<PAGE> 1
SCHEDULE 14A
(RULE 14a-101)
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 Rule 14a-11(c) or Rule 14a-12
</TABLE>
NORDSON CORPORATION
(NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
THOMAS L. MOORHEAD, VICE PRESIDENT, LAW AND ASSISTANT SECRETARY
(NAME OF PERSON(S) FILING PROXY STATEMENT, IF OTHER THAN THE REGISTRANT)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) 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 CORPORATION
-------------------------------------------------
Notice of 1997
Annual Meeting
and Proxy Statement
[NORDSON LOGO]
<PAGE> 3
[NORDSON LOGO]
Eric T. Nord
Chairman of the Board
William P. Madar
Vice Chairman and Chief
Executive Officer
January 31, 1997
Dear Shareholder:
You are cordially invited to attend the Annual Meeting of Shareholders to be
held at The Spitzer Conference Center, next to The Stocker Center, 1005 North
Abbe Road, Elyria, Ohio, at 5:30 p.m. on March 13, 1997. 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,
<TABLE>
<S> <C>
ERIC T. NORD WILLIAM P. MADAR
Chairman of the Board Vice Chairman and Chief
Executive Officer
</TABLE>
<PAGE> 4
NORDSON CORPORATION
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
The Annual Meeting of Shareholders of Nordson Corporation will be held at The
Spitzer Conference Center, 1005 North Abbe Road, Elyria, Ohio, at 5:30 p.m. on
March 13, 1997. The purposes of the meeting are:
1. To elect four directors to the class whose term expires in 2000.
2. To approve the Amendment to the Nordson Corporation 1993 Long-Term
Performance 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 17, 1997 are entitled
to notice of and to vote at the meeting.
For the Board of Directors
WILLIAM D. GINN
Secretary
January 31, 1997
<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 13, 1997, 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 will be voted
for the approval of the amendment to Nordson's 1993 Long-Term Performance 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 31, 1997. 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 ten directors, divided into two
classes of three members and one class of four members. The terms of these
classes as of the 1997 Annual Meeting will expire in 1998, 1999 and 2000,
respectively. Each of the directors serves for a term of three years and until a
successor is elected. The Board met seven times during the last fiscal year.
Four nominees for election as directors with terms expiring in 2000, as well as
present directors whose terms will continue after the meeting, appear below.
1
<PAGE> 6
NOMINEES FOR TERMS EXPIRING IN 2000
WILLIAM P. MADAR, age 57, has been a director of Nordson since 1985. He has
served as Vice Chairman of Nordson since August 1996 and as Chief Executive
Officer of Nordson since February 1986. From February 1986 to August 1996, Mr.
Madar also served as President of Nordson. 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 products, and The Lubrizol Corp., a manufacturer of specialty
chemicals.
WILLIAM W. COLVILLE, age 62, has been a director of Nordson since 1988. He was
Senior Vice President-Law, General Counsel, and Secretary of Owens-Corning
Fiberglas Corp. from 1984 until December 1994 and currently serves as a legal
consultant to Owens-Corning. Owens-Corning manufactures glass fiber products and
related materials. Mr. Colville is a director of Owens-Corning.
EVAN W. NORD, age 77, has been a director of Nordson or its predessor 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.
EDWARD P. CAMPBELL, age 47, was elected by the Board of Directors on August 2,
1996 to serve in a newly-created director position. He has served as President
and Chief Operating Officer of Nordson since August 1996. Mr. Campbell was
Executive Vice President and Chief Operating Officer of Nordson from 1994 to
August 1996, and was a Vice President of Nordson from 1988 to 1994. He is a
director of Victory Portfolios, Inc. and Key Funds, Inc., public investment
companies.
2
<PAGE> 7
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 1998
WILLIAM D. GINN, age 73, has been a director of Nordson since 1959. Mr. Ginn has
been Of Counsel to Thompson Hine & Flory LLP, a law firm, since January 1993.
Prior to that time he was a Partner with Thompson Hine & Flory LLP for more than
five years. He is a director of the Davey Tree Expert Company, a tree and lawn
care company. Thompson Hine & Flory LLP has in the past provided and continues
to provide legal services to Nordson.
STEPHEN R. HARDIS, age 61, has been a director of Nordson since 1984. He has
served as Chairman and Chief Executive Officer of Eaton Corporation since
January 1996 and was Vice Chairman and Chief Executive Officer from September
1995 to December 1995. Mr. Hardis was Vice Chairman and Chief Financial and
Administrative Officer of Eaton Corporation from 1986 until September 1995.
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, Lexmark International,
Inc., a manufacturer and seller of computer printer products, and The
Progressive Corporation, an insurance holding company.
WILLIAM L. ROBINSON, age 55, has been a director of Nordson since July 1995. Mr.
Robinson has served as Dean of the District of Columbia School of Law (now UDC
School of Law) since 1988.
PRESENT DIRECTORS WHOSE TERMS EXPIRE IN 1999
DR. GLENN R. BROWN, age 66, has been a director of Nordson since 1986. Dr. Brown
has been the Science Adviser to the Governor of the State of Ohio since July
1996. He is a retired Senior Vice President and a former director of The
Standard Oil Company (now BP
3
<PAGE> 8
America, Inc.). He served as Vice Provost for Corporate Research and Technology
Transfer of Case Western Reserve University from January 1991 to July 1993. He
is a director of Ferro Corporation, a producer of industrial specialty
materials.
DR. ANNE O. KRUEGER, age 62, 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 Corp., an international supplier of hard disk
drives for computers.
