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Exhibit 10-q-1
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is entered into on this ___ day of
_____________, 1998, by and between NORDSON CORPORATION, an Ohio corporation
(the "Company"), and XXXXXX X. XXXXXXXX ("Employee").
W I T N E S S E T H:
WHEREAS, Employee is an executive and key employee of the
Company, has fully and ably discharged his responsibilities and duties in his
service to the Company to date, and is now serving the Company as President and
Chief Executive Officer;
WHEREAS, the Company desires to assure itself of continuity of
management in the event of any threatened or actual Change in Control (as
hereafter defined);
WHEREAS, the Company desires to provide inducements for
Employee not to engage in activity competitive with the Company;
WHEREAS, the Company desires to assure itself, in the event of
any threatened or actual Change in Control, of the continued performance of
services by Employee on an objective and impartial basis and without distraction
by concern for his employment status and security;
WHEREAS, Employee is willing to continue in the employ of the
Company but desires assurance that his responsibilities and status as an
executive of the Company will not be adversely affected by any threatened or
actual Change in Control;
NOW, THEREFORE, the Company and Employee agree as follows:
1. OPERATION OF AGREEMENT. This Agreement shall be effective
and binding immediately upon its execution, but, anything in this Agreement to
the contrary notwithstanding, this Agreement shall not be operative unless and
until there has been a Change in Control while Employee is in the employ of the
Company. For purposes of this Agreement, a Change in Control shall have occurred
if at any time any of the following events occurs:
(a) a report is filed with the Securities and
Exchange Commission (the "SEC") on Schedule 13D or Schedule 14D-1 (or
any successor schedule, form, or report), each as promulgated pursuant
to the Securities Exchange Act of 1934 (the "Exchange Act"), disclosing
that any "person" (as the term "person" is used in Section 13(d) or
Section 14(d)(2) of the Exchange Act) is or has become a beneficial
owner, directly or indirectly, of securities of the Company
representing
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25% or more of the combined voting power of the Company's then
outstanding securities;
(b) the Company files a report or proxy statement
with the SEC pursuant to the Exchange Act disclosing in response to
Item 1 of Form 8-K thereunder or Item 5(f) of Schedule 14A thereunder
that a Change in Control of the Company has or may have occurred or
will or may occur in the future pursuant to any then-existing contract
or transaction;
(c) the Company is merged or consolidated with
another corporation and, as a result thereof, securities representing
less than 50% of the combined voting power of the surviving or
resulting corporation's securities (or of the securities of a parent
corporation in case of a merger in which the surviving or resulting
corporation becomes a wholly-owned subsidiary of the parent
corporation) are owned in the aggregate by holders of the Company's
securities immediately prior to such merger or consolidation;
(d) all or substantially all of the assets of the
Company are sold in a single transaction or a series of related
transactions to a single purchaser or a group of affiliated purchasers;
or
(e) during any period of 24 consecutive months,
individuals who were Directors of the Company at the beginning of such
period cease to constitute at least a majority of the Company's Board
of Directors (the "Board") unless the election, or nomination for
election by the Company's shareholders, of more than one half of any
new Directors of the Company was approved by a vote of at least
two-thirds of the Directors of the Company then still in office who
were Directors of the Company at the beginning of such 24 month period.
The first date on which a Change in Control occurs is referred to herein as the
"Change in Control Date." Upon the occurrence of a Change in Control while
Employee is in the employ of the Company, this Agreement shall become
immediately operative subject, however, to the provisions of Section 2, below.
