ii) the close of business on the 20th calendar day
after the date of the commencement of, or first public announcement of the
intent to commence, by any Person (other than the Company, any Subsidiary, any
employee benefit plan or employee stock ownership plan of the Company or of any
Subsidiary, or any Person organized, appointed or
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<PAGE> 16
established by the Company or any Subsidiary for or pursuant to the terms of
any such plan), a tender or exchange offer the consummation of which would
result in the Person making the tender offer or exchange offer becoming an
Acquiring Person (including any such day that is after the date of this
Agreement and prior to the issuance of the Rights; the earlier of the dates in
clauses (i) and (ii) of this Section 3(a) being herein referred to as the
"Distribution Date"), the Rights will be evidenced (subject to the provisions
of Section 3(b)) by the certificates for Common Shares registered in the names
of the holders of the Common Shares (which certificates for Common Shares shall
also be deemed to be Right certificates) and not by separate Right
certificates, and the Rights will be transferable only in connection with the
transfer of the Common Shares on the transfer books of the Company maintained
by the Company or its appointed transfer agent. As soon as practicable after
the Distribution Date, the Rights Agent will send, by first-class, insured,
postage prepaid mail, to each record holder of Common Shares as of the close of
business on the Distribution Date at the address of such holder shown on the
records of the Company, a Right certificate, in substantially the form of
Exhibit B hereto ("Right Certificate"), evidencing one Right for each Common
Share held of record as of the close
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<PAGE> 17
of business on the Distribution Date. As of the close of business on the
Distribution Date, the Rights will be evidenced solely by such Right
Certificates.
(b) On the Record Date or as soon as practicable
thereafter, the Company will send a copy of a Summary of Rights to Purchase
Common Shares, in substantially the form attached hereto as Exhibit C (the
"Summary of Rights"), by first-class, postage prepaid mail, to each record
holder of Common Shares as of the close of business on the Record Date at the
address of such holder shown on the records of the Company. With respect to
Common Shares outstanding as of the Record Date, the Rights will be evidenced
until the Distribution Date by the certificates for such Common Shares
registered in the names of the holders of the Common Shares together with a
copy of the Summary of Rights. Until the Distribution Date (or the earlier
redemption or expiration of the Rights), the surrender for transfer of any of
the certificates for Common Shares outstanding on the Record Date, with or
without a copy of the Summary of Rights, shall also constitute the surrender
for transfer of the Rights associated with the Common Shares represented by
such certificate.
(c) Rights shall be issued in respect of all Common
Shares issued or surrendered for transfer or
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<PAGE> 18
exchange after the Record Date but prior to the earlier of the occurrence of a
Triggering Event, the Expiration Date, or the Final Expiration Date (as such
terms are defined in Section 7). Certificates representing Common Shares
issued or surrendered for transfer or exchange after the Record Date but prior
to the earlier of the Distribution Date, the Expiration Date, or the Final
Expiration Date shall have impressed on, printed on, written on, or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Nordson
Corporation and AmeriTrust Company National Association, Rights Agent,
dated as of August 26, 1988 (the "Rights Agreement"), the terms of
which are hereby incorporated in this certificate by reference and a
copy of which is on file at the principal executive offices of Nordson
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. Nordson Corporation
will mail to the holder of this certificate a copy of the Rights
Agreement (as in effect on the date of mailing) without charge
promptly after receipt of a written request therefor. Under certain
circumstances, Rights that are or were beneficially owned by an
Acquiring Person or an Affiliate or Associate of an Acquiring Person
(as such terms are defined in the Rights Agreement) and any subsequent
holder of such Rights may become null and void.
Until the Distribution Date, the Rights associated with the Common Shares
represented by certificates containing the foregoing legend shall be evidenced
by such certificates alone, and the surrender for transfer of any such
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<PAGE> 19
certificate shall also constitute the surrender for transfer of the Rights
associated with the Common Shares represented by such certificate.
Section 4. FORM OF RIGHT CERTIFICATES. (a) Each
Right Certificate (and the forms of assignment and of election to purchase
shares to be printed on the reverse of the Right Certificate) shall be
substantially the same as Exhibit B hereto and may have such marks of
identification or designation and such legends, summaries, or endorsements
printed thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, as may be required to comply with any
applicable law, with any rule or regulation made pursuant thereto, or with any
rule or regulation of any stock exchange on which the Rights may from time to
time be listed or of any association on which the Rights may from time to time
be authorized for quotation, or to conform to usage. Subject to the provisions
of Section 22, the Right Certificates, whenever issued, shall be dated as of
the Record Date and, on their face, shall entitle the holders thereof to
purchase such number of Common Shares of the Company (or, upon the occurrence
of a Triggering Event, such number of Common Shares of the Company or of the
Principal Party, as defined in Section 13(b)) as shall be set forth therein at
the Purchase Price per share (or, upon
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<PAGE> 20
the occurrence of a Triggering Event, at the Exercise Price per share); the
number of such Common Shares, the Purchase Price, and the Exercise Price shall
be subject to adjustment as provided in this Agreement.
(b) Notwithstanding any other provisions of this
Agreement, any Right Certificate issued pursuant to Section 3 or Section 22
that represents Rights beneficially owned by (i) an Acquiring Person or any
Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who or that becomes a
transferee after the Acquiring Person became an Acquiring Person, or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
or that becomes a transferee prior to or concurrently with the Acquiring
Person's becoming an Acquiring Person and who or that either (A) holds an
equity interest in such Acquiring Person (or any such Associate or Affiliate)
or has any continuing agreement, arrangement, or understanding with such
Acquiring Person (or any such Associate or Affiliate) regarding the transferred
Rights or (B) receives such Rights pursuant to a transfer that the Board of
Directors of the Company has determined is part of a plan, arrangement, or
understanding that has as a primary purpose or effect the avoidance of Section
7(e), any Right Certificate issued at any time to any nominee of an
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<PAGE> 21
Acquiring Person, of any Associate or Affiliate of an Acquiring Person, or of
any such transferee, and any Right Certificate issued pursuant to Section 6 or
Section 11 upon transfer, exchange, replacement, or adjustment of any other
Right Certificate referred to in this sentence, shall contain the following
legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Right Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of the Rights Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION. (a)
The Right Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President, or any Vice President, either manually or by
facsimile signature, and have affixed thereto the Company's seal or a facsimile
thereof attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall be
manually countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company who has
signed any of the Right Certificates ceases to be such officer of the Company
before countersignature by the Rights Agent and issuance and delivery by the
Company, such Right
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<PAGE> 22
Certificates may nevertheless be countersigned by the Rights Agent, issued, and
delivered with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who, at
the date such Right Certificate is signed, is a proper officer of the Company
to sign such Right Certificate, although at the date of the execution of this
Rights Agreement such person was not such an officer.
(b) Following the Distribution Date, the Rights
Agent will keep or cause to be kept, at its principal offices in Cleveland,
Ohio, books for registration and transfer of the Right Certificates. Such
books shall show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the Right
Certificates, and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION, AND
EXCHANGE OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST, OR STOLEN RIGHT
CERTIFICATES. (a) Subject to the provisions of Section 4(b), Section 7(e),
and Section 14, any Right Certificate may, at any time after the close of
business on the Distribution Date and at or prior to the close of business on
the earlier of the Expiration Date or
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<PAGE> 23
the Final Expiration Date, be transferred, split up, combined, or exchanged for
another Right Certificate or Right Certificates entitling the registered holder
to purchase the same number of Common Shares (or Preferred Shares or other
securities, as the case may be) as the Right Certificate surrendered then
entitled such holder (or former holder in the case of a transfer) to purchase.
Any registered holder desiring to transfer, split up, combine, or exchange any
Right Certificate or Right Certificates shall make such request in writing
delivered to the Rights Agent and shall surrender the Right Certificate or
Right Certificates to be transferred, split up, combined, or exchanged at the
principal office of the Rights Agent in Cleveland, Ohio. Neither the Rights
Agent nor the Company shall be obligated to take any action with respect to the
transfer of any such surrendered Right Certificate until the registered holder
has completed and signed the certificate contained in the form of assignment on
the reverse side of such Right Certificate and has provided such additional
evidence of the identity of the Beneficial Owner or former Beneficial Owner, or
the Affiliates or Associates of the Beneficial Owner or former Beneficial
Owner, as the Company has reasonably requested. Thereupon the Rights Agent
shall, subject to Section 4(b), Section 7(e), and Section 14, countersign and
deliver to
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<PAGE> 24
the person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split Up, combination, or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction, or
mutilation of a Right Certificate, and, in case of the loss, theft, or
destruction of a Right Certificate, of indemnity or security reasonably
satisfactory to them and reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and, in case of the mutilation of a
Right Certificate, upon surrender to the Rights Agent and cancellation of the
mutilated Right Certificate, the Company shall make and deliver a new Right
Certificate of like tenor to the Rights Agent for delivery to the registered
owner in lieu of the Right Certificate so lost, stolen, destroyed, or
mutilated.
Section 7. EXERCISE OF RIGHTS: PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS. (a) Subject to Section 7(e), the registered holder
of any Right Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein), in whole or in part,
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<PAGE> 25
at any time after the Distribution Date upon surrender of the Right
Certificate, with the form of election to purchase on the reverse side thereof
duly executed, to the Rights Agent at its office in Cleveland, Ohio, together
with payment of the aggregate Purchase Price with respect to the total number
of Common Shares (or Preferred Shares or other securities, as the case may be)
as to which such surrendered Rights are being exercised, at or prior to the
close of business on the earlier of (i) September 9, 1998 (the "Final
Expiration Date"), or (ii) the date on which the Rights are redeemed as
provided in Section 23 (such earlier date being herein referred to as the
"Expiration Date").
(b) Each Right shall initially represent the right
to purchase one Common Share, subject to adjustment as provided in Section 11.
The Purchase Price for each Common Share upon the exercise of one of the Rights
shall initially be $200.00, subject to adjustment from time to time as provided
in Section 11, and shall be payable in lawful money of the United States of
America in accordance with Section 7(c).
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
duly executed, accompanied by payment of the Purchase Price for the Common
Shares (or
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<PAGE> 26
Preferred Shares or other securities, as the case may be) to be purchased and
an amount equal to any applicable transfer tax, in cash or by certified check
or bank draft payable to the order of the Company, the Rights Agent shall,
subject to Section 20(k), promptly (i) requisition from the Company's transfer
agent certificates for the total number of Common Shares (or Preferred Shares
or other securities, as the case may be) to be purchased, and the Company
hereby irrevocably authorizes and directs its transfer agent to comply with all
such requests, (ii) if the Company has elected to cause the total number of
Common Shares (or Preferred Shares or other securities, as the case may be)
issuable upon exercise of the Rights to be deposited with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of Common Shares (or Preferred Shares or other securities, as the case
may be) as are to be purchased (in which case the Company hereby authorizes and
directs its transfer agent to deposit with the depositary agent certificates
for the Common Shares (or Preferred Shares or other securities, as the case may
be) represented by such receipts), and the Company hereby authorizes and
directs the depositary agent to comply with all such requests, (iii) when
appropriate, requisition from the Company's transfer agent certificates for the
total number the Common
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<PAGE> 27
Shares (or Preferred Shares or other securities, as the case may be) to be
purchased in accordance with Section 11(a)(ii), and the Company hereby
authorizes and directs its transfer agent to comply with all such requests,
(iv) when appropriate, requisition from the Company the amount of cash to be
paid in accordance with Section 11(a)(iii) or in lieu of the issuance of
fractional shares in accordance with Section 14, (v) promptly after the receipt
of such certificates or depositary receipts, cause them to be delivered to or
upon the order of the registered holder of such Right Certificate, registered
in such name or names as may be designated by such holder, and (vi) when
appropriate, promptly after receipt deliver such cash to or upon the order of
the registered holder of such Right Certificate. In the event the Company is
obligated to issue Common Shares (or Preferred Shares or other securities, as
the case may be) or to pay cash pursuant to Section 11(a)(iii), the Company
will make all arrangements necessary so that such Common Shares (or Preferred
Shares or other securities, as the case may be) and cash are available for
issuance and payment by the Rights Agent, as and when appropriate.
(d) In case the registered holder of any Right
Certificate exercises less than all of the Rights evidenced thereby, a new
Right Certificate evidencing
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<PAGE> 28
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assign, subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to
the contrary, any Rights that are or were at any time on or after the earlier
of the Distribution Date or the Shares Acquisition Date beneficially owned by
(i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person became an
Acquiring Person, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming an Acquiring Person and who either (A) holds an
equity interest in such Acquiring Person (or any such Associate or Affiliate)
or has any continuing agreement, arrangement, or understanding with such
Acquiring Person (or any such Associate or Affiliate) regarding the transferred
Rights or (B) receives such Rights pursuant to a transfer that the Board of
Directors of the Company has determined is part of a plan, arrangement, or
understanding that has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void at the close of business on the 20th
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<PAGE> 29
calendar day following the occurrence of a Flip-in Event, and no holder of such
Rights shall have any right with respect to such Rights under any provision of
this Agreement from and after the close of business on the 20th calendar day
following the occurrence of the Flip-in Event. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) and of
Section 4(b) are complied with, but shall have no liability to any holder of
Rights or any other Person as a result of its failure properly to make any
determinations with respect to an Acquiring Person or its Affiliates,
Associates, or transferees in accordance with this Section 7(e).
(f) Notwithstanding anything in this Agreement to
the contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of Rights upon the
occurrence of any purported exercise as set forth in this Section 7 unless such
registered holder has (i) completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner or former Beneficial Owner, or
the Affiliates or Associates of the Beneficial Owner or former Beneficial
Owner, as the Company may reasonably request.
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Section 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination, or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Right Certificates shall be issued in lieu thereof
except as expressly permitted by the provisions of this Rights Agreement. The
Company shall deliver to the Rights Agent for cancellation and retirement, and
the Rights Agent shall cancel and retire, any Right Certificate purchased or
acquired by the Company otherwise than upon the exercise of the Right
Certificate. The Rights Agent shall deliver all cancelled Right Certificates
to the Company or shall, at the written request of the Company, destroy such
cancelled Right Certificates and deliver a certificate of destruction thereof
to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES.
(a) The Company shall submit to its shareholders for approval (and recommend
that its shareholders approve) at its annual meeting of shareholders in 1989 an
amendment to the Company's articles of incorporation authorizing an increase in
the number of Common Shares that, when such increase is added to the number of
Common Shares that are
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<PAGE> 31
(i) previously authorized by not issued or (ii) held in its treasury, will be
sufficient to permit the exercise in full of all of the outstanding Rights,
including the exercise of such Rights upon the occurrence of a Flip-in Event.
The Company covenants and agrees that, from and after its annual meeting of
shareholders in 1989, it will cause to be reserved and kept available out of
its authorized and unissued Common Shares or Common Shares held in its treasury
a number of Common Shares that will be sufficient to permit the exercise in
full of all of the outstanding Rights.
(b) In the event that, notwithstanding Section 9(a),
the number of authorized and unissued Common Shares and Common Shares held in
the Company's treasury is not sufficient to permit the exercise in full of all
of the outstanding Rights, including the exercise in full of all of the
outstanding Rights upon the occurrence of a Flip-in Event, at any time after
the Distribution Date, the Company shall promptly (i) file an amendment to the
Company's articles of incorporation which creates the Preferred Shares and
authorizes a number of Preferred Shares that, together with authorized and
unissued Common Shares and Common Shares held in the Company's treasury, is
sufficient to permit the exercise in full of all of the outstanding Rights and
(ii) make the Preferred Shares available in
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<PAGE> 32
place of Common Shares to permit the exercise of the Rights. Under such
circumstances, all rights and obligations of the Company and the Rights Agent
with respect to the Common Shares shall apply with respect to Preferred Shares.
(c) Unless the Common Shares of the Company have
been theretofore listed on the NYSE or another national securities exchange,
the Company shall, as soon as practicable following the Distribution Date, use
its best efforts to cause transactions in the Rights to be quoted in the
National Association of Securities Dealers Inc. Automated Quotation System
("NASDAQ") and shall, as soon as practicable after the rights become
exercisable, use its best efforts to cause transactions in any Preferred Shares
or other securities of the Company issuable upon exercise of the Rights to be
quoted in NASDAQ. In the event that the Common Shares are listed on the NYSE
or another national securities exchange, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable, all Common
Shares (or Preferred Shares or other securities, as the case may be) reserved
for such issuance upon exercise of the Rights to be listed on the NYSE or such
other exchange upon official notice of issuance.
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<PAGE> 33
(d) The Company shall (i) prepare and file, as soon
as practicable following the occurrence of a Triggering Event, a registration
statement under the Securities Act of 1933 (the "Act") on an appropriate form
with respect to the Rights and the securities purchasable upon exercise of the
Rights, (ii) use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing, and (iii) use its
best efforts to cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act) until the earlier
of the exercise of all of the Rights, the Expiration Date, or the Final
Expiration Date. The Company will also take such action as may be appropriate
to comply with the securities laws of each state in which holders of the Rights
reside. The Company may temporarily suspend, for a period of time not to
exceed 90 days, the exercisability of the Rights in order to prepare and file
such registration statement. Upon any such suspension, the Company shall issue
a public announcement and notice to the Rights Agent stating that the
exercisability of the Rights has been temporarily suspended, and the Company
shall issue a public announcement and notice to the Rights Agent at such time
as the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights
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<PAGE> 34
shall not be exercisable in any jurisdiction in which any requisite
registration or qualification has not been obtained or any requisite notice of
exemption has not been filed.
(e) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all Common Shares (or
Preferred Shares or other securities, as the case may be) delivered upon
exercise of Rights are, at the time of delivery of the certificates therefor
(subject to payment of the Purchase Price or the Exercise Price, as the case
may be), duly and validly authorized and issued, fully paid and nonassessable,
freely tradeable, free and clear of any liens, encumbrances or other adverse
claims, and not subject to any rights of call or first refusal.
(f) The Company further covenants and agrees that it
will pay, when due and payable, any and all federal and state transfer taxes
and charges that may be payable in respect of the issuance, delivery, or
transfer of the Right Certificates or of any Common Shares (or Preferred Shares
or other securities, as the case may be) upon exercise of the Rights. The
Company shall not, however, be required (i) to pay any transfer tax that may be
payable in respect of any transfer or delivery of Right Certificates to a
Person other than, or any issuance,
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delivery, or transfer of certificates for the Common Shares (or Preferred Share
or other securities, as the case may be) in a name other than that of, the
registered holder of the Right Certificate evidencing the Rights surrendered
for exercise or (ii) to issue or deliver any certificates for a number of
Common Shares (or Preferred Shares or other securities, as the case may be)
upon the exercise of any Rights until any such tax has been paid or until it
has been established to the Company's satisfaction that no such tax is due.
Any such tax shall be payable by the holder of such Right Certificate at the
time of surrender.
Section 10. COMMON SHARE RECORD DATE. Each Person
in whose name any certificate for a number of Common Shares (or Preferred
Shares or other securities, as the case may be) is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
such Common Shares (or Preferred Shares or other securities, as the case may
be) represented by such certificate on, and such certificate shall be dated,
the date upon which the Right Certificate evidencing such Rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer tax)
was made, except that, if the date of such surrender and payment is a date upon
which the transfer books of the Company for the Common Shares (or Preferred
Shares or other securities, as the
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case may be) are closed, such Person shall be deemed to have become the record
holder thereof on, and such certificate shall be dated, the next succeeding
business day on which the transfer books of the Company for the Common Shares
(or Preferred Shares or other securities, as the case may be) are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a shareholder of the Company
with respect to shares for which the Rights shall be exercisable, including the
right to vote, to receive dividends or other distributions, or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE AND
EXERCISE PRICE, NUMBER AND TYPE OF SHARES, OR NUMBER OF RIGHTS. The Purchase
Price and the Exercise Price, the number and type of shares covered by each of
the Rights, and the number of Rights outstanding is subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company at any time after
the date of this Agreement (A) declares a dividend on the Common
Shares payable in Common Shares, (B) subdivides the
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outstanding Common Shares, (C) combines the outstanding Common Shares
into a smaller number of shares, or (D) issues any shares other than
Common Shares in a reclassification of the Common Shares (including
any such reclassification in connection with a consolidation or merger
in which the Company is the continuing or surviving corporation), the
Purchase Price and the Exercise Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination, or reclassification, and the number of
Common Shares or the number and kind of shares other than Common
Shares, as the case may be, issuable on such date shall be
proportionately adjusted (except as otherwise provided in this Section
11(a) and Section 7(e)) so that the holder of any Rights exercised
after such time shall be entitled to receive the aggregate number of
Common Shares or the number and kind of shares other than Common
Shares, as the case may be, that, if such Rights had been exercised
immediately prior to such date and at a time when the transfer books
of the Company for the Common Shares were open, such holder would have
owned
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upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination, or reclassification. If an event occurs that would
require an adjustment under both Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) In the event
(A) any Person (other than the Company, any
Subsidiary, any employee benefit plan or employer stock
ownership plan of the Company or of any Subsidiary, or any
Person organized, appointed, or established by the Company or
any Subsidiary for or pursuant to the terms of any such plan),
alone or together with any of its Affiliates or Associates,
becomes the Beneficial Owner of 25% or more of the Common
Shares of the Company then outstanding (PROVIDED, HOWEVER,
that, for purposes of determining whether Eric T. Nord or Evan
W. Nord, together
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with each of their Affiliates or Associates, is the Beneficial
Owner of 25% or more of the Common Shares then outstanding,
the Common Shares then held by the Walter G. Nord Trust and by
the Nordson Foundation shall be excluded and, for purposes of
determining whether the Walter G. Nord Trust or the Nordson
Foundation, together with each of their Affiliates and
Associates, is the Beneficial Owner of 25% or more of the
Common Shares then outstanding, the Common Shares then held by
Eric T. Nord and by Evan W. Nord shall be excluded),
(B) any person is declared to be an Adverse Person
by the Board of Directors,
(C) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, at any time after the date
of this Agreement, directly or indirectly, other than in a
transaction subject to Section 13(a), (1) merges into or
consolidates with the Company and the
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Company is the surviving or continuing corporation in the
merger or consolidation, (2) merges or consolidates with a
Subsidiary, whether or not the Subsidiary is the surviving or
continuing corporation in the merger or consolidation, (3)
sells, purchases, leases, exchanges, mortgages, pledges, or
otherwise disposes of or acquires, to, from or with the
Company or a Subsidiary, assets having an aggregate Fair
Market Value (as such term is defined in Article Sixth,
Section 4(e) of the Company's 1984 Amended Articles of
Incorporation) ("Fair Market Value") of $1,000,000 or more,
(4) purchases or otherwise acquires from the Company or a
Subsidiary, with or without consideration, securities of the
Company or a Subsidiary having an aggregate Fair Market Value
of $1,000,000 or more, (5) sells or otherwise transfers, to
the Company or a Subsidiary, securities of the Acquiring
Person or any such Associate
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or Affiliate having an aggregate Fair Market Value of
$1,000,000 or more, (6) proposes the liquidation or
dissolution of the Company, or (7) engages in any transaction
or series of transactions that is similar in purpose or effect
those referred to in clauses (1) through (6) above or in
Subsection (D) below,
(D) during such time as there is an Acquiring
Person, there is any reclassification of securities (including
any reverse stock split), recapitalization of the Company,
merger or consolidation of the Company with any Subsidiary, or
other transaction or series of transactions to which the
Company or any Subsidiary is a party (whether or not with,
into, or otherwise involving an Acquiring Person or any
Associate or Affiliate of an Acquiring Person), other than a
transaction subject to Section 13(a), that has the effect,
directly or indirectly, of increasing by more than
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1% the percentage of the outstanding equity securities of any
class, or of securities exercisable for or convertible into
equity securities of any class, of the Company or any
Subsidiary that is beneficially owned, directly or indirectly,
by an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, or
(E) any Person makes or attempts to make a Control
Share Acquisition without complying with the provisions of
Section 1701.831 (unless prior thereto the articles of
incorporation of the Company have been amended to provide that
Section 1701.831 does not apply to Control Share Acquisitions
of the Company, the provisions of Section 1701.831 have been
held to be invalid by a court of competent jurisdiction and
such holding has not been reversed on appeal, or the Ohio
General Corporation Law has been amended to eliminate the
provisions of Section 1701.831),
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proper provision shall be made so that, from and after the close of
business on the twentieth calendar day after such Flip-in Event has
occurred, each holder of a Right (except as provided in Section 7(e))
shall thereafter have the right to receive, upon exercise of each of
the Rights held by such holder in accordance with the terms of this
Agreement, two Common Shares for an Exercise Price of $1.00 per Common
Share; the number of such Common Shares and the Exercise Price shall
be subject to adjustment as provided in this Section 11.
