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EXHIBIT 10-d
EMPLOYMENT AGREEMENT
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Nordson Corporation, an Ohio corporation (the "Company"), and Xxxxxxx X.
Xxxxx (the "Executive") agree as follows:
PART I
PRELIMINARY RECITALS AND AGREEMENTS
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1. EMPLOYMENT AND DUTIES. The Company agrees to employ the Executive,
and the Executive agrees to serve the Company, as the Company's President and
Chief Executive Officer. The Executive shall devote his full business time and
efforts to the performance of duties assigned to him by the Board of Directors
of the Company (the "Board") that are normally incident to the office of Chief
Executive.
2. DURATION OF EMPLOYMENT. The Executive's employment shall begin
February 15, 1986, and unless otherwise terminated shall continue through the
full Initial Period hereof and any Subsequent Period. Although it is the
present intention of the Company and the Executive that the Executive's
employment shall continue at least through the Initial Period, either party may
terminate his employment prior to the end of the Initial Period or any
Subsequent Period by giving sixty (60) days' prior written notice to the other.
In addition, either party may give notice of nonrenewal for any Subsequent
Period as provided in Section 4 below.
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3. DURATION OF AGREEMENTS WITH RESPECT TO COMPENSATION. Except as
expressly modified below, the Company's obligations under Part II hereof shall
continue in full force and effect through the Initial Period hereof and through
any Subsequent Period.
4. "INITIAL PERIOD;" "SUBSEQUENT PERIOD." The Initial Period of this
Agreement shall begin February 15, 1986, and shall continue through February
15, 1991. Each February 15th during the Initial Period and any Subsequent
Period, defined below, is herein referred to as an "Anniversary Date." The
Agreement shall be extended automatically as of the Anniversary Date of each
year beginning in 1991 for additional one year periods ("Subsequent
Periods"), with such modified terms hereof as may be mutually agreeable to the
Executive and the Board, until and unless during the last year of the Initial
Period or during any such Subsequent Period either party shall have given
written notice to the other party not less than six months prior to the next
succeeding Anniversary Date of its or his intention not to renew the Agreement
on such Anniversary Date.
PART II
AGREEMENTS WITH RESPECT TO
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EXECUTIVE'S COMPENSATION
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5. Cash Compensation.
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(a) During the Initial Period and each Subsequent Period, the
Executive's base salary shall be ad-
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justed annually as of the beginning of each fiscal year of the Company ("Fiscal
Year"). The initial base salary effective during the Fiscal Year ending
November 2, 1986, shall be at an annual rate of three hundred sixty thousand
dollars ($360,000.00). Thereafter, the base salary shall be reviewed by the
Compensation Committee of the Board (the "Compensation Committee") and shall be
determined by the Board upon consideration of the recommendation of the Com-
pensation Committee; provided, however, that such base salary for any Fiscal
Year shall not be less than the base salary of the prior Fiscal Year and shall
be increased as of the commencement of each Fiscal Year by at least as much as
the greater of (i) the percentage increase, if any, during the twelve month
period ending on the immediately preceding June 30 in the index number
entered in the "All Items" column of the table entitled "Consumer Price Index
for All Urban Consumers, U.S. City Average" published in the MONTHLY LABOR
REVIEW of the Bureau of Labor Statistics of the United States Department of
Labor and (ii) the percentage increase, if any, during the same period in
compensation payable to chief executive officers occupying similar positions,
as determined by Hay Management Consultants or such other consultant as may
be agreed upon by the Executive and the Compensation Committee. The
alternative in clause (ii) of the preceding sentence shall apply only if the
Executive and the Compensation Committee shall, no
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less than sixty (60) days prior to the commencement of such Fiscal Year, have
agreed upon both the consultant to determine such percentage increase and the
definition of "compensation payable to chief executive officers occupying
similar positions" to be used by the consultant in making the determination.
(b) The Company also agrees that the Executive shall be selected as a
participant in, and receive incentive compensation according to the terms of,
the Company's Management Incentive Compensation Plan during each year of the
Initial Period and any Subsequent Period for so long as the Company continues
such Plan. The Company currently expects to continue such Plan from year to
year and agrees that if such Plan, is not continued for any year during the
term of this Agreement the Board shall nevertheless award the Executive a
bonus for such year as though the Plan in effect on February 15, 1986 were
still in effect.