2. POSSIBLE "UNDOING" OF A CHANGE IN CONTROL. If a report is
filed with the SEC disclosing that a person (the "Acquiror") is or has become a
beneficial owner, directly or indirectly, of securities of the Company
representing 25% or more of the combined voting power of the company's
outstanding securities and, as a result of that filing, a Change in Control,
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as defined in Paragraph 1(a), above, occurs, while Employee is in the employ of
the Company, then, as provided in Paragraph 1, above, this Agreement will become
immediately operative. However, if:
(a) a Change in Control as described in Paragraph
1(a) occurs while Employee is in the employ of the Company;
(b) the Acquiror subsequently transfers or otherwise
disposes of sufficient securities of the Company in one or more
transactions, to a person or persons other than affiliates of the
Acquiror or any persons with whom the Acquiror has agreed to act
together for the purpose of acquiring, holding, voting or disposing of
securities of the Company, so that, after such transfer or other
disposition, the Acquiror is no longer the beneficial owner, directly
or indirectly, of securities of the Company representing 10% or more of
the combined voting power of the Company's then outstanding securities;
(c) at the time of the subsequent transfer or
disposition that reduced the Acquiror's holdings to less than 10% as
provided in (b), immediately above, no other event constituting a
Change in Control had occurred; and
(d) at the time of the subsequent transfer or other
disposition that reduced the Acquiror's holdings to less than 10%,
Employee's employment with the Company had not been terminated by the
Company without cause or by Employee for good reason,
then, for all purposes of this Agreement, the filing of the report constituting
a Change in Control under Paragraph 1(a) shall be treated as if it had not
occurred and this Agreement shall return to the status it had immediately before
the filing of the report constituting a Change in Control under Paragraph 1(a).
Accordingly, if and when a new Change in Control occurs, this Agreement will
again become operative on the date of that new Change in Control.
3. EMPLOYMENT, CONTRACT PERIOD.
(a) Subject to the terms and conditions of this
Agreement, upon the occurrence of a Change in Control, the Company
shall continue to employ Employee and Employee shall continue in the
employ of the Company for the period specified in Paragraph 3(b) (the
"Contract Period"), in the position and with the duties and
responsibilities set forth in Paragraph 4.
(b) The Contract Period shall commence on the
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Change in Control Date and, subject only to the provisions of Paragraph
9 below, shall continue for a period of twenty-four months to the close
of business on the day (the "Contract Expiration Date") falling
twenty-four months after the Change in Control Date.
4. POSITION, DUTIES, RESPONSIBILITIES. At all times during the
Contract Period, Employee shall:
(a) hold the same position with substantially the
same duties and responsibilities as an executive of the Company as
Employee held immediately before the Change in Control Date and those
duties and responsibilities may be extended, from time to time during
the Contract Period, by the Board with Employee's consent;
(b) adhere to and implement the policies and
directives promulgated, from time to time, by the Board;
(c) observe all Company policies applicable to
executive personnel of the Company; and
(d) devote his business time, energy, and talent to
the business of and to the furtherance of the purposes and objectives
of the Company to generally the same extent as he has so devoted his
business time, energy, and talent before the Change in Control Date,
and neither directly nor indirectly render any business, commercial, or
professional services to any other person, firm, or organization for
compensation without the prior approval of the Board.
Nothing in this Agreement shall preclude Employee from devoting reasonable
period of time to charitable and community activities or the management of his
investment assets provided such activities do not materially interfere with the
performance by Employee of his duties hereunder.
5. COMPENSATION. For services actually rendered by Employee on
behalf of the Company during the Contract Period as contemplated by this
Agreement the Company shall pay to Employee a base salary, annual bonus and
stock options (together referred to as "Total Compensation") as follows:
(a) base salary at a rate equal to the highest of (i)
the rate in effect immediately before the Change in Control date, (ii)
the rate in effect exactly two years before the Change in Control Date,
or (iii) such greater rate as the Company may determine. The base
salary shall be paid to Employee in the same increments and on the same
schedule each month as in effect immediately before the Effective Date;
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(b) an annual bonus under the 1995 Management
Incentive Compensation Plan as amended, or any substitute therefore,
("Bonus Plan") equal to the highest of (i) the amount calculated using
the Bonus Plan in effect immediately before the Change in Control Date,
(ii) the amount calculated using the Bonus Plan in effect exactly two
years before the Change of Control Date, or (iii) such greater amount
as the Company may determine. The annual bonus shall be paid to the
Employee not later than the first payroll date in January following the
plan year for which the bonus was earned;
(c) stock options shall be granted annually at such
times, under such terms and conditions, and in such amounts, as to be
no less valuable than the greater value of (i) stock options granted
immediately before the Change in Control Date, (ii) stock options
granted two years before the Change in Control Date, and (iii) such
greater value as the Company may determine.
