<PAGE> 1
SCHEDULE 14A
(RULE 14A)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / CONFIDENTIAL, FOR USE OF THE COMMISSION
ONLY (AS PERMITTED BY RULE 14A-6(E)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
NORDSON CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NORDSON CORPORATION
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
Not Applicable
(2) Aggregate number of securities to which transaction applies:
Not Applicable
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
Not Applicable
(4) Proposed maximum aggregate value of transaction:
Not Applicable
(5) Total fee paid:
Not Applicable
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
Not Applicable
(2) Form, Schedule or Registration Statement No.:
Not Applicable
(3) Filing Party:
Not Applicable
(4) Date Filed:
Not Applicable
<PAGE> 2
[NORDSON LOGO]
NORDSON CORPORATION
NOTICE OF 1995
ANNUAL MEETING
AND PROXY STATEMENT
<PAGE> 3
[NORDSON LOGO]
Eric T. Nord
Chairman of the Board
William P. Madar
President and Chief
Executive Officer
January 27, 1995
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at The Stocker Center, 1005 North Abbe Road, Elyria, Ohio, at 5:30 p.m. on
March 9, 1995. We hope that you will be able to attend.
The Notice of Annual Meeting of Shareholders and the Proxy Statement, which are
included in this booklet, describe the matters to be acted upon at the meeting.
Regardless of the number of shares you own, your vote on these matters is
important. Whether or not you plan to attend the meeting, we urge you to mark
your choices on the enclosed proxy card and to sign and return it in the
envelope provided. If you later decide to vote in person at the meeting, you
will have an opportunity to revoke your proxy and vote by ballot.
We look forward to seeing you at the meeting.
Sincerely,
ERIC T. NORD, WILLIAM P. MADAR,
Chairman of the Board President and Chief
Executive Officer
<PAGE> 4
NORDSON CORPORATION
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
The Annual Meeting of Shareholders of Nordson Corporation will be held at The
Stocker Center, 1005 North Abbe Road, Elyria, Ohio, at 5:30 p.m. on March 9,
1995. The purposes of the meeting are:
1. To elect three directors to the class whose term expires in 1998.
2. To approve the Nordson Corporation 1995 Management Incentive Compensation
Plan.
3. To hear reports and to transact any other business that may properly come
before the meeting.
Shareholders of record at the close of business on January 10, 1995 are entitled
to notice of and to vote at the meeting.
For the Board of Directors
WILLIAM D. GINN
Secretary
January 27, 1995
<PAGE> 5
NORDSON CORPORATION
PROXY STATEMENT
The Board of Directors of Nordson Corporation requests your proxy for use at the
Annual Meeting of Shareholders to be held on March 9, 1995, and at any
adjournments of that meeting. This Proxy Statement is to inform you about the
matters to be acted upon at the meeting.
If you attend the meeting, you can vote your shares by ballot. If you do not
attend, your shares can still be voted at the meeting if you sign and return the
enclosed proxy card. Shares represented by a properly signed card will be voted
in accordance with the choices marked on the card. If no choices are marked, the
shares will be voted to elect the nominees listed on page 2 and for the proposal
to approve the Nordson Corporation 1995 Management Incentive Compensation Plan.
You may revoke your proxy before it is voted by giving notice to Nordson in
writing or orally at the meeting.
This Proxy Statement and the enclosed proxy card are being mailed to
shareholders on or about January 27, 1995. Nordson's executive offices are
located at 28601 Clemens Road, Westlake, Ohio 44145. Its telephone number is
(216) 892-1580.
ELECTION OF DIRECTORS
Nordson's Board of Directors is composed of nine directors, three of whom are
elected each year. Each of the directors serves for a term of three years and
until a successor is elected. The Board met six times during the last fiscal
year.
Nominees for election as directors with terms expiring in 1998, as well as
present directors whose terms will continue after the meeting, appear below.
1
<PAGE> 6
NOMINEES FOR TERMS EXPIRING IN 1998
WILLIAM D. GINN, age 71, has been a director of Nordson since 1959. Mr. Ginn has
been Of Counsel to Thompson, Hine and Flory, a law firm, since January 1993.
Prior to that time he was a Partner with Thompson, Hine and Flory for more than
five years. He is a director of the Davey Tree Expert Company, a tree and lawn
care company. Thompson, Hine and Flory has in the past provided and continues to
provide legal services to Nordson.
STEPHEN R. HARDIS, age 59, has been a director of Nordson since 1984. He has
served as Vice Chairman and Chief Financial and Administrative Officer of Eaton
Corporation since April 1986. Eaton produces automation systems and equipment,
capital and consumer goods components, aerospace and defense systems, and
automotive components. Mr. Hardis is a director of Eaton, KeyCorp, a bank
holding company, The Progressive Corporation, an insurance holding company, and
First Union Real Estate Equity and Mortgage Investments, a real estate
investment company.
DR. JACOB O. KAMM, age 76, has been a director of Nordson since 1959. He has
been an economic and financial consultant for more than five years. He is a
trustee of Gradison-McDonald Cash Reserves Trust, Gradison Growth Trust,
Gradison Custodian Trust, and Gradison-McDonald Municipal Custodian Trust.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 1997
WILLIAM P. MADAR, age 55, has been a director of Nordson since 1985. He has
served as President and Chief Executive Officer of Nordson since February 1986.
Mr. Madar is a director of National City Bank, a national banking association,
Brush Wellman, Inc., a producer and supplier of beryllium and related products,
specialty metal systems, and precious metal
2
<PAGE> 7
products, and The Lubrizol Corporation, a manufacturer of specialty chemicals.
WILLIAM W. COLVILLE, age 60, has been a director of Nordson since 1988. He was
Senior Vice President-Law and General Counsel of Owens-Corning Fiberglas
Corporation from 1984 until December 1994 and currently serves as a consultant
to Owens-Corning. Owens-Corning manufactures glass fiber products and related
materials.
EVAN W. NORD, age 75, has been a director of Nordson since 1942. He was Vice
President and Treasurer of Nordson for more than five years prior to his
retirement in 1978. Evan Nord is Eric Nord's brother.
PRESENT DIRECTORS WHOSE TERMS EXPIRE
IN 1996
DR. GLENN R. BROWN, age 64, has been a director of Nordson since 1986. He is a
retired Senior Vice President and Director of The Standard Oil Company (now BP
America, Inc.). He served as Vice Provost for Corporate Research and Technology
Transfer of Case Western Reserve University from January 1991 to July 1993 and
Dean of the Colleges of Case Western Reserve University from August 1987 to
January 1991. He is a director of Ferro Corporation, a producer of industrial
specialty materials.
DR. ANNE O. KRUEGER, age 60, has been a director of Nordson since 1990. She has
been a Professor of Economics at Stanford University since July 1993 and a
Professor of Economics at Duke University from January 1987 to June 1993. She is
a director of Western Digital Corporation, an international supplier of large
scale integrated chips and board-level subsystems and systems.
ERIC T. NORD, age 77, has been a director of Nordson since 1941. He has served
as Chairman of the Board of
3
<PAGE> 8
Nordson for more than five years. Eric Nord is Evan Nord's brother.