ERIC T. NORD, age 79, has been a director of Nordson or its predecessor since
1941. He has served as Chairman of the Board of 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, Evan Nord and
Robinson and Drs. Brown 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 three 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 determines the salary and
other compensation of Nordson's President and Chief Operating Officer, approves
salary increases for other executive officers, supervises the administration of
Nordson's 1993 Long-Term Performance Plan, as amended (the "Performance Plan"),
1995 Management Incentive Compensation Plan (the "Bonus
4
<PAGE> 9
Plan"), Excess Defined Benefit Pension Plan, Excess Defined Contribution
Retirement Plan, and other pension and retirement plans. A CEO Compensation
Subcommittee, comprised of Messrs. Colville and Hardis and Dr. Krueger,
determines the salary and other compensation of Nordson's Vice Chairman and
Chief Executive Officer. During the last fiscal year the Compensation Committee
met three times and the CEO Compensation Subcommittee met three times.
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. The Nominating Committee did not meet
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
5
<PAGE> 10
credited with additional stock equivalents when dividends are paid.
Each non-employee director was granted a director option on March 10, 1992. New
non-employee directors are 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.
OWNERSHIP OF NORDSON COMMON SHARES
The following table shows the number and percent of Nordson Common Shares
beneficially owned on January 17, 1997 by each of the directors, including
nominees, 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.
<TABLE>
<CAPTION>
Number of
Name Shares (1) Percent
- - - - ----------------------------- ---------- -------
<S> <C> <C>
Dr. Glenn R. Brown 9,867 *
Edward P. Campbell (2) 126,476 0.7
William W. Colville 8,267 *
William D. Ginn (3)(4)(5)(6) 664,944 3.8
Stephen R. Hardis 24,286 0.1
Dr. Anne O. Krueger 3,710 *
William P. Madar (2) 528,137 3.0
Eric T. Nord (4)(5)(7) 2,429,860 13.9
Evan W. Nord (4)(7)(8) 2,688,870 15.4
William L. Robinson 630 *
John E. Jackson (2) 115,073 0.7
Yoshihiko Miyahara (2) 45,012 0.3
Robert E. Thayer (2) 56,425 0.3
23 directors and executive 7,055,096 38.5
officers as a group (9)
</TABLE>
- - - - ---------------
* Less than 0.1%.
(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
6
<PAGE> 11
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 Eric Nord and Mr.
Robinson) includes the right to acquire 437 shares on or before March 17,
1997 under the Director Option provisions of the Performance 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, 6,980
shares; Mr. Colville, 5,230 shares; Mr. Hardis, 11,849 shares; Dr. Krueger,
3,273 shares; Eric Nord, 7,760 shares; and Mr. Robinson, 211 shares. Mr.
Robinson has the right to acquire 419 shares on or before March 17, 1997
under the Director Option provisions of the Performance Plan.
(2) These include the right to acquire shares on or before March 17, 1997 in
amounts as follows: Mr. Madar, 307,789 shares; Mr. Campbell, 122,800 shares;
Mr. Jackson, 109,094 shares; Mr. Miyahara, 26,625 shares ; and Mr. Thayer,
16,125 shares.
(3) These include 73,465 shares held by Mr. Ginn as trustee of various trusts
for the children and grandchildren of Eric Nord.
(4) These include 346,058 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.
(5) 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.
(6) These include 6,000 shares held by the Ginn Family Fund. As a trustee of
this fund, Mr. Ginn
7
<PAGE> 12
has shared voting power and shared investment power with respect to these
shares.
(7) 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.
(8) 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.
(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 505,000 shares, sole
voting and sole investment power with respect to 1,914,392 shares, shared
voting power and shared investment power with respect to 3,796,499 shares,
and the right to acquire 839,205 shares on or before March 17, 1997.
As of November 3, 1996, present and former directors, officers, and employees of
Nordson and their families beneficially owned over 10.7 million Nordson Common
Shares, representing more than 61% 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. Except as described in the above table, to the best
of Nordson's knowledge, no person beneficially owns more than 5% of the
outstanding Nordson Common Shares.
8
<PAGE> 13
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 including the President. A CEO Compensation Subcommittee determines the
salary and other compensation of Nordson's Vice Chairman and Chief Executive
Officer. 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
-- 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
9
<PAGE> 14
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 cash
compensation program for executive officers, including the President and CEO
("Officers"), 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
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
10
<PAGE> 15
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 Bonus Plan and is
highly leveraged to achievement of the two corporate performance objectives.
In the Bonus Plan for 1996, 70% of the cash bonus eligibility was based on the
return on average invested capital component of the plan, with a bonus to be
paid if Nordson's annual return was at least 8%, and attaining its maximum when
the return reached 20%. The remaining 30% of the cash bonus eligibility was
based on the earnings per share component, with a bonus to be paid if Nordson's
earnings per share growth was positive, and attaining its maximum when growth
reached 30%.
Nordson achieved a 1996 return on average invested capital of 19.6% which
exceeded the corporate objective of 16%. Earnings per share growth was 2.8%.
Since performance exceeded the threshold payment level, Mr. Madar and the other
Officers were paid bonuses based upon the factors described above.
11
<PAGE> 16
For 1997 the Bonus Plan has been modified to further leverage earnings per share
growth without increasing the potential maximum payout. The earnings per share
component of the cash bonus formula has been increased from 30% to 50%, making
more of the bonus depend on growth of earnings per share. Correspondingly, the
average invested capital component of the plan will be 50%, continuing a strong
emphasis on this important objective.