6. VACATION, HOLIDAYS AND SICK LEAVE. Employee will be
entitled to such periods of vacation, holidays and sick leave allowance each
year as are determined by the Company's policies relevant to vacation, holidays
and sick pay for executive personnel as in effect immediately before the Change
in Control Date or as may be increased from time to time thereafter. Neither
vacation time nor sick leave allowance will be accumulated from year to year.
7. OTHER COMPANY PLANS, BENEFITS, AND PERQUISITES. During the
Contract Period Employee shall continue to be entitled to participate in every
employee benefit plan, incentive plan or arrangement ("Plan") that is generally
available to executive personnel of the Company immediately before the Change in
Control Date or that is specifically extended to Employee by the Company before
the Change in Control Date, whether or not Employee is eligible to participate
in such Plan on the date of this Agreement. Employee's participation in and
benefits under any such Plan shall be on the terms and subject to the conditions
specified in the governing document of the particular plan or arrangement as in
effect immediately before the Change in Control Date, which terms and conditions
shall not be amended during the Contract Period unless the benefits to Employee
are at least as great under the Plan as amended (or under a substitute Plan) as
were the benefits under the Plan as in effect immediately before the Change in
Control Date. Specific Plans of the Company to which Employee is entitled to
benefits include, but are not limited to, the Plans (or any substitute Plan)
listed on Exhibit A hereto.
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The Company will also provide Employee with such perquisites during the Contract
Period as the Company customarily provided to similarly situated executive
personnel in the period immediately before the Change in Control Date.
8. ADDITIONAL BENEFIT. If a Change in Control occurs and this
Agreement becomes operative and thereafter Employee's employment is terminated
by the Company without cause or by Employee for good reason, whether such
termination occurs before, on, or after the Contract Expiration Date, the
Company shall pay and provide benefits to or with respect to Employee in such
amounts and at such times so that the aggregate benefits payable to or with
respect to Employee under the Salaried Plan and the Excess Benefit Plans will be
equal to the aggregate benefits that would have been paid to or with respect to
Employee under the Salaried Plan and the Excess Benefit Plans if Employee were
exactly five years older than his actual age and his credit under the Salaried
Plan and the Excess Benefit Plans were equal to the greater of his actual
service or the amount of service he is deemed to have under paragraph 12(a)(iv),
below. If Employee's employment is terminated after a Change in Control by the
Company without cause or by Employee for good reason and Employee is entitled to
additional benefits by virtue of the additional five years of deemed age
provided for in this Paragraph 8, then the Company shall directly provide such
benefits to Employee in the same manner as additional benefits are to be
provided to Employee under paragraph 12(a), below.
9. PRIORITY OF PARAGRAPHS 2 OVER 8. Paragraph 2 of this
Agreement shall take precedence over Paragraph 8 of this Agreement so that if a
Change in Control occurs and is subsequently undone under Paragraph 2 of this
Agreement, Employee will thereafter have no rights under Paragraph 8 of this
Agreement unless and until a further Change in Control occurs.
10. EFFECT OF DISABILITY. If during the Contract Period and
before his employment hereunder is otherwise terminated, Employee becomes
disabled to such an extent that he is prevented from performing his duties
hereunder by reason of physical or mental incapacity: (a) he shall be entitled
to disability and other benefits at least equal to those that would have been
available to him had the Company continued, throughout the period of Employee's
disability, all of its programs, benefits, and policies with respect to disabled
employees that were in effect immediately before the Change in Control; and (b)
if he recovers from his disability before the end of the Contract Period he
shall be reinstated as an active employee for the remainder of the Contract
Period under and subject to all of the terms of this Agreement including,
without limitation, the Company's right to terminate Employee with or without
cause under Paragraph 11(b).