COMMITTEES OF THE BOARD OF DIRECTORS;
ATTENDANCE
The present members of the Audit Committee are Messrs. Ginn and Evan Nord and
Drs. Brown, Kamm and Krueger. The Audit Committee reviews the proposed audit
programs (including both independent and internal audits) for each fiscal year,
the results of these audits, and the adequacy of Nordson's systems of internal
control. The Committee also recommends to the Board of Directors the appointment
of the independent auditors for each fiscal year. The Audit Committee met four
times during the last fiscal year.
The present members of the Compensation Committee are Messrs. Colville, Hardis,
Eric Nord and Dr. Krueger. The Compensation Committee recommends to the Board of
Directors the salary and other compensation of Nordson's President and Chief
Executive Officer, approves salary increases for other executive officers,
supervises the administration of Nordson's 1993 Long-Term Performance Plan (the
"Performance Plan"), Management Incentive Compensation Plan (the "Bonus Plan"),
Excess Defined Benefit Pension Plan, Excess Defined Contribution Retirement
Plan, and other pension and retirement plans. The Compensation Committee met
three times during the last fiscal year.
The present members of the Nominating Committee are Messrs. Hardis, Madar, Eric
Nord and Dr. Brown, with Mr. Madar being a nonvoting member. The Nominating
Committee screens and nominates candidates for election as directors and
recommends committee members for appointment by the Board of Directors. A
shareholder who wishes to suggest a director candidate for consideration by the
Nominating Committee should send a resume of the candidate's business experience
and background to Mr. Madar at Nordson.
4
<PAGE> 9
The Nominating Committee met once during the last fiscal year.
During the last fiscal year, each director attended at least 75% of the meetings
of the Board of Directors and of the committees on which he or she served.
COMPENSATION OF DIRECTORS
Nordson pays directors who are not employees a fee of $4,500 per quarter, $1,000
for each Board meeting attended and, unless the committee meeting is held on the
same day as a Board meeting, $1,000 for each committee meeting attended with an
additional $400 per quarter for committee chairmen.
Directors may defer all or part of their fees until retirement under the
Performance Plan. The fees may be deferred as cash and credited with interest at
a U.S. Treasury rate, or they may be translated into stock equivalents based on
the market price of Nordson Common Shares when the fees are earned and credited
with additional stock equivalents when dividends are paid.
Each non-employee director was granted a Director Option on March 10, 1992. Any
new non-employee director will be granted a Director Option at the time of
appointment or election. Such directors who continue in office will receive an
additional Director Option five years after the previous Director Option was
granted.
5
<PAGE> 10
<TABLE>
OWNERSHIP OF NORDSON COMMON SHARES
The following table shows the number and percent of Nordson Common Shares
beneficially owned on January 10, 1995 by each of the directors, each of the
executive officers named in the Summary Compensation Table set forth on page 14,
and by all directors and executive officers as a group.
<CAPTION>
Number of
Name Shares (1) Percent
- - ----------------------------- ---------- -------
<S> <C> <C>
Dr. Glenn R. Brown 7,772 0.0%
William W. Colville 7,235 0.0%
William D. Ginn (2)(3)(4)(5) 815,393 4.4%
Stephen R. Hardis 23,134 0.1%
Dr. Jacob O. Kamm 103,937 0.6%
Dr. Anne O. Krueger 2,797 0.0%
William P. Madar (8) 439,618 2.4%
Evan W. Nord (3)(6)(7) 2,815,447 15.3%
Eric T. Nord (3)(4)(6) 2,469,403 13.4%
Edward P. Campbell (8) 85,275 0.5%
John E. Jackson (8) 102,928 0.6%
Werner Bohm (8) 36,742 0.2%
Yoshihiko Miyahara (8) 32,637 0.2%
21 directors and executive 7,317,726 38.5%
officers as a group (9)
<FN>
- - ---------------
(1) Except as otherwise stated in notes (2) through (9) below, beneficial
ownership of the shares held by each of the directors, executive officers
and nominees consists of sole voting power and sole investment power, or of
voting power and investment power that is shared with the spouse of the
nominee or director. Beneficial ownership of the shares held by the
non-employee directors (other than Dr. Kamm) includes the right to acquire
437 shares on or before March 9, 1995 under the Director Option provisions
of the Per-
6
<PAGE> 11
formance Plan, as well as the right to acquire the following number of
shares under the Directors Deferred Compensation provisions of the
Performance Plan: Dr. Brown, 5,885 shares; Mr. Colville, 4,198 shares; Mr.
Hardis, 10,697 shares; Dr. Krueger, 2,360 shares; and Eric Nord, 6,587
shares.
(2) These include 184,174 shares held by Mr. Ginn as trustee of various trusts
for the children and grandchildren of Eric Nord and Evan Nord.
(3) These include 366,058 shares held by The Nord Family Foundation. As trustees
of this foundation, Eric Nord, Evan Nord and Mr. Ginn have shared voting
power and shared investment power with respect to these shares.
(4) These include 80,000 shares held by the Eric and Jane Nord Foundation. As
trustees of this foundation, Eric Nord and Mr. Ginn have shared voting power
and shared investment power with respect to these shares.
(5) These include 6,000 shares held by the Ginn Family Fund. As a trustee of
this fund, Mr. Ginn has shared voting power and shared investment power with
respect to these shares.
(6) These include 1,002,780 shares held by Eric Nord and Evan Nord as
testamentary trustees under the will of Walter G. Nord, the founder of
Nordson. Eric Nord and Evan Nord have shared voting power and shared
investment power with respect to these shares.
(7) These include 500,000 shares held by the Cynthia W. Nord Charitable
Remainder Unitrust. As trust advisor of that trust Evan Nord has voting
power with respect to these shares.
(8) These include the right to acquire shares on or before March 9, 1995 in
amounts as follows: Mr. Madar, 220,148 shares; Mr. Campbell, 82,100
7
<PAGE> 12
shares; Mr. Jackson, 80,900 shares; Mr. Bohm, 12,000 shares; and Mr.
Miyahara, 14,625 shares.
(9) These include the shares held by The Nord Family Foundation. Beneficial
ownership of the shares held by each of the directors and officers as a
group consists of sole voting power with respect to 5,000 shares, sole
voting and sole investment power with respect to 2,586,289 shares, shared
voting power and shared investment power with respect to 4,089,813 shares,
and the right to acquire 636,624 shares on or before March 9, 1995.
</TABLE>
As of October 30, 1994, present and former directors, officers, and employees of
Nordson and their families beneficially owned over 11 million Nordson Common
Shares, representing more than 60% of the outstanding shares. Nordson is party
to an agreement that, with some exceptions, gives Nordson a right of first
refusal with respect to proposed sales of Nordson Common Shares by Evan Nord and
Eric Nord, individually or as testamentary trustees, Mr. Ginn, as trustee, and
The Nord Family Foundation.
Section 16(a) of the Securities Exchange Act of 1934 requires directors and
executive officers of Nordson and persons who own more than ten percent of
Nordson's common shares to file reports of ownership and changes in ownership of
Nordson common shares held by them with the Securities and Exchange Commission
("SEC"). Those officers, directors and greater than ten-percent shareholders are
required by the SEC to furnish Nordson with copies of all Section 16(a) forms
filed by them.