(iii) In the event the number of authorized but
unissued Common Shares of the Company and Common Shares held in the
Company's treasury is not sufficient to permit the exercise in full of
all of the outstanding Rights in accordance with paragraph (ii) of
this Section 11(a), the Company shall apportion among all of the
outstanding Rights, on a PRO RATA basis, the Common Shares available
for delivery upon exercise of the Rights and, upon exercise of each
Right, shall deliver to the holder thereof (A) the number or fraction
of Common Shares apportioned to the Right and (B) the number or
fraction of Preferred Shares equal to the balance
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of the Common Shares otherwise deliverable to the holder upon exercise
of the Right. If the number of Common Shares and Preferred Shares
that are authorized and unissued or held in the Company's treasury is
not sufficient to permit the exercise in full of all of the
outstanding Rights, the Company shall apportion among all of the
outstanding Rights, on a PRO RATA basis, the Common Shares and
Preferred Shares available for delivery upon exercise of the Rights
and, upon exercise of each Right, shall deliver to the holder thereof
(x) the number or fraction of Common Shares and Preferred Shares
apportioned to the Right and (y) cash in an amount equal to the
product of the balance of the Common Shares otherwise deliverable to
the holder upon exercise of the Right multiplied by the excess of the
market price per Common Share at the close of business on the 20th
calendar day following the occurrence of the Flip-in Event over the
Exercise Price, as adjusted pursuant to the provisions of this Section
11. To the extent any legal or contractual restrictions prevent the
Company from paying the full amount of the cash payable in accordance
with the foregoing sentence, the
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Company shall pay to holders of the Rights on a PRO RATA basis all of
the funds that are not then restricted. The Company shall continue to
make payments to holders of the Rights on a PRO RATA basis as funds
become available until such amount has been paid in full.
(b) In case the Company fixes a record date for the
issuance of rights or warrants to all holders of Common Shares entitling them
(for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Shares (or shares having the same rights,
privileges, and preferences as the Common Shares ("equivalent common shares")
or securities convertible into Common Shares or equivalent common shares) at a
price per Common Share or per equivalent common share (or having a conversion
price per share, if a security convertible into Common Shares or equivalent
common shares) less than the current market price (as defined in Section 11(d))
per Common Share on such record date, the Purchase Price and the Exercise Price
to be in effect after such record date shall be determined by multiplying the
Purchase Price and the Exercise Price in effect immediately prior to such
record date by a fraction the numerator of which is the number of Common Shares
outstanding on such record date plus the number of Common Shares that the
aggregate
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offering price of the total number of Common Shares or equivalent preferred
shares so to be offered (or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such market price
and the denominator of which is the number of Common Shares outstanding on such
record date plus the number of additional Common Shares or equivalent common
shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible). In case
any part of such subscription price is paid in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Common Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustment shall be made successively whenever such a
record date is fixed, and, in the event such rights or warrants are not so
issued, the Purchase Price and the Exercise Price shall be adjusted to be the
Purchase Price and the Exercise Price that would then be in effect if such
record date had not been fixed.
(c) In case the Company fixes a record date for the
making of a distribution to all holders of Common Shares (including any such
distribution made in connection
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with a consolidation or merger in which the Company is the continuing or
surviving corporation) or evidences of indebtedness or assets (other than a
regular periodic cash dividend at a rate per share not in excess of 150% of the
last quarterly cash dividend per share theretofore paid or a dividend payable
in Common Shares, but including any dividend payable in shares other than
Common Shares) or subscription rights or warrants (excluding those referred to
in Section 11(b)), the Purchase Price and the Exercise Price to be in effect
after such record date shall be determined by multiplying the Purchase Price
and the Exercise Price in effect immediately prior to such record date by a
fraction the numerator of which is the market price (as defined in Section
11(d)) per Common Share on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent) of
the portion of the assets (in the case of regular periodic cash dividends at a
rate per share in excess of 150% of the last quarterly cash dividend per share
theretofore paid, only that portion in excess of 150% of such quarterly cash
dividend per share) or evidences of indebtedness so to be distributed or of
such subscription rights or warrants applicable to one Common Share and the
denominator of which shall be such market price per Common
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Share. Such adjustments shall be made successively whenever such a record date
is fixed, and, in the event such distribution is not so made, the Purchase
Price and the Exercise Price shall be adjusted to be the Purchase Price and the
Exercise Price that would then be in effect if such record date had not been
fixed.
(d) For the purpose of any computation under Section
11(a), (b), or (c) hereof, the "market price" of a Common Share on any date of
determination shall be deemed to be the average of the daily closing prices per
Common Share for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date, except that, in the event the "market
price" per Common Share is determined during the period following the
announcement by the issuer of such Common Share of (A) a dividend or
distribution on such Common Share payable in Common Shares or securities
convertible into Common Shares or (B) any subdivision, combination, or
reclassification of such Common Shares and prior to the expiration of 30
Trading Days after the ex-dividend date for such dividend or distribution or
the record date for such subdivision, combination, or reclassification, the
"market price" shall, in each such case, be appropriately adjusted to take into
account ex-dividend trading. The closing price for each day shall be the last
sale price, regular way, or, in case
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no such sale takes place on such day, the average of the closing bid and asked
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the NYSE or, if the Common Shares are not listed or admitted to
trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Common Shares are listed or admitted to
trading or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, the last quoted sale price or, if no sale price
is quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in use
or, if on any such date the Common Shares are not reported by NASDAQ or such
other system, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Shares selected by the
Board of Directors of the Company, except that, if on any such date no market
maker is making a market in the Common Shares, the closing price on such date
shall be the value of a Common Share on such date as determined in good faith
by the Continuing Directors if the Continuing Directors constitute a majority
of the Board of Directors or, if the
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Continuing Directors do not constitute a majority of the Board of Directors, by
an independent investment banking firm selected by the Board of Directors,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. The term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
Common Shares are listed or admitted to trading is open for the transaction of
business or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, a Business Day. If the Common Shares are not
publicly held or not so listed or traded, "market price" per Common Share shall
mean the value per Common Share as determined in good faith by the Continuing
Directors if the Continuing Directors constitute a majority of the Board of
Directors or, if the Continuing Directors do not constitute a majority of the
Board of Directors, by an independent investment banking firm selected by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(e) No adjustment in the Purchase Price and the
Exercise Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price and the Exercise
Price, except that any
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adjustments that by reason of this Section 11(e) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
All calculations under this Section 11 shall be made to the nearest cent or to
the nearest ten-thousandth of a Common Share, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction that mandates such adjustment and
(ii) the date of the expiration of the right to exercise any of the Rights.
(f) If, as a result of an adjustment made pursuant
to Section 11(a), the holder of any of the Rights exercised after such
adjustment becomes entitled to receive upon exercise of the Rights any shares
of the Company other than Common Shares, the number of such other shares so
receivable shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to the
Common Shares contained in Section 11, and the provisions of Section 7, 9, 10,
13, and 14 with respect to the Common Shares shall I apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase
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Price and the Exercise Price shall evidence the right to purchase, at the
adjusted Purchase Price and (upon the occurrence of a Triggering Event) the
adjusted Exercise Price, the number of Common Shares purchasable from time to
time upon exercise of the Rights, all subject to further adjustment as provided
in this Agreement.
(h) Upon each adjustment of the Purchase Price and
the Exercise Price as a result of the calculations made in Sections 11(b) and
(c), each of the Rights outstanding immediately prior to the making of such
adjustment shall, unless the Company has exercised its election as provided in
Section 11(i), thereafter evidence the right to purchase, at the adjusted
Purchase Price or the adjusted Exercise Price, as the case may be, that number
of Common Shares (calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of Common Shares purchasable upon exercise of one of
the Rights immediately prior to this adjustment by (y) the Purchase Price or
the Exercise Price, as the case may be, in effect immediately prior to such
adjustment and (ii) dividing the product so obtained by the Purchase Price or
the Exercise Price, as the case may be, in effect immediately after such
adjustment.
(i) The Company may elect, on or after the date of
any adjustment of the Purchase Price and the
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Exercise Price, to adjust the number of Rights, in substitution for any
adjustment in the number of Common Shares purchasable upon the exercise of one
of the Rights. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of Common Shares for which
one of the Rights was exercisable immediately prior to such adjustment. Each
of the Rights held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest ten-thousandth)
obtained by dividing the Purchase Price and the Exercise Price in effect
immediately prior to the adjustment by the Purchase Price and the Exercise
Price in effect immediately after the adjustment. The Company shall make a
public announcement of its election to adjust the number of Rights, indicating
the record date for the adjustment to be made. This record date may be the
date on which the Purchase Price and the Exercise Price are adjusted or any day
thereafter but, if the Right Certificates have been issued, shall be at least
10 days later than the date of the public announcement. If Right Certificates
have been issued, the Company shall, upon each adjustment of the number of
Rights pursuant to this Section 11(i) and as promptly as practicable, cause to
be distributed to holders of Right Certificates on such record date Right
Certificates evidencing, subject to
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Section 14, the additional Rights to which such holders are entitled as a
result of such adjustment or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof if required by the Company, new Right Certificates
evidencing all the Rights to which such holders are entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed,
and countersigned in the manner provided for in this Agreement (and may bear,
at the option of the Company, the adjusted Purchase Price and the adjusted
Exercise Price) and shall be registered in the names of the holders of record
of Right Certificates on the record date specified in the public announcement.
(j) Notwithstanding any adjustment or change in the
Purchase Price and the Exercise Price or the number of Common Shares issuable
upon the exercise of the Rights, the Rights Certificates theretofore and
thereafter issued may continue to express the Purchase Price and the Exercise
Price per Common Share and the number of Common Shares that were expressed in
the initial Right Certificates issued under this Agreement.
(k) Before taking any action that would cause an
adjustment reducing the Purchase Price or the
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Exercise Price below the then stated capital, if any, of a Common Share
issuable upon exercise of the Rights, the Company shall take any corporate
action that may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and nonassessable Common
Shares at such adjusted Purchase Price or such adjusted Exercise Price.
(l) In any case in which this Section 11 requires
that an adjustment in the Purchase Price and the Exercise Price be made
effective as of a record date for a specified event, the Company may elect to
defer until the occurrence of such event the issuing to the holder of any
Rights exercised after such record date the number of Common Shares (or
Preferred Shares or other securities) issuable upon such exercise over and
above the number of Common Shares (or Preferred Shares or other securities)
issuable upon such exercise on the basis of the Purchase Price or the Exercise
Price, as the case may be, in effect prior to such adjustment, except that the
Company shall deliver to such holder a due bill or other appropriate instrument
evidencing such holder's right to receive such additional Common Shares (or
Preferred Shares or other securities) upon the occurrence of the event
requiring such adjustment.
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(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reduction in the
Purchase Price and the Exercise Price, in addition to those adjustments
expressly required by this Section 11, as and to the extent that the Board of
Directors of the Company in its discretion determines to be advisable in order
that any consolidation or subdivision of Common Shares, any issuance wholly for
cash or any of the Common Shares at less than the market price per Common
Share, any issuance wholly for cash or securities that by their terms are
convertible into or exchangeable for Common Shares, any stock dividends, and
any issuance of rights, options, or warrants referred to in this Section 11,
hereafter made by the Company to holders of the Common Shares will not be
taxable to such holders.
Section 12. CERTIFICATES OF ADJUSTED PURCHASE PRICE
OR NUMBER OF SHARES. Whenever an adjustment is made as provided in Sections 11
and 13, the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares a copy of such certificate, and (c) mail a brief summary thereof to each
holder of a Right Certificate (or, if prior to the Distribution Date, to each
holder of a certificate
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representing Common Shares) in accordance with Section 25. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment contained in such certificate.
Section 13. CONSOLIDATION, MERGER, OR SALE OR
TRANSFER OF ASSETS OR EARNING POWER. (a) In the event, following the
Distribution Date, (x) the Company consolidates with, or merges with and into,
any other Person and the Company is not the continuing or surviving
corporation, (y) any Person consolidates or merges with and into the Company,
the Company is the continuing or surviving corporation, and, in connection with
such consolidation or merger, all or part of the Common Shares of the Company
are changed into or exchanged for securities of any Person other than the
Company, cash, or other property, or (z) the Company sells or otherwise
transfers (or one or more of its Subsidiaries sells or otherwise transfers), in
one or more transactions, assets (including, without limitation, securities
creating any obligation on the part of the Company or any Subsidiary) or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any Person other than the
Company or its Subsidiaries, proper provision shall be made so that (i) each
holder of a Right shall thereafter have the right to receive, upon exercise
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of each of the Rights held by such holder in accordance with the terms of this
Agreement, at an exercise price for each of the Rights equal to twice the
Exercise Price set forth in Section 11(a)(ii) (subject to adjustment pursuant
to the provisions of Section 11), such number of validly issued, fully paid,
nonassessable, and freely tradeable Common Shares of the Principal Party (as
hereinafter defined), free and clear of any liens, encumbrances, or other
adverse claims and not subject to any rights of call or first refusal, as shall
be equal to the quotient of (A) two times the market price (determined in the
manner described in Section 11(d)) of the Common Shares of the Company at the
close of business on the date on which the Flip-over Event occurs divided by
(B) the market price of the Common Shares of the Principal Party at the close
of business on the date on which the Flip-over Event occurs; (ii) the Principal
Party shall thereafter be liable for, and shall assume by virtue of such
consolidation, merger, sale, or transfer, all of the obligations and duties of
the Company pursuant to this Agreement; (iii) the term "Company" as used in
this Agreement shall thereafter be deemed to refer to such Principal Party (it
being specifically intended that, except as expressly provided herein, all of
the provisions of this Agreement, including the provisions of Section
11(a)(iii), shall apply to such
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Principal Party); and (iv) such Principal Party shall take such steps
(including the reservation of a sufficient number of its Common Shares in
accordance with Section 9) as may be necessary to assure that the provisions of
this Agreement shall thereafter be applicable, as nearly as possible, in
relation to the Common Shares thereafter deliverable upon the exercise of the
Rights. Upon the occurrence of a Flip-over Event, the provision of Section
11(a)(ii) shall be of no effect.
(b) "Principal Party" means
(1) in the case of any Flip-over Event described in
clause (x) or (y) of the first sentence of Section 13(a), the Person
that is the issuer of any securities into which Common Shares of the
Company are converted in such merger or consolidation if securities
are so issued and, if no securities are so issued, the Person that is
the other party to the merger or consolidation; and
(2) in the case of any Flip-over Event described in
clause (z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets (including,
without limitation, securities creating any obligation on the part of
the
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Company or any Subsidiaries) or earning power transferred pursuant to
such transaction;
except that, in any such case, (x) if the Common Shares of such Person are not
at such time, and have not been continuously over the preceding 12-month
period, registered under Section 12 of the Exchange Act and a majority of the
outstanding Common Shares of such Person are owned by another Person the Common
Shares of which are and have been so registered, "Principal Party" shall refer
to such other Person; (y) in case there is more than one such Person referred
to in clause (x) above, or in case there is more than one Person referred to in
subparagraph (1) or (2) of this Section 13(b), the Common Shares of each of
which is and has been so registered, "Principal Party" shall refer to whichever
of such Persons is the issuer of publicly held Common Shares having the
greatest aggregate market value; and (z) in case such Person is owned, directly
or indirectly, by a joint venture formed by two or more joint venturers, the
rules set forth in clauses (x) and (y) above shall apply to each of the joint
venturers having an interest in such joint venture, and the joint venturers
shall each bear the obligations set forth in this Section 13 in the same ratio
as its direct or indirect interest in such joint venture bears to the total of
all such interests.
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(c) The Company shall not consummate any such
consolidation, merger, sale, or transfer unless prior thereto the Company and
such Principal Party have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in subsections (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of such consolidation, merger, sale, or transfer, the Principal Party
shall
(i) prepare and file a registration statement under
the Act on an appropriate form with respect to the Rights and the
Common Shares or other securities purchasable upon exercise of the
Rights, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing, and use its
best efforts to cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the Act)
until the date of the expiration of the Rights; and
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates that comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
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The provision of this Section 13 shall similarly apply to successive mergers,
consolidations, sales, or transfers. In the event one of the transactions
described in Section 13(a) occurs at any time after the occurrence of a
transaction described in Section 11(a)(ii), the Rights that have not
theretofore been exercised shall thereafter become exercisable in the manner
described in Section 13(a).
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or to
distribute Right Certificates that evidence fractional Rights. In lieu of such
fractional Rights, the Company may pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the market value of
one of the Rights. For the purposes of this Section 14(a), the market value of
one of the Rights shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities
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listed or admitted to trading on the NYSE or, if the Rights are not listed or
admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if no sale price is quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on any
such date the Rights are not quoted by NASDAQ or any such other system, the
average of the closing bid and asked prices as furnished by a professional
market maker making a market in the Rights selected by the Board of Directors
of the Company. If on any such date no such market maker is making a market in
the Rights, the market value of one of the Rights shall be the value of the
Rights on such date as determined in good faith by the Board of Directors of
the Company.
(b) The Company shall not be required to issue
fractions of a Common Share upon exercise of the Rights or to distribute
certificates that evidence fractional Common Shares. In lieu of fractional
shares, the Company may pay to the registered holders of Right
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Certificates at the time such Right Certificates are exercised an amount in
cash equal to the same fraction of the market price of a Common Share on the
date of exercise. For purposes of this Section 14(b), the market price of a
Common Share shall be determined in accordance with Section 11(d).
(c) The holder of Rights by the acceptance of the
Rights expressly waives his right to receive any fractional Rights or any
fractional Common Shares upon exercise of the Rights.
Section 15. RIGHTS OF ACTION. All rights of action
in respect of this Agreement are vested in the respective registered holders of
the Right Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares); and any registered holder of any Right
Certificate (or, prior to the Distribution Date, of the Common Shares), without
the consent of the Rights Agent or of the holder of any other Right Certificate
(or, prior to the Distribution Date, of any other Common Shares), may,in his
own behalf and for his own benefit, enforce, and may institute and maintain any
suit, action, or proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such Right
Certificate. Without limiting the foregoing or any remedies available to the
holders of
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Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of, and injunctive relief against actual or
threatened violations of, the obligations of any Person subject to this
Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Holders of
the Rights by accepting the Rights consent and agree with the Company and the
Rights Agent and with other holders of Rights that:
(a) prior to the Distribution Date, the Rights will
be transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right
Certificates will be transferable only on the registry books of the Rights
Agent if surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer and with the appropriate
forms and certificates fully executed; and
(c) the Company and the Rights Agent may, subject to
Section 6(a), Section 7(e), and Section 7(f), deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Share certificate) is registered as the absolute owner of
such Right Certificate and of the Rights
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evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Share certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be required to be affected by
any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends, or be deemed for any purpose the holder of the number
of Common Shares (or Preferred Shares or other securities, as the case may be)
that may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained in this Agreement or in any Right
Certificate be construed to confer upon the holder of any Right Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote in
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, to give or withhold consent to any corporate action, to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 24), to receive dividends or subscription rights, or
otherwise, until the Rights
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evidenced by such Right Certificate have been exercised in accordance with the
provisions of this Agreement.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The
Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it under this Agreement and, from time to time on demand
of the Rights Agent, to reimburse it for or pay its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
under this Agreement. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or expense incurred
without negligence, bad faith, or willful misconduct on the part of the Rights
Agent as a result of anything done or omitted to be done by the Rights Agent in
connection with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim of liability in the
premises.
(b) The Rights Agent shall be protected and shall
incur no liability for or in respect of any action taken, suffered, or omitted
by it in connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate for Common Shares or for other securities
of the Company, instrument of assignment or
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transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to
be genuine and to be signed, executed, and, if necessary, verified or
acknowledged by the proper person or persons.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF
NAME OF RIGHTS AGENT. (a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent is a party, or any corporation succeeding
to the corporate trust business of the Rights Agent or any successor Rights
Agent shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties to this Agreement, provided such corporation is eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In
case at the time such successor Rights Agent succeeds to the agency created by
this Agreement any of the Right Certificates have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor so countersigned; in case at that time any of the Right
Certificates have not been countersigned, any successor
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Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and, in
all such cases, such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent
is changed and at such time any of the Right Certificates have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; in case at that time any of the Right Certificates have not been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and, in all such cases, such Right
Certificates shall have the full force provided in the Right Certificates and
in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights
Agent undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance of the Right Certificates, shall be
bound:
(a) The Rights Agent may consult with legal counsel,
and the opinion of such counsel shall be full and complete authorization and
protection to the Rights Agent
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as to any action taken or omitted by it in good faith and in accordance with
such opinion, regardless of whether such counsel is also counsel to the
Company.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent deems it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect of
such fact or matter is specifically prescribed in this Agreement) may be deemed
to be conclusively proved and established by a certificate signed by any one of
the Chairman of the Board, the President, any Vice President, the Treasurer, or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent for any action
taken or omitted in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable under this
Agreement only for its own negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by
reason of any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or be
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required to verify such statements or recitals, but all such statements and
recitals are and shall be deemed to have been made only by the Company.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution
and delivery of this Agreement (except the due execution of this Agreement by
the Rights Agent) or in respect of the validity or execution of any Right
Certificate (except the countersignature of the Right Certificates by the
Rights Agent); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any adjustment required under the provisions of
Section 11 or 13 or responsible for the manner, method, or amount of any such
adjustment or the ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares or Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
Common Shares or Preferred Shares will, when issued, be
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validly authorized and issued, fully paid, and nonassessable.
(f) The Company agrees that it will perform,
execute, acknowledge, and deliver or cause to be performed, executed,
acknowledged, and delivered all such further and other acts, instruments, and
assurances as may reasonably be required by the Rights Agent for the carrying
out or performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
under this Agreement from any one of the Chairman of the Board, the President,
any Vice President, the Treasurer, or the Secretary of the Company and to apply
to such officers for advice or instructions in connection with its duties, and
it shall not be liable for any action taken or suffered to be taken by it in
good faith in accordance with the instructions of any such officer.
(h) The Rights Agent and any shareholder, director,
officer, or employee of the Rights Agent may buy, sell, or deal in any of the
Rights or other securities of the Company, become pecuniarily interested in any
transaction in which the Company may be interested, contract with or lend money
to the Company, or otherwise
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act as fully and freely as though it were not the Rights Agent under this
Agreement. Nothing in this Agreement shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of
the rights or powers vested in it by this Agreement or perform any duty under
this Agreement either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default,
neglect, or misconduct of any such attorney or agent or for any loss to the
Company resulting from any such act, default, neglect, or misconduct, provided
reasonable care was exercised in the selection and continued employment of such
attorney or agent.
(j) No provision of this Agreement shall require the
Rights Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the exercise of its
rights under this Agreement if there are reasonable grounds for believing that
the repayment of such funds, or adequate indemnification against such risk or
liability, is not reasonably assured to it.
(k) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
attached to the form of
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assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 or 2 of such
certificate, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights
Agent or any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 days' notice in writing mailed to the
Company and to each transfer agent of the Common Shares by registered or
certified mail and to the holders of the Right Certificates by first class
mail. If the Rights Agent resigns, is removed or otherwise becomes incapable
of acting, the Company shall appoint a successor to the Rights Agent. If the
Company fails to make such appointment within a period of 30 days after giving
notice of such removal or after it has been notified in writing of such
registration or incapacity by the resigning or incapacitated Rights Agent or by
the holder of any of the Rights (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the registered holder of any
Right may apply to any court of competent jurisdiction for the appointment of a
successor Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall
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be a corporation organized and doing business under the laws of the United
States or of the State of Ohio (or of any other state of the United States so
long as such corporation is authorized to do business as a banking institution
in the State of Ohio) that is in good standing, has a principal office in the
State of Ohio, is authorized under such laws to exercise corporate trust
powers, is subject to supervision or examination by federal or state
authorities, and has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $50 million. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties, and
responsibilities as if it had been originally named as Rights Agent without
further act or deed, but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
under this Agreement and execute and deliver any further assurance, conveyance,
act, or deed necessary for the purpose. Not later than the effective date of
any such appointment, the Company shall file notice of the appointment in
writing with the predecessor Rights Agent and each transfer agent of the Common
Shares and mail a notice thereof in writing to the registered holders of the
Right Certificates. Failure to give any notice provided for in this Section 21
or any defect in such notice shall,
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however, not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the case
may be.
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Right
Certificates to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and the
Exercise Price, in the number, kind, or class of shares or other securities or
property purchasable upon exercise of the Rights, or in any other provision of
this Agreement made in accordance with Section 11, Section 26, or any other
provision of this Agreement.
Section 23. REDEMPTION. (a) The Board of Directors
of the Company may, at its option, at any time prior to the earlier of (i) the
occurrence of a Triggering Event or (ii) the close of business on the Final
Expiration Date, redeem all but not less than all of the Rights then
outstanding at a redemption price of $.01 for each of the Rights, adjusted to
reflect any stock split, stock dividend, or similar transaction occurring after
the date of this Agreement (such redemption price being hereinafter
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referred to as the "Redemption Price"), except that, if such redemption occurs
on or after any Person, together with the Affiliates and Associates of such
Person, becomes the Beneficial Owner of 20% or more of the Common Shares of the
Company then outstanding, the Rights may be redeemed only if Continuing
Directors constitute a majority of the Board of Directors at the time of such
redemption and such redemption is approved by a majority of the Continuing
Directors. For purposes of the preceding sentence, in determining whether Eric
T. Nord or Evan W. Nord, together with each of their Affiliates or Associates,
is the Beneficial Owner of 20% or more of the Common Shares then outstanding,
the Common Shares then held by the Walter G. Nord Trust and by the Nordson
Foundation shall be excluded and, in determining whether the Walter G. Nord
Trust or the Nordson Foundation, together with each of their Affiliates and
Associates, is the Beneficial Owner of 20% or more of the Common Shares then
outstanding, the Common Shares then held by Eric T. Nord and by Evan W. Nord
shall be excluded. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable upon the occurrence of a Flip-in
Event pursuant to Section 11(a)(ii) prior to the expiration of the Company's
right of redemption pursuant to this Section 23(a).
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(b) Immediately upon the action of the Board of
Directors of the Company ordering the redemption of the Rights (and, if
required, approval by a majority of the Continuing Directors), and without any
further action and without any notice, the right to exercise the Rights shall
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 days after the action of the Board of
Directors ordering the redemption of the Rights, the Company shall give notice
of such redemption to the holders of the then outstanding Rights by mailing
such notice to each such holder at the last address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent for the Common
Shares. Any notice that is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire, or purchase for value any Rights at any time in
any manner other than as specifically set forth in this Section 23 or in
connection with the repurchase of Common Shares prior to the Distribution Date.