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11. TERMINATION FOLLOWING A CHANGE IN CONTROL. Following a
Change in Control:
(a) Employee's employment hereunder will terminate
without further notice upon the death of Employee;
(b) The Company may terminate Employee's employment
hereunder effective immediately upon giving notice of such termination:
(i) for "cause," (A) if Employee commits an
act of fraud, embezzlement, theft, or other similar criminal
act constituting a felony and involving the Company's business
or (B) if Employee breaches his agreement with respect to the
time to be devoted to the business of the Company set forth in
Paragraph 3(d) hereof and fails to cure such breach within 30
days of receipt of written notice of such breach from the
Board; or
(ii) without cause at any time; and
(c) Employee may terminate his employment hereunder
effective immediately upon giving of notice of such termination or
retirement:
(i) without cause at any time; or
(ii) for "good reason," which, for purposes
of this Agreement shall mean notice by the Employee to the
Company of the occurrence of any of the following:
(A) any reduction in base salary or position or any
material reduction in responsibilities or duties contemplated for
Employee under this Agreement or any material reduction in the
aggregate of employee benefits, perquisites, or fringe benefits
contemplated for Employee under this Agreement, provided that any
particular reduction described in this clause (A) shall constitute
"good reason" only if Employee terminates his employment within six
months of the date of the reduction; or
(B) any good faith determination by Employee that, as
a result of fundamental differences of opinion between Employee and the
Board as to the goals of the Company, Employee is unable to carry out
the responsibilities and duties contemplated for Employee under this
Agreement, provided that any determination by Employee described in
this clause (B) shall constitute "good reason" only if Employee
terminates his employment within six months of the
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Change in Control Date.
12. SEVERANCE COMPENSATION.
(a) If, before the Contract Expiration Date,
Employee's employment is terminated by the Company without cause or by
Employee for good reason, then, except as provided in Paragraph 12(b),
12(c), or 12(d), the Company shall pay and provide to Employee the
following compensation and benefits through the last to occur of
(x) the expiration of twenty-four months after the effective date of
the termination, and (y) the Contract Expiration Date (such
last-to-occur date is hereinafter referred to as the "Severance
Benefits Termination Date"):
(i) Base Salary and Annual Bonus at the
highest rate payable to Employee during the Contract Period,
to be paid at the times provided in Paragraph 5 hereof;
(ii) in lieu of the opportunity to receive
stock option grants during the period from the effective date
of termination through the Severance Benefits Termination
Date, the Company will pay to Employee an amount in cash equal
to the product of (A) the aggregate value of the stock options
granted to Employee with Respect to the fiscal year ended
immediately prior to the Change in Control and (B) a fraction,
the numerator of which is the number of days from the
effective date of termination through the Severance Benefits
Termination Date and the denominator of which is 365; for this
purpose, the value of the stock options will be determined
using the Black-Scholes option price model;
(iii) coverage under the Company's medical,
dental, insurance, short-term disability, long-term disability
plans, and other Plans, as listed on Exhibit A, Items 7
through 14 (provided that he became eligible to participate
therein prior to the date his employment is terminated), each
as in effect on the Change in Control Date (or, if
subsequently amended to increase benefits to Employee or his
dependents, as so amended) and each as if Employee's
employment had continued through the Severance Benefits
Termination Date; and
(iv) coverage and service credit under the
Salaried Plan and the Excess Benefit Plans maintained in
connection with the Salaried Plan under which he is eligible
to participate so that the aggregate benefits payable to or
with respect to the Employee under the
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Salaried Plan and the Excess Benefit Plan will be equal to the
aggregate benefits that would have been paid to or with
respect to Employee under the Salaried Plan and the Excess
Benefit Plans if Employee's employment had continued through
the Severance Benefits Termination Date.