Based on its review of the copies of the Section 16(a) forms received by it, the
Company believes that, during the fiscal year ended October 30, 1994, all filing
requirements applicable to its officers, directors, and greater than ten-percent
shareholders were met except that one gift transaction and an acquisition
transaction
8
<PAGE> 13
under the Nordson dividend reinvestment program by Yoshihiko Miyahara were
inadvertently omitted from Mr. Miyahara's Form 5 filing for the year ended
October 30, 1994, but subsequently reported on an amended Form 5 filing.
Additionally, a transfer of Nordson shares from Evan Nord to a trust (which may
be deemed to be required to file Section 16(a) reports) for the benefit of Evan
Nord, who is also the trustee of the trust, was reported on a late Form 3
filing.
COMPENSATION OF EXECUTIVE OFFICERS
COMPENSATION COMMITTEE REPORT ON
EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors, each
member of which is a non-employee director, is responsible for approving
executive management compensation and for administering the incentive and equity
participation plans which make up the variable compensation paid to executive
officers ("Officers"). The Committee also administers employee stock plans and
certain other benefit plans.
The Committee and the Board believe that the executive management compensation
program should support the goals and objectives of the Company. These goals and
objectives should balance the importance of annual financial performance with
the equally important creation and protection of long-term fundamentals which
support long-term growth and profitability.
Nordson's executive management compensation program:
-- establishes compensation performance objectives that are directly linked to
corporate goals;
-- provides a high degree of leverage between compensation and corporate
performance;
-- creates long-term incentives directly linked to shareholder returns; and
9
<PAGE> 14
-- is designed to attract, retain and motivate key executives.
Total Cash Compensation
Nordson's corporate goal is to double the value of the Company over a five-year
period, with the primary value set by the market for Company shares. Two annual
performance objectives to support the achievement of this goal have been
established: 1) an annual return on average invested capital of 16%; and 2)
earnings per share growth of 15% per year.
The Committee believes that consistent achievement of these two objectives will
lead to doubling the value of the Company over a five-year period. The Officer
cash compensation program, which consists of a fixed annual base salary plus an
annual cash bonus, is designed to link directly to the achievement of these two
annual performance objectives.
In establishing the Officer cash compensation levels, the Committee uses a peer
group of approximately 250 manufacturing companies having similar sales volume
and/or market value. This is a changing group of companies, with which Nordson
would compete for Nordson executive talent or be a source from which future
executives might be recruited.
This comparison group of companies is not identical to the companies included in
the S&P 500 Index or the S&P Diversified Manufacturing Index used in the
performance graph appearing on page 23. Nordson believes that these indices are
a useful comparison for purposes of comparing Nordson's share price performance
to the performance of a broad group of comparable companies. However, the
companies included in these indices are not necessarily companies with which
Nordson competes for executive talent or that would be a source from which
future executives may be recruited, and are therefore an inappropriate group of
10
<PAGE> 15
companies for purposes of establishing cash compensation levels.
The Officer cash compensation program is designed such that if Nordson's
financial performance is equal to the median financial performance of the peer
group of companies, each Officer's total cash compensation will be less than the
median compensation for similar positions in the peer group. As Nordson
performance increases above the median for the peer group, Officer total cash
compensation will increase correspondingly such that the percentile ranking of
each Officer's total cash compensation will correlate with the percentile
ranking of Nordson performance.
Base Salary
Officers' base salaries are targeted at the 50th percentile salary for similar
positions within the peer group of companies. The Committee reviews the
competitiveness of Officers' base salaries annually and if appropriate, salaries
are changed based upon individual performance, competitive position and salary
practices of the peer group companies.
Annual Cash Bonus
The bonus portion of cash compensation is paid pursuant to the existing Bonus
Plan and is highly leveraged to achievement of the two corporate performance
objectives.
Seventy percent of the cash bonus eligibility is based on the return on average
invested capital component of the plan, with a bonus being paid if Nordson's
annual return is at least 8%, and attaining its maximum when the return reaches
20%. The remaining 30% of the cash bonus eligibility is based on the earnings
per share component, with a bonus being paid if Nordson's earnings per share
growth is positive, and attaining its maximum when growth reaches 30%.
11
<PAGE> 16
Nordson achieved a 1994 return on average invested capital of 20% which exceeded
the corporate objective of 16%. Earnings per share growth equaled the 15% goal.
Since performance exceeded the threshold payment level, Mr. Madar and the other
Officers were paid bonuses based upon the factors described above.
Stock Options
The Committee believes that through the use of stock options, Officer interests
are directly tied with those of the Company's shareholders.
Officers are issued stock option grants annually with an exercise price equal to
the fair market value of the shares on the date of grant. These options are not
fully exercisable until four years following the date of grant and expire in ten
years, to reinforce a long-term perspective and to help retain key executives.
The intent is to provide stock option grants competitive with those offered to
similar positions within the peer group of companies.
Deduction Limitation on Executive Compensation
The recently enacted Revenue Reconciliation Act of 1993 precludes a
publicly-held corporation from taking a deduction for certain compensation in
excess of $1 million paid or accrued with respect to certain of the Officers.
These provisions became effective for the Company's tax year beginning October
31, 1994.
On October 27, 1994, the Committee adopted the Nordson Corporation 1995
Management Incentive Compensation Plan (the "1995 Bonus Plan"). Subject to
shareholder approval at the Annual Meeting, the Committee believes that the 1995
Bonus Plan satisfies the Internal Revenue Service's requirements for
"performance-based" compensation which would not be subject to the deductibility
limitation under currently proposed Internal Revenue Service regulations. As
discussed under the heading "Proposal" beginning on
12
<PAGE> 17
page 26, the 1995 Bonus Plan is being submitted to shareholders for approval at
the Annual Meeting. The Committee will continue to monitor its compensation
policy, including compensation, if any, paid under the 1995 Bonus Plan, for
deductibility under these regulations.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS:
William W. Colville, Chairman
Stephen R. Hardis
Dr. Anne O. Krueger
Eric T. Nord
January 27, 1995
13
<PAGE> 18
<TABLE>
SUMMARY COMPENSATION TABLE
The following table sets forth individual compensation information for the fiscal year ended October 30, 1994,
for William P. Madar, and the four other most highly compensated executive officers whose total annual salary
and bonus for the fiscal year ended October 30, 1994 exceeded $100,000:
<CAPTION>
Long-Term Compensation
--------------------------
Annual Compensation
-------------------------------------- Awards
Other --------------------------
Name Annual Restricted All Other
And Principal Salary Bonus Compensation Stock Awards Options/ Compensation
Position Year ($) ($) ($) ($) SARs (#) ($) (1)
- - ------------------------------- ---- -------- -------- ------------ ------------ --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
William P. Madar 1994 600,000 648,000 646,117(2) 0 75,000 75,134
President & 1993 565,150 505,000 929,943(2) 0 50,000 101,028
CEO 1992 536,705 516,954 1,560,000(3) 19,341
Edward P. Campbell 1994 253,000 249,000 0 0 16,000 24,890
Executive Vice President 1993 214,000 155,500 0 0 16,000 35,810
& Chief Operating Officer 1992 195,000 188,000 0 14,000
John E. Jackson 1994 230,000 202,000 0 0 16,000 25,006
Senior Vice President 1993 214,000 155,500 0 0 16,000 35,913
1992 195,000 188,000 0 14,000
Werner Bohm 1994 220,000 193,000 0 0 16,000 20,417
Senior Vice President 1993 200,000 145,000 72,229(4) 0 16,000 27,117
1992 170,000 170,000 0 14,000
Yoshihiko Miyahara (5) 1994 310,707 79,350 0 0 10,500 0
Vice President 1993 269,565 72,444 0 0 10,500 0
1992 235,147 54,868 0 9,000
<FN>
14
<PAGE> 19
- - ---------------
(1) Includes in each case, employer matching and allocations made to Nordson
Corporation's Employee Savings Trust Plan and Supplemental Plan, and
Nordson's Employee Stock Ownership Plan and Supplemental Plan, as follows:
Mr. Madar, $32,285 and $42,849; Mr. Campbell, $11,168 and $13,722; Mr.