6. Restricted Stock.
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(a) The Company shall grant to the Executive 10,000 Common Shares with
a par value of $1 each of the Company (the "Common Shares") on February 15,
1986, and on each Anniversary Date during the Initial Period and each
Subsequent Period. Except as contemplated by subsections (b) and (c) below,
the Common Shares granted under this Section 6 (the "Restricted Stock") may not
be
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sold, transferred, pledged, assigned or otherwise alienated or hypothecated,
otherwise than by will or the laws of descent and distribution, for the
following periods, based upon the year in which the Restricted Stock is
granted:
(i) Restricted Stock granted in 1986 and 1987 shall be restricted for
three years from the date of grant. The restrictions on thirty percent (30%)
of the shares granted in each such year shall lapse on the day prior to the
first Anniversary Date after the date of grant, the restrictions on thirty
percent (30%) of such shares shall lapse on the day prior to the second
Anniversary Date after the date of grant, and the restrictions on forty (40%)
of such shares shall lapse on the day prior to the third Anniversary Date
after the date of grant.
(ii) Restricted Stock granted in 1988 shall be restricted for three
years from the date of grant. The restrictions on forty percent (40%) of the
shares granted in 1988 shall lapse on the day prior to the first Anniversary
Date after the date of grant, the restrictions on forty percent (40%) of such
shares shall lapse on the day prior to the second Anniversary Date after the
date of grant, and the restrictions on
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twenty percent (20%) of such shares shall lapse on the day prior to the third
Anniversary Date after the date of grant.
(iii) Restricted Stock granted in 1989 and each subsequent year shall be
restricted for two years from the date of grant. The restrictions on fifty
percent (50%) of the shares granted in each such year shall lapse on the day
prior to the first Anniversary Date after the date of grant, and the
restrictions on fifty percent (50%) of such shares shall lapse on the day prior
to the second Anniversary Date after the date of grant.
In addition, Restricted Stock may not be sold or transferred by the Executive
otherwise than in compliance with federal law, the Ohio Securities Act, as
amended from time to time, or any other applicable state securities laws. Each
certificate representing Restricted Stock granted hereunder shall bear legends
referring to the restrictions in accordance with Ohio law.
(b) In the event of a merger, consolidation or
acquisition in which the Company is not the surviving corporation, or a
tender or exchange offer for at least a majority of the outstanding Common
Shares, all restrictions on shares of Restricted Stock theretofore
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granted to the Executive shall lapse prior to the effective date of such
merger, consolidation or acquisition or consummation of such tender or
exchange offer.
(c) In the event of any change in the outstanding Common Shares by
reason of a stock dividend, stock split, recapitalization, merger,
consolidation, combination or exchange of shares or other similar change, the
aggregate number of shares of Restricted Stock to be issued hereunder shall be
appropriately adjusted.
(d) The Executive agrees that he will not elect under Section 83(b) of
the Internal Revenue Code of 1954, as amended (the "Code"), or any similar
provisions of the Code, to include the tax basis of any Restricted Stock in his
gross income for any year prior to the year in which inclusion of such tax
basis is required by the Code. The Company shall pay to the Executive on or
before the date such Executive's federal income tax payment is due with respect
to Restricted Stock on which restrictions have previously lapsed, a cash bonus
(a "gross-up bonus") intended to pay such federal income taxes. Such
gross-up bonus shall be equal to a percentage of the tax basis of the shares of
Restricted Stock on which the restrictions have lapsed during the year for
which the Executive's taxes are then due. Such percentage shall be equal to a
fraction, the numerator of which shall be the product of the
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Executive's marginal federal income tax rate for the year in which the
restrictions lapsed multiplied by the sum of the tax basis of the Restricted
Stock on which such restrictions have lapsed plus the amount of the gross-up
bonus, and the denominator of which is the tax basis of such Restricted Stock.