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Section 24. NOTICE OF CERTAIN EVENTS. In case the
Company proposes at any time following the Distribution Date (a) to pay any
dividend payable in shares of any class to the holders of Common Shares or to
make any other distribution to the holders of Common Shares (other than a
regular periodic cash dividend at a rate per share not in excess of 150% of the
last cash quarterly dividend per share theretofore paid), (b) to offer to the
holders of Common Shares rights or warrants to subscribe for or to purchase any
additional Common Shares, shares of any other class, or any other securities,
rights, or options, (c) to effect any reclassification of the Common Shares
(other than a reclassification involving only the subdivision of outstanding
Common Shares), (d) to effect any transaction which would constitute a
Flip-over Event, or (e) to effect the liquidation, dissolution, or winding up
of the Company, the Company shall, in each such case, give to each holder of
Rights, in accordance with Section 25, a notice of such proposed action
specifying the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or winding up
is to take place and the date of participation therein by the holders of the
Common Shares, if any such date is to be fixed. Such notice shall be so given,
in the
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case of any action described in clause (a) or (b) above, at least 20 days prior
to the record date for determining holders of the Common Shares for purposes of
such action and, in the case of any such other action, at least 20 days prior
to the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares, whichever is the earlier. In case
any of the events set forth in Section 11(a)(ii) of this Agreement occurs, the
Company shall, in any such case, as soon as practicable thereafter give to each
holder of Rights, in accordance with Section 25, a notice of the occurrence of
such event specifying the event and the consequences of the event to holders of
Rights under Section 11(a)(ii).
Section 25. NOTICES. Notices or demands authorized
by this Agreement to be given or made by the Rights Agent or by the holder of
any Right Certificate to or on the Company shall be sufficiently given or made
if personally delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
Nordson Corporation
28601 Clemens Road
Westlake, Ohio 44145
Attention:General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by
this Agreement to be given or made by the Company or by the holder of any Right
Certificate to or
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on the Rights Agent shall be sufficiently given or made if personally delivered
or sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
AmeriTrust Company National Association
Corporate Trust Division
P.O. Box 6477
Cleveland, Ohio 44101
Attention:Victor W. LaTessa
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to or on the holder of any Right Certificate shall
be sufficiently given or made if personally delivered or sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder
as shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. The Company
may from time to time supplement or amend this Agreement without the approval
of any holders of Rights in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained in this Agreement that may be defective or
inconsistent with any other provision in this Agreement, and (iii), prior to
the occurrence of a Triggering Event, to make any other change in the
provisions of this Agreement that the Board of Directors of the Company deems
to be consistent with the purposes of this Agreement and not adverse to the
interests of the
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Company and its shareholders. Notwithstanding the foregoing, the Agreement may
not be supplemented or amended pursuant to clause (iii) above after any Person,
together with the Affiliates and Associates of such Person, becomes the
Beneficial Owner of 20% or more of the Common Shares of the Company then
outstanding unless the Continuing Directors constitute a majority of the Board
of Directors and the supplement or amendment is approved by a majority of the
Continuing Directors. For purposes of the preceding sentence, in determining
whether Eric T. Nord or Evan W. Nord, together with each of their Affiliates
or Associates, is the Beneficial Owner of 20% or more of the Common Shares then
outstanding, the Common Shares then held by the Walter G. Nord Trust and by the
Nordson Foundation shall be excluded and, in determining whether the Walter G.
Nord Trust or the Nordson Foundation, together with each of their Affiliates
and Associates, is the Beneficial Owner of 20% or more of the Common Shares
then outstanding, the Common Shares then held by Eric T. Nord and by Evan W.
Nord shall be excluded. Upon the delivery of a certificate from an appropriate
officer of the Company that states that the proposed supplement or amendment is
in compliance with the terms of this Section 26, the Rights Agent shall execute
such supplement or amendment unless the Rights Agent determines in good faith
that such supplement or amendment
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would adversely affect its interests under this Agreement. Prior to the
occurrence of a Triggering Event, the interests of the holders of Rights shall
be deemed to be coincident with the interests of the holders of Common Shares.
Section 27. SUCCESSORS. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns.
Section 28. DETERMINATIONS AND ACTIONS BY THE BOARD
OF DIRECTORS, ETC. For all purposes of this Agreement, any calculation of the
number of Common Shares outstanding at any particular time, including the
purpose of determining the particular percentage of such outstanding Common
Shares of which any Person is the Beneficial Owner, shall be made in accordance
with the provisions of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this Agreement.
The Board of Directors of the Company (or, where expressly provided for herein,
the Continuing Directors) shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board (or, where expressly provided herein, the Continuing
Directors) or the Company or as may be necessary or advisable in the
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administration of this Agreement, including the right and power (i) to
interpret the provisions of this Agreement and (ii) to make all determinations
deemed necessary or advisable for the administration of this Agreement. All
such actions, calculations, interpretations, and determinations (including, for
the purpose of clause (ii) below, all omissions with respect to the foregoing)
that are done or made by the Board (or, where expressly provided herein, by the
Continuing Directors) in good faith shall (i) be final, conclusive, and binding
on the Company, the Rights Agent, the holders of Right Certificates, and all
other parties and (ii) not subject the Board or the Continuing Directors to any
liability to the holders of Right Certificates.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in
this Agreement shall be construed to give to any Person other than the Company,
the Rights Agent, and the registered holders of Rights (and, prior to the
Distribution Date, the registered holders of Common Shares) any legal or
equitable right, remedy, or claim under this Agreement, but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent,
and the registered holders of Rights (and, prior to the Distribution Date, the
registered holders of Common Shares).
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Section 30. SEVERABILITY. If any term, provision,
covenant, or restriction of or in this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void, or
unenforceable, the remainder of the terms, provisions, covenants, and
restrictions of or in this Agreement shall remain in full force and effect and
shall in no way be affected, impaired, or invalidated, except that,
notwithstanding anything in this Agreement to the contrary, if any such term,
provision, covenant, or restriction is held by such court or authority to be
invalid, void, or unenforceable and the Board of Directors of the Company
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the 20th day following the date
of such determination by the Board of Directors.
Section 31. GOVERNING LAW. This Agreement and each
Right Certificate issued under it shall be deemed to be a contract made under
the laws of the State of Ohio and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
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Section 32. COUNTERPARTS. This Agreement may be
executed in any number of counterparts, and each such counterpart shall for all
purposes be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 33. DESCRIPTIVE HEADINGS. Descriptive
headings of the Sections of this Agreement are inserted for convenience only
and shall not control or affect the meaning or construction of any of the
provisions of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be duly executed as of the day and year first above written.
NORDSON CORPORATION
By /s/ William P. Madar
--------------------------
William P. Madar
President and Chief
Executive Officer
AMERITRUST COMPANY
NATIONAL ASSOCIATION
By /s/ Donald J. Sprenger
--------------------------
Donald J. Sprenger,
Vice President
<PAGE> 87
EXHIBIT A
TO BE INCLUDED IN ARTICLE FOURTH OF
AMENDED ARTICLES OF INCORPORATION
"EXPRESS" TERMS OF SERIES B CONVERTIBLE PREFERRED SHARES
A series of Serial Preferred Shares is created with
the following "express" terms:
A. DESIGNATION. The shares of such series are
designated as "Series B Convertible Preferred Shares without par value" (the
"Series B Preferred Shares").
B. AUTHORIZED NUMBER OF SHARES; FRACTIONAL SHARES.
The authorized number of Series & Preferred Shares is _______ - Series B
Preferred Shares may be issued in fractions of a share that shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions, and have the benefit
of all other rights of holders of Series B Preferred Shares.
C. DIVIDENDS AND DISTRIBUTIONS.
(1) Dividends and other distributions shall be
declared and paid on the Series B Preferred Shares at the same time that
dividends or other distributions are declared and paid on the Common Shares.
The amount per share and kind of the dividends or other distributions on the
Series B Preferred Shares shall be the same as the amount per share and kind of
the dividends or other distributions on the Common Shares.
(2) Dividends on Series B Preferred Shares shall not
accrue or be cumulative.
D. CONVERSION. Each Series B Preferred Share is
convertible, at the option of the holder, into one Common Share, provided that,
at the time of conversion, there is a sufficient number of authorized but
unissued Common Shares, or Common Shares held in the Company's treasury, to
permit the conversion of all Series B Preferred Shares then outstanding.
LIQUIDATION, DISSOLUTION, OR WINDING UP.
Upon liquidation, dissolution, or winding up of the
Company, holders of Series B Preferred Shares shall have the same rights and
shall be treated the same as
A-1
<PAGE> 88
holders of Common Shares with respect to distributions by the Company.
E. CONVERSION ON MERGER, CONSOLIDATION, ETC. In case
the Company enters into any merger, consolidation, combination, or other
transaction in which Common Shares are exchanged or changed into other shares
or securities, cash, or other property, each Series Preferred Share shall in
any such case at the same time be similarly exchanged or changed in an amount
per share equal to the aggregate amount of shares, securities, cash, or other
property (payable in kind), as the case may be, into which or for which each
Common Share is changed or exchanged.
F. REDEMPTION. The outstanding Series B Preferred
Shares shall not be redeemable.
G. VOTING RIGHTS. Each holder of Series B Preferred
Shares shall be entitled to one vote for each share held and, except as
otherwise provided by law, the holders of Series B Preferred Shares and the
holders of Common Shares shall vote together as one class.
A-2
<PAGE> 89
EXHIBIT B
[Form of Right Certificate)
Certificate No. R - ____________ Rights
NOT EXERCISABLE AFTER AUGUST ______, 1998, OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 FOR EACH OF THE RIGHTS ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. [THE RIGHTS REPRESENTED BY THIS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR
BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT).
ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY
MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION
7(e) OF THE RIGHTS AGREEMENT.)*
RIGHT CERTIFICATE
This certifies that ___________________ or registered
assigns, is the registered owner of the number of Rights set forth above, each
of which entitles the owner thereof, subject to the terms, provisions, and
conditions of the Rights Agreement dated as of August 26, 1988 (the "Rights
Agreement"), between Nordson Corporation, an Ohio corporation (the "Company"),
and AmeriTrust Company National Association, (the "Rights Agent"), to purchase
from the Company at any time after the Distribution Date (as such term is
defined in the Rights Agreement) and prior to 5:00 P.M., Cleveland time, on
August 26, 1998, at the office of the Rights Agent, or of its successor as
Rights Agent, in Cleveland, Ohio, one fully paid and non-
_____________
* The portion of the legend in brackets shall be inserted only if applicable.
B-1
<PAGE> 90
assessable Common Share with a par value of $1.00 (the "Common Shares") of the
Company, at a purchase price of $200.00 per Common Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly executed. The number of Rights evidenced by
this Right Certificate, the number of Common Shares that may be purchased upon
exercise of the Rights, and the Purchase Price per Common Share set forth
above, are the numbers and Purchase Price as of September 9, 1988, based on the
Common Shares as constituted at such date, and are subject to adjustment as
provided in the Rights Agreement.
If the Rights evidenced by this Right Certificate are
beneficially owned by (i) an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement), (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person became an Acquiring Person, or
(iii), under certain circumstances specified in the Rights Agreement, a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person
becoming an Acquiring Person, such Rights shall, at the close of business on
the 20th calendar day following the occurrence of a Flip-in Event (as defined
in the Rights Agreement),
B-2
<PAGE> 91
become null and void and thereafter no holder hereof shall have any right with
respect to such Rights.
At the close of business on the 20th calendar day
following the occurrence of a Flip-in Event, each Right becomes the right to
purchase two Common Shares at an Exercise Price of $1.00 per share, subject to
adjustment in accordance with the Rights Agreement. Upon the occurrence of a
Flip-over Event (as defined in the Rights Agreement), each Right becomes the
right to purchase, at twice the Exercise Price (subject to adjustment), the
number of Common Shares of the Principal Party equal to the quotient of (A) two
times the market value of the Common Shares of the Company when the Flip-over
Event occurs divided by (B) the market value of the Common Shares of the
Principal Party when the Flip-over Event occurs.
As provided in the Rights Agreement, the Purchase
Price, the Exercise Price, and the number of Common Shares or kind of other
securities that may be purchased upon the exercise of the Rights evidenced by
this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the
terms, provisions, and conditions of the Rights Agreement, which terms,
provisions, and conditions are hereby incorporated by reference and made a part
of this Right Certificate. Reference is hereby made to the Rights
B-3
<PAGE> 92
Agreement for a full description of the rights, limitations of rights,
obligations, duties, and immunities of the Rights Agent, the Company, and the
holders of the Right Certificates. Copies of the Rights Agreement are on file
at the office of the Rights Agent mentioned above.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal office of the Rights Agent, may
be exchanged for another Right Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a like aggregate
number of Common Shares as the Right evidenced by the Right Certificate or
Right Certificates surrendered entitled such holder to purchase. If this Right
Certificate is exercised in part, the holder shall be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates for the number
of whole Rights not exercised.
Subject to the provisions of the Rights Agreement,
the Rights evidenced by this Right Certificate may be redeemed by the Company
at its option at a redemption price of $.01 for each of the Rights.
The Company is not required to issue fractional
Common Shares upon the exercise of any Rights evidenced hereby, but in lieu
thereof may make a cash payment, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled
to vote or receive dividends or be deemed for any
B-4
<PAGE> 93
purpose to be the holder of the Common Shares or any other securities of the
Company that may at any time be issuable on the exercise hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder of the
Company or any right to vote in the election of directors or upon any matter
submitted to shareholders at any meeting thereof, to give or withhold consent
to any corporate action, to receive notice of meetings or other actions
affecting shareholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights or otherwise, until the Rights
evidenced by this Right Certificate have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or
obligatory for any purpose until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper
officers of the Company and its corporate seal.
Dated as of ____________________ 19
ATTEST: NORDSON CORPORATION
______________________ By _____________________________
Secretary Title:
Countersigned:
______________________
By ___________________
B-5
<PAGE> 94
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if the
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED _________________ hereby sells,
assigns, and transfers unto _______________________________________________
___________________________________________________________________________
(Please print name and address of transferee)
_____ this Right Certificate, together with all right, title, and interest
therein, and does hereby irrevocably constitute and appoint _______________
as attorney, to transfer the Right Certificate on the books of Nordson
Corporation, with full power of substitution.
Dated:________________, 19__
_____________________________
Signature
Signature Guaranteed:
B-6
<PAGE> 95
CERTIFICATE
(Applicable to Form of Assignment)
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being
sold, assigned, and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was, or
subsequently became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: ___________, 19__ ____________________________
Signature
NOTICE
The signature to the foregoing Assignment and
Certificate must correspond to the name as written upon the face of this Right
Certificate in every particular, without any alteration or change whatsoever.
B-7
<PAGE> 96
FORM OF ELECTION TO PURCHASE
(To be executed if the holder desires to
exercise the Right Certificate)
To Nordson Corporation:
The undersigned hereby irrevocably elects to exercise
___________________ Rights represented by this Right Certificate to purchase
the Common Shares or other securities issuable upon the exercise of such Rights
and requests that certificates therefor be issued in the name of:
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Please insert social security
or other identifying number:_________________________________________________
If such number of Rights are not all of the Rights
evidenced by this Right Certificate, a new Right Certificate for the balance
of such Rights shall be registered in the name of and delivered to:
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
Please insert social security
or other identifying number:_______________________________
Dated:________________, 19__ ________________________________
Signature
(Signature must conform in all
respects to name of the holder
as specified on the face of this
Right Certificate)
Signature Guaranteed:
B-8
<PAGE> 97
CERTIFICATE
(Applicable to Form of Election to Purchase)
The undersigned hereby certifies by checking the
appropriate boxes that:
(1) the Rights evidenced by this Right Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of
the undersigned, the undersigned [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated:_____________, 19__ _______________________________
Signature
NOTICE
The signature to the foregoing Election to Purchase
and Certificate must correspond to the name as written upon the fact of this
Right Certificate in every particular, without any alteration or change
whatsoever.
B-9
<PAGE> 98
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
COMMON SHARES
The Board of Directors of Nordson Corporation on
August 26, 1988 declared a dividend consisting of rights to purchase Common
Shares of Nordson. One of the rights is distributable to the holder of each
Common Share outstanding on September 9, 1988, the record date for the
distribution. Rights will also be distributed with Common shares issued by
Nordson after the record date but before the expiration of the rights or the
occurrence of a "flip-in" event or "flip-over" event, as described below.
When the rights become exercisable, the holder of
each of the rights will be entitled to purchase one Common Share of Nordson for
$200. The rights will become exercisable 20 days after the earlier of (1) a
public announcement that a person or group has become the beneficial owner of
20% or more of the outstanding Common Shares, (2) a public announcement that
the Board of Directors has declared a person or group to be an "adverse
person," as defined below, or (3) the commencement or announcement of an
intention to commence a tender offer or exchange offer that would result in the
beneficial ownership of 20% or more of the outstanding Common Shares by a
person or group. An "adverse person" is defined as a person or group that is
declared to be adverse by the Board of Directors of Nordson upon a
determination that (a) the person or group is, or has announced an intention to
become, the beneficial owner of a substantial number of Common Shares (which
may not be less than 15% of the outstanding Common Shares) and (b) ownership of
the Common Shares is intended or likely to result in consequences that are not
in the long-term interests of Nordson and its shareholders.
Until the rights become exercisable, they will trade
with the Common Shares, and any transfer of Common Shares will also constitute
a transfer of the associated rights. When the rights become exercisable, they
will begin to trade separate and apart from the Common Shares. At that time,
separate certificates representing the rights will be mailed to holders.
Twenty days after certain events occur, each of the
rights will "flip-in" and become the right to purchase two Common Shares of
Nordson for $1.00 per share.
C-1
<PAGE> 99
Upon the occurrence of these events, rights held by an "adverse person," or by
a person or group that beneficially owns 20% or more of the outstanding Common
Shares, will become void. These events are (1) the beneficial ownership by a
person or group of 25% or more of the outstanding Common Shares, (2) the
declaration by the Board of Directors that a person or group has become an
"adverse party," (3) certain transactions between Nordson and a person or group
that beneficially owns 20% or more of the outstanding Common Shares, (4) a
reclassification or recapitalization of Nordson that has the effect of
increasing by more than 1% the percentage of Common Shares owned by a person or
group that is the beneficial owner of 20% or more of the outstanding Common
Shares, and (5) a person or group making or attempting to make a 1,control
share acquisition," as defined below, without complying with the Ohio control
share acquisition law. A "control share acquisition" is defined as the
acquisition by a person or group of voting power in the following ranges: (i)
20% or more but less than 33-1/3%, (ii) 33-1/3% or more but less than 50%, and
(iii) 50% or more. The Ohio control share acquisition law requires shareholder
approval of any "control share acquisition" of certain Ohio corporations,
including Nordson.
If Nordson is acquired in a merger or other business
combination, or 50% or more of its assets or earning power is sold, each of the
rights will "flip-over" and become the right to purchase common shares of the
acquiror for a total of $2.00. The number of common shares of the acquiror to
be purchased upon exercise of the right has been set so that the market value
of this number of common shares of the acquiror equals the market value of two
Common Shares of Nordson.
The exercise price, and the number of Common Shares
of Nordson (or common shares of an acquiror) to be purchased upon exercise of
the rights, are subject to adjustment from time to time to prevent dilution.
The Board of Directors may redeem the rights for $.01
each at any time before the rights "flip-in" or "flip-over," as described
above. However, the right may not be redeemed while a person or group is the
beneficial owner of 20% or more of the outstanding Common Shares unless (1)
"continuing directors," as defined below, constitute a majority of the Board of
Directors and (2) a majority of the "continuing directors" approve the
redemption. "Continuing directors" are defined as directors who were in office
when the person or group became the beneficial owner of, or commenced a tender
offer or
C-2
<PAGE> 100
exchange offer for, 20% or more of the outstanding Common Shares or whose
election to office was recommended by a majority of the "continuing directors"
in office at the time of the election.
Eric T. Nord and Evan W. Nord are trustees of the
Walter G. Nord Trust and of the Nordson Foundation. For purposes of
determining the percentage of Common Shares deemed to be beneficially owned by
them, Common Shares held by the Walter G. Nord Trust and by the Nordson
Foundation will not be attributed to either Eric T. Nord or Evan W. Nord.
Similarly, Common Shares held by Eric T. Nord and Evan W. Nord will not be
attributed to either the Walter G. Nord Trust or the Nordson Foundation.
The terms of the rights are set forth in a Rights
Agreement between Nordson and AmeriTrust Company National Association, as
rights agent. The provisions of the Rights Agreement may be amended by the
Board of Directors to cure any ambiguity or correct any defect or inconsistency
or, prior to the occurrence of a "flip-in" or "flip-over" event, to make other
changes that the Board of Directors deems to be consistent with the purposes of
the Rights Agreement and not adverse to the interests of Nordson and its
shareholders. However, the Rights Agreement may not be amended while a person
or group is the beneficial owner of 20% or more of the outstanding Common
Shares unless (1) "continuing directors" constitute a majority of the Board of
Directors and (2) a majority of the "continuing directors" approve the
amendment.
A copy of the Rights Agreement has been filed with
the Securities and Exchange Commission as an Exhibit to a Registration
Statement on Form 8-A dated August ___, 1988. A copy of the Rights Agreement
is available from Nordson free of charge. This summary of the rights is not
complete and is qualified in its entirety by reference to the Rights Agreement.
C-3
<PAGE> 1
Exhibit 10-a-1
NORDSON CORPORATION
MANAGEMENT INCENTIVE COMPENSATION PLAN
1994 REVISION TO EXHIBITS A, B AND C
<PAGE> 2
EXHIBIT A
NORDSON CORPORATION
MANAGEMENT INCENTIVE COMPENSATION PLAN
ELIGIBLE POSITIONS FOR FY 1994 PLAN YEAR
- President and Chief Executive Officer
- Vice President
- Vice President
- Vice President
- President - Nordson K.K.
- President - Pacific/South Division
- President - European Division
- Vice President - Corporate Research and Technology
- Vice President - Finance and Controller
- Vice President - Law and Assistant Secretary
- Vice President - Manufacturing
- Vice President - Human Resources
<PAGE> 3
<TABLE>
EXHIBIT B
NORDSON CORPORATION
TARGET INCENTIVE AWARDS
FY 1994 PLAN YEAR
<CAPTION>
Target
Position Title Incumbent Award Amount
- ------------------------ --------------- ------------
<S> <C> <C>
President and
Chief Executive Officer W. P. Madar $ 480,000
Vice President J. E. Jackson 149,500
Vice President E. P. Campbell 149,500
President -
European Division W. Bohm 143,000
Vice President R. E. Thayer 126,750
President -
Pacific/South Division D. J. McLane 117,000
Vice President - Finance
and Controller N. D. Pellecchia 85,250
Vice President - Law
and Assistant Secretary T. L. Moorhead 78,650
Vice President -
Manufacturing D. R. Bunch 77,000
Vice President - Corporate
Research and Technology R. G. Klein 77,000
Vice President -
Human Resources B. H. Fields 74,800
President - Nordson K.K. Y. Miyahara 73,450*
----------
Aggregate Target Award: $1,631,900
==========
<FN>
*Represents Yen 8,125,000 converted at the December 31, 1993
exchange rate of Yen 110.6 to the U.S. $1.
</TABLE>
<PAGE> 4
EXHIBIT C
NORDSON CORPORATION
MANAGEMENT INCENTIVE COMPENSATION PLAN - FY 1994
PERFORMANCE COMPONENTS
________________________________________________________________
<TABLE>
<S> <C> <C> <C> <C>
I. 70% of Target Award II. 30% of Target Award
RETURN ON CAPITAL PROFITABILITY
CORPORATE
GOAL 16% / Year 15% / Year
</TABLE>
_________________________________________________________________
<TABLE>
<CAPTION>
% of % of
Target Earnings Target
ROC Award Per Share Award
--- ------ --------- ------
<S> <C> <C> <C> <C>
PAYOUT
TABLES 8% -0- $2.13 -0-
12% 50 2.29 50
16% 100 2.45 100
20% and above 150 2.77 and above 150
</TABLE>
_________________________________________________________________
<PAGE> 1
Exhibit 10-c-2
NORDSON CORPORATION
AMENDMENT TO
1979 EMPLOYEES STOCK OPTION PLAN
PROVIDING FOR
ACCELERATION UPON CHANGE IN CONTROL
Section 7(b) of the 1979 Employees Stock Option Plan shall
be amended to read as follows:
(b) Notwithstanding any exercise date determined by the
Committee or by the Board of Directors under Subsection (a), all
outstanding options shall become exercisable upon the occurrence of
any of the following:
(i) Any Person (other than Nordson, any of its
subsidiaries, any employee benefit plan or
employee stock ownership plan of Nordson or of any
of its subsidiaries, or any Person organized,
appointed, or established by Nordson or any of its
subsidiaries for or pursuant to the terms of any
such plan), alone or together with any of its
Affiliates or Associates, becomes the Beneficial
Owner of 20% or more of the Common Shares then
outstanding, any such Person is declared to be an
Adverse Person by the Board of Directors, or any
such Person commences or publicly announces an
intent to commence a tender offer or exchange
offer the consummation of which would result in
the Person becoming the Beneficial Owner of 20% or
more of the Common Shares then outstanding
(PROVIDED, HOWEVER, that, for purposes of
determining whether Eric T. Nord or Evan W. Nord,
together with each of their Affiliates or
Associates, is the Beneficial Owner of 20% or more
of the Common Shares then outstanding, the Common
Shares then held by the Walter G. Nord Trust and
by the Nordson Foundation shall be excluded and,
for purposes of determining whether the Walter G.