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
Section 162(m) of the Internal Revenue Code of 1986, as amended, and the
regulations thereunder, 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. This provision became effective for the
Company's tax year beginning October 31, 1994.
On March 9, 1995, the shareholders approved the Bonus Plan. The Committee
believes that the Bonus Plan satisfies the Internal Revenue Service's
requirements for "performance-based" compensation which would not be subject to
the deductibility limitation under applicable Internal Revenue Service
regulations.
12
<PAGE> 17
On March 10, 1993, the shareholders approved the Performance Plan. To satisfy
the Internal Revenue Service's current requirements for "performance-based"
compensation, the Board of Directors amended the Performance Plan as of November
1, 1996, subject to shareholder approval at the Annual Meeting. As discussed
under the heading "Proposal" beginning on page 26, the amendment to the
Performance 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 Bonus Plan and the Performance
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 31, 1997
13
<PAGE> 18
SUMMARY COMPENSATION TABLE
The following table sets forth individual compensation information for the
fiscal year ended November 3, 1996, for William P. Madar, and the four other
most highly compensated executive officers whose total annual salary and bonus
for the fiscal year ended November 3, 1996 exceeded $100,000:
<TABLE>
<CAPTION>
Annual Compensation
----------------------------------
Other
Name Annual
And Principal Salary Bonus Compensation
Position Year ($) ($) ($)
- - - - ------------------------ ---- ------- ------- ------------
<S> <C> <C> <C> <C>
William P. Madar 1996 655,000 561,700 0
Vice Chairman 1995 627,000 681,200 0
& CEO 1994 600,000 648,000 646,117(2)
Edward P. Campbell 1996 325,000 278,700 0
President & Chief 1995 304,000 330,250 0
Operating Officer 1994 242,827 249,000 0
John E. Jackson 1996 250,000 174,200 0
Senior Vice President 1995 240,000 211,850 0
1994 230,000 202,000 0
Yoshihiko Miyahara (3) 1996 327,807 85,230 0
Vice President 1995 363,199 122,580 0
1994 310,707 79,350 0
Robert E. Thayer (4) 1996 212,000 147,700 36,692(5)
Vice President 1995 203,000 179,200 0
1994 195,000 171,000 0
<CAPTION>
Long-Term Compensation
------------------------
Awards
------------------------
Name Restricted All Other
And Principal Stock Awards Options/ Compensation
Position ($) SARs (#) ($) (1)
- - - - ------------------------ ------------ -------- ------------
<S> <C> <C> <C>
William P. Madar 0 70,000 76,899
Vice Chairman 0 70,000 41,630
& CEO 0 75,000 75,134
Edward P. Campbell 0 30,000 32,122
President & Chief 0 30,000 16,589
Operating Officer 0 16,000 24,890
John E. Jackson 0 16,000 25,780
Senior Vice President 0 16,000 15,167
0 16,000 25,006
Yoshihiko Miyahara (3) 0 12,000 0
Vice President 0 10,500 0
0 10,500 0
Robert E. Thayer (4) 0 12,000 21,784
Vice President 0 10,500 12,493
0 10,500 21,287
</TABLE>
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, $38,395 and $38,504; Mr. Campbell, $16,699 and $15,423; Mr.
Jackson, $13,312 and $12,468; and Mr. Thayer, $11,267 and $10,517,
respectively.
(2) Represents a tax gross-up payment associated with restricted stock, granted
under the employment agreement with Mr. Madar dated January 30, 1986, which
is a direct function of the appreciation in Nordson share price.
(3) Mr. Miyahara's salary and bonus are stated in U.S. Dollars and reflect the
average annual Japanese Yen exchange rate in effect during each of the
fiscal years noted.
(4) Mr. Thayer retired from Nordson Corporation effective November 4, 1996.
(5) Represents a one time accrued vacation payout.
15
<PAGE> 20
OPTION/SAR GRANTS IN LAST FISCAL YEAR
The following table sets forth information regarding individual grants of stock
options/SARs made during the fiscal year ended November 3, 1996 to each
executive officer named in the Summary Compensation Table:
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARs
UNDERLYING GRANTED TO EXERCISE OR GRANT DATE
OPTIONS/SARs EMPLOYEES IN BASE PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (1) (2) FISCAL YEAR ($/SHARE) DATE ($) (3)
- - - - ------------------ --------------- ------------ ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
William P. Madar 70,000 20.1% 57.25 10/30/2005 1,612,100
Edward P. Campbell 30,000 8.6% 57.25 10/30/2005 690,900
John E. Jackson 16,000 4.6% 57.25 10/30/2005 368,480
Yoshihiko Miyahara 12,000 3.4% 57.25 10/30/2005 276,370
Robert E. Thayer 12,000 3.4% 57.25 10/30/2005 276,370
</TABLE>
- - - - ---------------
(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.
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<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: 19.1%;
(c) Assumed risk-free rate of interest: 5.83%;
(d) Dividend of $.18 per share per quarter; and
(e) No reduction in the value calculated has been made for possible
forfeitures.