If any of the benefits to be provided under the Company's Plans cannot
be provided through that Plan to Employee following termination of his
employment, the Company shall directly provide the full equivalent of
such benefits to Employee. For example, since it is not possible to
provide additional service credit directly through the Salaried Plan,
if Employee becomes entitled to an additional 18 months of service
credit under the Salaried plan pursuant to (iv) above, the Company will
be required to pay to Employee, from its general assets, on each date
on which Employee receives a payment from the Salaried Plan, a
supplemental payment equal to the amount by which that particular
payment under the Salaried Plan would have been increased if Employee's
total service credit under the Salaried Plan were 18 months greater
than is actually the case by reason of this Agreement. In addition, if
in these circumstances any payments become due under the Salaried Plan
with respect to Employee following his death, the Company will be
obligated to make similar supplemental payments with respect to
Employee on the dates on which payments are made with respect to
Employee under the Salaried Plan.
Furthermore, the provisions of this Agreement shall not affect the
validity or enforceability of any other agreement between the Company
and Employee, and the benefits provided under this Agreement shall be
additive to any other benefits promised to Employee under such other
agreement. Moreover, this Agreement shall not operate to negate any
other assurances provided to Employee.
(b) If Employee becomes entitled to compensation and
benefits pursuant to Paragraph 12(a) he shall use reasonable efforts to
seek other employment, provided, however, that he shall not be required
to accept a position of less importance and dignity or of substantially
different character than of his position with the Company or a position
that would require Employee to engage in activity in violation of
Employee's agreement with respect to noncompetition set forth in
Paragraph 14 hereof nor shall he be required to accept a position
outside the greater Cleveland area. The Company's obligations under
item (i) and (ii) of Paragraph 12(a) will be offset by payments and
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benefits received by Employee from another employer to the following
extent:
(i) The Company's obligation to pay any
particular installment of base salary following Employee's
termination will be offset, on a dollar for dollar basis, by
any cash compensation received by Employee from another
employer before the date on which the installment of base
salary is payable by the Company.
(ii) To the extent that Employee is provided
medical, dental, or short-term or long-term disability income
protection benefits by another employer during any period, the
Company will be relieved of its obligation to provide such
benefits to Employee. For example, if a new employer provides
Employee with a medical benefits plan that pays $500.00 for a
specific claim made by Employee and the Company's medical
insurance plan would have paid $750.00 for that claim, then
the Company will be obligated to pay Employee $250.00 with
respect to that claim.
Other than as provided in this Paragraph 12(b) Employee shall have no
duty to mitigate the amount of any payment or benefit provided for in
this Agreement.
(c) If during any period in which Employee is
entitled to payments or benefits from the Company under Paragraph
12(a):
(i) Employee materially and willfully
breaches his agreement with respect to confidential
information set forth in Paragraph 13 hereof and such breach
directly causes the Company substantial and demonstrable
damage; or
(ii) Employee materially and wilfully
breaches his agreement with respect to noncompetition set
forth in Paragraph 14 hereof and such breach directly causes
the Company substantial and demonstrable damage;
then the Company will be relieved of its obligations under paragraph
12(a) hereof as of the first day of the month immediately following the
date of such material breach.
(d) If Employee dies on or before the Severance
Benefits Termination Date and immediately before his death he is
entitled to payments or benefits from the Company under Paragraph
12(a), the Company will be relieved of its
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obligations under item (i) of Paragraph 12(a) as of the first day of
the month immediately following the month in which Employee dies and
thereafter the Company will provide to Employee's beneficiaries and
dependents salary continuation payments, benefits under the Excess
Benefits Plan (as supplemented by item (iii) of Paragraph 12(a), and
continuing medical and dental benefits to the same extent (subject to
reduction for payments or benefits from a new employer under paragraph
12(b) as if Employee's death had occurred while Employee was in the
active employ of the Company.
13. CONFIDENTIAL INFORMATION. Employee agrees that he will
not, during the term of the Agreement or at any time thereafter, either directly
or indirectly, disclose or make known to any person, firm, or corporation any
confidential information, trade secret, or proprietary information of the
Company that Employee may acquire in the performance of Employee's duties
hereunder. Upon the termination of Employee's employment with the Company,
Employee agrees to deliver forthwith to the Company any and all literature,
documents, correspondence, and other materials and records furnished to or
acquired by Employee during the course of such employment.