Nord Trust or the Nordson Foundation, together
with each of their Affiliates and Associates, is
the Beneficial Owner of 20% or more of the Common
Shares then held by Eric T. Nord and by Evan W.
Nord shall be excluded). For purposes of
<PAGE> 2
this clause (i), the terms "Adverse Person,"
"Affiliates," "Associates," "Beneficial
Ownership," and "Person" shall have the meanings
given to them in the rights Agreement, dated as of
August 26, 1988, between Nordson and AmeriTrust
Company National Association, as Rights Agent, as
amended from time to time.
(ii) At any time during a period of 24 consecutive
months, individuals who were directors of Nordson
at the beginning of the period no longer
constitute a majority of Nordson's directors,
unless the election, or the nomination for
election by Nordson's shareholders, of each
director who was not a director at the beginning
of the period is approved by at least a majority
of the directors who are in office at the time of
the election or nomination and were directors at
the beginning of the period.
(iii) A record date is established for determining
shareholders entitled to vote upon (a) a merger or
consolidation of Nordson with another corporation
in which Nordson is not the surviving or
continuing corporation or in which all or part of
the outstanding Common Shares are to be converted
into or exchanged for cash, securities, or other
property, (b) a sale or other disposition of all
or substantially all of the assets of Nordson, or
(c) the liquidation and dissolution of Nordson.
(iv) Any person who proposes to make a "control share
acquisition" of Nordson, within the meaning of
Section 1701.01(Z)(1) of the Ohio General
Corporation Law, submits or is required to submit
an acquiring person statement of Nordson.
<PAGE> 3
NORDSON CORPORATION
AMENDMENT TO
1979 EMPLOYEES STOCK OPTION PLAN
PROVIDING FOR
WITHHOLDING TAX ELECTION
The heading of Section 10 of the 1979 Employees Stock Option Plan shall be
changed to "Exercise of Options; Payment for Shares; Withholding Tax Election"
and the text of Section 10 shall be amended to read as follows:
(a) Options shall be exercised by delivery of written notice of
exercise to Nordson accompanied by payment of the option price.
Common Shares subject to an option shall be issued or, in the case
of treasury shares, sold only upon exercise of the option in whole
or in part and upon full payment of the option price. Payment of
the option price shall be made in cash, by delivery of Common
Shares, or partly in cash and partly by delivery of Common Shares.
Any Common Shares so delivered shall be valued at the closing price
of the Common Shares as reported by the NASDAQ National Market
System for the last date on which trades were reported prior to the
date on which the option is exercised.
(b) The Committee may, in its discretion and subject to such
rules as the Committee may adopt, permit an optionee to satisfy, in
whole or in part, any withholding tax that may arise in connection
with the exercise of an option by delivering Common Shares to
Nordson, or by having Nordson retain a portion of the Common Shares
subject to the option, with a fair market value equal to the amount
of the withholding tax. The fair market value of the Common Shares
to be delivered or retained shall be the closing price of the
Common Shares as reported by the NASDAQ National Market System for
the last date on which trades were reported prior to the date on
which the amount of the withholding tax is determined.
<PAGE> 1
Exhibit 10-d-3
NORDSON CORPORATION
AMENDMENT TO
1982 INCENTIVE STOCK OPTION PLAN
PROVIDING FOR
ACCELERATION UPON CHANGE IN CONTROL
Section 10 of the 1982 Incentive Stock Option Plan shall
be amended to read as follows:
10. EXERCISE OF OPTIONS AND PAYMENT FOR SHARES.
(a) Options shall be exercised by delivery of written
notice of exercise to Nordson accompanied by payment of the option price.
Upon exercise of an option, the purchase price shall be payable in cash or,
if determined by the Committee when the option is granted and specified in
the notice of grant of the option, either (i) through the transfer to
Nordson by the employee of Common Shares having a current market value equal
to the purchase price or (ii) by a combination of cash and the transfer of
Common Shares. Any Common Shares so delivered shall be valued at the
closing price of the Common Shares as reported by the NASDAQ National Market
System for the last date on which trades were reported prior to the date on
which the option is exercised. Common Shares subject to an option shall be
issued or, in the case of treasury shares, sold only upon exercise of the
option in whole or in part and upon full payment of the option price. An
optionee shall have none of the rights of a shareholder with respect to the
Common Shares subject to the option until the Common Shares are issued or
transferred to him.
(b) Notwithstanding any exercise date determined by the
Committee or by the Board of Directors under Subsection (a), all outstanding
options shall become exercisable upon the occurrence of any of the
following:
(i) Any Person (other than Nordson, any of its
subsidiaries, any employee benefit plan or
employee stock ownership plan of Nordson or of any
of its subsidiaries, or any Person organized,
appointed, or established by Nordson or any of its
subsidiaries for or pursuant to the terms of any
such plan), alone or together with any of its
Affiliates or Associates, becomes the Beneficial
Owner of 20% or more of the Common Shares then
outstanding, any such Person is declared to be an
Adverse Person by the Board of Directors, or any
such Person commences or
<PAGE> 2
publicly announces an intent to commence a
tender offer or exchange offer the consummation of
which would result in the Person becoming the
Beneficial Owner of 20% or more of the Common
Shares then outstanding (PROVIDED, HOWEVER, that,
for purposes of determining whether Eric T. Nord
or Evan W. Nord, together with each of their
Affiliates or Associates, is the Beneficial Owner
of 20% or more of the Common Shares then
outstanding, the Common Shares then held by the
Walter G. Nord Trust and by the Nordson Foundation
shall be excluded and, for purposes of determining
whether the Walter G. Nord Trust and by the
Nordson Foundation, together with each of their
Affiliates and Associates, is the Beneficial Owner
of 20% or more of the Common Shares then held by
Eric T. Nord and by Evan W. Nord shall be
excluded). For purposes of this clause (i), the
terms "Adverse Person," "Affiliates,"
"Associates," "Beneficial Ownership," and "Person"
shall have the meanings given to them in the
Rights Agreement, dated as of August 26, 1988,
between Nordson and AmeriTrust Company National
Association, as Rights Agent, as amended from time
to time.
(ii) At any time during a period of 24 consecutive
months, individuals who were directors of Nordson
at the beginning of the period no longer
constitute a majority of Nordson's directors,
unless the election, or the nomination for
election by Nordson's shareholders, of each
director who was not a director at the beginning
of the period is approved by at least a majority
of the directors who are in office at the time of
the election or nomination and were directors at
the beginning of the period.
(iii) A record date is established for determining
shareholders entitled to vote upon (a) a merger or
consolidation of Nordson with another corporation
in which Nordson is not the surviving or
continuing corporation or in which all or part of
the outstanding Common Shares are to be converted
into or exchanged for cash, securities, or other
property, (b) a sale or other disposition of all
or substantially all of the assets of Nordson, or
(c) the liquidation and dissolution of Nordson.
<PAGE> 3
(iv) Any person who proposes to make a "control share
acquisition" of Nordson, within the meaning of
Section 1701.01(Z)(1) of the Ohio General
Corporation Law, submits or is required to submit
an acquiring person statement to Nordson.
<PAGE> 1
Exhibit 10-e-1
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment is entered into this 10th day of
March, 1993 by and between Nordson Corporation, an Ohio corporation (the
"Company"), and William P. Madar (the "Executive").
WHEREAS, the Company and the Executive entered into
an Employment Agreement dated January 30, 1986 (the "Agreement") providing for
the employment of the Executive by the Company for the consideration and upon
the terms set forth therein; and
WHEREAS, the Company and the Executive desire to
amend the Agreement in certain respects, each of them hereby agrees as follows:
1. All capitalized terms used herein and not
otherwise specifically defined shall have the meanings ascribed thereto in the
Agreement.
2. Section 2 of the Agreement is deleted in its
entirety and a new Section 2 shall read as follows:
The Executive's employment shall continue until
terminated by either party. Either the Company or the
Executive may terminate the Executive's employment by giving
the other party written notice six (6) months in advance, to
the extent reasonably practicable, but in any event, at
least sixty (60) days in advance of the termination date.
3. Section 3 of the Agreement is deleted in its
entirety.
4. Section 4 of the Agreement is deleted in its
entirety.
<PAGE> 2
5. Section 5 of the Agreement is deleted in its
entirety and a new Section 5 shall read as follows:
5. CASH COMPENSATION. The Company shall set the
Executive's base salary as of the beginning of each fiscal year of the
Company ("Fiscal Year"); provided, however, that for purposes of
Sections 10(a) and 11(a) of the Agreement, the Executive's base salary
shall not be less than $565,150.00. Moreover, the Executive shall
participate in and receive incentive compensation under the terms of
the Company's Management Incentive Compensation Plan for so long as
the Company continues to maintain such plan.
6. Section 6(a) of the Agreement is deleted in its
entirety.
7. Except for purposes of paragraph 10 of this
Amendment, the existing subparagraph (b) of Section 6 of the Agreement is
redesignated as subparagraph (a).
8. Except for purposes of paragraph 10 of this
Amendment, Section 6(c) of the Agreement is deleted in its entirety.
9. Except for purposes of paragraph 10 of this
Amendment, Section 6(d) of the Agreement is redesignated as subparagraph (b)
and amended to insert the following words after "any restricted stock" on line
5:
issued to him by the Company on February 15, 1991 and February 15,
1992,
and to insert the following words after "restricted stock" on line 9:
issued to him by the Company on February 15, 1991 and February 15, 1992
-2-
<PAGE> 3
10. Section 7(a) of the Agreement is hereby deleted
and a new Section 7(a) shall read as follows:
(a) Upon approval by the shareholders of an Omnibus
Stock Plan of the Company to be submitted to the Shareholders of the
Company at the 1993 Annual Meeting of Shareholders, the Company shall
grant to the Executive options to purchase 50,000 shares of the
Company's common stock at an exercise price equal to the lower of (i)
the fair market value of the underlying shares or (ii) $46.50 per
share.
All options granted pursuant to this Section 7(a)
shall vest sixty (60) days after the date of grant and shall be
exercisable by the Executive, or by the executor or administrator of
the Executive's estate, until the tenth anniversary of the date of
grant, notwithstanding the termination of the employment of the
Executive for any reason, or the death or disability of the Executive.
So long as the Executive's employment has not been terminated, the
Executive shall be eligible to receive grants of stock options and
shall be considered for such grants as part of the Company's employee
stock option program.
In the event shareholder approval of such Omnibus
Stock Plan is not obtained at the 1993 Annual Meeting of Shareholders,
the Company shall grant 30,000 shares of restricted stock to the
Executive, of which one-half may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated otherwise than by will
or the laws of descent and distribution prior to February 14, 1994 and
the remaining one-half of such shares may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated otherwise
than by will or the laws of descent and distribution prior to February
14, 1995. Any restricted stock granted hereunder shall also be
subject to the conditions and obligations of the Executive and the
Company described in Section 6(b), 6(c) and 6(d) of the unamended
January 30, 1986 Agreement and in Section 11 of the Agreement, as
amended by this Amendment.
-3-
<PAGE> 4
11. Section 7(b) of the Agreement is deleted in its
entirety.
12. Section 9 of the Agreement is hereby deleted in
its entirety and a new Section 9 shall read as follows:
9. SUPPLEMENTAL PENSION BENEFITS.
(a) DEFINITIONS. For purposes of this Section 9,
the following terms shall have the meanings hereinafter set forth.
(1) The term "Highest Consecutive 36-Month Average
Annual Compensation" shall mean one-third of the aggregate
amount of the Executive's base salary and incentive
compensation as determined under Section 5 with respect to the
36-consecutive-calendar-month period which produces a higher
average than any other 36-consecutive-calendar-month period;
provided, however, that in the event the Executive becomes
disabled prior to the attainment of age 65, he shall be deemed
to receive the base salary and incentive compensation he
received during the Fiscal Year prior to his disability for
the period of such disability until the earlier of attainment
of age 65 or commencement of supplemental pension benefits
under this Section 9. For purposes of this Section 9, 1/12th
of the Executive's incentive compensation for each Fiscal Year
shall be allocated to each month of the Fiscal Year for which
the incentive compensation is awarded and any portion of the
Executive's base salary or incentive compensation that is
deferred pursuant to any deferred compensation program
sponsored by the Company shall be included as base salary or
incentive compensation, respectively, for the month in which
it would otherwise have been paid or allocated, as the case
may be.
-4-
<PAGE> 5
(2) The term "Highest Consecutive 36-Month Average
Annual Compensation Percentage" shall mean a percentage of the
Executive's Highest Consecutive 36-Month Average Annual
Compensation that is equal to the lesser of: (i) 56 percent,
or (ii) the product of 1.6 percent multiplied by a fraction
the numerator of which is 248 plus the number of months of
service for benefit accrual purposes credited to the Executive
under the Nordson Pension Plan and the denominator of which is
12.
(3) The term "IRS Tables" shall mean tables attached
hereto as Exhibit A.
(4) The term "PBGC Interest Rates" shall mean the
interest rate or rates for immediate or deferred annuities, as
applicable, utilized by the Pension Benefit Guaranty
Corporation for plans terminating on the date a determination
of a lump sum benefit is made.
(b) COMPUTATION OF BENEFITS. Upon termination of
the Executive's employment with the Company, the Executive shall be
eligible to receive an annual straightlife supplemental pension
benefit equal to his Highest Consecutive 36-Month Average Annual
Compensation multiplied by his Highest Consecutive 36-month Average
Annual Compensation Percentage reduced by .4166% for each full
calendar month by which the Executive's supplemental pension benefit
commences prior to age 60, and reduced further by the sum of:
(i) $42,956 upon attainment of age 65 by the
Executive;
(ii) the annual straight-life pension benefit
payable to the Executive under any tax-qualified defined
benefit pension plan of the Company which is attributable to
contributions of the Company; and
-5-
<PAGE> 6
(iii) 50 percent of the annual Primary Social
Security Benefit payable to the Executive at age 65.
Any reduction of the Executive's supplemental pension benefit under
subparagraphs (i) and (iii) above shall be made only on and after
November 3, 2004 and any such reduction under subparagraph (ii) above
shall be made only when such benefits are actually payable to the
Executive. Exhibit B attached hereto illustrates the method by which
such annual supplemental pension benefit is to be calculated.
(c) METHOD OF PAYMENT. The annual supplemental
pension benefit computed under Section 9(b) shall be payable to the
Executive in either (i) a lump sum utilizing the IRS Tables and the
PBGC Interest Rates and/or (ii) any optional method of payment
available to a participant in the Nordson Pension Plan utilizing the
IRS Tables and the PBGC Interest Rates.
13. Section 10(a) of the Agreement is deleted in its
entirety and a new Section 10(a) shall read as follows:
(a) CASH COMPENSATION. The Executive or his estate
shall continue for the two-year period following his death or
Disability Termination Date to receive his base salary at the rate
then in effect under Section 5 for the Fiscal Year in which his death
or Disability Termination Date occurs.
14. Section 10(d) of the Agreement is deleted and a
new Section 10(d) shall read as follows:
(d) INSURANCE AND PENSION BENEFITS. The Company
shall continue to provide medical coverage for so long as the
Executive, his spouse or any dependent child is living and shall
continue to provide group life insurance coverage to the Executive for
so long as he is living. In addition, the Company's obligations under
Section 9 shall remain in full force and effect. Any supplemental
pension benefit payable under Section 9 shall be payable to the
Executive in the event of his disability without any reduction
-6-
<PAGE> 7
for commencement of benefits prior to age 60. In the event of the
Executive's death prior to the termination of his employment, the
Company shall, in satisfaction of its obligations under Section 9,
provide a monthly survivor benefit to the Executive's surviving spouse
which is equal to one-half of the actuarial equivalent of the
supplemental pension benefit computed under Section 9 as of the date
of the Executive's death, but without any reduction for early
commencement under Section 9(b)(iv), and payable immediately in a 50
percent joint and survivor form computed using the IRS Tables and PBGC
Interest Rates. In the event of the Executive's disability, the
Executive shall be deemed to continue in the employ of the Company and
shall accrue months of benefit service for purposes of the
supplemental pension benefit computed under Section 9 until the
earlier of (i) attainment of age 65 and (ii) commencement of the
Executive's supplemental pension benefit. If the employment of the
Executive is terminated by reason of disability, any supplemental
pension benefits paid to the Executive prior to his attainment of age
65 pursuant to the provisions of Section 9 shall be reduced by the
amount of disability benefits received by the Executive from or
through the Company or the Social Security Administration.
15. The caption of Section 11 and the first
paragraph thereof shall be revised to read in their entirety as follows:
11. EFFECTS OF TERMINATION BY THE COMPANY OR
RESIGNATION OR RETIREMENT BY THE EXECUTIVE. If the Company terminates
the Executive's employment other than pursuant to Section 13 hereof,
or if the Executive's employment is terminated by reason of his
resignation or retirement, the Company's obligations under Part II
hereof shall terminate except as provided below.
16. Section 11(a) of the Agreement is deleted in its
entirety and a new Section 11(a) shall read as follows:
-7-
<PAGE> 8
(a) CASH COMPENSATION. The Executive shall continue
for the one-year period following the date of his termination of
employment to receive his base salary at the rate then in effect under
Section 5 with respect to the Fiscal Year in which his termination of
employment occurs, plus an additional amount equal to 20 percent of
such base salary.
17. Section 11(d) of the Agreement is deleted in its
entirety and a new Section 11(d) shall read as follows:
(d) INSURANCE AND PENSION BENEFITS. The Company
shall continue to provide medical coverage for so long as the
Executive, his spouse, or any dependent child is living and shall
continue to provide group life insurance coverage to the Executive for
so long as the Executive is living; provided, however, that such
medical coverage or group life insurance coverage, as the case may be,
shall cease if the Executive receives medical coverage or group life
insurance coverage through other employment. In addition, the
Company's obligations under Section 9 shall remain in full force and
effect. For purposes of Section 9, if the Executive elects to receive
payment of his supplemental pension benefits thereunder on or after
the date of his termination of employment and has not attained age 56,
he shall be deemed to have attained age 56 for purposes of computing
any reduction in his supplemental pension benefit under Section
9(b)(iv) with respect to commencement of benefits prior to age 60.
18. Sections 5 through 11 of the Agreement are
redesignated as Sections 3 through 9, and any references to such Sections shall
be redesignated consistent therewith.
19. Section 12 of the Agreement is deleted in its
entirety.
-8-
<PAGE> 9
20. Sections 13 through 21 of the Agreement are
redesignated as Sections 10 through 18, and any references to such Sections
shall be redesignated consistent therewith.
21. Except as expressly provided in this Amendment,
the terms and conditions of the Agreement shall remain in full force and effect
as set forth therein.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the date first set forth above.
<TABLE>
<S> <C>
NORDSON CORPORATION
By: /s/ Eric T. Nord
-----------------------------
Eric T. Nord
/s/ William P. Madar
-----------------------------
William P. Madar
</TABLE>
<PAGE> 10
EXHIBIT A
APPENDIX E. Life Expectancy Tables
TABLE 1
(Single Life Expectancy)*
<TABLE>
<CAPTION>
AGE DIVISOR AGE DIVISOR
- ----------------------------------------------------------------
<S> <C> <C> <C>
35 47.3 73 13.9
36 46.4 74 13.2
37 45.4 75 12.5
38 44.4 76 11.9
39 43.5 77 11.2
40 42.5 78 10.6
41 41.5 79 10.0
42 40.6 80 9.5
43 39.6 81 8.9
44 38.7 82 8.4
45 37.7 83 7.9
46 36.8 84 7.4
47 35.9 85 6.9
48 34.9 86 6.5
49 34.0 87 6.1
50 33.1 88 5.7
51 32.2 89 5.3
52 31.3 90 5.0
53 30.4 91 4.7
54 29.5 92 4.4
55 28.6 93 4.1
56 27.7 94 3.9
57 26.8 95 3.7
58 25.9 96 3.4
59 25.0 97 3.2
60 24.2 98 3.0
61 23.3 99 2.8
62 22.5 100 2.7
63 21.6 101 2.5
64 20.8 102 2.3
65 20.0 103 2.1
66 19.2 104 1.9
67 18.4 105 1.8
68 17.6 106 1.6
69 16.8 107 1.4
70 16.0 108 1.3
71 15.3 109 1.1
72 14.6 110 1.0
</TABLE>
*Table I does not provide for IRA owners younger than 35 years of age. For
additional life expectancy tables, see Publication 939.
<PAGE> 11
EXHIBIT B
February 9, 1993
Ref: NDP 1012
MEMO TO: W. W. Colville
COPY TO: Mary Ann Jorgenson
W. P. Madar
FROM: N. D. Pellecchia
SUBJECT: W. P. MADAR PENSION CALCULATION
Bill Madar asked me to forward the attached pension calculation (assuming an
age 56 retirement) to you for your review.
Some additional information regarding the assumptions noted on the worksheets
follows:
1. Pensionable earnings for purposes of the calculation are based on
average estimated calendar year earnings for 1993-1995. A gross
annual pension amount was arrived at by applying the service formula
stated in the contract against average annual earnings for the period.
We reduced the gross amount by 18.33% to reflect a February 1996
retirement date. This factor is the product of .4166 multiplied by 44
months (the number of months that the retirement date precedes age
60).
2. Pensionable earnings for Nordson qualified plan calculations are
higher than previous calculations provided. In brief, the qualified
plan bases pensionable earnings on a "highest five out of ten year
salary history." An age 56 retirement assumption would include
earnings from the years 1986 through 1988 in the ten year history.
Pensionable earnings in these years are higher than later years since
starting in 1990, pensionable earnings for purposes of qualified plan
calculations were "capped" by law. Limits range from $200,000 in 1990
to $228,860 in 1992. Earlier calculations were based on an age 60
retirement. Accordingly, the 1986-1988 period was not included in the
ten year history.
3. The interest rate assumption used for calculating lump sum amounts is
5.75%--the current PBGC rate in effect for calculating immediate
annuities - PBGC regulation 2619.26(b)(2)(IV).
<PAGE> 12
Memo To: W. Colville Page 2 February 9, 1993
SUBJECT: W. P. MADAR PENSION CALCULATION
4. The life expectancy assumption is based on Appendix E (Table I, Single
Life Expectancy), IRS Publication 590, 1992 edition. Prior
calculations were based on life expectancy data included in IRS
Publication 575, 1988 edition. Life expectancies under both tables
are the same.
5. The lump sum amount noted on the attached calculation is approximately
$1.3 million higher than the lump sum amount (calculated using
identical life expectancy and interest rate assumptions) noted in my
memorandum to you dated September 2, 1992.
The most significant factor contributing to this difference is a
higher assumed average annual earnings amount. For the attached
calculation, we assumed that base salary will grow at a 5% annual
rate, while annual bonus amounts will be earned at a rate of 135% of
target or roughly 108% of base salary. For purposes of the September
calculation, we applied a 5% annual increase factor to actual total
annual compensation amounts through 1991. During this period, the
relation of bonus to base pay averaged 85%.
If you need any further information, please let me know.
NDP/bcr
<PAGE> 13
<TABLE>
<CAPTION>
NORDSON CORPORATION PREP. BY: JRL
PENSION CALCULATION DATE: 03/09/93
AGE 56 RETIREMENT 09:17 AM
FILE: WPMPENPV.WQ!
Note: Pension benefit paid from Nordson is paid at beginning of each period.