17
<PAGE> 22
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END
OPTION/SAR VALUES
The following table sets forth information regarding each exercise of stock
options/SARs during the fiscal year ended November 3, 1996, by each executive
officer named in the Summary Compensation Table, and the value of unexercised
stock options/SARs held by each executive officer named in the Summary
Compensation Table:
<TABLE>
<CAPTION>
VALUE OF
NUMBER OF UNEXERCISED
UNEXERCISED IN-THE-MONEY
NUMBER OF OPTIONS/SARs AT OPTIONS/SARs AT
SECURITIES FY-END (#) FY-END($)
UNDERLYING VALUE
OPTIONS/SARs REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISED ($)(1) UNEXERCISABLE UNEXERCISABLE(2)
- - - - ------------------ ------------ -------- --------------- ----------------
<S> <C> <C> <C> <C>
William P. Madar 7,194 335,097 307,789/ 5,001,433/
106,250 32,813
Edward P. Campbell 0 0 124,100/ 2,332,400/
41,500 7,000
John E. Jackson 0 0 112,400/ 2,375,900/
24,000 7,000
Yoshihiko Miyahara 0 0 35,625/ 215,156/
16,875 4,594
Robert E. Thayer 0 0 39,225/ 342,956/
16,875 4,594
</TABLE>
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 $55.25 on the NASDAQ
National Market System on November 1, 1996. 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.
19
<PAGE> 24
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.
<TABLE>
<CAPTION>
Final
Average Years of Benefit Service
Annual --------------------------------------------------------------
Compensation 10 15 20 25 30
- - - - ------------ -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
100,000 13,340 20,012 26,680 33,352 40,024
200,000 31,671 47,512 63,343 79,184 95,024
300,000 50,003 75,012 100,006 125,015 150,024
500,000 86,666 130,012 173,332 216,678 260,024
800,000 141,660 212,512 283,321 354,173 425,024
1,100,000 196,655 295,012 393,310 491,667 590,024
1,400,000 251,649 377,512 503,299 629,162 755,024
1,700,000 306,636 460,000 613,272 766,636 920,000
1,900,000 343,307 515,012 686,614 858,319 1,030,024
2,100,000 379,970 570,012 759,940 949,982 1,140,024
2,200,000 398,301 599,150 796,603 995,814 1,195,024
2,300,000 416,633 625,012 833,266 1,041,645 1,250,024
2,400,000 434,964 652,512 869,929 1,087,476 1,305,024
2,500,000 453,296 680,012 906,592 1,133,308 1,360,024
2,600,000 471,627 707,512 943,255 1,179,140 1,415,024
2,700,000 489,959 735,012 979,918 1,224,971 1,470,024
2,800,000 508,290 762,512 1,016,581 1,270,803 1,525,024
</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 November 3,
1996 for the executive officers named in the Summary Compensation Table who
participate in the Plan are as follows: Mr. Madar - 10 years; Mr. Campbell - 8
years; Mr. Jackson - 10 years; and Mr. Thayer - 31 years. Mr. Miyahara is not
included in the pension plan described above but is covered by a pension
arrange-
20
<PAGE> 25
ment that is specific to Nordson K.K., the Japanese subsidiary.
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
21
<PAGE> 26
Excess Defined Contribution Retirement Plan may be made either in lump sum or in
monthly installments over a two-year period. The Compensation Committee
administers 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
November 3, 1996 are as follows: Mr. Madar - $33,895 and 602 shares; Mr.
Campbell - $12,199 and 216 shares; Mr. Jackson - $8,812 and 156 shares; Mr.
Thayer - $6,767 and 120 shares; and all current executive officers as a group -
$90,930 and 1,616 shares.
22
<PAGE> 27
PERFORMANCE GRAPH
The following is a graph which compares the five year cumulative return from
investing $100 on November 1, 1991 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.
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN
AMONG NORDSON CORPORATION, S&P 500 INDEX AND
S&P DIVERSIFIED MANUFACTURING INDEX
<TABLE>
<CAPTION>
S&P
DIVERSIFIED
MEASUREMENT PERIOD NORDSON S&P 500 MANUFACTURING
(FISCAL YEAR COVERED) CORP. INDEX INDEX
<S> <C> <C> <C>
1991 100 100 100
1992 111 109 109
1993 128 126 132
1994 135 131 145
1995 141 165 183
1996 136 205 253
</TABLE>
Assumes $100 invested on November 1, 1991 in Nordson Corporation, S&P 500 Index,
and S&P Diversified Manufacturing Index. Total return assumes reinvestment of
dividends.
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 CEO
Subcommittee of the Compensation Committee of the Board of Directors as
described beginning on page 9. 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
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.
PROPOSAL
APPROVAL OF AN AMENDMENT TO THE
NORDSON CORPORATION
1993 LONG-TERM PERFORMANCE PLAN
Shareholders approved the Nordson Corporation 1993 Long-Term Performance Plan
(the "Plan") at the 1993 Annual Meeting. In November of 1996, the Board of
Directors approved an amendment to the Plan, subject to shareholder approval, to
comply with certain changes to Section 162(m) of the Internal Revenue Code of
1986, as amended, and the regulations thereunder ("Section 162(m)") in order to
preserve for Nordson the tax deduction for certain compensation paid pursuant to
the Plan.
THE AMENDMENT. Section 162(m) generally precludes a publicly-held corporation
from taking a deduction for certain employee compensation in excess of $1
million, unless such compensation is "performance-based". Among other
requirements, Section 162(m) requires, that in order for compensation to qualify
as performance-based, the maximum amount of compensation that could be paid to
any employee must be stated.
To meet this requirement, the Board adopted an amendment to the Plan (the
"Amendment"), subject to shareholder approval. The Amendment provides that the
number of Common Shares that may be subject to
26
<PAGE> 31
stock options or stock appreciation rights granted to any participant in any
fiscal year of Nordson during the term of the Plan, which stock options or stock
appreciation rights have an exercise price greater than or equal to the fair
market value of the underlying Common Shares on the date of grant, may not
exceed 100,000 Common Shares.