14. NONCOMPETITION. During any period in which Employee is
receiving Total Compensation under this Agreement (whether during the Contract
Period pursuant to Paragraph 5 or following termination pursuant to Paragraph
12(a), Employee shall not act as a proprietor, investor, director, officer,
employee, substantial stockholder, consultant, or partner in any business
engaged to a material extent in direct competition with the Company in any
market in any line of business engaged in by the Company during the Contract
period. If Employee delivers to the Company a written waiver of his right to
receive any further compensation or benefits pursuant to Paragraph 12(a), if
agreed to by the Company in writing, he shall be released, effective as of the
date of agreement by the Company, from the post-termination noncompetition
covenant contained in this Paragraph 14.
15. COSTS OF ENFORCEMENT. The Company shall pay and be solely
responsible for any and all costs and expenses (including attorneys' fees)
incurred by Employee in seeking to enforce the Company's obligations under this
Agreement unless and to the extent a court of competent jurisdiction determines
that the Company was relieved of those obligations because (a) the Company
terminated Employee for cause (as determined under Paragraph 11(b)(i) hereof),
(b) Employee voluntarily terminated his employment other than for good reason
(as determined under Paragraph 11(c)(ii) hereof), or (c) Employee materially and
willfully breached his agreement not to compete with the Company
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or his agreement with respect to confidential information and such breach
directly caused substantial and demonstrable damage to the Company. The Company
shall forthwith pay directly or reimburse Employee for any and all such costs
and expenses upon presentation by Employee or by counsel selected from time to
time by Employee of a statement or statements prepared by Employee or by such
counsel of the amount of such costs and expenses. If and to the extent a court
of competent jurisdiction renders a final binding judgment determining that the
Company was relieved of its obligations for any of the reasons set forth in (a),
(b) or (c) above, Employee shall repay the amount of such payments or
reimbursements to the Company. In addition to the payment and reimbursement of
expenses of enforcement provided for in this Paragraph 15, the Company shall pay
to Employee in cash, as and when the Company makes any payment on behalf of, or
reimbursement to, Employee, an additional amount sufficient to pay all federal,
state, and local taxes (whether income taxes or other taxes) incurred by
Employee as a result of (x) payment of the expense or receipt of the
reimbursement, and (y) receipt of the additional cash payment. The Company shall
also pay to Employee interest (calculated at the Base Rate from time to time in
effect at Xxxxxxxx Xxxx Xxxx, Xxxxxxxxx, Xxxx, compounded monthly) on any
payments or benefits that are paid or provided to Employee later than the date
on which due under the terms of this Agreement.
16. EMPLOYEE RIGHTS. Nothing expressed or implied in this
Agreement shall create any right or duty on the part of the Company or Employee
to have Employee remain in the employ of the Company before any Change in
Control and Employee shall have no rights under this Agreement if his employment
with the Company is terminated for any reason or for no reason before any Change
in Control. Nothing expressed or implied in this Agreement shall create any duty
on the part of the Company to continue in effect, or continue to provide to
Employee, any plan or benefit unless and until a Change in Control occurs. If,
before a Change in Control, the Company ceases to provide any plan or benefit to
Employee, nothing in this Agreement shall be construed to require the Company to
reinstitute that plan or benefit to Employee upon the later occurrence of a
Change in Control.
17. NOTICES. For purposes of this Agreement, all
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or when mailed by United States registered
or certified mail, return receipt requested, postage prepaid, addressed to the
Company (Attention: President) at its principal executive office and to Employee
at his principal residence, or to such other address as either party may have
furnished to the other in writing and in accordance herewith, except that
notices of change of address shall be effective only upon receipt.
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18. ASSIGNMENT, BINDING EFFECT.
(a) This Agreement shall be binding upon and shall
inure to the benefit of the Company and the Company's successors and
assigns. The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation, or otherwise) to all or
substantially all of the business and or assets of the Company, by
agreement in form and substance satisfactory to Employee, to expressly
assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no
such succession had taken place.
