Exhibit 10-h-2
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT is entered into effective ___________, 200__
by and between NORDSON CORPORATION, an Ohio corporation (the "Company"),
and______________________, whose residence is at
_________________________________________ ("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 a ____________________;
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 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, 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
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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 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
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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;
(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
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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.
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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.
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
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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).
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
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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 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 twelve
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 Salaried
Plan and the Excess Benefit Plan will be equal to the aggregate
benefits that would have been paid to or with respect to
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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 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
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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 willfully 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 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
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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 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
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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.
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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.
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.
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21. Waiver of Breach. The failure at any time to enforce any of the
provisions of this Agreement or to require 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 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.
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(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 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
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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:
-----------------------------------------
Title: Secretary
Employee:
-----------------------------------
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EXHIBIT A
COMPANY PLANS
1. The Nordson Corporation 2004 Management Incentive Compensation
Plan;
2. The Nordson Corporation 2004 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 Salaried Employees' Health Care Plan;
8. The Nordson Corporation Prescription Drug and Dental Plans;
9. The Nordson Corporation Short Term and Long Term Disability
Plans;
10. The Nordson Corporation Group Life Insurance Plan-Salaried;
11. The Nordson Corporation Group Travel Accident Plan;
12. The Company's car allowance Plan;
13. Nordson's policy of reimbursement for club dues, airline travel
clubs, and the like.
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