Jackson, $11,168 and $13,838; and Mr. Bohm, $7,500 and $12,917,
respectively.
(2) Represents a tax gross-up payment associated with restricted stock, granted
under the employment agreement with Mr. Madar dated January 30, 1986, which
is a direct function of the appreciation in Nordson share price.
(3) Amount shown for Mr. Madar represents the dollar value on the date of grant
of 30,000 shares of restricted stock (none of which was restricted as of
October 30, 1994) awarded during fiscal year 1992 under his January 1986
employment agreement prior to its amendment. (See "Agreements with
Officers," beginning on page 24.)
(4) Represents a tax equalization payment associated with an expatriate
assignment.
(5) Mr. Miyahara's salary and bonus are stated in U.S. Dollars and reflect the
average annual Japanese Yen exchange rate in effect during each of the
fiscal years noted.
</TABLE>
15
<PAGE> 20
<TABLE>
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding individual grants of stock options/SARs made during the
fiscal year ended October 30, 1994 to each executive officer named in the Summary Compensation Table:
<CAPTION>
INDIVIDUAL GRANTS
- - ---------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (1) (2) FISCAL YEAR ($/SHARE) DATE ($) (3)
- - ------------------------------------- --------------- ------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
William P. Madar 75,000 23.6% 53.50 11/01/2003 1,791,000
Edward P. Campbell 16,000 5.0% 53.50 11/01/2003 382,080
John E. Jackson 16,000 5.0% 53.50 11/01/2003 382,080
Werner Bohm 16,000 5.0% 53.50 11/01/2003 382,080
Yoshihiko Miyahara 10,500 3.3% 53.50 11/01/2003 250,740
<FN>
- - ---------------
(1) All options become exercisable beginning one year after grant date at 25% per year on a cumulative
basis. The exercise price was equal to the fair market value on the date of grant. The exercise price and
tax withholding obligations related to the exercise may be paid by cash, delivery of already owned shares,
or by offset of the underlying shares, or any combination thereof.
16
<PAGE> 21
(2) No stock appreciation rights ("SARs") were granted to any employee other
than stock appreciation rights ("Limited Rights") that become exercisable
only upon the occurrence of a change in control of Nordson.
(3) These values were calculated using a Black-Scholes option pricing model. The
Black-Scholes model is a complicated mathematical formula which is widely
used and accepted for valuing traded stock options. The actual value, if
any, an executive may realize will depend on the excess of the stock price
over the exercise price on the date the options are exercised, and no
assurance exists that the value realized by an executive will be at or near
the value estimated by the Black-Scholes model. The following assumptions
were used in the calculations:
(a) Exercise at any time;
(b) Volatility factor: 30.9%;
(c) Assumed risk-free rate of interest: 4.6%;
(d) Dividend of $.14 per share per quarter; and
(e) No reduction in the value calculated has been made for possible
forfeitures.
</TABLE>
17
<PAGE> 22
<TABLE>
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information regarding each exercise of stock options/SARs during the fiscal year
ended October 30, 1994, by each executive officer named in the Summary Compensation Table, and the value
of unexercised stock options/SARs held by each executive officer named in the Summary Compensation Table:
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS/SARS AT OPTIONS/SARS AT
SECURITIES FY-END (#) FY-END($)
UNDERLYING VALUE
OPTIONS/SARS REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISED ($)(1) UNEXERCISABLE UNEXERCISABLE(2)
- - ------------------------------------- ------------- ------------ ----------------- -----------------
<S> <C> <C> <C> <C>
William P. Madar 6,400 298,368 188,395/ 5,255,346/
92,838 570,184
Edward P. Campbell 0 0 70,600/ 2,246,700/
35,000 277,500
John E. Jackson 2,200 108,900 69,400/ 2,288,100/
35,000 277,500
Werner Bohm 7,200 189,800 15,000/ 290,500/
35,000 277,500
Yoshihiko Miyahara 15,801 410,476 10,325/ 210,700/
22,875 180,750
<FN>
18
<PAGE> 23
- - ---------------
(1) Represents the difference between the option exercise price and the last
sales price of a common share on the NASDAQ National Market System on the
date prior to exercise.
(2) Based on the last sales price of the common shares of $57.00 on the NASDAQ
National Market System on October 28, 1994. The ultimate realization of
profit on the sale of the common shares underlying such options is dependent
upon the market price of such shares on the date of sale.
</TABLE>
19
<PAGE> 24
<TABLE>
SALARIED EMPLOYEES' PENSION PLAN
Benefits under the U.S. Salaried Employees' Pension Plan are based on average
annual compensation (salaries, commissions, and incentive bonuses) for the
highest five years during the last 10 years of employment prior to retirement.
The following table shows the annual benefit payable under the Plan at age 65.
<CAPTION>
Final
Average Years of Benefit Service
Annual --------------------------------------------------------------------------------
Compensation 10 15 20 25 30
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
$ 100,000 $ 13,744 $ 20,618 $ 27,488 $ 34,362 $ 41,236
200,000 28,743 43,118 57,485 71,861 86,236
300,000 50,407 75,618 100,814 126,025 151,236
500,000 87,070 130,618 174,140 217,668 261,236
800,000 142,065 213,118 284,129 355,182 426,236
1,100,000 197,059 295,618 394,118 492,677 591,236
1,400,000 252,054 378,118 504,107 630,171 756,236
1,700,000 307,048 460,618 614,096 767,666 921,236
1,900,000 343,711 515,618 687,422 859,329 1,031,236
2,100,000 380,374 570,618 760,748 950,992 1,141,236
2,200,000 398,705 598,118 797,410 996,823 1,196,236
2,300,000 417,037 625,618 834,074 1,042,655 1,251,236
2,400,000 435,368 653,118 870,737 1,088,486 1,306,236
</TABLE>
The amounts shown in the table represent the annual benefit (after reduction for
Social Security payments) payable to an employee for life. Certain surviving
spouse benefits are also available under the Plan, as well as early retirement
benefits. The table has been prepared without regard to benefit limitations
imposed by the Internal Revenue Code of 1986, as amended (the "Internal Revenue
Code"). The years of benefit service credited under the Plan as of October 30,
1994 for the executive officers named in the Summary Compensation Table who
participate in the Plan are as follows: Mr. Madar - 8 years; Mr. Campbell - 6
years; Mr. Jackson - 8 years; and Mr. Bohm - 17 years. Mr. Miyahara is not
included in the pension plan described above but is covered by a pension
arrangement that is specific to Nordson K.K., the Japanese subsidiary.