The parties recognize that the Executive's marginal tax rate may vary from year
to year and that the gross-up bonus shall vary accordingly. The Executive
shall promptly advise the Company if the gross-up bonus needs to be adjusted as
a result of audit or otherwise, and the Executive and the Company agree to
make such adjustments as are required.
7. Stock Options; Stock Purchase Plan.
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(a) On February 15, 1986, and on each Anniversary Date
during the Initial Period and each Subsequent Period, the Company shall grant
to the Executive options to purchase a number of Common Shares computed as set
forth in the next succeeding sentence. On the date of grant, the aggregate
fair market value of the Common Shares subject to the options granted shall be
equal to the sum of the Executive's base salary under Section 5(a) plus his
incentive bonus under Section 5(b) for the prior Fiscal Year; provided that the
Common Shares subject to options granted on February 15, 1986 shall have an
aggregate fair market value on such date equal to $432,000.00, and the
aggregate fair market value on the date of grant of the
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Common Shares subject to options granted in 1987 will be equal to the sum of
$360,000.00 plus the amount the Executive would have received as an incentive
bonus under Section 5(b) for the 1986 Fiscal Year had he been employed for a
full year. The stock options granted hereunder shall be incentive stock
options within the meaning of Section 422A of the Code to the maximum extent
allowed. The balance of such options shall be nonqualified stock options.
(b) The Executive shall also be entitled to participate in the Nordson
Corporation Employee Stock Purchase Plan (the "Stock Purchase Plan").
8. BENEFITS AND PERQUISITES. The Executive shall be entitled to benefits
and perquisites generally provided by the Company to its executive officers and
such benefits and perquisites as are recommended by the Compensation
Committee and approved by the Board. Such benefits shall include, but not be
limited to, life insurance, short-term and long-term disability insurance,
comprehensive medical coverage for the Executive, his spouse and any depend-
ent children ("medical coverage"), financial counseling and tax preparation, an
executive automobile or its equivalent, first-class travel as the Executive
deems advisable, an allowance for travel by his spouse as deemed advantageous
by the Executive to promote the Company's interests, membership in business
oriented clubs, including the Pepper
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Xxxx Xxxx and the Union Club, and at least five weeks of paid vacation per
year. For purposes of benefits administration, the Executive shall be deemed
to have been employed by the Company for twenty years at the date of
commencement of his employment, except as otherwise provided herein.
9. Supplemental Retirement Benefits.
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(a) Pension Benefit.
1. COMPUTATION. Upon termination of the Executive's employment
with the Company, the Executive shall be eligible to receive an annual
straight-life supplemental pension benefit equal to a percentage of his
Highest Consecutive 36-Month Average Annual Compensation reduced by:
(i) The sum of:
(A) the annual straight-life normal retirement benefits to which
the Executive is eligible under the qualified defined benefit pension plan and
any supplemental defined benefit pension retirement plan of The Standard Oil
Company which are attributable to employer contributions;
(B) the annual straight-life normal retirement benefit to which the
Executive becomes eligible under any nonqualified defined benefit program of
the Company which is attributable to contributions by the Company;
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(C) the annual straight-life normal retirement pension benefit to
which the Executive becomes eligible under any tax-qualified defined benefit
pension plan of the Company which is attributable to contributions of the
Company; and
(D) fifty percent (50%) of the Executive's Primary Social Security
Amount, as defined under the Nordson Corporation Salaried Employees Pension
Plan (the "Nordson Pension Plan"); and
(ii) .4166 percent for each month that commencement of his supplemental
pension benefit occurs prior to age 60.
The percentage referred to in the preceding sentence shall be equal to the
lesser of (i) fifty six percent (56%) and (ii) the product of one and
six-tenths percent (1.6%) multiplied by a fraction, the numerator of which is
the sum of two hundred forty eight (248) plus the number of months of the
Executive's benefit service under the Nordson Pension Plan and the denominator
of which is twelve (12).
2. METHOD OF PAYMENT. The supplemental pension benefit computed
under paragraph 1 above shall be payable to the Executive in (i) a lump sum
form computed utilizing the interest rate and deferred rates for lump sum
benefit purposes under the Nordson Pension Plan or (ii) any optional method of
payment available to a participant in the Nordson Pension Plan computed
utilizing the same fac-
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tors applicable thereto, as the Executive shall elect in writing.