The Amendment is intended to exempt the deductions associated with all future
grants of such stock options and stock appreciation rights from the $1 million
limitation. The effectiveness of the Amendment is contingent on shareholder
approval at the Annual Meeting, and if so approved, the Amendment will be
effective as of November 1, 1996, until the Plan is terminated.
The following summary is a brief description of the material features of the
Plan, as amended, and is qualified in its entirety by reference to the terms of
the Plan, as amended. Shareholders may obtain a copy of the Plan, as amended,
upon written request to the Secretary of Nordson.
SUMMARY OF THE PLAN, AS AMENDED. The objective of the Plan is to foster and
promote the long-term growth and performance of Nordson by enhancing Nordson's
ability to attract and retain qualified employees and directors and by
motivating employees and directors through stock ownership and performance-based
incentives. The Plan is administered by the Compensation Committee of Nordson's
Board of Directors (the "Committee") and will remain in effect until terminated
by the Committee. All key employees of Nordson and its subsidiaries and all
directors of Nordson are eligible to participate in the Plan.
AUTHORITY OF COMMITTEE. The Committee has authority to: select the participants
who will receive awards, grant awards (other than director options), determine
the terms, conditions, and restrictions applicable to the awards (other than
director options), determine how
27
<PAGE> 32
the exercise price is paid, modify or replace outstanding awards within the
limits of the Plan, accelerate the date on which awards become exercisable,
waive the restrictions and conditions applicable to awards (other than director
options), and establish rules governing the Plan, including special rules
applicable to awards made to employees who are foreign nationals or are employed
outside the United States.
The Plan does not generally establish limits on the exercise price of awards,
earn-out or vesting periods, or termination provisions in the event of
termination of employment, except with respect to director options. Instead, the
Committee is given the broad authority to establish these terms in order best to
achieve the purpose of the Plan.
Under the terms of the Plan, all directors of Nordson are eligible for the grant
of the awards. In addition, non-employee directors may also receive director
options. Unlike other awards, however, the terms of director options are
prescribed by the Plan, and not established by the Committee.
The Committee will be constituted in a manner consistent with the "Non-Employee
Director" standard set forth in Rule 16b-3 under the Securities Exchange Act of
1934, as amended, and a subcommittee of the Committee will be constituted in a
manner consistent with the "outside director" standard of Section 162(m), as
applicable.
NUMBER OF COMMON SHARES. The Plan provides for the grant of 3% of the number of
Common Shares outstanding as of the first day of each fiscal year plus the
number of Common Shares that were available for grant of awards, but not
granted, in prior years; in no event, however, will the number of Common Shares
available for the grant of awards in any fiscal year exceed 3.5% of the Common
Shares outstanding as of the first day of that fiscal year. The maximum number
of
28
<PAGE> 33
Common Shares that may be issued upon exercise of incentive stock options is
1,000,000. Common Shares issued under the Plan may be either newly-issued shares
or treasury shares.
Common Shares subject to an award that is forfeited, terminated, or canceled
without having been exercised (other than shares subject to a stock option that
is canceled upon the exercise of a related stock appreciation right) are
generally available for grant under the Plan, without reducing the number of
Common Shares available in any fiscal year for grant of awards under the Plan.
In the event of a recapitalization, stock dividend, stock split, distribution to
shareholders (other than normal cash dividends), or similar transaction, the
Committee will adjust the number and class of shares that may be issued under
the Plan (including the number of shares that may be subject to awards granted
to a participant in any fiscal year) and the number and class of shares, and the
exercise price, applicable to outstanding awards.
TYPES OF AWARDS. The Plan provides for the grant of stock options (incentive
stock options or "non-qualified" stock options), restricted stock, stock
appreciation rights, stock purchase rights, stock equivalent units, cash awards,
and other stock or performance-based incentives. These awards are payable in
cash or Common Shares, or any combination thereof, as established by the
Committee. The Plan also provides for the maintenance of an employee stock
purchase program.
GRANT OF AWARDS. Awards may be granted singularly or in combination or tandem
with other awards. Awards may also be granted in replacement of other awards
granted by Nordson. If a participant pays all or part of the exercise price or
taxes associated with an award by the transfer of Common Shares or the surrender
of all or part of an award (including the award being exer-
29
<PAGE> 34
cised), the Committee may, in its discretion, grant a new award to replace the
Common Shares or award that were transferred or surrendered. Nordson may also
assume awards granted by an organization acquired by Nordson or may grant awards
in replacement of any such awards.
While awards, if any, to be granted under the Plan, as amended, are not yet
determinable, awards granted for the fiscal year ended November 3, 1996 under
the existing Plan for each of William P. Madar, Edward P. Campbell, John E.
Jackson, Yoshihiko Miyahara, and Robert E. Thayer are shown under the heading
"Long-Term Compensation" in the Summary Compensation Table set forth on page 14,
and awards granted for all executive officers (including those foregoing named
executive officers) as a group, all directors who are not executive officers as
a group, and all employees other than executive officers are 209,200, 0, and
214,635, respectively.
PAYMENT OF EXERCISE PRICE. The exercise price of a stock option (other than an
incentive stock option), director option, stock purchase right, and any other
stock award for which the Committee has established an exercise price may be
paid in cash, by the transfer of Common Shares, by the surrender of all or part
of an award (including the award being exercised), or by a combination of these
methods, as and to the extent permitted by the Committee. The exercise price of
an incentive stock option may be paid in cash, by the transfer of Common Shares,
or by a combination of these methods, as and to the extent permitted by the
Committee at the time of grant, but may not be paid by the surrender of an
award.