20
<PAGE> 25
EXCESS DEFINED BENEFIT PENSION PLAN AND
EXCESS DEFINED CONTRIBUTION RETIREMENT PLAN
The Internal Revenue Code limits the benefits provided under the Salaried
Employees' Pension Plan, the amount that an employee can contribute to the
Employees' Savings Trust Plan, and the amount that Nordson can contribute on
behalf of an employee under the Employees' Savings Trust Plan and the Employee
Stock Ownership Plan.
The Excess Defined Benefit Pension Plan provides for the payment, out of
Nordson's general funds, of the amount by which certain participants' benefits
under the Salaried Employees' Pension Plan would exceed the limitations
applicable to that Plan. The terms of payment under the Excess Defined Benefit
Pension Plan are the same as those under the Salaried Employees' Pension Plan.
The table on page 20, which does not reflect benefit limitations imposed by the
Internal Revenue Code, shows the aggregate annual pension benefits payable under
both the Salaried Employees' Pension Plan and the Excess Defined Benefit Pension
Plan.
The Excess Defined Contribution Retirement Plan provides for the payment, out of
Nordson's general funds, of the amount by which the participant's contributions
under the Employees' Savings Trust Plan and Nordson's contributions to the
Employees' Savings Trust Plan and the Employee Stock Ownership Plan would exceed
the limitations applicable to those Plans. Salaried employees who are designated
by the Compensation Committee and who participate in the Employees' Savings
Trust Plan or the Employee Stock Ownership Plan are eligible to participate in
the Excess Defined Contribution Retirement Plan. Payments under the Excess
Defined Contribution Retirement Plan may be made either in lump sum or in
monthly installments over a two-year period. The Compensation Committee ad-
21
<PAGE> 26
ministers the Excess Defined Contribution Retirement Plan.
Benefits under the Excess Defined Contribution Retirement Plan resulting from
the Internal Revenue Code limitations applicable to the Employees' Savings Trust
Plan will be paid in cash, and benefits resulting from the Internal Revenue Code
limitations applicable to the Employee Stock Ownership Plan will be paid in
Nordson Common Shares. The amount to be paid in Nordson Common Shares is based
on the benefits that participating employees would have received under the
Employee Stock Ownership Plan if the Internal Revenue Code Limitations
applicable to that plan had not been in effect.
The portions of Nordson's contributions under the Excess Defined Contribution
Retirement Plan allocated to the accounts of the executive officers named in the
compensation table except Mr. Miyahara, who does not participate in the plan,
and to all current executive officers as a group during the fiscal year ended
October 30, 1994 are as follows: Mr. Madar - $27,788 and 510 shares; Mr.
Campbell - $6,671 and 82 shares; Mr. Jackson - $6,671 and 82 shares; Mr. Bohm -
$425 and 68 shares; and all current executive officers as a group - $62,764 and
826 shares.
PERFORMANCE GRAPH
The following is a graph which compares the five year cumulative return from
investing $100 on October 29, 1989 in each of Nordson Corporation common stock,
the S&P 500 Index of companies and the S&P Diversified Manufacturing Index of
companies, with dividends assumed to be reinvested when received. In prior years
Nordson used the S&P Capital Goods Index rather than the S&P Diversified
Manufacturing Index. The S&P Capital Goods Index does not report reinvestment of
dividends while both Nordson and the S&P 500 Index, as well as the S&P
Diversified Manufacturing Index,
22
<PAGE> 27
reflect reinvestment of dividends. If the S&P Capital Goods Index used in 1993
had been used in 1994 instead of the S&P Diversified Manufacturing Index, the
levels for the index in the chart would have been as follows: 1989 -- $100, 1990
- - -- $86, 1991 -- $109, 1992 -- $109, 1993 -- $119, and 1994 -- $136.
<TABLE>
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG NORDSON CORPORATION, S&P 500 INDEX AND
S&P DIVERSIFIED MANUFACTURING INDEX
<CAPTION>
S&P DIVERSIFIED
MEASUREMENT PERIOD MANUFACTURING
(FISCAL YEAR COVERED) NORDSON CORP. S&P 500 INDEX INDEX
<S> <C> <C> <C>
1989 100 100 100
1990 74 93 89
1991 163 124 125
1992 181 136 136
1993 209 156 165
1994 221 162 182
<FN>
* Assumes $100 invested on October 29, 1989 in Nordson Corporation, S&P 500
Index, and S&P Diversified Manufacturing Index. Total return assumes
reinvestment of dividends.
</TABLE>
23
<PAGE> 28
AGREEMENTS WITH OFFICERS
In January 1986, Nordson entered into an employment agreement with Mr. Madar.
The agreement had an initial five-year term, and was extended automatically for
additional one-year terms unless terminated by either party upon certain
conditions. The agreement was amended in March 1993 and conformed the method for
determining Mr. Madar's cash compensation beginning in fiscal year 1994 to that
used to establish the cash compensation for the other executive officers. As
amended, the agreement provides for the continued employment of Mr. Madar until
terminated by either party upon certain conditions.
Under the amended agreement, Mr. Madar's annual cash compensation beginning
fiscal year 1994, which consists of an annual base salary and incentive
compensation under the Bonus Plan, is determined annually by the Compensation
Committee of the Board of Directors as described on pages 11 and 12. Mr. Madar
is also eligible to receive grants of stock options during his employment term,
as well as benefits and perquisites generally provided by the Company to its
executive officers.
The amended agreement provides that Mr. Madar will receive a supplemental
pension benefit that, in effect, maintains the benefits he would have received
if he had remained with his former employer, and this benefit is essentially
unchanged from the unamended January 1986 agreement. The amount of the benefit
is equal to a percentage of his highest annual compensation (base salary and
incentive compensation) over the 36 consecutive month period producing the
highest average compensation reduced by the sum of the benefits payable under
the pension plans of Nordson and his former employer and one-half of his
estimated Social Security benefit. The percentage will be 56%, subject to
reduction if the total number of years of employment with Nordson and his former
employer is less than 35.
24
<PAGE> 29
(Mr. Madar had 20 and 2/3 years of employment with his former employer). The
benefit will also be reduced by 5% per year for retirement before age 60. The
benefit may, at Mr. Madar's election, be paid in a lump sum or in any other form
permitted under the Salaried Employees' Pension Plan. Mr. Madar is, under some
circumstances, entitled to the continuation of certain compensation and benefits
upon the termination of his employment or because of his death or disability.
Nordson has also agreed to provide Mr. Jackson with a supplemental pension
benefit in order to restore the benefits he would have received if he had
remained with his former employer. This benefit is calculated on the same basis
as Mr. Madar's supplemental pension benefit. Mr. Jackson had 14 years of
employment with his former employer.
Nordson has also agreed to provide Mr. Campbell with a supplemental pension
benefit in order to restore some of the benefits he would have received if he
had remained with his former employer. Mr. Campbell's supplemental pension
benefit will equal the amount by which his pension benefit under the Salaried
Employees' Pension Plan would be increased if his prior service with his former
employer were recognized under the plan. His highest average annual compensation
and reduction in benefit if he retires before age 60 will be calculated on the
same basis as under Mr. Madar's and Mr. Jackson's supplemental pension benefits.