3. THE HIGHEST CONSECUTIVE 36-MONTH AVERAGE ANNUAL COMPENSATION. For
purposes of the computation in paragraph 1 above, the Highest Consecutive
36-Month Average Annual Compensation shall mean one-third of the aggregate
amount of the Executive's base salary under Section 5(a) and incentive
bonuses under Section 5(b) with respect to the thirty six (36) consecutive
calendar months which produce a higher average than any other such thirty six
(36) consecutive calendar months; for this purpose, one-twelfth of the
Executive's incentive bonus for each Fiscal Year shall be allocated to each
month of the Fiscal Year for which the incentive bonus is awarded, and the
Executive's base salary and incentive bonuses shall include any portion
thereof that is deferred pursuant to any deferred compensation program
sponsored by the Company. Notwithstanding the foregoing, if the Executive's
months of employment with the Company are fewer than thirty six (36), such
term shall mean the annual average of the aggregate amount of such base salary
and incentive bonuses for his entire employment period.
(b) RETIREMENT BENEFITS. Upon the termination of Executive's
employment with the Company, the Executive will receive a supplemental
retirement benefit, payable in a lump sum, equal to any amount forfeited by him
solely
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by reason of the termination of his employment prior to the vesting in full of
his benefits under the Nordson Corporation Salaried Employees' Retirement
Plan and the Nordson Corporation Excess Defined Contribution Retirement Plan,
or any subsequent plan adopted by the Company that furnishes comparable
benefits to participants.
PART III
EFFECTS OF DEATH, DISABILITY,
RESIGNATION OR TERMINATION
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10. EFFECTS OF DEATH OR DISABILITY. If the Executive is continuously
incapacitated for a period of six months so that he cannot perform his duties
hereunder on a full-time basis, then either the Company or the Executive may
give written notice to the other terminating the Executive's employment
effective thirty (30) days thereafter (the "Disability Termination Date"). If
the Executive dies prior to the termination of his employment or notice of
termination for disability is given as provided above, the Company's
obligations under Part II hereof shall terminate as of the Executive's death or
the Disability Termination Date except as follows:
(a) CASH COMPENSATION. The Executive or his estate shall continue to
receive his base salary in accordance with Section 5(a) for a period of two
years following his death or the Disability Termination Date.
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(b) RESTRICTED STOCK. The Company shall be under no obligation to
grant additional Restricted Stock pursuant to Section 6, but any restrictions
then in effect shall immediately lapse with respect to all Restricted Stock
previously granted.
(c) STOCK OPTIONS; STOCK PURCHASE PLAN. The Company shall be under
no obligation to grant further options pursuant to Section 7, and the
Executive's participation in the Stock Purchase Plan shall terminate as
therein provided. The Executive or his estate may exercise options then held
by him in accordance with the terms of such options.
(d) INSURANCE AND PENSION BENEFITS. The Company shall continue to
provide medical coverage for so long as the Executive, his spouse or any
dependent child is living and to provide group life insurance coverage to the
Executive for so long as he is living. The Company's obligations under Section
9 shall remain in full force and effect. Any benefit payable under Section 9
shall be payable to the Executive or, in the event of his death, to his
designated beneficiary. In the event of the Executive's death prior to the
termination of his employment, the Company shall, in satisfaction of its
obligations under Section 9(a), provide a monthly survivor benefit to the
Executive's surviving spouse which is equal to one-half of the actuarial
equivalent of the supplemental pension
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benefit computed under Section 9(a) as of the date of the Executive's death,
but without any reduction for early commencement under subparagraph l(ii) of
Section 9(a), and payable immediately in a fifty percent (50%) joint and
survivor form computed using the factors utilized under the Nordson Pension
Plan; provided, however, that if the Executive dies prior to age 55 he will be
deemed nevertheless to have attained age 55 on the date of his death. In the
event of the Executive's disability, the Executive shall be deemed to continue
in the employ of the Company and shall accrue months of benefit service for
purposes of the supplemental pension benefit computed under Section 9(a) until
the earlier of (i) attainment of age 65 and (ii) the age on which the Executive
elects to receive his supplemental pension benefit. Moreover, for purposes
of determining his Highest Consecutive 36-Month Average Annual Compensation
under paragraph 3 of Section 9(a), the Executive shall be deemed to have
continued receiving the compensation he received during the Fiscal Year prior
to his disability. If the Executive is terminated by reason of disability, any
benefits paid pursuant to Section 9(a) shall be reduced by the amount of
disability benefits received by the Executive through the Company or the
Social Security Administration.