TAXES ASSOCIATED WITH AWARDS. Prior to the payment of an award, Nordson may
withhold, or require a participant to remit to Nordson, an amount sufficient to
pay any Federal, state, and local taxes associated with the award. If, however,
a stock option has been transferred
30
<PAGE> 35
and the participant does not pay such taxes on the date of exercise, the taxes
will be paid by reducing the number of Common Shares to be received upon
exercise. The Committee may permit participants to pay the taxes associated with
an award (other than an incentive stock option) in cash, by the transfer of
Common Shares, by the surrender of all or part of an award (including the award
being exercised), or by a combination of these methods.
TERMINATION OF AWARDS. The Committee may cancel any awards if the participant,
without Nordson's prior written consent, (i) renders services for an
organization, or engages in a business, that is, in the judgment of the
Committee, in competition with Nordson or (ii) discloses to anyone outside of
Nordson, or uses for any purpose other than Nordson's business, any confidential
information or material relating to Nordson.
CHANGE IN CONTROL. In the event of a change in control of Nordson, as defined in
the Plan, unless the Board of Directors determines otherwise, (i) all
outstanding stock options, stock appreciation rights, and stock purchase rights
become fully exercisable, (ii) all restrictions and conditions applicable to
restricted stock and other awards exercisable for Common Shares will be deemed
to have been satisfied, and (iii) all cash awards will be deemed to have been
fully earned. Any such determination by the Board of Directors that is made
after the occurrence of the change in control will not be effective unless a
majority of the directors then in office are "continuing directors" and the
determination is approved by a majority of the "continuing directors." For this
purpose, "continuing directors" are directors who were in office prior to the
change in control or were recommended or elected to succeed "continuing
directors" by a majority of the "continuing directors" then in office.
31
<PAGE> 36
NONASSIGNABILITY OF AWARDS. Unless the Committee otherwise determines, no award
granted under the Plan may be transferred or assigned by the "holder" other than
by "designation of beneficiary," or, if none, by will, pursuant to the laws of
descent and distribution, or pursuant to a qualified domestic relations order.
For this purpose, a "holder" is a participant in the Plan or an eligible
transferee (as determined by the Committee) and a "designation of beneficiary"
is the person or entity designated to receive the holder's option on the
holder's death in accordance with Committee procedures.
The Plan also provides that, unless the Committee otherwise determines, an award
may be exercised during the holder's lifetime, only by the holder or by the
holder's guardian or legal representative. No incentive stock option or Section
423 Right (as defined in the Plan), however, may be transferred or assigned
pursuant to a qualified domestic relations order or exercised, during the
participant's lifetime, by the participant's guardian or legal representative.
AMENDMENT, EFFECTIVE DATE, AND TERMINATION OF THE PLAN. The Board of Directors
may amend, suspend, or terminate the Plan at any time. Shareholder approval for
any such amendment will be required only to the extent necessary to comply with
the rules of the NASDAQ National Market System or any other exchange or
quotation system on which the Common Shares are traded or listed, the rules and
regulations related to incentive stock options, Section 162(m) of the Code, or
any other applicable legal requirements. If approved by the shareholders, the
Amendment to the Plan will be effective as of November 1, 1996 and will remain
in effect until terminated by the Board of Directors. If the Amendment to the
Plan is not approved by shareholders, the deduction relating to certain future
grants of stock options and stock appreciation rights may be disallowed.
32
<PAGE> 37
FEDERAL INCOME TAX CONSEQUENCES OF AWARDS. The following is a brief general
discussion of the anticipated income tax treatment, under current provisions of
the Code, of the grant and exercise of awards to Nordson and the participants.
INCENTIVE STOCK OPTIONS. In general, an employee will not recognize taxable
income at the time an incentive stock option is granted or exercised, and
Nordson Corporation will not be entitled to a deduction, so long as a minimum
employment requirement is satisfied. However, the excess of the fair market
value of the Common Shares acquired upon exercise over the exercise price is
potentially subject to the alternative minimum tax. If the employment
requirement is not satisfied, the income tax treatment will be the same as that
for a non-qualified stock option, described below. Upon disposition of the
Common Shares acquired upon exercise, capital gain or capital loss will be
recognized in an amount equal to the difference between the sale price and the
exercise price, so long as minimum holding period requirements are satisfied. If
the holding period requirements are not satisfied, the employee will recognize
ordinary income, and Nordson Corporation will be entitled to a corresponding
deduction, to the extent of the difference between the exercise price and the
lesser of the fair market value of the shares on the date the option is
exercised or the amount realized in the disposition. Any remaining gain or loss
is treated as a capital gain or capital loss.
NON-QUALIFIED STOCK OPTIONS. In general, an employee will not recognize taxable
income upon the grant of a stock option that does not qualify as an incentive
stock option (a "non-qualified stock option"), and Nordson Corporation will not
be entitled to a deduction. Upon exercise, the employee will recognize ordinary
income in an amount equal to the difference between the exercise price and the
fair market value of the Common Shares acquired upon exercise,
33
<PAGE> 38
and Nordson Corporation will be entitled to a corresponding deduction. Upon
disposition of the Common Shares, appreciation or depreciation after the date of
exercise will be treated as either capital gain or capital loss.