Mr. Campbell's amount of benefit will also be reduced by the benefits payable
under his former employer's pension plan. Mr. Campbell had 11 years of
employment with his former employer.
25
<PAGE> 30
PROPOSAL
Approval of the Nordson Corporation 1995
Management Incentive Compensation Plan
On October 27, 1994, the Committee adopted the "1995 Bonus Plan" and the Board
of Directors recommended that the 1995 Bonus Plan be approved by the
shareholders at the Annual Meeting. The effectiveness of the 1995 Bonus Plan is
contingent on shareholder approval at the Annual Meeting.
The amendments in 1993 to the Internal Revenue Code adding Section 162(m) to the
Internal Revenue Code and the proposed regulations promulgated thereunder
provide that certain employee compensation for years beginning after December
31, 1993 in excess of $1,000,000 will not be deductible for federal income tax
purposes. Section 162(m), however, enumerates certain types of compensation
which will not be subject to the $1,000,000 limitation, including "performance-
based" compensation. Among other requirements, Section 162(m) requires that in
order for compensation to qualify as performance-based, the material terms of
the compensation and the performance goals on which payment of such compensation
is conditioned must be disclosed to and approved by the shareholders before
payment is made.
Nordson's existing Bonus Plan and the performance goals thereunder have not been
approved by shareholders and, consequently, awards under the existing Bonus Plan
cannot qualify as "performance-based" as defined under Section 162(m). Awards
under the existing Bonus Plan for the fiscal year ended October 30, 1994 and
deducted by Nordson in such year are not subject to Section 162(m) because that
fiscal year began prior to December 31, 1993. Compensation paid for the
subsequent fiscal years, however, will be subject to the Section 162(m)
limitations.
26
<PAGE> 31
The 1995 Bonus Plan is designed to provide for compensation which will, subject
to shareholder approval of the 1995 Bonus Plan, qualify as "performance-based"
compensation under Section 162(m). In the event that shareholders do not approve
the 1995 Bonus Plan, no awards will be made under the 1995 Bonus Plan, although
other incentive awards may, subject to the considerations discussed above under
the heading "COMPENSATION OF EXECUTIVE OFFICERS -- Compensation Committee Report
on Executive Compensation" beginning on page 9, be paid in the future at the
discretion of the Committee.
The Board believes that approval of the 1995 Bonus Plan will benefit Nordson and
its shareholders by enabling Nordson to continue to attract and retain
outstanding employees who can contribute to the continued growth and
profitability of Nordson and to award those employees who do in fact so
contribute.
The 1995 Bonus Plan is substantially similar to the Bonus Plan currently in
place and discussed above under the heading "COMPENSATION OF EXECUTIVE
OFFICERS -- Compensation Committee Report on Executive Compensation" beginning
on page 9 except that certain amendments have been made in order to provide that
the compensation awarded under the 1995 Bonus Plan will quality as
performance-based under Section 162(m).
These amendments include limitation of an Incentive Award to a participant for
any Plan Year to 150% of base salary earnings, maximum dollar amounts for
Incentive Awards to any participant in any Plan Year, and elimination of
discretionary upward adjustment of Incentive Awards to participants by the
Committee. While benefits, if any, to be paid under the 1995 Bonus Plan are not
yet determinable, amounts paid for the fiscal year ended October 30, 1994 under
the existing Bonus Plan for each of William P. Madar, Edward P. Campbell, John
E. Jackson, Werner Bohm and
27
<PAGE> 32
Yoshihiko Miyahara are shown under the heading "Bonus" in the Summary
Compensation Table set forth on page 14 and amount paid for all executive
officers (including those foregoing named executive officers) as a group was
$2,583,707.
If approved by the shareholders, the 1995 Bonus Plan will be effective for the
fiscal year which began on October 31, 1994 and for each fiscal year thereafter
until terminated. A copy of the 1995 Bonus Plan is attached as Appendix A to
this Proxy Statement and this summary of the material terms of the 1995 Bonus
Plan is qualified in its entirety by reference to Appendix A.
The Committee can amend the 1995 Bonus Plan to the extent necessary to treat the
compensation payable pursuant to the 1995 Bonus Plan as qualified
performance-based compensation exempt from the non-deductible limitation of
Section 162(m) of the Internal Revenue Code.
The 1995 Bonus Plan will be administered by the Committee and will remain in
effect until terminated by the Committee.
For each fiscal year during the term of the 1995 Bonus Plan (a "Plan Year"), on
or before the 90th day of the Plan Year, the Committee will determine the
participants in the 1995 Bonus Plan for the Plan Year and establish target
levels of cash bonuses, or "Incentive Awards", to be awarded to participants
upon the achievement by the Corporation of certain pre-determined financial
performance goals. At the October 27, 1994 meeting of the Committee these
determinations were made for the current Plan Year.
Participants and proposed target awards for each Plan Year will be recommended
to the Committee by Nordson's Chief Executive Officer at the beginning of each
Plan Year and the Committee shall approve or, at its discretion, modify those
recommendations. Executive
28
<PAGE> 33
officers of Nordson holding any of the positions specified in Exhibit 1 to the
1995 Bonus Plan who are in a position to make significant contributions to the
financial success of Nordson will be eligible to participate in the 1995 Bonus
Plan. Incentive Awards will be based on a percentage (not to exceed 150%) of
each participant's base salary earnings for the applicable Plan Year, provided
that the maximum annual dollar award to any participant for the Plan Year which
began on October 31, 1994 will be $950,000 and the maximum dollar award for each
subsequent plan year will be 107% of the immediately preceding Plan Year. For
example, the maximum annual dollar award for the 1996 Plan Year is $1,016,500,
and for the 1997 Plan Year is $1,087,655. Carrying this example forward, the
maximum award for the 2005 Plan Year would be $1,868,794.
Under the 1995 Bonus Plan, two financial performance components have been
established for use in determining whether or not awards will be made under the
1995 Bonus Plan and, if so, the amount of any Incentive Awards. These two
performance goals, against which Nordson's financial performance will be
measured are Return on Average Invested Capital ("ROAIC") and Profitability
(measured by earnings per share) ("EPS"). If the specified minimum performance
goals are achieved (8% ROAIC and EPS equal to or greater than the previous
fiscal year), an Incentive Award may be made.
Subject to the limitation discussed above, the amount of the Incentive Award
will be based on the actual ROAIC and EPS percentages achieved, with ROAIC
comprising a 70% weighting in the award and EPS comprising a 30% weighting in
the award.
The amount of the Incentive Award otherwise payable under the 1995 Bonus Plan
may, in the discretion of Committee, be reduced by up to 20% based on individual
performance.
29
<PAGE> 34
Following the end of the each Plan Year, the Committee will determine each
participant's Incentive Award, if any, based on Nordson's performance against
the foregoing pre-established performance goals and will certify achievement of
those goals prior to payment of any award. Payment of Incentive Awards, if any,
will be made in the year following the Plan Year in which the Incentive Award
was earned.