(b) This Agreement shall be binding upon Employee and
this Agreement and all rights of Employee hereunder shall inure to the
benefit of, and be enforceable by, Employee and his personal or legal
representatives, executors, or administrators. No right, benefit, or
interest of Employee hereunder shall be subject to assignment,
anticipation, alienation, sale, encumbrance, charge, pledge,
hypothecation, or to execution, attachment, levy, or similar process;
except that Employee may assign any right, benefit, or interest
hereunder if such assignment is permitted under the terms of any plan
or policy of insurance or annuity contract governing such right,
benefit, or interest.
19. INVALID PROVISIONS.
(a) Any provision of this Agreement that is
prohibited or unenforceable shall be ineffective to the extent, but
only to the extent, of such prohibition or unenforceability without
invalidating the remaining portions hereof and such remaining portions
of this Agreement shall continue to be in full force and effect.
(b) In the event that any provision or portion of
this Agreement shall be determined to be invalid or unenforceable, the
parties will negotiate in good faith to replace such provision with
another provision that will be valid or enforceable and that is as
close as practicable to the provision held invalid or unenforceable.
20. MODIFICATION. No modification, amendment, or waiver of any
of the provisions of the Agreement shall be effective unless in writing,
specifically referring hereto, and signed by both parties.
21. WAIVER OF BREACH. The failure at any time to enforce any
of the provisions of this Agreement or to require
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performance by the other party of any of the provisions of this Agreement shall
in no way be construed to be a waiver of such provisions or to affect either the
validity of this Agreement or any part of this Agreement or the right of either
party thereafter to enforce each and every provision of this Agreement in
accordance with the terms hereof.
22. GOVERNING LAW. This Agreement has been made in and shall
be governed and construed in accordance with the laws of the State of Ohio.
23. GROSS-UP OF PAYMENTS DEEMED TO BE EXCESS PARACHUTE
PAYMENTS.
(a) The Company and Employee acknowledge that,
following a Change of Control, one or more payments or distributions to
be made by the Company to or for the benefit of Employee (whether paid
or payable or distributed or distributable pursuant to the terms of
this Agreement, under some other plan, agreement, or arrangement, or
otherwise) (a "Payment") may be determined to be an "excess parachute
payment" that is not deductible by the Company for Federal income tax
purposes and with respect to which Employee will be subject to an
excise tax because of Sections 280G and 4999, respectively, of the
Internal Revenue Code (hereinafter referred to respectively as "Section
280G" and "Section 4999"). If Employee's employment is terminated after
a Change of Control occurs, the Accounting Firm, which, subject to any
inconsistent position asserted by the Internal Revenue Service, shall
make all determinations required to be made under this Paragraph 23,
shall determine whether any Payment would be an excess parachute
payment and shall communicate its determination, together with detailed
supporting calculations, to the Company and to Employee within 30 days
after the date on which Employee's employment with the Company
terminates or such earlier time as is requested by the Company. The
Company and Employee shall cooperate with each other and the Accounting
Firm and shall provide necessary information so that the Accounting
Firm may make all such determinations. The Company shall pay all of the
fees of the Accounting Firm for services performed by the Accounting
Firm as contemplated in this Paragraph 23.
(b) If the Accounting Firm determines that any
Payment gives rise, directly or indirectly, to liability on the part of
Employee for excise tax under Section 4999 (and/or any penalties and/or
interest with respect to any
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such excise tax), the Company shall make additional cash payments to
Employee, from time to time and at the same time as any Payment
constituting an excess parachute payment is paid or provided to
Employee, in such amounts as are necessary to put Employee in the same
position, after payment of all federal, state, and local taxes (whether
income taxes, excise taxes under Section 4999 or otherwise, or other
taxes) and any and all penalties and interest with respect to any such
excise tax, as Employee would have been in after payment of all
federal, state, and local income taxes if the Payments had not given
rise to an excise tax under Section 4999 and no such penalties or
interest had been imposed.