Life Expectancy - 27.7 years at age 56.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR: 0 1 2 3 4 5 6 7 8
PAYMENT NUMBER: 1 2 3 4 5 6 7 8 9
DATE: Feb-96 Feb-97 Feb-98 Feb-99 Feb-2000 Feb-2001 Feb-2002 Feb-2003 Feb-2004
AGE: 56 57 58 59 60 61 62 63 64
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL CALCULATED
PENSION BENEFIT (1) 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977
LESS:
STANDARD OIL PENSION (2)
NORDSON QUAL. PLAN
PENSION (3)
SOCIAL SECURITY (7)
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL OFFSETS 0 0 0 0 0 0 0 0 0
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
PAYABLE FROM NORDSON 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977
========= ========= ========== ========== ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR: 9 10 11 12 13 14 15 16 17
PAYMENT NUMBER: 10 11 12 13 14 15 16 17 18
DATE: Feb-2005 Feb-2006 Feb-2007 Feb-2008 Feb-2009 Feb-2010 Feb-2011 Feb-2012 Feb-2013
AGE: 65 66 67 68 69 70 71 72 73
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL CALCULATED
PENSION BENEFIT (1) 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977
LESS:
STANDARD OIL PENSION (2) 42,956 42,956 42,956 42,956 42,956 42,956 42,956 42,956 42,956
NORDSON QUAL. PLAN
PENSION (3) 70,785 70,785 70,785 70,785 70,785 70,785 70,785 70,785 70,785
SOCIAL SECURITY (7) 7,019 7,019 7,019 7,019 7,019 7,019 7,019 7,019 7,019
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL OFFSETS 120,760 120,760 120,760 120,760 120,760 120,760 120,760 120,760 120,760
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
PAYABLE FROM NORDSON 374,217 374,217 374,217 374,217 374,217 374,217 374,217 374,217 374,217
========= ========= ========== ========== ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
YEAR: 18 19 20 21 22 23 24 25 26
PAYMENT NUMBER: 19 20 21 22 23 24 25 26 27
DATE: Feb-2014 Feb-2015 Feb-2016 Feb-2017 Feb-2018 Feb-2019 Feb-2020 Feb-2021 Feb-2022
AGE: 74 75 76 77 78 79 80 81 82
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL CALCULATED
PENSION BENEFIT (1) 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977
LESS:
STANDARD OIL PENSION (2) 42,956 42,956 42,956 42,956 42,956 42,956 42,956 42,956 42,956
NORDSON QUAL. PLAN
PENSION (3) 70,785 70,785 70,785 70,785 70,785 70,785 70,785 70,785 70,785
SOCIAL SECURITY (7) 7,019 7,019 7,019 7,019 7,019 7,019 7,019 7,019 7,019
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL OFFSETS 120,760 120,760 120,760 120,760 120,760 120,760 120,760 120,760 120,760
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
PAYABLE FROM NORDSON 374,217 374,217 374,217 374,217 374,217 374,217 374,217 374,217 374,217
========= ========= ========== ========== ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
YEAR: 27 27.7 (6)
PAYMENT NUMBER: 28 29 PRESENT
DATE: Feb-2023 Oct-2023 VALUE AT
AGE: 83 84 TOTAL 5.75%
--------- --------- ---------- ----------
TOTAL CALCULATED
PENSION BENEFIT (1) 494,977 346,484 14,205,840 7,273,090
LESS:
STANDARD OIL PENSION (2) 42,956 30,069 846,233 318,823
NORDSON QUAL. PLAN
PENSION (3) 70,785 49,549 1,394,455 525,369
SOCIAL SECURITY (7) 7,019 4,913 138,274 52,096
--------- --------- ---------- ----------
TOTAL OFFSETS 120,760 84,532 2,378,963 896,288
--------- --------- ---------- ----------
PAYABLE FROM NORDSON 374,217 261,952 11,826,877 6,376,802
========= ========= ========== ==========
</TABLE>
(1): ESTIMATED AS FOLLOWS:
AMOUNT SHOULD BE AVERAGE OF 36 HIGHEST
CONSECUTIVE MONTHS DURING SERVICE.
ESTIMATED BY FOLLOWING CALCULATION:
1,175,450 EST. CY 1993 PENSIONABLE EARNINGS
1,234,233 EST. CY 1994 PENSIONABLE EARNINGS
1,295,934 EST. CY 1995 PENSIONABLE EARNINGS
---------
3,705,606 SUBTOTAL
0.33 /36 MO. X 12 MO.
---------
1,235,202 AVERAGE FOR HIGHEST 36 MONTHS
TIMES: LESSER OF 56% OR
49.07% 1.6% X ((248 + MOS. OF NORDSON SERVICE) / 12)
---------
606,072 TOTAL PENSION INCOME
81.67% 0.4166% REDUCTION FOR EACH MONTH PRIOR TO AGE 60
---------
494,977 ADJUSTED TOTAL PENSION INCOME
=========
2/15/86 THROUGH 2/15/96
MONTHS OF NORDSON SERVICE = 120
2/15/96 THROUGH 11/03/99
MONTHS PRIOR TO AGE 60 = 44
(2): ASSUMES EMPLOYEE CONTRIBUTIONS ARE WITHDRAWN; EMPLOYER PAYOUT
BEGINS AT AGE 65. AGE 65 AMT FACTOR
42,956 X 100% = 42,956
(3): ESTIMATED AS FOLLOWS:
428,122 AVERAGE ANNUAL SALARY + BONUS;
EARNINGS ARE REDUCED BY IRS LIMIT (when applicable)
55% TIMES 55%
-------
235,467 PENSION BEFORE OFFSET/REDUCTION
(14,038) LESS SOCIAL SECURITY (ESTIMATED 1996 BENEFIT)
-------
221,429 PENSION AFTER S. S. OFFSET
33.32% SERVICE OFFSET (.0833 X MONTHS OF NORSDON SERVICE) / 30
-------
73,780 CALCULATED NORDSON PENSION BENEFIT
100% REDUCTION FOR AGE 65 DRAW
-------
73,780 NORDSON PENSION PAYABLE AT AGE 65
======= Section 415 test passed? NO
70,785 NORDSON PENSION PAYABLE AT AGE 65 After Section 415 Limit
=======
(4): Life Expectancy is from Appendix E (Table 1, Single Life Expectancy),
IRS Publication 590, 1992 Edition.
(5): Payments are 70% of full year amounts.
(6): Interest rate is based on PBGC Regulation Section 2619.26(b)(2)(iv).
This is the PBGC interest rate for immediate annuities in effect on the
valuation date.
On 01/01/93 the rate in effect is 5.75%
(7): 50% of estimated Social Security benefit for the year in which employee
attains age 65.
From Hewitt Associates table (1993 version).
<PAGE> 1
Exhibit 10-l
[Nordson Corporation Letterhead] April 7, 1988
CONFIDENTIAL
Mr. Edward P. Campbell
1700 Queen Anne's Gate
Westlake, Ohio 44145
Dear Ed:
I am pleased to confirm my offer to you for the position of Vice President,
Corporate Development for Nordson Corporation. In this key position, you will
report directly to me. Your initial compensation and benefit package will be
as follows:
COMPENSATION
BASE SALARY
Your initial base salary will be ONE HUNDRED FIFTY THOUSAND DOLLARS
($150,000) PER YEAR. Your Base Salary will be reviewed on November
1, 1988 and yearly thereafter, coinciding with an annual
performance review.
BONUS - A target bonus of fifty-five percent (55%) of Base Salary
has been established for your position under the Nordson Executive
Incentive Bonus Plan. As we discussed should you accept this
offer, you will be guaranteed the amount of the target Bonus for
Fiscal Year 1988, which ends October 30, 1988, prorated for the
part of Fiscal Year 1988 in which you are employed by Nordson. As
with all bonuses paid under the Plan, payment will be made in cash
not later than the first payroll date in January following the end
of a Fiscal Year.
<PAGE> 2
Mr. E. P. Campbell -2- April 7, 1988
STOCK
In our discussions, I have stressed the goals for the Corporation. Achievement
of these goals enhances the value of Nordson Common Stock. Your participation
as a member of my team allows you to contribute to the achievement of these
goals and share in the increased value of our stock as a reward for your
efforts.
RESTRICTED STOCK
You will be granted 3,000 shares of Restricted Nordson Common Stock
when you commence your employment. Upon expiration of a three-year
restriction period, you will have full right, title and interest in
the Stock provided you are still an active Nordson employee. Under
the Restricted Stock Plan, you relinquish right, title and interest
in the Stock if your employment terminates prior to the expiration
of the restriction period.
INCENTIVE STOCK OPTIONS - Effective on your first day of
employment, you will be entitled to an Incentive Stock Option on
3,000 shares of Nordson Common Stock. The option price will be
established on your first day of employment in accordance with the
Incentive Stock Option Plan. The Stock Options have a ten-year
exercise period and will become exercisable in cumulative
installments of 25% per year beginning one year after the effective
date.
NON-QUALIFIED STOCK OPTIONS - Effective on your first day of
employment, you will be entitled to a Non-Qualified Stock Option on
4,000 shares of Nordson Common Stock. The option price will be
established on your first day of employment in accordance with the
terms of the Plan. The options will become exercisable in
cumulative installments of 25% per year beginning one year after
the effective date and will expire ten years after the effective
date.
<PAGE> 3
Mr. E. P. Campbell -3- April 7, 1988
CAR ALLOWANCE
You will be entitled to an Executive Automobile Allowance in the amount of
Eight Thousand Dollars ($8,000) per year, payable in quarterly installments.
PENSION PLAN
You will be a participant in the Nordson Corporation Salaried Employees'
Pension Plan. Your pension benefit will be equal to the benefit you quality
for under this Pension Plan described in the attached booklet, but modified by
the following in view of your prior service with The Standard Oil Company/BP
America:
1. Your prior service with The Standard Oil Company/BP America will be
recognized in determining vesting and the amount of your pension
benefit.
2. Your "Final Average Pay" will be determined as the average of your
monthly compensation during your 36 consecutive highest-paid
months (instead of 60).
3. You will be eligible for a full pension benefit at age 60 instead
of age 65. You will be eligible for early retirement at age 55
with a reduction of 5% per year for each year that actual
retirement occurs prior to age 60.
4. If your employment with Nordson terminates for any reason other
than disability or death prior to retirement at age 55, your
pension benefit will be equal to the benefit you would have
received if you had remained employed by The Standard Oil
Company/BP America calculated using your total years of service at
The Standard Oil Company/BP America and Nordson.
5. The benefit you qualify for under the Nordson Pension Plan will be
reduced by any pension benefit payment you receive from The
Standard Oil Company/BP America.
<PAGE> 4
Mr. E. P. Campbell -4- April 7, 1988
OTHER BENEFITS
You will be entitled to Nordson Corporation's benefit package normally offered
to executive at the Vice President level. They include the following:
- Medical, Dental and Life Insurance Plans
- Disability Income (Long-term disability coverage will
commence upon your first day of employment. We are waiving
the customary waiting period for this benefit.)
- Employee Stock Ownership Plan and Stock Purchase Plan
- Nordson Employees' Savings Trust Plan (401K)
- Four weeks annual paid vacation
- Officers Deferred Compensation Plan
- Supplemental Executive Retirement Plan
This offer is contingent upon your completion of a physical examination and the
signing of Nordson Corporation's Employee Agreement. We have enclosed a copy
of the Employee Agreement for your review. If you have any questions
concerning this Agreement, please feel free to discuss them with me. This
Agreement is to be signed in the presence of a member of the Human Resource
Department on the first day of your employment. It will also be necessary for
you to complete the enclosed Nordson Employee Application and bring it with you
on your first day of work.
On behalf of Nordson Corporation, I want you to know I feel you can contribute
significantly towards the growth and success of the Company. We believe that
you will find the position of Vice President, Corporate Development
stimulating, challenging and rewarding.
Sincerely,
/s/ W. P. Madar
W. P. Madar
WPM:
Enclosures
<PAGE> 1
<TABLE>
Exhibit 11
NORDSON CORPORATION
CALCULATION OF EARNINGS PER SHARE
Years Ended October 31, 1993, November 1, 1992 and November 3, 1991
(Dollar and shares in thousands except for per share amounts)
<CAPTION>
1993 1992 1991
------- ------- -------
<S> <C> <C> <C>
Primary:
Weighted average number of common
shares outstanding during the year 18,751 18,828 18,730
Effect of company stock plans based
on the treasury stock method using
average market price 433 643 363
------- ------- -------
Total weighted average common and
common equivalent shares 19,184 19,471 19,093
======= ======= =======
Income before cumulative effect of
accounting changes $40,775 $39,537 $33,787
Cumulative effect of accounting changes (4,784) - -
------- ------- -------
Net income $35,991 $39,537 $33,787
======= ======= =======
Earnings per share:
Income before cumulative effect of
accounting changes $ 2.13 $ 2.03 $ 1.77
Cumulative effect of accounting changes (.25) - -
------- ------- -------
Net income $ 1.88 $ 2.03 $ 1.77
======= ======= =======
Fully Diluted:
Weighted average number of common
shares outstanding during the year 18,751 18,828 18,730
Effect of company stock plans based
on the treasury stock method using
the higher of year-end or average
market price 453 666 449
------- ------- -------
Total weighted average common and
common equivalent shares 19,204 19,494 19,179
======= ======= =======
Income before cumulative effect of
accounting changes $40,775 $39,537 $33,787
Cumulative effect of accounting changes (4,784) - -
------- ------- -------
Net income $35,991 $39,537 $33,787
======= ======= =======
Earnings per share:
Income before cumulative effect of
accounting changes $ 2.12 $ 2.03 $ 1.76
Cumulative effect of accounting changes (.25) - -
------- ------- -------
Net income $ 1.87 $ 2.03 $ 1.76
======= ======= =======
</TABLE>
<PAGE> 1
Exhibit 13-a
Nordson Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS
FISCAL YEARS 1993 AND 1992
Sales in 1993 reached a record level of $461.6 million, an 8 percent increase
over 1992. This increase is attributable to an 11 percent improvement in sales
volume, reduced by unfavorable currency effects. Strong volume gains were
achieved by North American and Pacific South operations. European operations
reported moderate volume increases, while our Japanese organization experienced
a decline in local activity. Overall growth was driven by increased sales of
adhesive dispensing systems for nonwovens applications and specially engineered
powder coating systems. Sales of adhesive application equipment to the
packaging industry also showed steady gains.
Gross margins, expressed as a percentage of sales, were 58.5 percent in 1993
compared with 60.4 percent in 1992. The decline in the margin rate reflects
product sales mix and unfavorable currency exchange rates.
Selling and administrative costs, expressed as a percentage of sales, decreased
to 43.9 percent in 1993 from 44.6 percent in 1992. Although Nordson continued
to expand its geographic operations, spending grew at a slower rate than sales.
Interest expense, net of interest income, decreased $.4 million. This
improvement was due to lower average borrowing levels and lower average rates.
Other income increased $1.0 million, primarily because of non-recurring
occupancy charges recognized in the prior year. The effective tax rate
decreased to 34.5 percent in 1993 from 34.9 percent in 1992. Lower aggregate
effective foreign tax rates and a lower federal tax rate on previously taxed
income offset the impact of a higher statutory federal tax rate and higher
effective state and local taxes.
Effective as of the beginning of 1993, Nordson adopted Financial Accounting
Standards Board Statements "Employers' Accounting for Postretirement Benefits
Other Than Pensions" (FAS 106), "Accounting for Income Taxes" (FAS 109), and
"Employers' Accounting for Postemployment Benefits" (FAS 112). The combined
cumulative effect of these changes in accounting principles was an aftertax
charge to first quarter earnings of $4.8 million or $.25 per share. Aside from
the one-time charge, adoption of these statements was not material to current
year results.
Income before cumulative effect of accounting changes was $40.8 million, or
$2.13 per share, in 1993 compared with $39.5 million, or $2.03 per share, in
1992. After the cumulative effect of accounting changes, net income in 1993
was $36.0 million, or $1.88 per share.
FISCAL YEARS 1992 AND 1991
Sales in 1992 were $425.6 million, a 10 percent increase over 1991. Sales
volume, which advanced 8 percent, and favorable currency effects accounted for
this increase. Steady gains were achieved in sales of adhesive application
systems. These gains were complemented by strong demand in North America for
special engineered coating systems. North American, European, and Pacific
South operations recorded solid volume gains in 1992, while in local currency,
operations in Japan posted a slight decline.
Gross margins, expressed as a percentage of sales, were 60.4 percent in 1992
compared with 59.0 percent in 1991. This increase was influenced by growth in
core product sales and positive currency effects.
Selling and administrative costs, expressed as a percentage of sales, rose to
44.6 percent in 1992 from 44.0 percent in 1991. This growth resulted from the
residual effects of converting independent distributor organizations to
directly owned entities in 1991, and from Nordson's commitment to long-term
spending programs.
Interest expense, net of interest income, decreased $.8 million due to lower
average borrowing levels and higher cash balances available for investment.
Other expenses increased $1.1 million,
18
<PAGE> 2
primarily from losses under the equity method of accounting for investments in
affiliates and non-recurring occupancy charges, offset in part by lower net
currency exchange losses. The effective tax rate decreased to 34.9 percent in
1992 from 35.0 percent in 1991. Lower aggregate effective foreign tax rates
were substantially offset by higher effective state and local taxes and lower
tax benefits from the Foreign Sales Corporation.
Net income was $39.5 million in 1992, up $5.8 million from 1991. Earnings per
share were $2.03 in 1992, representing a 15 percent improvement over earnings
of $1.77 in 1991.
LIQUIDITY AND SOURCES OF CAPITAL
Cash and cash equivalents increased $10.7 million during 1993. Cash generated
by operations increased to $61.5 million. Significant uses for cash included
capital expenditures, repayments of short-term and long-term debt and capital
lease obligations, repurchases of Nordson stock, and dividends.
In 1993, working capital increased $20.3 million to $125.4 million. Current
year operations increased working capital by $22.3 million, driven by increases
in cash and receivables and decreases in notes payable. The effects of
currency translations reduced working capital by $1.2 million, and a business
acquisition reduced it by $.9 million.
Long-term debt, including the current portion, decreased $4.6 million from the
prior year. The decrease resulted primarily from scheduled repayments of $3.4
million and from the early repayment of a $1.7 million, 7.3 percent note
originally due in 1998.
Nordson has various lines of credit with both domestic and foreign banks. At
October 31, 1993, these lines aggregated $128.8 million, of which $109.7 was
unused. The company believes that the combination of present capital
resources, internally generated funds, and unused financing sources are more
than adequate to meet cash requirements for 1994.
EFFECTS OF FOREIGN CURRENCY AND INFLATION
The impact of changes in foreign currency exchange rates on sales and operating
results cannot be precisely measured because of changes in selling prices,
sales volume, product mix and cost structures in each country where Nordson
operates. As a general rule, a weakening of the U.S. dollar relative to
foreign currencies has a favorable effect on sales and net income, while a
strengthening of the U.S. dollar has a detrimental effect.
In 1993 relative to 1992, the U.S. dollar was stronger against European
currencies and weaker against the Japanese yen. If exchange rates for 1992 had
been in effect during 1993, sales would have been approximately $11.7 million
higher, and third-party costs would have been approximately $5.7 million
higher. In 1992 relative to 1991, the U.S. dollar was generally weaker against
foreign currencies. If exchange rates for 1991 had been in effect during 1992,
sales would have been approximately $6.6 million lower, and third-party costs
would have been approximately $3.9 million lower.
Inflation puts pressure on profit margins because the ability to pass cost
increases onto customers is restricted by competitive pricing. Although
inflation has been modest in recent years, and its effect is not material for
the years covered by the financial statements, Nordson continues to seek ways
to minimize the impact of inflation through efforts to achieve greater
productivity.
TRENDS
The Eleven-Year Summary on pages 40 and 41 documents Nordson's historical
financial trends. Over this period, world economic conditions fluctuated
significantly. Nordson's solid performance is traced to the company's
long-term commitment to develop and provide quality products and worldwide
service to meet customers' changing needs.
19
<PAGE> 1
Exhibit 13-b
<TABLE>
Nordson Corporation
CONSOLIDATED STATEMENT OF INCOME
Years ended October 31, 1993, November 1, 1992 and November 3, 1991
<CAPTION>
1993 1992 1991
- --------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
SALES $461,557 $425,618 $387,962
OPERATING COSTS
AND EXPENSES:
Cost of sales 191,575 168,437 158,885
Selling and administrative expenses 202,608 189,887 170,814
-------- -------- --------
394,183 358,324 329,699
-------- -------- --------
OPERATING PROFIT 67,374 67,294 58,263
Other income (expense):
Interest expense (6,426) (6,796) (7,333)
Interest and investment income 1,110 1,098 798
Other - net 190 (829) 232
-------- -------- --------
(5,126) (6,527) (6,303)
-------- -------- --------
Income before income taxes and cumulative
effect of accounting changes 62,248 60,767 51,960
Income taxes:
Current 23,198 22,838 21,466
Deferred (1,725) (1,608) (3,293)
-------- -------- --------
21,473 21,230 18,173
-------- -------- --------
Income before cumulative effect of
accounting changes 40,775 39,537 33,787
Cumulative effect of accounting changes (4,784) -- --
-------- -------- --------
NET INCOME $ 35,991 $ 39,537 $ 33,787
======== ======== ========
COMMON SHARES
AND COMMON SHARE EQUIVALENTS 19,184 19,471 19,093
======== ======== ========
EARNINGS PER SHARE:
Income before cumulative effect of
accounting changes $ 2.13 $ 2.03 $ 1.77
Cumulative effect of accounting changes (.25) -- --
-------- -------- --------
Net income $ 1.88 $ 2.03 $ 1.77
======== ======== ========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
20
<PAGE> 1
Exhibit 13-c
<TABLE>
Nordson Corporation
CONSOLIDATED BALANCE SHEET
October 31, 1993 and November 1, 1992
<CAPTION>
1993 1992
- ----------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 18,128 $ 7,409
Marketable securities 5,235 5,600
Receivables 107,395 106,489
Inventories 84,661 87,674
Deferred income taxes 21,708 20,819
Prepaid expenses 4,545 3,845
-------- --------
TOTAL CURRENT ASSETS 241,672 231,836
Property, plant and equipment - net 78,689 77,372
Intangible assets - net 27,251 31,578
Deferred income taxes 6,689 --
Other assets 3,669 5,511
-------- --------
$357,970 $346,297
======== =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable $ 19,050 $ 39,743
Accounts payable 22,186 19,082
Income taxes payable 16,955 14,945
Accrued liabilities 44,420 42,779
Deferred income taxes 3,810 --
Customer advance payments 3,505 3,557
Current maturities of long-term debt 3,174 3,366
Current obligations under capital leases 3,181 3,226
-------- --------
TOTAL CURRENT LIABILITIES 116,281 126,698
Long-term debt 17,667 22,075
Obligations under capital leases 4,422 4,748
Deferred income taxes 495 2,647
Other liabilities 22,700 12,409
Shareholders' equity:
Common shares without par value:
Authorized - 80,000,000 shares
Issued - 24,506,000 shares 12,253 12,253
Capital in excess of stated value 45,167 37,264
Cumulative translation adjustments 7,627 13,378
Retained earnings 263,988 236,973
Common shares in treasury, at cost (129,549) (118,096)
Guarantee of ESOP obligation (3,081) (4,052)
-------- --------
TOTAL SHAREHOLDERS' EQUITY 196,405 177,720
-------- --------
$357,970 $346,297
======== ========
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
21
<PAGE> 1
Exhibit 13-d
<TABLE>
Nordson Corporation
CONSOLIDATED STATEMENT OF CASH FLOWS
Years ended October 31, 1993, November 1, 1992 and November 3, 1991
<CAPTION>
1993 1992 1991
- -------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $35,991 $39,537 $33,787
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 17,107 16,679 14,747
Provision for losses on receivables 646 1,173 1,637
Deferred income taxes (5,989) (1,822) (3,354)
Other 1,356 690 232
Changes in working capital:
Receivables (8,807) (15,853) (7,356)
Inventories (2,081) (2,022) (7,424)
Other current assets (929) (1,365) (57)
Accounts payable 3,963 (465) (2,801)
Income taxes payable 3,562 2,292 1,511
Accrued liabilities 4,661 4,748 8,163
Customer advance payments 314 752 (756)
Decrease (increase) in
other non-current assets 1,221 (590) (1,948)
Increase in other non-current liabilities 10,436 2,294 833
------- ------- -------
Net cash provided by operating activities 61,451 46,048 37,214
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment (15,834) (10,271) (9,785)
Proceeds from sale of property, plant
and equipment 419 1,639 236
Acquisition of businesses (455) (8,302) (5,562)
Purchase of marketable securities (6,925) (5,110) --
Proceeds from sale of marketable securities 7,290 10 790
------- ------- -------
Net cash used in investing activities (15,505) (22,034) (14,321)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowing 588 10,482 8,557
Repayment of short-term borrowing (17,245) (10,508) (16,181)
Proceeds from long-term debt 702 -- 3,901
Repayment of long-term debt (3,955) (2,373) (3,899)
Repayment of capital lease obligations (3,298) (3,154) (2,360)
Issuance of common shares under company
stock and employee benefit plans 3,841 9,374 4,956
Purchase of treasury shares (9,400) (22,782) (8,641)
Tax benefit from stock option and restricted
stock transactions 1,134 982 418
Dividends paid (8,976) (8,271) (7,464)
------- -------- -------
Net cash used in financing activities (36,609) (26,250) (20,713)
Effect of exchange rate changes 1,382 (336) 254
------- ------- -------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 10,719 (2,572) 2,434
Cash and cash equivalents at beginning of year 7,409 9,981 7,547
------- ------- -------
Cash and cash equivalents at end of year $18,128 $ 7,409 $ 9,981
======= ======= =======
<FN>
The accompanying notes are an integral part of the consolidated financial
statements.
</TABLE>
22
<PAGE> 1
Exhibit 13-e
<TABLE>
Nordson Corporation
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Years ended October 31, 1993, November 1, 1992 and November 3, 1991
<CAPTION>
CAPITAL IN CUMULATIVE GUARANTEE
COMMON EXCESS OF TRANSLATION RETAINED TREASURY OF ESOP
SHARES STATED VALUE ADJUSTMENTS EARNINGS SHARES OBLIGATION
- ------------------------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT
OCTOBER 28, 1990 $12,253 $21,130 $7,075 $179,384 $ (88,668) $ (800)
Shares issued under
company stock and
employee benefit plans 3,968 1,943
Net increase in
guarantee of
ESOP obligation (805)
Tax benefit from
stock option and restricted
stock transactions 418
Purchase of treasury
shares (8,641)
Translation adjustments (866)
Net income 33,787
Dividends - $.40 per share (7,464)
------------------------------------------------------------------------------------------------
BALANCE AT
NOVEMBER 3, 1991 12,253 25,516 6,209 205,707 (95,366) (1,605)
Shares issued under
company stock and
employee benefit plans 10,766 3,017
Net increase in
guarantee of
ESOP obligation (2,447)
Tax benefit from
stock option and restricted
stock transactions 982
Purchase of treasury
shares (25,747)
Translation adjustments 7,169
Net income 39,537
Dividends - $.44 per share (8,271)
------------------------------------------------------------------------------------------------
BALANCE AT
NOVEMBER 1, 1992 12,253 37,264 13,378 236,973 (118,096) (4,052)
Shares issued under
company stock and
employee benefit plans 6,769 1,560
Reduction in
guarantee of
ESOP obligation 971
Tax benefit from
stock option and restricted
stock transactions 1,134
Purchase of treasury
shares (13,013)
Translation adjustments (5,751)
Net income 35,991
Dividends - $.48 per share (8,976)
------------------------------------------------------------------------------------------------
BALANCE AT
OCTOBER 31, 1993 $12,253 $45,167 $7,627 $263,988 $(129,549) $(3,081)
================================================================================================
<FN>
The accompanying notes are an integral part of the consolidated financial statements.