The Board recommends a vote "FOR" adoption of the 1995 Bonus Plan.
Approval of the 1995 Bonus Plan requires the affirmative vote of the holders of
at least a majority of the votes cast (including abstentions and broker non-
votes) on the proposal.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
Eric Nord, who serves on the Compensation Committee, was formerly President and
Chief Executive Officer of the Company.
INDEPENDENT AUDITORS
Ernst & Young LLP has been appointed as Nordson's independent auditors for the
fiscal year ending October 29, 1995. Ernst & Young LLP or a predecessor has
served as Nordson's independent auditors since 1935. A representative of Ernst &
Young LLP is expected to be present at the meeting. The representative will be
given an opportunity to make a statement if desired and to respond to questions
regarding Ernst & Young LLP's examination of Nordson's financial statements and
records for the fiscal year ended October 30, 1994.
30
<PAGE> 35
GENERAL
VOTING AT THE MEETING
Shareholders of record at the close of business on January 10, 1995 are entitled
to vote at the meeting. On that date, a total of 18,365,253 Nordson Common
Shares were outstanding. Each share is entitled to one vote.
Voting for directors will be cumulative if any shareholder gives notice in
writing to the President, a Vice President, or the Secretary of Nordson at least
48 hours before the time set for the meeting and an announcement of the notice
is made at the beginning of the meeting by the Chairman or the Secretary, or by
or on behalf of the shareholder giving the notice. If cumulative voting is in
effect, Nordson's shareholders will be entitled to cast, in the election of
directors, a number of votes equal to the product of the number of directors to
be elected multiplied by the number of shares that each shareholder is voting.
Nordson's shareholders may cast all of these votes for one nominee or distribute
them among several nominees, as they see fit. If cumulative voting is in effect,
shares represented by each properly signed proxy card will also be voted on a
cumulative basis, with the votes distributed among the nominees in accordance
with the judgment of the persons named in the proxy card.
Under Ohio law, directors are elected by the votes of shareholders exercising a
majority of the voting power of the corporation present at a meeting at which a
quorum is present, and proposals are adopted or approved by the vote of a
specified percentage of the voting power of the corporation. Abstentions and
broker non-votes are tabulated in determining the votes present at a meeting.
Consequently, an abstention or a broker non-vote has the same effect as a vote
against a proposal or a director nominee, as each abstention or broker non-vote
would be one less vote in favor of a proposal or for a director nominee.
31
<PAGE> 36
If any of the nominees listed on page 2 becomes unable or declines to serve as a
director, each properly signed proxy card will be voted for another person
recommended by the Board of Directors. However, the Board has no reason to
believe that this will occur.
The Board of Directors knows of no other matters that will be presented at the
meeting other than the election of directors and the proposal described above
under the heading "PROPOSAL." However, if other matters do properly come before
the meeting, the persons named in the proxy card will vote on these matters in
accordance with their best judgment.
SHAREHOLDER PROPOSALS
Any shareholder who wishes to submit a proposal to be considered for inclusion
in next year's Proxy Statement should send the proposal to Nordson on or before
October 1, 1995. Nordson will bear the expense of preparing, printing, and
mailing this Notice and Proxy Statement. In addition to requesting proxies by
mail, officers and regular employees of Nordson may request proxies by telephone
or in person. Nordson will ask custodians, nominees, and fiduciaries to send
proxy material to beneficial owners in order to obtain voting instructions.
Nordson will, upon request, reimburse them for their reasonable expenses for
mailing the proxy material.
Nordson's Annual Report to Shareholders, including financial statements for the
fiscal year ended October 30, 1994, is being mailed to shareholders of record
with this Proxy Statement.
For the Board of Directors
WILLIAM D. GINN
Secretary
January 27, 1995
32
<PAGE> 37
APPENDIX A
NORDSON CORPORATION
1995 MANAGEMENT
INCENTIVE COMPENSATION PLAN
1. PLAN OBJECTIVES
The objectives of the Plan are to advance the interests of the corporation and
its shareholders by providing executive officers incentive opportunities and to
attract, retain and motivate outstanding personnel by:
a. Providing compensation opportunities that are competitive with those of
other corporations of comparable size and value in similar businesses.
b. Focusing key executives' attention on the accomplishment of specifically
identified Corporate objectives.
c. Establishing incentive pay opportunities appropriate for various levels
of individual performance.
2. DEFINITIONS
For purposes of the Plan, the following definitions shall control:
a. "CORPORATION" -- Nordson Corporation, its Divisions and subsidiaries.
b. "BOARD" -- The Board of Directors of Nordson Corporation.
c. "COMMITTEE" -- The Compensation Committee appointed by the Board
consisting of non-employee Directors.
d. "INCENTIVE AWARD" -- Awards made by the Committee under this Plan. All
awards will be paid in cash.
-1-
<PAGE> 38
e. "PLAN" -- The 1995 Management Incentive Compensation Plan as adopted by
the Board.
f. "PLAN YEAR" -- The Corporation's fiscal year.
3. ADMINISTRATION OF THE PLAN
The Plan will be administered by the Committee. The Committee is authorized to
interpret the Plan and to establish and amend guidelines necessary for Plan
administration. Decisions and determinations of the Committee shall be binding
on all persons claiming rights under the Plan.
The Committee can amend the 1995 Bonus Plan to the extent necessary to treat the
compensation payable pursuant to the 1995 Bonus Plan as qualified
performance-based compensation exempt from the non-deductible limitation of
Section 162(m) of the Internal Revenue Code.
4. DESCRIPTION OF THE PLAN
At the end of each fiscal year the Committee establishes the base salary for
executive officers ("Officers") of the Corporation to be in effect the following
fiscal year, taking into consideration individual performance, competitive
position and salary practices of "peer group" companies. The Committee may also
adjust base salaries of Officers from time to time to reflect bona fide
promotions or changes in responsibilities. In addition to their base salary, the
Officers are also eligible for a cash bonus, the amount of which is established
in accordance with the Plan.
The Plan provides for the establishment by the Committee of target award levels
of Incentive Awards based on the Corporation's performance against specific pre-
determined performance goals. Performance goals are established on a
consolidated basis for Corporate performance for each Plan Year.
-2-
<PAGE> 39
At the beginning of each Plan Year, the Chief Executive Officer shall submit to
the Committee recommendations for the Plan Year which shall include proposed
participants and target award levels, and the Committee shall approve or modify
these recommendations on or before the 90th day of such Plan Year.
As soon as practicable after the end of the Plan Year, each participant's
Incentive Award will be determined based on performance against the
pre-established performance objectives, and the Committee will certify
achievement and approve the awards before payment is made.
5. PARTICIPANTS
Participants will be selected by the Committee each year from among the Officers
of the Corporation. Directors who are employees of the Corporation will be
eligible for inclusion.
a. Awards under this Plan may be made only to Officers of the Corporation
who are in a position to make significant contributions to the financial
success of the Corporation.
b. The Chief Executive Officer of the Corporation shall recommend to the
Committee, in writing, the Officers who are to be participants under the Plan
for each Plan Year.
c. Participants for each Plan Year shall be those Officers occupying
eligible positions as set forth in Exhibit 1, which exhibit may be amended
from time to time with approval of the Committee.
d. Employees who are promoted or hired into an eligible position set forth
on Exhibit 1 (as amended from time to time) will participate in the Plan for
such first year based on their base pay earnings (pro-rated) at the
Corporation for the Plan Year and at the target award level associated with
the position.