(c) If the Internal Revenue Service determines that
any Payment gives rise, directly or indirectly, to liability on the
part of Employee for excise tax under Section 4999 (and/or any
penalties and/or interest with respect to any such excise tax) in
excess of the amount, if any, previously determined by the Accounting
Firm, the Company shall make further additional cash payments to
Employee not later than the due date of any payment indicated by the
Internal Revenue Service with respect to these matters, in such amounts
as are necessary to put Employee in the same position, after payment of
all federal, state, and local taxes (whether income taxes, excise taxes
under Section 4999 or otherwise, or other taxes) and any and all
penalties and interest with respect to any such excise tax, as Employee
would have been in after payment of all federal, state, and local
income taxes if the Payments had not given rise to an excise tax under
Section 4999 and no such penalties or interest had been imposed.
(d) If the Company desires to contest any
determination by the Internal Revenue Service with respect to the
amount of excise tax under Section 4999, Employee shall, upon receipt
from the Company of an unconditional written undertaking to indemnify
and hold Employee harmless (on an after tax basis) from any and all
adverse consequences that might arise from the contesting of that
determination, cooperate with the Company in that contest at the
Company's sole expense. Nothing in this Paragraph 23(d) shall require
Employee to incur any expense other than expenses with respect to which
the Company has paid to Employee sufficient sums so that after the
payment of the expense by Employee and taking into account the payment
by the Company with respect to that expense and any and all taxes that
may be imposed upon Employee as a result of his receipt of that
payment, the net effect is no cost to Employee. Nothing in this
Paragraph 23(d) shall require Employee to extend the statute of
limitations with respect
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to any item or issue in his tax returns other than, exclusively, the
excise tax under Section 4999. If, as the result of the contest of any
assertion by the Internal Revenue Service with respect to excise tax
under Section 4999, Employee receives a refund of a Section 4999 excise
tax previously paid and/or any interest with respect thereto, Employee
shall promptly pay to the Company such amount as will leave Employee,
net of the repayment and all tax effects, in the same position, after
all taxes and interest, that he would have been in if the refunded
excise tax had never been paid.
(e) For purposes of this Paragraph 23, the term
"Accounting Firm" means the independent auditors of the Company for the
fiscal year preceding the year in which the earlier of (i) the date of
termination of Employee's employment with the Company, or (ii) the
year, if any, in which occurred the first Change of Control occurring
after the date of this Agreement, and such firm's successor or
successors; provided, however, if such firm is unable or unwilling to
serve and perform in the capacity contemplated by this Agreement, the
Company shall select another national accounting firm of recognized
standing to serve and perform in that capacity under this Agreement,
except that such other accounting firm shall not be the then
independent auditors for the Company or any of its affiliates (as
defined in Rule 12b-2 promulgated under the Exchange Act).
IN WITNESS WHEREOF, the Company and Employee have executed
this Agreement on the day and year first above written.
NORDSON CORPORATION
By:_________________________________
Xxxxxx X. Xxxxxxxx
Title: Vice President, Law and
Assistant Secretary
Employee:___________________________
Xxxxxx X. Xxxxxxxx
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EXHIBIT A
COMPANY PLANS
1. The Nordson Corporation 1995 Management Incentive
Compensation Plan;
2. The Nordson Corporation 1993 Long-Term Performance Plan;
3. The Nordson Corporation Salaried Employees Pension Plan
(the "Salaried Plan");
4. Nordson Corporation Officers' Deferred Compensation Plan;
5. The Nordson Corporation Excess Defined Benefit Pension Plan
and the Excess Defined Contribution Retirement Plan (the "Excess Benefit
Plans");
6. The Nordson Corporation Employees' Savings Trust Plan
(NEST);
7. The Nordson Corporation Non-Union Employees Stock Ownership
Plan;
8. The Nordson Corporation Salaried Employees' Health Plan;
9. The Nordson Corporation Prescription Drug Plan;
10. The Nordson Corporation Short Term and Long Term
Disability Plans;
11. The Nordson Corporation Employees' Dental Expense Plan;
12. The Nordson Corporation Group Life Insurance
Plan-Salaried;
13. The Nordson Corporation Group Travel Accident Plan;
14. The Company's car allowance Plan;
15. Nordson's policy of reimbursement for club dues, airline
travel clubs, and the like.
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