RESTRICTED STOCK. Unless an employee makes an election under Section 83(b) of
the Code, the employee will recognize no income, and Nordson Corporation will be
entitled to no deduction, at the time restricted stock is awarded to the
employee. When the restrictions lapse or are otherwise removed, the employee
will recognize compensation income equal to the excess of the fair market value
of the restricted stock at that time over the amount, if any, paid by the
employee for the restricted stock, and Nordson Corporation will be entitled to a
deduction in the same amount. Dividends paid on restricted stock during any
restriction period will, unless the employee has made an election under Section
83(b) of the Code, constitute compensation income, and Nordson Corporation will
be entitled to a deduction in the same amount. Upon disposition of Common Shares
after the restrictions lapse or are otherwise removed, any gain or loss realized
by an employee will be treated as capital gain or loss.
If an employee makes an election under Section 83(b) of the Code, the employee
will recognize compensation income equal to the excess of the fair market value
of the Common Shares on the date of grant over the price paid for those Common
Shares, and Nordson Corporation will be entitled to a deduction in the same
amount. Dividends paid on the stock thereafter will be treated as dividends
taxable to the employee and not deductible by Nordson Corporation.
STOCK APPRECIATION RIGHTS AND STOCK EQUIVALENT UNITS. The grant of stock
appreciation rights and stock equivalent units will have no immediate tax
consequences to Nordson Corporation or the employee receiving the grant. The
amount received by the
34
<PAGE> 39
employee upon the exercise of the stock appreciation rights will be included in
the employee's ordinary income in the taxable year in which the stock
appreciation rights are exercised, and Nordson Corporation will be entitled to a
deduction in the same amount in that year. In general, at the time Nordson
Corporation pays any amount to the employee with respect to the stock equivalent
units, the employee will recognize compensation income equal to the amount of
that payment, and Nordson Corporation will be entitled to a deduction in that
amount.
STOCK PURCHASE RIGHTS. In general, the exercise of a stock purchase right under
a stock purchase program that does not meet the requirements of Section 423 of
the Code will be treated as the exercise of a non-qualified stock option for tax
purposes, as described above.
In general, the exercise of a stock purchase right under a stock purchase
program that does meet the requirements of Section 423 of the Code (a "Section
423 Right") will receive the same treatment as the exercise of an incentive
stock option, described above, with the following differences. If the employee
disposes of the stock before minimum holding period requirements are satisfied,
the amount of ordinary income recognized by the employee will be the difference
between the fair market value of the stock at the time of exercise and the
exercise price. If, after minimum holding period requirements are satisfied, the
employee disposes of stock received on exercise of a Section 423 Right at an
exercise price of less than 100% of the fair market value of the stock at the
time of grant, or dies at any time while holding such stock, the employee will
recognize ordinary income in an amount equal to the lesser of the fair market
value of the stock at the time of disposition (or the date of death) or the fair
market value of the stock at the time of grant over the exercise price. Any
additional gain or loss to the employee on a
35
<PAGE> 40
disposition of such stock will be capital, and the amount of any ordinary income
will be added to basis for purposes of determining the amount of such gain or
loss.
VOTE REQUIRED TO ADOPT THE AMENDMENT. The favorable vote of the holders of a
majority of the Common Shares present in person or by proxy at the Annual
Meeting is required to approve the Amendment to the Plan. NORDSON'S BOARD OF
DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE "FOR" APPROVAL OF THE AMENDMENT TO
THE PLAN.
INDEPENDENT AUDITORS
Ernst & Young LLP has been appointed as Nordson's independent auditors for the
fiscal year ending November 2, 1997. 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 November 3, 1996.
GENERAL
VOTING AT THE MEETING
Shareholders of record at the close of business on January 17, 1997 are entitled
to vote at the meeting. On that date, a total of 17,477,834 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
36
<PAGE> 41
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.
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 to approve the
adoption of the Amendment to Nordson's 1993 Long-Term Performance Plan. However,
if other matters do properly
37
<PAGE> 42
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 3, 1997. 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 November 3, 1996, is being mailed to shareholders of record
with this Proxy Statement.
For the Board of Directors
WILLIAM D. GINN
Secretary
January 31, 1997
38
<PAGE> 43
YOUR VOTE IS IMPORTANT.
PLEASE SIGN, DATE AND RETURN
YOUR PROXY.
<PAGE> 44
NORDSON CORPORATION
P ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 13, 1997
R -----------------------------------------------------------
O
X THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
Y
At the Annual Meeting of Shareholders of NORDSON CORPORATION to be
held on March 13, 1997, and at any adjournment, WILLIAM D. GINN,
DR. GLENN R. BROWN, and ERIC T. NORD, and each of them, with full
power of substitution and resubstitution, are hereby authorized to
represent me and vote all my shares on the following matters:
<TABLE>
<S> <C>
1. Election of four Directors: (change of address)
Edward P. Campbell, William W. Colville, William P. Madar, and ________________________________________
Evan W. Nord
________________________________________
2. Approval of the Amendment to the Nordson Corporation
1993 Long-Term Performance Plan. ________________________________________
3. Any other matter that may properly come before this ________________________________________
meeting. (If you have written in the space above,
please mark the corresponding box on the
reverse side of this Card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES
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> 45
<TABLE>
<S> <C> <C>
X PLEASE MARK YOUR SHARES IN YOUR NAME REINVESTMENT SHARES
VOTES AS IN THIS
EXAMPLE.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN The Board of Directors recommends a vote FOR
1. Election of [ ] [ ] 2. Approval of [ ] [ ] [ ] approval of the Amendment to the Nordson Corpora-
Directors Amendment to tion 1993 Long-Term Performance Plan. Unless other-
(see reverse) the Nordson wise specified above, this Proxy will be voted FOR
Corporation the election as Directors of the nominees noted on the
1993 Long-Term reverse side and FOR approval of the Amendment to
Performance Plan. the Nordson Corporation 1993 Long-Term
Performance Plan.