-3-
<PAGE> 40
e. If, during a Plan Year, a participant shifts between eligible positions
set forth on Exhibit 1 (as amended from time to time), the target award level
for such participant for such Plan Year will be the average of the target
award levels associated with each position held by the participant during the
Plan Year based on the number of days in the year that the participant held
each position.
f. In the event of termination of employment during a Plan Year by reason of
disability, retirement within the provisions of the Retirement Plan or other
policies of the Corporation, plant closing or divestiture of a business unit,
the participant shall earn a pro-rata amount based on the time employed prior
to termination during the Plan Year and upon the Corporation's actual
performance against established targets during the entire Plan Year.
g. In the event of a death of a participant during the Plan Year, the
participant's beneficiary under the Corporation's Pension Plan shall receive a
pro-rata amount based on the time employed prior to death during the Plan Year
and upon the Corporation's actual performance against established targets
during the entire Plan Year.
h. In the event of termination of employment during a Plan Year for any
other reason, participation in the Plan will be as determined by the
Committee.
6. TARGET AWARD LEVELS
a. The target award levels of annual Incentive Awards, expressed as
percentages (not to exceed 150%) of each participant's base salary earnings
during the Plan Year, will be recommended by the CEO to the Committee for
approval, provided that the maximum annual dollar award to any participant for
the Plan Year which began on October 31, 1994 will be $950,000 and the maximum
dollar award for each subsequent Plan Year will be 107% of the
-4-
<PAGE> 41
immediately preceding Plan Year. For example, the maximum annual dollar award
for the 1996 Plan Year is $1,016,500, and for the 1997 Plan Year is
$1,087,655. Carrying this example forward, the maximum award for the 2005 Plan
Year would be $1,868,794.
b. Target award levels shall be established by the Committee for each Plan
Year as stated in Section 4.
7. PERFORMANCE FACTORS
For each Plan Year, two Company performance goals have been established, and are
used in a formula for calculating individual Incentive Awards. These are as
follows:
a. Return on Average Invested Capital (ROAIC), comprising a 70% weighting in
the award calculation, with 8% ROAIC meriting a 0% performance factor, 12%
ROAIC meriting a 50% performance factor, 16% ROAIC meriting a 100% performance
factor, and 20% ROAIC and above meriting a 150% performance factor; and
b. Profitability, measured by Earnings Per Share (EPS), comprising a 30%
weighting in the award calculation, with an EPS equal to or less than the
previous year meriting a 0% performance factor, a 7.5% increase in EPS
meriting a 50% performance factor, a 15% increase in EPS meriting a 100%
performance factor, and a 30% or higher increase in Earnings Per Share over
the previous year meriting a 150% performance factor.
Weighted average performance factors will be determined for participants by the
extent of the Corporation's achievement of each of the performance goals for the
year. Intermediate points will be determined by interpolation.
-5-
<PAGE> 42
8. CALCULATION OF AWARDS
The Incentive Award of a participant for any Plan Year shall be calculated by
multiplying the base salary earnings of the participant for the Plan Year (B)
times the target award level (TA, expressed as a % of base salary) times the sum
of the Return on Average Invested Capital performance factor (ROAIC-PF)
multiplied by .7 and the Profitability performance factor (EPS-PF), multiplied
by .3. Otherwise expressed:
Incentive Award=B x TA x (ROAIC-PFx.7 + EPS-PFx.3)
9. PAYMENTS OF AWARDS
a. Incentive Awards shall be earned and payable in the local currency of the
participants and shall be paid in cash not later than the first payroll date
in January following the Plan Year in which the Incentive Award was earned.
b. The Committee will have the authority and responsibility to reduce the
actual Incentive Award payable to a participant by up to a maximum of 20% of
the calculated Incentive Award, based upon an individual participant's
performance.
c. In the event of the death of a participant, any amounts shall be paid as
soon as practicable after the end of the Plan Year to the participant's
designated beneficiary as provided in Article 5g.
d. If termination is by reason of disability or retirement within the
provisions of the Retirement Plan or other policies of the Corporation, the
date of payment shall be made as determined by the Chief Executive Officer.
10. COMMUNICATION OF THE PLAN
After performance results are known and the Committee certifies achievement, the
Chief Executive Officer, or his designee, shall communicate to each participant
-6-
<PAGE> 43
the specific performance factors, the Incentive Award levels, and the manner in
which awards will be paid.
11. TERM OF THE PLAN
The Plan will remain in effect until terminated by the Committee.
-7-
<PAGE> 44
EXHIBIT 1
NORDSON CORPORATION
1995 MANAGEMENT INCENTIVE
COMPENSATION PLAN
ELIGIBLE POSITIONS FOR 1995 PLAN YEAR
- - - President and Chief Executive Officer
- - - Executive Vice President and Chief Operating Officer
- - - Sr. Vice President
- - - Sr. Vice President
- - - Vice President
- - - Vice President
- - - Vice President
- - - Vice President
- - - Vice President -- Corporate Research and Technology
- - - Vice President -- Finance and Controller
- - - Vice President -- Law and Assistant Secretary
- - - Vice President -- Manufacturing
- - - Vice President -- Human Resources
-8-
<PAGE> 45
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN
YOUR PROXY
<PAGE> 46
NORDSON CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 9, 1995
P ----------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
R
At the Annual Meeting of Shareholders of NORDSON CORPORATION to be
O held on March 9, 1995, and at any adjournment, ERIC T. NORD, EVAN W.
NORD, and WILLIAM P. MADAR, and each of them, with full power of
X substitution and revocation, are hereby authorized to represent me
and vote all my shares on the following matters:
Y
<TABLE>
<S> <C>
1. Election of three Directors: (change of address)
William D. Ginn, Stephen R. Hardis, and Dr. Jacob O.
Kamm --------------------
2. Approval of the Nordson Corporation 1995 Management --------------------
Incentive Compensation Plan. --------------------
3. Any other matter that may properly come before this --------------------
meeting.
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOX, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE
PROXIES CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
<PAGE> 47
<TABLE>
<S> <C> <C> <C>
/ X / PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
FOR WITHHELD FOR AGAINST ABSTAIN
1. Election of / / / / 2. Approval of / / / / / /
Directors the Nordson
(see reverse) Corporation 1995
Management
Incentive
Compensation
Plan
For, except vote withheld from the following nominee(s):
- - --------------------------------------------------------
Unless otherwise specified above, this Proxy will be voted FOR the election as
Directors of the nominees noted on the reverse side and FOR the approval of the
Nordson Corporation 1995 Management Incentive Compensation Plan.
PLEASE DATE, SIGN, AND
RETURN IN THE ENCLOSED ENVELOPE --
NO POSTAGE NECESSARY
SIGNATURE(S) DATE
------------------------------------------------- ----------
SIGNATURE(S) DATE
------------------------------------------------- ----------
NOTE: Please sign exactly as name appears hereon. Joint owners should each sign.
When signing as attorney, executor, administrator, trustee or guardian, please
give full title as such.
</TABLE>