11. EFFECTS OF TERMINATION BY THE COMPANY. If the Company terminates the
Executive's employment, other
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than pursuant to Section 13 hereof, its obligations under Part II hereof shall
terminate, except as provided below. A termination by the Company shall be
considered as having occurred not only if notice is given by the Company under
Section 2, but also if it gives notice of its intention not to renew for a
Subsequent Period under Section 4.
(a) CASH COMPENSATION. The Executive shall continue to receive his
base salary in accordance with Section 5(a) plus an additional amount equal to
20% of his base salary until the later of the end of (i) the Initial Period
or (ii) one year from date of termination of employment.
(b) RESTRICTED STOCK. The Company shall be under no obligation to
grant additional Restricted Stock pursuant to Section 6, but any existing
restrictions then in effect shall immediately lapse with respect to all
Restricted Stock previously granted.
(c) STOCK OPTIONS; STOCK PURCHASE PLAN. The Company shall be under
no obligation to grant further options pursuant to Section 7, and the
Executive's participation in the Stock Purchase Plan shall terminate as
therein provided. The Executive may exercise options then held by him in
accordance with the terms of such options.
(d) INSURANCE AND PENSION BENEFITS. The Company shall continue to
provide medical coverage and group life insurance to the Executive only so long
as the
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Executive, his spouse or any dependent child is living and the Executive is not
receiving medical coverage or group life insurance, as the case may be, through
other employment. The Company's obligations under Section 9 shall remain in
full force and effect. For purposes of Section 9, if the Executive elects to
retire on or after the date of termination and has not attained age 56, he
shall be deemed to have attained age 56 for purposes of computing the reduction
in the supplemental pension benefit under subparagraph l(ii) of Section 9(a).
If at such time he does not have at least sixty (60) months of benefit service
under the Nordson Pension Plan, he shall be deemed to have sixty (60) months of
such benefit service for purposes of computing the percentage referred to in
Section 9(a).
12. EFFECTS OF RESIGNATION OR RETIREMENT BY THE EXECUTIVE. If the
Executive's employment is terminated by reason of his resignation or
retirement, the Company's obligations under Part II hereof shall terminate,
except as provided below. A resignation by the Executive shall be deemed to
have occurred not only if he gives notice under Section 2, but also if he gives
notice of his intention not to renew for a Subsequent Period under Section 4.
(a) CASH COMPENSATION. The Executive shall continue to receive his
base salary in accordance with Section 5(a) for a period of one year following
the termination of his employment.
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(b) RESTRICTED STOCK. The Company shall be under no obligation to
grant additional Restricted Stock, and any shares of Restricted Stock on which
the restrictions have not lapsed prior to the termination of his employment
will be forfeited and returned to the Company.
(c) STOCK OPTIONS; STOCK PURCHASE PLAN. The Company shall be under
no obligation to grant further options pursuant to Section 7, and the
Executive's participation in the Stock Purchase Plan shall terminate as
therein provided. The Executive may exercise options then held by him in
accordance with the terms of such options.
(d) INSURANCE AND PENSION BENEFITS. The Company's obligations under
Section 9 shall remain in full force and effect. The Company shall continue to
provide medical coverage for one year after the termination of his employment
except for any period during which the Executive is receiving medical coverage
through other employment; provided, however, that if the Executive has
attained age 56 at or prior to the termination of his employment, the Company
shall continue to provide medical coverage for so long as the Executive, his
spouse or any dependent child is living and the Executive is not receiving
medical coverage through other employment.