</TABLE>
23
<PAGE> 1
Exhibit 13-f
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
- --------------------------------------------------------------------------------
FISCAL YEAR -- The fiscal year for the Company's domestic operations ends on
the Sunday closest to October 31, and in 1993, 1992 and 1991, contained 52, 52
and 53 weeks, respectively. For international operations, the Company's fiscal
year ends on September 30.
CONSOLIDATION -- The consolidated financial statements include the accounts of
the Company and its majority-owned and controlled subsidiaries. All
significant intercompany accounts and transactions have been eliminated in
consolidation. Investments in non-controlled affiliates are accounted for by
the equity method.
CASH AND CASH EQUIVALENTS -- The Company considers highly liquid instruments
with a maturity of 90 days or less at date of purchase to be cash equivalents.
Cash and cash equivalents are carried at cost, which approximates market.
MARKETABLE SECURITIES -- Marketable securities, consisting primarily of
municipal and other short-term notes with maturities greater than 90 days at
date of purchase, are carried at cost, which approximates market.
INVENTORIES -- Inventories are valued at the lower of cost or market. Cost has
been determined using the last-in, first-out (LIFO) method for approximately 56
percent of consolidated inventories at October 31, 1993 (55 percent at November
1, 1992). The first-in, first-out (FIFO) method is used for all other
inventories. Consolidated inventories would have been $10,752,000 and
$10,867,000 higher than reported at October 31, 1993 and November 1, 1992,
respectively, had the Company used the FIFO method, which approximates current
cost, for valuation of all inventories.
PROPERTY, PLANT AND EQUIPMENT AND DEPRECIATION -- Property, plant and equipment
is carried at cost. The Company capitalizes interest costs as part of the cost
of constructing major facilities and equipment. No interest costs were
capitalized in 1993, 1992 or 1991. Plant and equipment is depreciated for
financial reporting purposes using the straight-line method over the estimated
useful lives of the assets or, in the case of property under capital leases,
over the terms of the leases.
INTANGIBLE ASSETS -- Intangibles, consisting primarily of costs in excess of
net assets of acquired businesses, are amortized using the straight-line method
over periods not exceeding 15 years.
RESEARCH AND DEVELOPMENT -- Research and development costs are charged to
expense as incurred and amounted to $19,655,000 in 1993 ($18,431,000 in 1992
and $17,999,000 in 1991).
EARNINGS PER SHARE -- Earnings per common share are computed based on the
weighted average number of common shares and common share equivalents
outstanding during each year. Common share equivalents consist primarily of
shares issuable upon exercise of the Company's stock options and stock purchase
rights, computed using the treasury stock method.
PRESENTATION -- Certain 1992 and 1991 amounts have been reclassified to conform
with the 1993 presentation.
24
<PAGE> 2
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2 - ACCOUNTING CHANGES
- -------------------------------------------------------------------------------
In the fourth quarter of 1993, the Company adopted Statement of Financial
Accounting Standards (FAS) No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," effective as of the beginning of the year. This
statement requires accrual over the employee service period of the expected
cost of providing postretirement medical and life insurance benefits. Prior to
1993, the Company expensed these benefits when they were paid. The cumulative
effect at November 2, 1992 of adopting FAS 106 reduced net income by
$4,344,000, net of $2,692,000 of income tax benefits.
In the fourth quarter of 1993, the Company adopted FAS 109, "Accounting for
Income Taxes," effective as of the beginning of the year. This statement
requires recognition of deferred tax assets and liabilities for the expected
future tax consequences of temporary differences between tax bases and
financial reporting bases of other liabilities and assets. Previously, the
Company deferred the past tax effects of timing differences between financial
reporting and taxable income. The cumulative effect at November 2, 1992 of
adopting FAS 109 reduced net income by $138,000.
Also, in the fourth quarter of 1993, the Company adopted FAS 112, "Employers'
Accounting for Postemployment Benefits," effective as of the beginning of the
year. This statement requires that certain benefits available to former
employees be accrued when it becomes probable that such benefits will be paid.
Prior to 1993, the Company expensed these benefits when they were paid. The
cumulative effect at November 2, 1992 of adopting FAS 112 reduced net income by
$302,000, net of $187,000 of income tax benefits.
No prior year financial statements have been restated. Previously reported
first quarter 1993 results have been restated to reflect the combined aftertax
charge of $4,784,000, or $.25 per share. Aside from the one-time charge,
adoption of these statements was not material to quarterly or annual results in
the current year.
NOTE 3 -- PENSION, RETIREMENT AND OTHER POSTRETIREMENT PLANS
- -------------------------------------------------------------------------------
PENSION PLANS -- The Company has various pension plans which cover
substantially all employees. Pension plan benefits are generally based on
years of employment and, for salaried employees, the level of compensation.
The Company contributes actuarially determined amounts to domestic plans to
provide sufficient assets to meet future benefit payment requirements. The
Company's international subsidiaries fund their pension plans according to
local requirements. The Company also sponsors an unfunded supplemental pension
plan for certain employees.
Net pension cost for the Company's significant plans consists of the following
components:
<TABLE>
<CAPTION>
1993 1992 1991
- -------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Service cost - benefits earned during period $2,893 $2,531 $2,145
Interest cost on projected benefit obligations 3,625 2,917 2,305
Actual return on assets (5,654) (2,742) (7,230)
Net amortization and deferral 2,572 (51) 4,735
------ ------ ------
Net periodic pension cost $3,436 $2,655 $1,955
====== ====== ======
</TABLE>
25
<PAGE> 3
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 -- PENSION, RETIREMENT AND OTHER POSTRETIREMENT PLANS (CONTINUED)
- ------------------------------------------------------------------------------
The following table sets forth the plans' funded status and amounts recognized
in the Company's balance sheet for its significant pension plans:
<TABLE>
<CAPTION>
1993 1992
- ---------------------------------------------------------------------------------------------------------------
ASSETS ACCUMULATED ASSETS ACCUMULATED
EXCEED BENEFITS EXCEED BENEFITS
ACCUMULATED EXCEED ACCUMULATED EXCEED
BENEFITS ASSETS BENEFITS ASSETS
- ---------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Actuarial present value of obligations:
Vested benefit obligations $ 28,637 $ 6,413 $ 25,088 $ 5,137
======== ======== ======== ========
Accumulated benefit obligations $ 30,559 $ 9,935 $ 26,722 $ 8,320
======== ======== ======== =========
Projected benefit obligations $ 39,577 $ 15,381 $ 34,515 $ 13,341
Plan assets at fair value 40,851 2,513 35,933 2,173
-------- -------- -------- --------
Excess (deficiency) of assets over
projected benefit obligations 1,274 (12,868) 1,418 (11,168)
Unrecognized prior service costs 1,205 2,168 1,307 2,028
Unrecognized net (gain) loss (3,292) 4,254 (2,071) 4,319
Unrecognized net transition
(asset) obligation (3,021) 178 (3,653) 240
-------- -------- -------- --------
Accrued pension costs $ (3,834) $ (6,268) $ (2,999) $ (4,581)
======== ======== ======== ========
</TABLE>
The actuarial present value of projected benefit obligations at the end of 1993
and 1992 was determined using a weighted average discount rate of 7.5 percent
and 8.0 percent, respectively, and a rate of increase in future compensation
levels of 4.6 percent and 5.0 percent, respectively. Plan assets consist
primarily of stocks and bonds. The expected long-term rate of return on plan
assets was 8.0 percent for 1993, 1992 and 1991.
Plans for which accumulated benefit obligations exceeded plan assets consist of
the unfunded supplemental plan and certain international plans, which are
partially unfunded by local practice.
RETIREMENT PLANS -- The parent company and certain subsidiaries have funded
contributory retirement plans covering certain employees. The Company's
contributions are primarily determined by the terms of the plans subject to the
limitation that they shall not exceed the amounts deductible for income tax
purposes. The Company also sponsors an unfunded contributory supplemental
retirement plan for certain employees. Generally, benefits under these plans
vest gradually over a period of approximately five years from date of
employment, and are based on the employee's contribution. The expense
applicable to retirement plans for 1993, 1992 and 1991 was approximately
$1,988,000, $1,756,000 and $1,555,000, respectively.
POSTRETIREMENT BENEFIT PLAN -- The parent company has an unfunded
postretirement defined benefit plan covering certain employees. The plan
provides medical and life insurance benefits. The plan is contributory, with
retiree contributions adjusted annually, and contains other cost-sharing
features such as deductibles and coinsurance.
26
<PAGE> 4
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3 -- PENSION, RETIREMENT AND OTHER POSTRETIREMENT PLANS (CONTINUED)
- --------------------------------------------------------------------------------
Effective as of the beginning of 1993, the Company adopted FAS 106, which
requires these benefits to be expensed during the employees' working careers.
Postretirement benefit expense for years prior to 1993, which was recorded when
the benefits were paid, has not been restated. The Company elected to
immediately expense the accumulated benefit obligation at the beginning of the
year of $4,344,000, net of $2,692,000 of income tax benefits. Aside from the
one-time charge, adoption of this accounting method was not material to current
year results.
Net postretirement benefit cost includes the following components:
<TABLE>
<CAPTION>
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Service cost - benefits earned during period $388 -- --
Interest cost on accumulated benefit obligations 551 -- --
---- ---- ----
Net periodic postretirement benefit cost $939 $153 $142
==== ==== ====
</TABLE>
The following table sets forth the amount recognized in the Company's balance
sheet for its postretirement benefit plan:
<TABLE>
<CAPTION>
1993
- --------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C>
Accumulated postretirement benefit obligation:
Retirees $2,339
Fully eligible active plan participants 1,687
Other active plan participants 3,762
------
7,788
Unrecognized net loss (38)
------
Accrued postretirement benefit costs $7,750
======
</TABLE>
The discount rate used in determining the accumulated postretirement benefit
obligation at October 31, 1993 was 7.5 percent. The annual rate of increase in
the per capita cost of covered benefits (the health care cost trend rate) was
assumed to be 10.0 percent for 1994, decreasing gradually to 5 percent for 2001
and thereafter. The health care cost trend rate assumption has a significant
effect on the amounts reported. For example, increasing the assumed health
care cost trend rates by one percentage point in each year would increase the
net postretirement benefit cost for 1993 by $185,000 and the accumulated
postretirement benefit obligation as of October 31, 1993 by $1,347,000.
NOTE 4 -- INCENTIVE COMPENSATION PLAN
- -----------------------------------------------------------------------------
The Company has an incentive compensation plan for executive officers.
Participants in the plan and payments under the plan are approved by a
committee appointed by the Board of Directors. Members of the committee are
directors and are not active officers of the Company. Amounts paid under the
plan are based on a percentage of the base salary of each participant.
Compensation expense attributable to the plan was $1,557,000 in 1993
($1,843,000 in 1992 and $1,719,000 in 1991).
27
<PAGE> 5
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 -- INCOME TAXES
- -------------------------------------------------------------------------------
Effective as of the beginning of 1993, the Company changed its method of
accounting for income taxes from the deferred method to the liability method
required by FAS 109. As permitted under the new rules, prior years' financial
statements have not been restated. The cumulative effect of adopting FAS 109 as
of the beginning of 1993 decreased net income by $138,000. Application of the
new income tax rules was not material to current year results.
Income tax expense includes the following:
<TABLE>
<CAPTION>
U.S. STATE
FEDERAL AND LOCAL FOREIGN TOTAL
- ---------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
1993 - LIABILITY METHOD
Current $ 12,825 $ 2,684 $ 7,689 $ 23,198
Deferred (1,547) (140) (38) (1,725)
-------- ------ -------- --------
Total $ 11,278 $ 2,544 $ 7,651 $ 21,473
======== ======= ======= ========
1992 - DEFERRED METHOD
Current $ 9,705 $ 1,849 $11,284 $ 22,838
Deferred (138) (270) (1,200) (1,608)
-------- ------- ------- --------
Total $ 9,567 $ 1,579 $10,084 $ 21,230
======== ======= ======= ========
1991 - DEFERRED METHOD
Current $ 9,169 $ 1,452 $10,845 $ 21,466
Deferred (2,537) (744) (12) (3,293)
-------- ------- ------- --------
Total $ 6,632 $ 708 $10,833 $ 18,173
======== ======= ======= ========
</TABLE>
Earnings before income taxes of international operations were $16,884,000,
$20,431,000 and $24,472,000 in 1993, 1992 and 1991, respectively. Deferred
income taxes are not provided on undistributed earnings (which aggregated
approximately $17,977,000 at October 31, 1993) of international subsidiaries
which are intended to be permanently invested in those operations. Should
those earnings be distributed, applicable foreign tax credits would
substantially offset U.S. taxes due upon the distribution.
The reconciliation of the United States statutory federal income tax rate to
the worldwide consolidated effective tax rate follows:
<TABLE>
<CAPTION>
LIABILITY DEFERRED
METHOD METHOD
1993 1992 1991
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Statutory federal income tax rate 34.8% 34.0% 34.0%
Foreign Sales Corporation exemption (3.8) (3.9) (4.5)
Foreign earnings (excluding unrealized net exchange
gains and losses) subject to an aggregate tax
rate different than the statutory federal tax rate
(including the effect of U.S. tax credits) 1.7 2.6 3.7
State and local taxes, net of federal income tax benefit 2.7 1.7 .9
Enacted rate changes (1.0) -- --
Other - net .1 .5 .9
----- ------ ------
Effective tax rate 34.5% 34.9% 35.0%
====== ====== ======
</TABLE>
28
<PAGE> 6
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 -- INCOME TAXES (CONTINUED)
- ------------------------------------------------------------------------------
Significant components of the Company's deferred tax assets and liabilities as
of October 31, 1993 are as follows:
<TABLE>
<CAPTION>
1993
- ---------------------------------------------------------------------------------------
(In thousands)
<S> <C>
Deferred tax assets:
Sales to international subsidiaries and related consolidation adjustments $15,174
Accruals not currently deductible for taxes 4,844
Employee benefits 4,663
Inventory adjustments 1,586
Translation of foreign currency accounts 1,494
Depreciation 276
Other - net 360
-------
Total deferred tax assets 28,397
Deferred tax liabilities:
Depreciation 3,734
Inventory adjustments 435
Other - net 136
-------
Total deferred tax liabilities 4,305
-------
Net deferred tax assets $24,092
=======
</TABLE>
The components of the provision for deferred income taxes for
1992 and 1991 are as follows:
<TABLE>
<CAPTION>
1992 1991
- --------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Sales to international subsidiaries
and related consolidation adjustments $ (721) $(1,854)
Declared repatriation of foreign earnings
net of foreign tax credit 913 (193)
Employee benefits (657) (425)
Depreciation (180) 235
Inventory adjustments (253) (387)
Translation of foreign currency accounts 218 (372)
Changes in accruals not currently
deductible for taxes (901) (275)
Other - net (27) (22)
------- -------
Total $(1,608) $(3,293)
======= =======
</TABLE>
29
<PAGE> 7
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 -- ACQUISITIONS
- -------------------------------------------------------------------------------
During 1993, the Company acquired a distributor in Latin America. During 1992,
the Company acquired a U.S. manufacturer of adhesive application equipment.
The cost of acquisitions amounted to $455,000 in 1993 and $8,302,000 in 1992.
Business acquisitions are accounted for as purchases, with the acquired assets
and liabilities recorded at their estimated fair value at the dates of
acquisition, and the related operating results included in the consolidated
financial statements from the dates of acquisition. The excess of the total
acquisition costs over the fair value of net assets acquired is included in
intangible assets and amortized over 15 years using the straight-line method.
Assuming the acquisitions had taken place at the beginning of each year, net
sales on a pro forma unaudited basis would have been $438,017,000 in 1992,
while the effects on net sales in 1993 and net income and earnings per share
for both years would have been immaterial.
NOTE 7 -- LINES OF CREDIT AND NOTES PAYABLE
- -------------------------------------------------------------------------------
At October 31, 1993, the Company had lines of credit with various domestic and
foreign banks aggregating $128,758,000. The unused portion of these credit
lines was $109,708,000. The Company has no agreement, formal or informal, to
maintain compensating balances or to pay significant commitment fees relating
to these lines, which can generally be withdrawn at the option of the banks.
The carrying amount of the Company's notes payable approximates their fair
value.
NOTE 8 -- LONG-TERM DEBT
- -------------------------------------------------------------------------------
The long-term debt of the Company follows:
<TABLE>
<CAPTION>
1993 1992
- ----------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Industrial Revenue Bonds -- City of Westlake, Ohio $ 7,650 $ 8,500
Industrial Revenue Bonds -- Gwinnett County, Georgia 6,000 6,000
Variable Rate Term Loan 387 774
State of Ohio Loan 585 685
Guarantee of ESOP obligation 3,081 4,052
5.33% Mortgage Note, payable in semi-annual installments of
$153,000 through June 1996 971 1,418
5.50% Mortgage Note, payable in semi-annual installments of
$49,000 through June 1998 491 681
5.50% Mortgage Note, payable in semi-annual installments of
$52,000 through June 1998 518 718
4.70% Note, payable in semi-annual installments of
$94,000 through June 1997 755 --
5.75% Note, payable in semi-annual installments of
$52,000 through December 1996 364 541
7.30% Note, payable upon maturity in August 1998 -- 1,667
Other (primarily foreign currency borrowings) 39 405
------- -------
20,841 25,441
Less current maturities 3,174 3,366
------- -------
Total $17,667 $22,075
======= =======
</TABLE>
30
<PAGE> 8
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 -- LONG-TERM DEBT (CONTINUED)
- -------------------------------------------------------------------------------
INDUSTRIAL REVENUE BONDS -- CITY OF WESTLAKE, OHIO -- These bonds were issued
in connection with the construction of the Company's World Headquarters in
Westlake, Ohio. The bonds are due in annual installments of $850,000 extending
through 2002 with interest payable quarterly. The tax-free interest rate
varies weekly and was 2.55 percent at October 31, 1993. The bonds are secured
by a $7,977,000 standby letter of credit.
INDUSTRIAL REVENUE BONDS -- GWINNETT COUNT, GEORGIA -- These bonds were issued
in connection with the acquisition and renovation of the Norcross Manufacturing
Facility in Gwinnett County, Georgia. These bonds are due in annual
installments of $600,000 beginning in 2000 and extending through 2009 with
interest payable quarterly. The tax-free interest rate varies weekly and was
2.70 percent at October 31, 1993. The bonds are secured by a $6,300,000
standby letter of credit.
VARIABLE RATE TERM LOAN -- The loan proceeds were used to purchase shares of
the Company's common stock which were subsequently contributed to the Company's
Employee Stock Ownership Plan. The final annual installment of $387,000 is due
in 1994 with interest payable quarterly. Interest resets periodically at a
rate below generally available taxable rates (3.41 percent at October 31,
1993).
STATE OF OHIO LOAN -- This loan was issued for the construction of a sales and
demonstration facility in Amherst, Ohio. The loan is payable in annual
installments of $100,000 through 1998, with the final installment of $85,000
due in 1999. Interest is payable quarterly at a fixed rate of 5.00 percent.
The loan is secured by a $1,025,000 standby letter of credit.
GUARANTEE OF ESOP OBLIGATION -- The Company's Employee Stock Ownership Plan
(ESOP) has borrowed under a $10,000,000 revolving credit agreement. Since the
Company has unconditionally guaranteed the repayment of the ESOP's borrowings,
the loans are reported as long-term debt on the consolidated balance sheet. A
corresponding amount has also been recorded as a reduction of shareholders'
equity. The obligation is payable in annual installments of $570,000 to
$971,000 through 1997 with interest payable quarterly. Interest resets
periodically at a rate approximately 20 percent below generally available
taxable rates (3.20 percent at October 31, 1993). The ESOP will repay the
loans plus interest using Company contributions and dividends received on the
shares of common stock that have not been allocated to plan participants.
Dividends on unallocated shares were $49,000, $46,000 and $22,000 in 1993, 1992
and 1991, respectively.
MORTGAGE AND OTHER NOTES PAYABLE -- The mortgage and other notes are payable
primarily in deutsche marks. Assets with a net book value of $5,218,000 have
been pledged as security for certain notes.
FAIR VALUE -- The fair value of the Company's long-term debt, including current
maturities, at October 31, 1993, is approximately $19,957,000, estimated by
discounting future cash flows at currently available taxable rates for
borrowing arrangements with similar terms and conditions.
ANNUAL MATURITIES -- The annual maturities of long-term debt for the five years
subsequent to October 31, 1993 are as follows: 1994 - $3,174,000, 1995 -
$2,536,000, 1996 - $2,533,000, 1997 - $1,962,000 and 1998 - $1,152,000.
NOTE 9 -- CAPITAL SHARES
- --------------------------------------------------------------------------------
PREFERRED -- The Company has authorized 10,000,000 Series A convertible
preferred shares without par value. No preferred shares were outstanding in
1993 or 1992.
COMMON -- The Company has 80,000,000 authorized common shares without par
value. In March 1992, the shareholders adopted an amendment to the Company's
articles of incorporation which, when filed with the state of Ohio, would
increase the number of authorized common shares to 160,000,000. At October 31,
1993 and November 1, 1992, there were 24,506,000 common shares issued, which
included 5,780,000 and 5,754,000 treasury shares, respectively.
31
<PAGE> 9
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 -- COMPANY STOCK PLANS
- --------------------------------------------------------------------------------
LONG-TERM PERFORMANCE PLAN -- The Company's long-term performance plan, adopted
in 1993, provides for the granting of stock options, stock appreciation rights,
restricted stock, stock purchase rights, stock equivalent units, cash awards,
and other stock or performance-based incentives. The number of common shares
available for grant of awards is 3 percent of the number of common shares
outstanding as of the first day of each fiscal year, plus up to an additional
.5 percent, consisting of shares available, but not granted, in prior years.
At November 1, 1993, there were 655,000 shares available for grant in 1994.
STOCK OPTIONS -- The Company may grant non-qualified or incentive stock options
to employees and directors of the Company. The exercise price of outstanding
stock options is the fair market value of the common shares at the date of
grant. Generally, the options may be exercised after one year from the date of
grant at a rate not exceeding 25 percent per year and expire 10 years from the
date of grant. Vesting accelerates upon the occurrence of events which involve
or may result in a change of control of the Company.
No charges have been made against income in accounting for stock options. Tax
benefits arising from the exercise of non-qualified stock options are
recognized when realized and credited to capital in excess of stated value.
Summarized transactions are as follows:
<TABLE>
<CAPTION>
Number of Exercise Price
Options Range Per Share
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding at November 1, 1992 1,213,491 $ 9.75 - $52.00
Granted 302,020 $43.50 - $47.00
Exercised (133,266) $12.75 - $42.50
Forfeited (7,544) $19.75 - $47.00
---------
Outstanding at October 31, 1993 1,374,701 $ 9.75 - $52.00
=========
Exercisable at October 31, 1993 800,000 $ 9.75 - $52.00
</TABLE> =========
STOCK APRECIATION RIGHTS -- The Company may grant stock appreciation rights to
employees. A stock appreciation right provides for a payment equal to the
excess of the fair market value of a common share when the right is exercised,
over its value when the right was granted. The Company accrues for these
payments over the periods in which the stock appreciation rights vest and are
exercisable. There were no stock appreciation rights outstanding during 1993,
1992 and 1991.
Limited stock appreciation rights that become exercisable upon the occurrence
of events which involve or may result in a change of control of the Company
have been granted with respect to 1,305,901 shares.
RESTRICTED STOCK -- The Company may grant restricted stock to employees.
Generally, these shares may not be disposed of for a designated period of time
defined at the date of grant, and are to be returned to the Company if the
recipient's employment terminates during the restriction period. As shares are
issued, deferred compensation equivalent to the market value on the date of
grant is charged to shareholders' equity and subsequently amortized over the
restriction period. Net amortization was $876,000 in 1993 ($1,443,000 in 1992
and $955,000 in 1991). Tax benefits arising from restricted stock are
recognized when realized and credited to capital in excess of stated value. In
1993, there were 8,850 restricted shares granted and 200 restricted shares
forfeited.
32
<PAGE> 10
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 -- COMPANY STOCK PLANS (CONTINUED)
- -------------------------------------------------------------------------------
EMPLOYEE STOCK PURCHASE RIGHTS -- Under the Company's stock purchase programs,
eligible employees may purchase common shares at specified times each year in
an amount up to 15 percent of their annual compensation. For domestic
employees, the purchase price is equal to 95 percent of the fair market value
of the common shares at the date of purchase. Foreign employees may purchase
shares at a price equal to the lesser of: (a) 85 percent of the fair market
value of the common shares at the date of the employee's entry into the
program, or (b) 85 percent of the fair market value at the date of purchase.
In 1993, there were 106,550 common shares issued under these programs at an
average price of $35.25 per share. As of October 31, 1993, common shares
totaling 525,354 could be purchased in 1994 under the programs.
EMPLOYEE STOCK OWNERSHIP PLAN -- The Employee Stock Ownership Plan covers all
domestic employees. Company contributions are discretionary and funded
annually by a combination of cash and shares of the Company's common stock.