</TABLE>
For, except vote withheld from the following nominee(s):
__________________________________________________________
<TABLE>
<S> <C> <C>
Change
[ ] of PLEASE DATE, SIGN, AND RETURN
Address IN THE ENCLOSED ENVELOPE --
NO POSTAGE NECESSARY
</TABLE>
<TABLE>
<S> <C> <S> <C>
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>
<PAGE> 46
NORDSON CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 13, 1997
-----------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
To: Key Trust Company of Ohio, N.A., as Trustee for the Nordson
Corporation Non-Union Employees' Stock Ownership Plan and Trust
(the "Plan").
Pursuant to Article VI, Section 6.6 of the Plan, the undersigned,
as a Participant of the Plan, hereby directs the Trustee to vote as
designated below (in person or by proxy) the undersigned's entire
proportionate interest of Nordson Corporation Common Shares held in
the Nordson Stock Fund on the record date at the Annual Meeting of
Shareholders of NORDSON CORPORATION to be held on March 13, 1997,
and at any adjournment, WILLIAM D. GINN, DR. GLENN R. BROWN, and
ERIC T. NORD, and each of them, with full power of substitution and
resubstitution, are hereby authorized to represent me and vote all
my shares on the following matters:
<TABLE>
<S> <C>
1. Election of four Directors: (change of address)
Edward P. Campbell, William W. Colville, William P. Madar, and ____________________________________________________
Evan W. Nord
____________________________________________________
2. Approval of the Amendment to the Nordson Corporation
1993 Long-Term Performance Plan. ____________________________________________________
(If you have written in the space above, please mark
3. Any other matter that may properly come before this the corresponding box on the reverse side of this
meeting. Card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY
BOXES 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>
X PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN The Board of Directors recommends a vote FOR
1. Election of [ ] [ ] 2. Approval of [ ] [ ] [ ] approval of the Amendment to the Nordson Corpora-
Directors Amendment to tion 1993 Long-Term Performance Plan. Unless other-
(see reverse) the Nordson wise specified above, this Proxy will be voted FOR
Corporation the election as Directors of the nominees noted on the
1993 Long-Term reverse side and FOR approval of the Amendment to
Performance Plan. the Nordson Corporation 1993 Long-Term
Performance Plan.
</TABLE>
For, except vote withheld from the following nominee(s):
__________________________________________________________
<TABLE>
<S> <C> <C>
Change
[ ] of PLEASE DATE, SIGN, AND RETURN
Address IN THE ENCLOSED ENVELOPE --
NO POSTAGE NECESSARY
</TABLE>
<TABLE>
<S> <C> <S> <C>
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>
<PAGE> 48
NORDSON CORPORATION
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MARCH 13, 1997
-----------------------------------------------------------
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS
To: Key Trust Company of Ohio, N.A., as Trustee for the Nordson
Corporation Union Employees' Stock Ownership Plan and Trust (the
"Plan").
Pursuant to Article VI, Section 6.6 of the Plan, the undersigned,
as a Participant of the Plan, hereby directs the Trustee to vote as
designated below (in person or by proxy) the undersigned's entire
proportionate interest of Nordson Corporation Common Shares held in
the Nordson Stock Fund on the record date at the Annual Meeting of
Shareholders of NORDSON CORPORATION to be held on March 13, 1997,
and at any adjournment, WILLIAM D. GINN, DR. GLENN R. BROWN, and
ERIC T. NORD, and each of them, with full power of substitution and
resubstitution, are hereby authorized to represent me and vote all
my shares on the following matters:
<TABLE>
<S> <C>
1. Election of four Directors: (change of address)
Edward P. Campbell, William W. Colville, William P. Madar, and ____________________________________________________
Evan W. Nord
____________________________________________________
2. Approval of the Amendment to the Nordson Corporation
1993 Long-Term Performance Plan. ____________________________________________________
(If you have written in the space above, please mark
3. Any other matter that may properly come before this the corresponding box on the reverse side of this
meeting. Card.)
</TABLE>
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE
APPROPRIATE BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY
BOXES 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> 49
<TABLE>
<S> <C> <C>
X PLEASE MARK YOUR SHARES IN YOUR NAME
VOTES AS IN THIS
EXAMPLE.
</TABLE>
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
FOR WITHHELD FOR AGAINST ABSTAIN The Board of Directors recommends a vote FOR
1. Election of [ ] [ ] 2. Approval of [ ] [ ] [ ] approval of the Amendment to the Nordson Corpora-
Directors Amendment to tion 1993 Long-Term Performance Plan. Unless other-
(see reverse) the Nordson wise specified above, this Proxy will be voted FOR
Corporation the election as Directors of the nominees noted on the
1993 Long-Term reverse side and FOR approval of the Amendment to
Performance Plan. the Nordson Corporation 1993 Long-Term
Performance Plan.
</TABLE>
For, except vote withheld from the following nominee(s):
__________________________________________________________
<TABLE>
<S> <C> <C>
Change
[ ] of PLEASE DATE, SIGN, AND RETURN
Address IN THE ENCLOSED ENVELOPE --
NO POSTAGE NECESSARY
</TABLE>
<TABLE>
<S> <C> <S> <C>
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>