13. EFFECTS OF TERMINATION BY THE COMPANY FOR CAUSE. Notwithstanding
anything to the contrary herein, in the event that the Executive's employment
is termi-
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nated by the Company for the reason that the Executive is convicted of a felony
involving the Company or its property (other than a felony committed by the
Executive in good faith and in a manner he reasonably believes to be in the
best interests of the Company), all of the Executive's rights to compensation
and benefits, including supplemental retirement benefits provided in Section 9,
shall terminate, and shares of Restricted Stock on which the restrictions have
not lapsed shall be forefeited and returned to the Company.
PART IV
MISCELLANEOUS
14. TRADE SECRETS; CONFIDENTIAL AND PROPRIETARY INFORMATION. The
Executive shall not at any time or in any manner, either directly or
indirectly, divulge, disclose or communicate to any person, firm or corporation
in any manner whatsoever any information concerning any matters affecting or
relating to the business of the Company, except as directed by the Company,
including without limiting the generality of the foregoing, any of its cus-
tomers, its prices or proceeds from sales, its products or any other
information concerning the business of the Company, its manner of operation,
its plans, processes, or other data, without regard to whether all of the
foregoing matters will be deemed confidential, material, or impor-
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tant; the parties hereto stipulating that as between them the same are
important, material and confidential and affect the effective and successful
conduct of the Company's business. This Section 14 shall remain in full
force and effect after termination of this Agreement for any reason.
15. COVENANT NOT TO COMPETE. The Executive agrees that during the term
of this Agreement and for a period of five years thereafter he will not,
without the Company's prior written consent, directly or indirectly engage in,
make any investment in or have any interest in any business in competition with
the business of the Company; and he will not advise, assist or render
services either directly or indirectly to any person, firm or corporation
other than the Company with reference to any business in competition with
business engaged in by the Company during the Executive's employment by the
Company. For purposes of this Section 15, a business in competition with the
Company shall mean any business engaged in the manufacture, processing,
purchase or distribution of products of the Company at the time of the
Executive's termination.
16. SUCCESSORS; BINDING AGREEMENT. (a) The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation, or
otherwise) to all or substantially all of
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the business and/or assets of the Company, by agreement in form and substance
satisfactory to Executive, 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 and all rights of Executive hereunder shall inure
to the benefit of, and be enforceable by, Executive's personal or legal
representatives, executors or administrators.
17. NOTICES. All notices, requests, demands and other communications
made or given in connection with this Agreement shall be in writing and shall
be deemed to have been duly given (a) if delivered, at the time delivered or
(b) if mailed, at the time mailed at any general or branch United States Post
Office enclosed in a registered or certified postage paid envelope addressed to
the address of the respective parties as follows:
To the Company: Nordson Corporation
X.X. Xxx 000
000 Xxxxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
To the Executive: Xx. Xxxxxxx X. Xxxxx
0000 Xxxxxxxx Xxxx
Xxxxxx Xxxxxxx, Xxxx 00000
or to such other addresses as the party to whom notice is to be given may have
previously furnished to the other party in writing in the manner set forth
above, provided that
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notices of changes of address shall only be effective upon receipt.
18. MODIFICATIONS AND WAIVERS. No provisions of this Agreement may be
modified or discharged unless such modification or discharge is authorized by
the Board and is agreed to in writing, signed by the Executive and by another
executive officer of the Company. No waiver by either party hereto of any
breach by the other party hereto or any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
19. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
of the parties hereto relating to the subject matter hereof and there are no
written or oral terms or representations made by either party other than those
contained herein.
20. GOVERNING LAW. The validity, interpretation, construction,
performance and enforcement of this Agreement shall be governed by the laws of
the State of Ohio.
21. INVALIDITY. The invalidity or unenforceability of any term or
terms of this Agreement shall not invalidate, make unenforceable or otherwise
affect any other term of this Agreement which shall remain in full force and
effect.
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22. HEADINGS. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF the parties hereto have executed this Agreement in
Cleveland, Ohio, on January 30, 1986.
ATTEST: NORDSON CORPORATION
/s/Xxxxxxx X. Xxxx By: /s/Xxxx X. Xxxx
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Secretary Chairman of the Board
/s/Xxxxxxx X. Xxxxx
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Executive