Allocations to the participants' accounts are made on December 31 on the basis
of their compensation for the year. Each participant vests in his account at a
rate of 20 percent per year. Distribution of a participant's account occurs at
retirement, death, or termination of employment.
During 1993, $1,809,000 was charged to expense ($2,031,000 in 1992 and
$2,850,000 in 1991) using the shares-allocated method. These amounts include
$128,000, $131,000 and $69,000 in 1993, 1992 and 1991, respectively, charged
to interest expense related to the Company's guarantee of the plan's debt
obligation. Contributions to the plan were $2,068,000, $1,929,000 and
$1,812,000 in 1993, 1992 and 1991, respectively.
SHAREHOLDER RIGHTS PLAN -- In August 1988, the Board of Directors declared a
dividend of one common share purchase right for each common share outstanding
on September 9, 1988. Rights are also distributed with common shares issued by
Nordson after that date. The rights may only be exercised if a party acquires
20 percent or more of the Company's common shares, makes a tender offer for at
least 20 percent of the Company's common shares, or is declared to be an
"adverse person." The exercise price of each right is $100 per share. The
rights trade with the shares until the rights become exercisable.
If a party acquires at least 25 percent of the Company's common shares, is
declared to be an "adverse person," or attempts a "control share acquisition"
without complying with Ohio law, or if an acquiring party engages in certain
self-dealing actions ("flip-in" events), each right then becomes the right to
purchase two common shares of Nordson for $.50 per share. In the event the
Company is acquired in a merger or other business combination ("flip-over"
events), each right entitles its holder to purchase, for $1, shares of the
surviving company having a market value equal to two common shares of Nordson.
The rights may be redeemed by the Company at a price of $.01 per right at any
time prior to the earlier of the "flip-in" or "flip-over" events, or expiration
of the rights on September 9, 1998.
SHARES RESERVED FOR FUTURE ISSUANCE -- At October 31, 1993, there were
41,964,000 shares reserved for future issuance through the exercise of
outstanding options or rights, including 40,064,000 shares under the
shareholder rights plan.
33
<PAGE> 11
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 -- OFF-BALANCE-SHEET RISK AND CONCENTRATIONS OF CREDIT RISK
- -------------------------------------------------------------------------------
The Company uses foreign exchange contracts as one method to hedge receivables
and payables denominated in foreign currencies. These contracts usually have
maturities of 90 days or less and generally require the Company to exchange
foreign currencies for U.S. dollars at maturity, at rates agreed to at the
inception of the contracts. Gains and losses from changes in the market value
of these contracts offset foreign exchange losses and gains on the related
asset or liability. At October 31, 1993, the Company had $42,422,000 of
contracts outstanding, of which $29,500,000 were in European currencies and
$10,731,000 were in Japanese yen. The carrying amount of the Company's foreign
exchange contracts approximates their market value.
As a financing tool, certain subsidiaries of the Company discount a portion of
their receivables to financial institutions with recourse to those
subsidiaries. Reserves for potential credit losses have been recorded and are
evaluated regularly. At October 31, 1993, the related credit risk amounted to
$1,913,000.
At October 31, 1993, the Company had issued $2,247,000 of guarantees to support
the term borrowing facilities of an unconsolidated affiliate. The fair value
of these guarantees is not material.
Financial instruments which potentially subject the Company to concentrations
of credit risk consist principally of temporary cash investments and trade
receivables. The Company invests its excess cash in deposits with major banks
throughout the world and in securities with strong credit ratings. The
Company's customers represent a wide variety of industries and geographic
regions. As of October 31, 1993, there were no significant concentrations of
credit risk.
NOTE 12 -- INDUSTRY SEGMENT AND GEOGRAPHIC AREA DATA
- --------------------------------------------------------------------------------
INDUSTRY SEGMENT DATA -- The Company operates in one industry segment which
engages in developing, manufacturing and marketing industrial application
equipment. This equipment is used to apply adhesives, sealants, and liquid and
powder coatings to a broad range of consumer and industrial products during
manufacturing operations.
GEOGRAPHIC AREA DATA -- Financial data by geographic area is before elimination
of intercompany transactions. Geographic transfers are generally accounted for
at prices which approximate arm's-length wholesale market prices.
Operating profit is total revenue less operating expenses. In computing
operating profit, none of the following has been added or deducted: general
corporate expenses, other income and expense, and provision for income taxes.
Identifiable assets are those assets used in the operations of each geographic
area. Corporate assets are principally cash and cash equivalents, marketable
securities, and property, plant and equipment maintained for general corporate
purposes.
No single customer accounted for more than 5 percent of sales in 1993, 1992 or
1991.
34
<PAGE> 12
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 12 -- INDUSTRY SEGMENT AND GEOGRAPHIC AREA DATA (CONTINUED)
- -------------------------------------------------------------------------------
The following table summarizes the Company's operations within geographic
areas:
<TABLE>
<CAPTION>
1993 1992 1991
- -------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Sales to unaffiliated customers:
North America $ 197,708 $ 154,502 $ 140,666
Europe 166,927 180,718 162,458
Japan 64,871 63,125 61,066
Pacific and Latin America 32,051 27,273 23,772
--------- --------- ---------
461,557 425,618 387,962
Transfers between geographic areas:
North America 101,496 102,497 95,030
Europe 7,694 10,194 8,831
Japan 262 112 56
Pacific and Latin America 354 60 25
Eliminations (109,806) (112,863) (103,942)
--------- --------- ---------
Total sales $ 461,557 $ 425,618 $ 387,962
========= ========= =========
Operating profit:
North America $ 68,169 $ 61,831 $ 53,128
Europe 14,610 21,417 22,112
Japan 6,497 7,184 9,499
Pacific and Latin America 2,067 2,867 2,482
Eliminations 1,337 (902) (4,597)
--------- --------- ---------
Geographic operating profit 92,680 92,397 82,624
General corporate expenses (25,306) (25,103) (24,361)
Other expense - net (5,126) (6,527) (6,303)
--------- --------- ---------
Income before income taxes and
cumulative effect of accounting changes $ 62,248 $ 60,767 $ 51,960
========= ========= =========
Assets:
North America $ 164,029 $ 147,737 $ 126,180
Europe 112,892 133,655 114,771
Japan 47,176 40,376 36,338
Pacific and Latin America 17,310 15,368 12,754
Corporate 32,140 25,900 20,086
Eliminations (15,577) (16,739) (13,199)
--------- --------- ---------
Total assets $ 357,970 $ 346,297 $ 296,930
========= ========= =========
</TABLE>
35
<PAGE> 13
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13 -- LEASES
- --------------------------------------------------------------------------------
The Company has lease commitments expiring at various dates, principally for
warehouse and office space, automobiles and office equipment. Most leases
contain renewal options and some contain purchase options.
The Company has an operating lease for office space owned by a partnership in
which the Company is a partner. The lease ends in 2010 and contains a renewal
option and an option to purchase the property at fair market value in 2000.
Monthly rentals range from $35,000 to $89,000 and approximate market rates.
Rent expense for all operating leases was approximately $8,740,000 in 1993
($6,784,000 in 1992 and $5,349,000 in 1991).
Assets held under capitalized leases are included in property, plant and
equipment as follows:
<TABLE>
<CAPTION>
1993 1992
- ------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Transportation equipment $ 9,438 $ 10,241
Other 3,374 2,619
-------- --------
Total capitalized leases 12,812 12,860
Less accumulated amortization 5,203 4,887
-------- --------
Net capitalized leases $ 7,609 $ 7,973
======== ========
</TABLE>
At October 31, 1993, future minimum lease payments under noncancellable
capitalized and operating leases are as follows:
<TABLE>
<CAPTION>
CAPITALIZED OPERATING
LEASES LEASES
- ------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Fiscal Year Ending:
1994 $ 4,163 $ 7,556
1995 3,231 5,964
1996 1,813 4,678
1997 454 3,686
1998 218 1,846
Later years 51 13,763
------- --------
Total minimum lease payments 9,930 $ 37,493
========
Less amount representing executory costs 621
-------
Net minimum lease payments 9,309
Less amount representing interest 1,706
-------
Present value of net minimum lease payments 7,603
Less current portion 3,181
-------
Long-term obligations at October 31, 1993 $ 4,422
=======
</TABLE>
36
<PAGE> 14
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14 -- DETAILS OF BALANCE SHEET
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
1993 1992
- --------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C>
Receivables:
Accounts $ 92,298 $ 90,075
Notes 14,397 16,103
Other 3,347 3,026
--------- ---------
110,042 109,204
Less allowance for doubtful accounts (2,647) (2,715)
--------- ---------
$ 107,395 $ 106,489
========= =========
Inventories:
Finished goods $ 30,747 $ 35,121
Work in process 8,466 14,217
Raw materials and finished parts 45,448 38,336
--------- ---------
$ 84,661 $ 87,674
========= =========
Property, plant and equipment:
Land $ 3,655 $ 3,748
Land improvements 2,342 2,363
Buildings 49,964 50,538
Machinery and equipment 68,560 65,266
Construction in progress 9,606 4,327
Leased property under capitalized leases 12,812 12,860
--------- ---------
146,939 139,102
Less accumulated depreciation and amortization (68,250) (61,730)
--------- ---------
$ 78,689 $ 77,372
========= =========
Intangibles:
Costs in excess of net assets of acquired businesses $ 34,064 $ 36,614
Other 1,580 1,465
--------- ---------
35,644 38,079
Less accumulated amortization (8,393) (6,501)
--------- ---------
$ 27,251 $ 31,578
========= =========
Accrued liabilities:
Salaries and other compensation $ 18,341 $ 18,041
Pension and retirement 7,900 6,397
Taxes other than income taxes 2,802 2,446
Other 15,377 15,895
--------- ---------
$ 44,420 $ 42,779
========= =========
</TABLE>
37
<PAGE> 15
Nordson Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 -- SUPPLEMENTAL INFORMATION FOR THE STATEMENT OF CASH FLOWS
<TABLE>
- --------------------------------------------------------------------------------------------------------------
<CAPTION>
1993 1992 1991
- --------------------------------------------------------------------------------------------------------------
(In thousands)
<S> <C> <C> <C>
Cash operating activities:
Interest paid $ 6,351 $ 6,831 $ 7,095
Income taxes paid 19,355 20,038 20,058
======== ======== ========
Noncash investing and financing activities:
Capitalized lease obligations incurred $ 4,670 $ 6,061 $ 3,666
Capitalized lease obligations terminated 1,250 945 824
Shares acquired and issued through
exercise of stock options 3,613 2,965 --
======== ======== ========
Noncash assets and liabilities of businesses
acquired:
Working capital $ (406) $ 883 $ 1,613
Property, plant and equipment -- 411 696
Intangibles and other 861 7,103 8,253
Long-term debt and other liabilities -- (95) (5,000)
-------- -------- --------
$ 455 $ 8,302 $ 5,562
======== ======== ========
</TABLE>
NOTE 16 -- QUARTERLY FINANCIAL DATA (UNAUDITED)
<TABLE>
- --------------------------------------------------------------------------------------------------------------
The following table sets forth selected financial data for each quarter of 1993 and 1992. The first quarter
of 1993 has been restated due to accounting changes, as described in Note 2.
<CAPTION>
First Second Third Fourth
Quarter Quarter Quarter Quarter
- --------------------------------------------------------------------------------------------------------------
(In thousands except for per share amounts)
<S> <C> <C> <C> <C>
1993
Sales $100,300 $109,250 $123,341 $128,666
Cost of sales 40,318 44,564 52,748 53,945
Income before cumulative effect
of accounting changes 6,683 8,787 12,075 13,230
Cumulative effect of accounting
changes (4,784) -- -- --
Net income 1,899 8,787 12,075 13,230
Earnings per share:
Income before cumulative effect
of accounting changes $.35 $.46 $.63 $.69
Cumulative effect of
accounting changes (.25) -- -- --
Net income .10 .46 .63 .69
1992
Sales $ 93,392 $106,166 $105,559 $120,501
Cost of sales 36,496 41,060 41,523 49,358
Net income 7,376 10,238 10,307 11,616
Earnings per share $.38 $.52 $.53 $.60
</TABLE>
38
<PAGE> 1
Exhibit 13-g
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Nordson Corporation
We have audited the accompanying consolidated balance sheet of Nordson
Corporation as of October 31, 1993 and November 1, 1992, and the related
consolidated statements of income, shareholders' equity and cash flows for each
of the three years in the period ended October 31, 1993. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated financial position of Nordson
Corporation at October 31, 1993 and November 1, 1992, and the consolidated
results of its operations and its cash flows for each of the three years in the
period ended October 31, 1993 in conformity with generally accepted accounting
principles.
As discussed in Note 2 to the consolidated financial statements, in fiscal 1993
the Company changed its method of accounting for postretirement benefits other
than pensions, postemployment benefits, and income taxes.
/s/ Ernst & Young
Cleveland, Ohio
December 7, 1993
39
<PAGE> 1
<TABLE>
Exhibit 13-h
Nordson Corporation
ELEVEN-YEAR SUMMARY
<CAPTION>
(Dollars and shares in thousands
except for per share amounts) 1993(d) 1992 1991 1990(e) 1989
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
OPERATING DATA (a)
Sales $461,557 425,618 387,962 344,904 282,098
Cost of sales $191,575 168,437 158,885 154,653 116,588
% of sales 42 40 41 45 41
Selling and administrative expenses $202,608 189,887 170,814 140,450 112,716
% of sales 44 45 44 41 40
Operating profit $ 67,374 67,294 58,263 49,801 52,794
% of sales 15 16 15 14 19
Income from continuing operations $ 40,775 39,537 33,787 29,346 34,187
% of sales 9 9 9 9 12
Income before cumulative effect of
accounting changes $ 40,775 39,537 33,787 29,346 34,187
% of sales 9 9 9 9 12
Net income $ 35,991 39,537 33,787 29,346 34,187
% of sales 8 9 9 9 12
FINANCIAL DATA (a)
Working capital $125,391 105,138 87,004 66,093 53,834
Net property, plant and equipment
and other non-current assets $116,298 114,461 103,015 95,599 79,383
Total invested capital $241,689 219,599 190,019 161,692 133,217
Total assets $357,970 346,297 296,930 269,523 235,551
Long-term obligations $ 45,284 41,879 37,305 31,318 26,299
Shareholders' equity $196,405 177,720 152,714 130,374 106,918
Return on average invested
capital -- % (b) 19 20 21 21 29
Return on average shareholders'
equity -- % (c) 23 24 25 25 35
PER SHARE DATA (a)
Earnings per share:
Continuing operations $ 2.13 2.03 1.77 1.52 1.76
Income before cumulative effect of
accounting changes $ 2.13 2.03 1.77 1.52 1.76
Net income $ 1.88 2.03 1.77 1.52 1.76
Dividends per common share $ .48 .44 .40 .36 .32
Book value per common share $10.49 9.48 8.14 6.94 5.69
Common shares and common share
equivalents 19,184 19,471 19,093 19,266 19,386
</TABLE>
<TABLE>
<CAPTION>
(Dollars and shares in thousands
except for per share amounts) 1988 1987 1986(e) 1985 1984 1983
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATING DATA (a)
Sales 245,028 205,175 168,693 140,005 140,109 121,057
Cost of sales 96,771 81,604 74,494 65,975 58,558 48,778
% of sales 40 40 44 47 42 40
Selling and administrative expenses 99,039 84,106 71,726 58,352 58,440 52,213
% of sales 40 41 43 42 42 43
Operating profit 49,218 39,465 22,473 15,678 23,111 20,066
% of sales 20 19 13 11 16 17
Income from continuing operations 31,583 24,707 13,834 9,714 13,336 12,418
% of sales 13 12 8 7 10 10
Income before cumulative effect of
accounting changes 31,583 24,707 13,834 9,714 11,254 10,352
% of sales 13 12 8 7 8 9
Net income 31,583 24,707 13,834 9,714 11,254 10,352
% of sales 13 12 8 7 8 9
FINANCIAL DATA (a)
Working capital 64,040 80,528 61,108 50,920 66,266 64,038
Net property, plant and equipment
and other non-current assets 43,075 37,835 37,076 34,820 29,454 27,251
Total invested capital 107,115 118,363 98,184 85,740 95,720 91,708
Total assets 162,912 164,212 133,981 113,240 119,558 114,158
Long-term obligations 18,006 17,158 16,406 13,361 13,384 13,321
Shareholders' equity 89,109 101,205 81,778 72,379 82,336 78,387
Return on average invested
capital -- % (b) 29 23 16 11 13 12
Return on average shareholders'
equity -- % (c) 33 27 18 13 14 14
PER SHARE DATA (a)
Earnings per share:
Continuing operations 1.55 1.17 .67 .43 .55 .51
Income before cumulative effect of
accounting changes 1.55 1.17 .67 .43 .46 .43
Net income 1.55 1.17 .67 .43 .46 .43
Dividends per common share .28 .24 .23 .22 .20 .18
Book value per common share 4.66 4.89 3.97 3.43 3.55 3.35
Common shares and common share
equivalents 20,340 21,040 20,752 22,488 24,382 24,190
<FN>
(a) See accompanying Notes to Consolidated Financial Statements.
(b) Income before cumulative efffect of accounting changes plus interest on long-term obligations net of income taxes, as a
percentage of total assets less current liabilities.
(c) Income before cumulative effect of accounting changes, as a percentage of shareholders' equity.
(d) In 1993, the Company adopted Statements of Financial Accounting Standards No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions," No. 109, "Accounting for Income Taxes," and No. 112, "Employers' Accounting for Postemployment
Benefits." Prior years have not been restated.
(e) The Company adopted Statement of Financial Accounting Standards No. 87, "Employers' Accounting for Pensions," for its domestic
plans in 1986 and for its significant foreign plans in 1990; prior years have not been restated.
</TABLE>
<PAGE> 1
Exhibit 13-i
INVESTOR INFORMATION
Following is a summary of dividends paid per common share, the range of market
prices, and average price-earnings ratios with respect to common shares, during
each quarter of 1993 and 1992. The price-earnings ratios reflect average market
prices relative to trailing four-quarter earnings before cumulative effect of
accounting changes.
<TABLE>
<CAPTION>
Common Stock Price Price-
Dividend --------------------------------------- Earnings
Paid 1993 1992 Ratio
--------------- ----------------- ----------------- --------------
1993 1992 High Low High Low 1993 1992
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
First Quarter $ .12 $ .11 $52.00 $43.00 $48.75 $37.00 23.8 23.7
Second Quarter .12 .11 47.00 38.25 53.00 45.00 22.0 25.4
Third Quarter .12 .11 46.00 39.25 57.00 47.50 20.9 26.1
Fourth Quarter .12 .11 54.75 42.00 51.50 43.25 22.7 23.3
</TABLE>
DIVIDEND POLICY AND CORPORATE DATA
<TABLE>
<S> <C>
Nordson Corporation's policy is to pay annual ANNUAL SHAREHOLDERS' MEETING
dividends in an amount which approximates
6 percent of shareholders' equity at the Date: March 10, 1994
beginning of the fiscal year. This policy Time: 5:30 p.m.
mitigates the effect of short-term swings in Place: The Stocker Center
earnings and results in predictable, stable 1005 North Abbe Road
dividend payments to shareholders. Elyria, Ohio
Registered owners of commons tock may
automatically reinvest dividends in additional
shares through the Company's dividend ADDITIONAL INFORMATION
reinvestment program. For additional
information, contact our transfer agent and Copies of Nordson Corporation's annual
registrar. Report to the Securities and Exchange
Commission (Form 10-K), quarterly reports
and proxy statement are available without
NASDAQ SYMBOL: NDSN charge to shareholders upon written request
INDEPENDENT AUDITORS to Barbara Price, Supervisor, Shareholder
Services, Nordson Corporaiton, 28601 Clemens
Ernst & Young Road, Westlake, Ohio 44145. Telephone:
Cleveland, Ohio (216) 892-1580; telecopier: (216) 892-9507.
TRANSFER AGENT AND REGISTRAR
Society National Bank
P. O. Box 6477
Cleveland, Ohio 44101
Telephone: (216) 737-5745
MARKET MAKERS AND RESEARCH
The following firms make a market (M) in Roney & Co. (M)
Nordson Corporation stock and/or provide Smith Barney, Shearson, Inc. (M)
research data (R) on Nordson Corporation: Sherwood Securities Corp. (M)
Standard & Poors Corp. (R)
Barrington Research Assoc. (R) Troster Singer Corp. (M)
Black & Co., Inc. (R) Value Line, Inc. (R)
The First Boston Corp. (R) Weeden & Co., Inc. (M)
Kemper Securities Group, Inc. (M) Wertheim Schroder & Co., Inc. (M) (R)
McDonald & Co. Securities, Inc. (M) (R) Wheat, First Securities, Inc. (M)
Merrill Lynch, Pierce, Fenner & Wright Investors' Service (R)
Smith, Inc. (M)
The Robinson-Humphrey Co., Inc. (M) (R)
</TABLE>
40
<PAGE> 1
Exhibit 21
NORDSON CORPORATION
SUBSIDIARIES OF THE REGISTRANT
The following table sets forth the subsidiaries of the Registrant
(each of which is included in the Registrant's consolidated financial
statements), and the jurisdiction under the laws of which each subsidiary was
organized.
<TABLE>
<CAPTION>
Jurisdiction of
Incorporation Name
- --------------- ----
INTERNATIONAL:
- -------------
<S> <C>
Australia Nordson Australia Pty. Limited
Austria Nordson GbmH
Belgium Nordson Belgium N.V.
Brazil Nordson do Brasil Industria e
Comercio Ltda.
Canada Nordson Canada Limited
Denmark Nordson Danmark A/S
Finland Nordson Finland Oy
France Nordson France S.A.
Germany Nordson Engineering GmbH
Germany Nordson Deutschland GmbH (1)
Italy Nordson Finishing S.r.l.
Italy Nordson Italia SpA (2)
Japan Nordson K.K.
Japan Nordson Engineering K.K.
Korea Nordson Sang San Limited (3)
Malaysia Nordson (Malaysia) Sdn. Bhd. (4)
Mexico Nordson de Mexico, S.A. de C.V.
Netherlands Nordson Nederland B.V.
Norway Nordson Norge A/S
Poland Nordson Polska Sp.z.o.o.
Portugal Nordson Portugal Equipamento
Industrial Lda.
Singapore Nordson S.E. Asia (Pte.) Limited
Spain Nordson Iberica, S.A.
Sweden Nordson Sverige AB
Switzerland Nordson (Schweiz) AG (5)
United Kingdom Nordson (U.K.) Limited
United States Virgin Islands Nordson FSC, Inc.
DOMESTIC:
- --------
California Slautterback Corporation
Ohio Nordson Pacific, Inc.
Georgia Meltex Corporation
<FN>
(1) Owned by Nordson Engineering GmbH and Nordson Corporation
(2) Owned by Nordson Finishing S.r.l.
(3) A 45%-owned joint venture accounted for on the equity method
(4) A 65%-owned joint venture
(5) Owned by Nordson Belgium S.A.
</TABLE>
<PAGE> 1
Exhibit 23
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this Annual Report
(Form 10-K) of Nordson Corporation of our report dated December 7, 1993
included in the Annual Report to Shareholders of Nordson Corporation for the
year ended October 31, 1993.
We also consent to the incorporation by reference in the
Registration Statements (Forms S-8) listed below and the related
prospectuses of Nordson Corporation of our reports dated December 7, 1993,
with respect to the consolidated financial statements and financial
statement schedules of Nordson Corporation included and incorporated by
reference in this Annual Report (Form 10-K) for the year ended October 31,
1993:
- Nordson Corporation 1982 Amended and Restated Stock Appreciation
Rights Plan (No. 2-66776)
- Nordson Corporation 1979 Employees Stock Option Plan (No. 2-66776)
- Nordson Corporation 1982 Incentive Stock Option Plan (Nos. 2-82915
and 33-18279)
- Nordson Employees' Savings Trust Plan (No. 33-18309)
- Nordson Corporation 1988 Employees Stock Purchase Plan (No. 33-20452)
- Nordson Corporation 1988 International Employees Stock Purchase
Plan (No. 33-20451)
- Nordson Corporation 1989 Stock Option Plan (No. 33-32201)
- Nordson Hourly-Rated Employees' Savings Trust Plan (No. 33-33481)
- Nordson Corporation 1993 Long-Term Performance Plan (No. 33-67780)
- Nordson Corporation - Slautterback Corporation 401(k) Profit
Sharing Plan (No. 33-73522)
<TABLE>
<S> <C>
/s/ Ernst & Young
Ernst & Young
Cleveland, Ohio
January 26, 1994
</TABLE>
<PAGE> 1
Exhibit 99-c
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For fiscal year ended December 31, 1993
1988 EMPLOYEES STOCK PURCHASE PLAN
(Full title of the Plan)
NORDSON CORPORATION
(Name of issuer of securities held pursuant to the Plan)
28601 Clemens Road
Westlake, Ohio 44145
(Address of principal executive office)
<PAGE> 2
ITEM 1. CHANGE IN THE PLAN.
No material changes in the provisions of the Plan were made in
the fiscal year.
ITEM 2. CHANGES IN INVESTMENT POLICY.
No material changes were made during the fiscal year in the
policy with respect to the kind of securities and other investments in which
funds held under the Plan may be invested.
ITEM 3. CONTRIBUTIONS UNDER THE PLAN.
No contributions were made under the Plan by the issuer.
ITEM 4. PARTICIPATING EMPLOYEES.
There were 1,735 employees who were eligible to participate in
the Plan at December 31, 1993.
ITEM 5. ADMINISTRATION OF THE PLAN.
(a) The Plan is administered by the following persons, in
their capacity as members of the Compensation Committee of the Board of
Directors of the issuer:
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH ISSUER
---------------- --------------------
<S> <C>
Eric T. Nord Director & Chairman of the Board
23 Hawthorne Avenue
Oberlin, Ohio 44074
William W. Colville Director
Owens Corning Fiberglas
Fiberglas Tower
Toledo, Ohio 43659
Stephen R. Hardis Director
Eaton Corporation
Eaton Center
Cleveland, Ohio 44114
Dr. Anne O. Krueger Director
Department of Economics
Stanford University
Stanford, CA 94305-6072
</TABLE>
(b) Members of the Compensation Committee received no
compensation from the Plan.
<PAGE> 3
ITEM 6. CUSTODIAN OF INVESTMENTS.
(a) Society National Bank, 127 Public Square, Cleveland,
Ohio 44115 acts as custodian for amounts contributed by employees under the
Plan.
(b) No compensation was received from the Plan by Society
National Bank or any other persons.
(c) The officers and employees of Society National Bank
who are responsible for custody of the securities and other investments under
the Plan are covered by a Financial Institutions Bond and has limits of
$40,000,000 per occurrence with an $80,000,000 policy aggregate, subject to a
$5,000,000 deductible.
ITEM 7. REPORTS TO PARTICIPATING EMPLOYEES.
Each participant in the Plan that has amounts withheld from
their wages receives annual statements from Society National Bank reporting the
transactions of that participant's account during the preceding year and the
status of the account at the end of such year. In addition, each participant
in the Plan receives, on an annual basis, a copy of the Registrant's Annual
Report to Shareholders.
ITEM 8. INVESTMENT OF FUNDS.
Society National Bank, the Trustee of the Plan, is investing
the assets in Money Market Funds. No brokerage commissions have been paid by
the Plan.
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS.
<TABLE>
<CAPTION>
<S> <C>
(a) FINANCIAL STATEMENTS
PAGE NO.
--------
Report of Independent Auditors F-1
Statement of Financial Condition - December 31, 1993
and 1992 F-2
Statement of Income and Changes in Participants' Equity
for each of the three years in the period ended
December 31, 1993 F-3
Notes to financial statements F-4 & F-5
</TABLE>
Schedules I, II and III have been omitted since the required
information is included in the financial statements, including the notes
thereto, or is not present, or not present in amounts sufficient to require
submission of the schedule.
(b) EXHIBITS
Consent of Independent Auditors
<PAGE> 4
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
NORDSON CORPORATION
1988 EMPLOYEES STOCK PURCHASE PLAN
By /s/ Nicholas D. Pellecchia
----------------------------------------
Nicholas D. Pellecchia
Vice President-Finance and Treasurer
Nordson Corporation
Date: January 21, 1994
<PAGE> 5
REPORT OF INDEPENDENT AUDITORS
The Compensation Committee and Participants
Nordson Corporation 1988 Employees Stock Purchase Plan
We have audited the accompanying statement of financial
condition of the Nordson Corporation 1988 Employees Stock Purchase Plan as of
December 31, 1993 and 1992 and the related statement of income and changes in
participants' equity for each of the three years in the period ended December
31, 1993. These financial statements are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of the Nordson
Corporation 1988 Employees Stock Purchase Plan at December 31, 1993 and 1992
and the results of its operations and changes in its participants' equity for
each of the three years in the period ended December 31, 1993 in conformity
with generally accepted accounting principles.
/s/ Ernst & Young
Ernst & Young
Cleveland, Ohio
January 21, 1994
F-1
<PAGE> 6
NORDSON CORPORATION
1988 EMPLOYEES STOCK PURCHASE PLAN
STATEMENT OF FINANCIAL CONDITION
DECEMBER 31, 1993 AND 1992
<TABLE>
<CAPTION>
ASSETS 1993 1992
-------- --------
<S> <C> <C>
Cash equivalents $157,140 $157,993
======== ========
PARTICIPANTS' EQUITY
Participants' equity $157,140 $157,993
======== ========
</TABLE>
See accompanying notes.
F-2
<PAGE> 7
NORDSON CORPORATION
1988 EMPLOYEES STOCK PURCHASE PLAN
STATEMENT OF INCOME AND CHANGES IN PARTICIPANTS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- --------
<S> <C> <C> <C>
Net income from investments $ 3,098 $ 3,070 $ 6,007
Employee contributions 2,081,811 1,776,013 1,368,353
Employee stock purchases (Note 1) (1,998,248) (1,638,890) (1,248,842)
Employee withdrawals (87,514) (105,883) (137,285)
---------- ---------- ----------
Increase (decrease) in
participants' equity (853) 34,310 (11,767)
Participants' equity at the
beginning of the period 157,993 123,683 135,450
---------- ---------- ----------
Participants' equity at the end
of the period $ 157,140 $ 157,993 $ 123,683
========== ========== ==========
</TABLE>
See accompanying notes.
F-3
<PAGE> 8
NORDSON CORPORATION
1988 EMPLOYEES STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
1. PROVISIONS OF THE PLAN.
The following description of the 1988 Employees Stock Purchase
Plan ("the Plan") provides only general information. Participants should refer
to the Plan agreement for a more complete description of the Plan's provisions.
The Plan authorized the sale of up to 1,200,000 common shares.
As of December 31, 1993, 949,880 common shares are available to be sold under
this Plan. On March 10, 1993, Nordson Corporation ("the Registrant")
shareholders approved the adoption of the Nordson's 1993 Long-Term Performance
Plan ("the Long-Term Plan"). Under the Long-Term Plan, the aggregate number of
common shares that may be subject to award grants in any fiscal year would be
three percent of the number of common shares outstanding at the beginning of
the fiscal year plus the number of common shares that were available for grant
but not granted the previous years. The total common shares available for
grant in any fiscal year can not exceed three and one-half percent of the
common shares outstanding at the beginning of the fiscal year. The common
shares available for sale under the Plan are part of the common shares
available under the Long-Term Plan.
The shares may be purchased at certain times by eligible
employees who enter into an agreement with the Registrant. The purchase price
for the common shares offered under the Plan is 95% of the fair market value of
the common shares at the date of purchase (May 1 of each year). No agreements
may be entered into after April 30, 1994. The Plan is intended to provide all
eligible employees with an opportunity to designate up to 15% of their gross
earnings from the Registrant for the purchase of common shares either through
payroll deductions, by lump sum payments, transfer to the Registrant by the
employee of common shares having a current market value equal to the purchase
price, or by a combination of these methods. As of May 1, 1993, 1992 and
1991, 53,244, 34,416 and 53,934 common shares, respectively, were purchased
under the Plan. As of December 31, 1993, the Registrant was a party to stock
purchase agreements with 172 employees providing for payroll deductions and
1,735 employees deemed or enrolled as participants.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES.
METHOD OF ACCOUNTING - Plan transactions are accounted for on
the accrual method.
INCOME TAX STATUS - The Plan is not required to file income
tax returns or pay income taxes. The Plan meets the requirements of an
"employee stock purchase plan," as defined in Section 423 of the Internal
Revenue Code. Under Section 423, a participating employee will recognize no
income, and the Registrant will be entitled to no deduction, for federal income
tax purposes when the employee enters into an agreement or when the participant
completes payment for and receives common shares under the Plan. Interest
earned on the participants' contributions through payroll deductions are
credited to each participants' stock purchase account and is taxable to each
participant in the year earned.
F-4
<PAGE> 9
NORDSON CORPORATION
1988 EMPLOYEES STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993
INVESTMENTS - The investments of the Plan are carried at
market value which equals cost.
3. OTHER.
All costs and expense incurred in administering the Plan,
including fees of the trustee, are paid by the Registrant.
4. EMPLOYEE WITHDRAWALS.
Employee withdrawals represent refunds of participants'
contributions to the Plan for those employees who have either elected
voluntarily to end their participation in the Plan, have retired or have
terminated their employment from the Registrant.
F-5
<PAGE> 10
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-20452) pertaining to the Nordson
Corporation 1988 Employees Stock Purchase Plan of our report dated January 21,
1994, with respect to the financial statements of the Nordson Corporation 1988
Employees Stock Purchase Plan included in the Annual Report (Form 11-K) for the
year ended December 31, 1993 which is included as Exhibit 99-c in this Annual
Report (Form 10-K) for the year ended October 31, 1993.
/s/ Ernst & Young
Ernst & Young
Cleveland, Ohio
January 26, 1994
<PAGE> 1
Exhibit 99-d
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
1988 INTERNATIONAL EMPLOYEES STOCK PURCHASE PLAN
(Full title of the Plan)
NORDSON CORPORATION
(Name of issuer of securities held pursuant to the Plan)
28601 Clemens Road
Westlake, Ohio 44145
(Address of principal executive office)
<PAGE> 2
ITEM 1. CHANGES IN THE PLAN.
No material changes in the provisions of the Plan were made
during the fiscal year.
ITEM 2. CHANGES IN INVESTMENT POLICIES.
None.
ITEM 3. CONTRIBUTIONS UNDER THE PLAN.
No contributions are made under the Plan by the issuer.
ITEM 4. PARTICIPATING EMPLOYEES.
The Company estimates that approximately 905 employees were
eligible to participate in the Plan at December 31, 1993.
ITEM 5. ADMINISTRATION OF THE PLAN.
(a) The Plan is administered by the following persons, in
their capacity as members of the Compensation Committee of the Board of
Directors of the issuer:
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH ISSUER
---------------- --------------------
<S> <C>
Eric T. Nord Director & Chairman of the Board
23 Hawthorne Avenue
Oberlin, Ohio 44074
William W. Colville Director
Owens Corning Fiberglas
Fiberglas Tower
Toledo, Ohio 43659
Stephen R. Hardis Director
Eaton Corporation
Eaton Center
Cleveland, Ohio 44114
Dr. Anne O. Krueger Director
Department of Economics
Stanford University
Stanford, CA 94305-6072
</TABLE>
(b) Members of the Compensation Committee received no
compensation from the Plan.
ITEM 6. CUSTODIAN OF INVESTMENTS.
Each participant in the Plan that has amounts withheld from
their wages, also has an account set up in their own name at the local
subsidiary level.
<PAGE> 3
ITEM 7. REPORTS TO PARTICIPATING EMPLOYEES.
Each participant in the Plan receives, on an annual basis, a
copy of the Registrant's Annual Report to Shareholders.
Item 8. Investment of funds.
None.
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS.
<TABLE>
<S> <C>
(a) FINANCIAL STATEMENTS
Report of Independent Auditors F-1
Statement of Income and Changes in Participants'
Equity for the years ended December 31, 1993,
1992 and 1991 F-2
Notes to financial statement F-3 & F-4
</TABLE>
Schedules I, II and III have been omitted since the required
information is included in the financial statement, including the notes
thereto, or is not present, or not present in amounts sufficient to require
submission of the schedule.
(b) EXHIBITS
Consent of Independent Auditors
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
NORDSON CORPORATION
1988 INTERNATIONAL EMPLOYEES STOCK PURCHASE PLAN
By /s/ Nicholas D. Pellecchia
------------------------------------------
Nicholas D. Pellecchia
Vice President-Finance and Treasurer
Nordson Corporation
Date: January 21, 1994
<PAGE> 4
REPORT OF INDEPENDENT AUDITORS
The Compensation Committee and Participants
Nordson Corporation 1988 International Employees Stock Purchase Plan
We have audited the accompanying statement of income and
changes in participants' equity of the Nordson Corporation 1988 International
Employees Stock Purchase Plan for each of the three years in the period ended
December 31, 1993. This statement of income and changes in participants'
equity is the responsibility of the Plan's management. Our responsibility is
to express an opinion on the statement of income and changes in participants'
equity based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the statement of income and changes in
participants' equity referred to above presents fairly, in all material
respects, the results of operations and changes in participants' equity of the
Nordson Corporation 1988 International Employees Stock Purchase Plan for each
of the three years in the period ended December 31, 1993 in conformity with
generally accepted accounting principles.
/s/ Ernst & Young
Ernst & Young
Cleveland, Ohio
January 21, 1994
F-1
<PAGE> 5
NORDSON CORPORATION
1988 INTERNATIONAL EMPLOYEES STOCK PURCHASE PLAN
STATEMENT OF INCOME AND CHANGES IN PARTICIPANTS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
<TABLE>
<CAPTION>
1993 1992 1991
---------- ---------- ----------
<S> <C> <C> <C>
Participants' equity at the
beginning of the period $ - $ - $ -
Employee contributions 1,757,929 5,262,356 1,003,507
Employee stock purchases
(Note 1) (1,757,929) (5,262,356) (1,003,507)
---------- ---------- ----------
Participants' equity at
the end of the period $ - $ - $ -
========== ========== ==========
</TABLE>
See accompanying notes.
F-2
<PAGE> 6
NORDSON CORPORATION
1988 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1993
1. PROVISIONS OF THE PLAN
The following description of the 1988 International Employees
Stock Purchase Plan ("the Plan") provides only general information.
Participants should refer to the Plan agreement for a more complete description
of the Plan's provisions.
The Plan authorized the sale of up to 600,000 common shares.
The shares may be purchased at certain times by eligible foreign employees at
specifically designated locations of Nordson Corporation's ("the Registrant")
subsidiaries who enter into an agreement with the Registrant. The agreements
may have been entered into as of May 1, 1990 and May 1, 1992, respectively,
except employees who become eligible to participate as of any intervening May 1
or November 1 shall be eligible to enter into an agreement as of such date.
The term of all outstanding agreements will end as of May 1, 1992 or May 1,
1994, respectively. No agreements may be entered into when no more common
shares are available to be offered and sold under this Plan, or after November
1, 1993. As of December 31, 1993, 40,196 common shares are available to be
sold under this Plan.
The purchase price of the shares under the Plan is the lesser
of: (a) 85% of the fair market value of the common shares at the date of the
agreement (fair market value at May 1, 1990 was $23.50, at November 1, 1990
was $20.00, at May 1, 1991 was $24.38, at November 1, 1991 was $42.75, at May
1, 1992 was $50.13, at November 1, 1992 was $46.63, at May 1, 1993 was $39.50,
and at November 1, 1993 was $53.38), or (b) 85% of the fair market value at
date of purchase (May 1 each year during the agreement period). The Plan is
intended to provide all eligible employees with an opportunity to designate up
to 15% of their previous year gross earnings or, if the employee did not
receive compensation during all twelve months of the previous year, their
current annualized pay from the Registrant's subsidiary for the purchase of
common shares. Employees who become eligible to participate in the Plan as of
any November 1st will be limited until the next May 1st to 7.5% of base
compensation. The purchase of common shares can be made through payroll
deduction, lump sum payment, transfer to the Registrant by the participating
employee of common shares having a current market value equal to the purchase
price, or by a combination of these methods. Pursuant to agreements made in
May 1992 through November 1992, 53,306 common shares were purchased on May 1,
1993. Pursuant to agreements made in May 1990 through November 1991, 263,706
and 52,142 common shares were purchased on May 1, 1992 and 1991, respectively.
As of December 31, 1993, the Registrant was a party to stock purchase
agreements with 905 employees.
F-3
<PAGE> 7
NORDSON CORPORATION
1988 INTERNATIONAL EMPLOYEE STOCK PURCHASE PLAN
NOTES TO FINANCIAL STATEMENT
DECEMBER 31, 1993
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
METHOD OF ACCOUNTING - Plan transactions are accounted for on
the accrual method.
INCOME TAX STATUS - The Plan is not required to file income
tax returns or pay income taxes. The Plan is not intended to qualify under the
Internal Revenue Code, and the income tax consequences for the Registrant and
for participants in the Plan will depend on the tax laws of the countries in
which the various participants reside.
PAYROLL DEDUCTION DEPOSITS - Employee payroll deductions are
deposited into separate accounts in the employee's name by the various
subsidiaries. The amounts designated by the employees for purchase of shares
under the Plan are then transferred to the Plan administrator as of May 1st of
each year.
3. OTHER
All costs and expenses incurred in administering the Plan are
paid by the Registrant.
F-4
<PAGE> 8
CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in the
Registration Statement (Form S-8 No. 33-20451) pertaining to the Nordson
Corporation 1988 International Employees Stock Purchase Plan of our report
dated January 21, 1994, with respect to the financial statements of the Nordson
Corporation 1988 International Employees Stock Purchase Plan included in the
Annual Report (Form 11-K) for the year ended December 31, 1993 which is
included as Exhibit 99-d in this Annual Report (Form 10-K) for the year ended
October 31, 1993.
/s/ Ernst & Young
Ernst & Young
Cleveland, Ohio
January 26, 1994
<PAGE> 1
Exhibit 99-e
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
NORDSON EMPLOYEES' SAVINGS TRUST PLAN
(Full title of the Plan)
NORDSON CORPORATION
(Name of issuer of securities held pursuant to the Plan)
28601 Clemens Road
Westlake, Ohio 44145
(Address of principal executive office)
<PAGE> 2
ITEM 1. CHANGES IN THE PLAN.
No material changes in the provisions of the Plan were made
during the fiscal year.
ITEM 2. CHANGES IN INVESTMENT POLICY.
No material changes in the investment policy of the Plan were
made during the fiscal year.
ITEM 3. CONTRIBUTIONS UNDER THE PLAN.
For the fiscal year, the issuer accrued contributions of
$1,484,944 to the Plan. The issuer's contribution is an amount equal to 50% of
the participants' contribution of 1% to 6% of base salary (as defined by the
Plan).
ITEM 4. PARTICIPATING EMPLOYEES.
There were approximately 1,242 employees participating in the
Plan on December 31, 1993.
ITEM 5. ADMINISTRATION OF THE PLAN.
(a) The Plan was administered by the following persons,
in their capacity as members of the Retirement Committee of the issuer:
<TABLE>
<CAPTION>
NAME AND ADDRESS POSITION WITH ISSUER
---------------- --------------------
<S> <C>
Edward P. Campbell Vice President
Nordson Corporation
28601 Clemens Road
Westlake, Ohio 44145
William P. Madar President and Chief Executive Officer
Nordson Corporation
28601 Clemens Road
Westlake, Ohio 44145
Thomas L. Moorhead Vice President-Law and Assistant
Nordson Corporation Secretary
28601 Clemens Road
Westlake, Ohio 44145
Nicholas D. Pellecchia Vice President-Finance and
Nordson Corporation Treasurer
28601 Clemens Road
Westlake, Ohio 44145
</TABLE>
(b) Members of the Retirement Committee received no
compensation from the Plan.
2
<PAGE> 3
ITEM 6. CUSTODIAN OF INVESTMENTS.
(a) Wachovia Bank & Trust Company, N.A., 301 North Main
Street, Winston-Salem, North Carolina 27150 acts as custodian for all
investments under the Plan except for the investments of the Nordson Stock Fund
and the Bond Fund. The investments of the Nordson Stock Fund are held at
Society National Bank, 127 Public Square, Cleveland, Ohio 44114. The
investments of the Bond Fund are held at the Pacific Investment Management
Company, 3400 Peachtree Road, Atlanta, Georgia 30326.
(b) No compensation was paid by the Plan to Wachovia Bank
& Trust Company, N.A., Society National Bank, or Pacific Investment Management
Company.
(c) The officers and employees of Wachovia Bank & Trust
Company, N.A. are covered by a $80 million Financial Institutions Bond.
The officers and employees of Society National Bank are
covered by a Financial Institutions Bond and has a limit of $40,000,000 per
occurrence with an $80,000,000 policy aggregate, subject to a $5,000,000
deductible.
Pacific Investment Management Company maintains a $2,700,000
fidelity bond against acts of larceny and embezzlement by officers and
employees as required by Rule 17g-1 of the Investment Company Act of 1940.
ITEM 7. REPORTS TO PARTICIPATING EMPLOYEES.
As of March 31, June 30, September 30, and December 31, a
statement is sent to each participant in the Plan. The statement reports all
transactions to the participants' account during the preceding three month
period, and the status of the account balance as of the end of the period. In
addition, each participant in the Plan that has money invested in the Nordson
Stock Fund receives, on an annual basis, a copy of the issuer's Annual Report
to Shareholders.
ITEM 8. INVESTMENT OF FUNDS.
The assets of the Plan are commingled with the assets of the
Nordson Employees' Savings Trust to form the Nordson Corporation Master Trust.
Wachovia Bank & Trust Company, N.A., the trustee of the Plan, directs the
assets to Investment Managers as requested by the participants of the Plan. No
brokerage commissions have been paid by the Plan.
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS.
In accordance with Rule 12d-21, the financial statements and
exhibits required by Form 11-K with respect to the Plan will be filed as an
amendment to the annual report within 180 days after the Plan's fiscal year
end.
3
<PAGE> 4
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
NORDSON CORPORATION
NORDSON EMPLOYEES' SAVINGS TRUST PLAN
By /s/ Nicholas D. Pellecchia
------------------------------------
Nicholas D. Pellecchia
Vice President-Finance and Treasurer
Nordson Corporation
Date: January 21, 1994
4
<PAGE> 1
Exhibit 99-f
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
NORDSON HOURLY-RATED EMPLOYEES' SAVINGS TRUST PLAN
(Full title of the Plan)
NORDSON CORPORATION
(Name of issuer of securities held pursuant to the Plan)
28601 Clemens Road
Westlake, Ohio 44145
(Address of principal executive office)
<PAGE> 2
ITEM 1. CHANGES IN THE PLAN.
No material changes in the provisions of the Plan were made
during the fiscal year.
ITEM 2. CHANGES IN INVESTMENT POLICY.
No material changes in the investment policy of the Plan were
made during the fiscal year.
ITEM 3. CONTRIBUTIONS UNDER THE PLAN.
For the fiscal year, the issuer accrued contributions of
$172,295 to the Plan. The issuer's contribution is an amount equal to 50% of
the participants' contribution of 1% to 3% of base salary (as defined by the
Plan).
ITEM 4. PARTICIPATING EMPLOYEES.
There were approximately 379 employees participating in the
Plan on December 31, 1993.
ITEM 5. ADMINISTRATION OF THE PLAN.
(a) The Plan was administered by the following persons,
in their capacity as members of the Retirement Committee of the issuer:
<TABLE>
<CAPTION>
Name and Address Position with Issuer
---------------- --------------------
<S> <C>
Edward P. Campbell Vice President
Nordson Corporation
28601 Clemens Road
Westlake, Ohio 44145
William P. Madar President and Chief Executive Officer
Nordson Corporation
28601 Clemens Road
Westlake, Ohio 44145
Thomas L. Moorhead Vice President-Law and Assistant
Nordson Corporation Secretary
28601 Clemens Road
Westlake, Ohio 44145
Nicholas D. Pellecchia Vice President-Finance and
Nordson Corporation Treasurer
28601 Clemens Road
Westlake, Ohio 44145
</TABLE>
(b) Members of the Retirement Committee received no
compensation from the Plan.
2
<PAGE> 3
ITEM 6. CUSTODIAN OF INVESTMENTS.
(a) Wachovia Bank & Trust Company, N.A., 301 North Main
Street, Winston-Salem, North Carolina 27150 acts as custodian for all
investments under the Plan except for the investments of the Nordson Stock Fund
and the Bond Fund. The investments of the Nordson Stock Fund are held at
Society National Bank, 127 Public Square, Cleveland, Ohio 44115. The
investments of the Bond Fund are held at the Pacific Investment Management
Company, 3400 Peachtree Road, Atlanta, Georgia 30326.
(b) No compensation was paid by the Plan to Wachovia Bank
& Trust Company, N.A., Society National Bank, or Pacific Investment Management
Company.
(c) The officers and employees of Wachovia Bank & Trust
Company, N.A. are covered by a $80 million Financial Institutions Bond.
The officers and employees of Society National Bank are
covered by a Financial Institutions Bond and has a limit of $40,000,000 per
occurrence with an $80,000,000 policy aggregate, subject to a $5,000,000
deductible.
Pacific Investment Management Company maintains a $2,700,000
fidelity bond against acts of larceny and embezzlement by officers and
employees as required by Rule 17g-1 of the Investment Company Act of 1940.
ITEM 7. REPORTS TO PARTICIPATING EMPLOYEES.
As of March 31, June 30, September 30, and December 31, a
statement was sent to each participant in the Plan. The statement reports all
transactions to the participants account during the preceding three month
period and the status of the account balance as of the end of the period. In
addition, each participant in the Plan that has money invested in the Nordson
Stock Fund receives, on an annual basis, a copy of the issuer's Annual Report
to Shareholders.
ITEM 8. INVESTMENT OF FUNDS.
The assets of the Plan are commingled with the assets of the
Nordson Hourly-Rated Employees' Savings Trust to form the Nordson Corporation
Master Trust. Wachovia Bank & Trust Company, N.A., the trustee of the Plan,
directs the assets to Investment Managers as requested by the participants of
the Plan. No brokerage commissions have been paid by the Plan.
ITEM 9. FINANCIAL STATEMENTS AND EXHIBITS.
In accordance with Rule 12d-21, the financial statements and
exhibits required by Form 11-K with respect to the Plan will be filed as an
amendment to the annual report within 180 days after the Plan's fiscal year
end.
3
<PAGE> 4
Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this
annual report to be signed by the undersigned thereunto duly authorized.
NORDSON CORPORATION
NORDSON HOURLY-RATED EMPLOYEES' SAVINGS TRUST PLAN
By /s/ Nicholas D. Pellecchia
---------------------------------
Nicholas D. Pellecchia
Vice President-Finance and Treasurer
Nordson Corporation
Date: January 21, 1994
4
