-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SuTEZg34nm3fxu7YXLkNeHtvWEuip2ER82dl3b2oT22Y1RM7x/q3oSV96di0rRsY qjg2o3aYzsJZz5JuTK3AtQ== 0000950152-05-001798.txt : 20050307 0000950152-05-001798.hdr.sgml : 20050307 20050307144827 ACCESSION NUMBER: 0000950152-05-001798 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 20050130 FILED AS OF DATE: 20050307 DATE AS OF CHANGE: 20050307 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NORDSON CORP CENTRAL INDEX KEY: 0000072331 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT, NEC [3569] IRS NUMBER: 340590250 STATE OF INCORPORATION: OH FISCAL YEAR END: 1103 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07977 FILM NUMBER: 05663744 BUSINESS ADDRESS: STREET 1: 28601 CLEMENS RD CITY: WESTLAKE STATE: OH ZIP: 44145 BUSINESS PHONE: 2168921580 MAIL ADDRESS: STREET 1: 28601 CLEMENS ROAD CITY: WESTLAKE STATE: OH ZIP: 44145 10-Q 1 l12457ae10vq.htm NORDSON CORPORATION FORM 10-Q NORDSON CORPORATION FORM 10-Q
Table of Contents

 
 

FORM 10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
     
(Mark One)
þ
  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the quarterly period ended January 30, 2005
 
   OR
 
o
  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  For the transition period from                      to                     

Commission file number 0-7977

NORDSON CORPORATION

(Exact name of registrant as specified in its charter)

     
Ohio   34-0590250
     
(State of incorporation)   (I.R.S. Employer Identification No.)
     
28601 Clemens Road    
     
Westlake, Ohio   44145
     
(Address of principal executive offices)   (Zip Code)

(440) 892-1580

(Telephone Number)

Securities registered pursuant to Section 12(b) of the Act:
None
Securities registered pursuant to Section 12(g) of the Act:
Common Shares with no par value

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes þ No o

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act)
Yes þ No o

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: Common Shares without par value as of January 28, 2005: 36,449,053

 
 

Page 1

Table of Contents

Nordson Corporation

Table of Contents

         
    3  
 
        
    3  
    3  
    4  
    5  
    6  
    14  
    14  
    15  
    16  
    17  
    17  
 
        
    18  
 
        
    18  
    18  
    19  
 
        
    20  
 EX-10.1 NORDSON 2005 DEFERRED COMPENSATION PLAN
 EX-10.2 2005 EXCESS DEFINED BENEFIT PENSION PLAN
 EX-10.3 2005 DIRECTORS DEFERRED COMPENSATION
 EX-31.1 302 CERT. FOR CEO
 EX-31.2 302 CERT. FOR CFO
 EX-32.1 906 CERT. FOR CEO
 EX-32.2 906 CERT FOR CFO

Page 2

Table of Contents

Nordson Corporation

Part I – FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)

Condensed Consolidated Statements of Income

                 
Thirteen Weeks Ended   January 30, 2005     February 1, 2004
(In thousands, except for per share data)                
Sales
   $ 190,166     $ 170,640  
 
                
Operating costs and expenses:
                
Cost of sales
     83,625       77,767  
Selling and administrative expenses
     82,791       74,733  
 
 
     166,416       152,500  
 
Operating profit
     23,750       18,140  
 
                
Other income (expense):
                
Interest expense
     (3,296 )     (3,989 )
Interest and investment income
     346       174  
Other - net
     483       99  
 
 
     (2,467 )     (3,716 )
 
Income before income taxes
     21,283       14,424  
 
                
Income taxes
     6,917       4,760  
 
Net income
   $ 14,366     $ 9,664  
 
 
                
Average common shares
     36,226       34,568  
Incremental common shares attributable to outstanding stock options, nonvested stock, and deferred stock-based compensation
     974       1,064  
 
Average common shares and common share equivalents
     37,200       35,632  
 
 
                
Basic earnings per share
   $ 0.40     $ 0.28  
 
Diluted earnings per share
   $ 0.39     $ 0.27  
 
 
                
Dividends per share
   $ 0.16     $ 0.155  
 

See accompanying notes.

Page 3

Table of Contents

Nordson Corporation

Condensed Consolidated Balance Sheet

                 
    January 30, 2005     October 31, 2004  
(In thousands)                
Assets
                
Current assets:
                
Cash and cash equivalents
   $ 27,018     $ 11,176  
Marketable securities
     35,604       49,403  
Receivables
     171,221       175,013  
Inventories
     88,409       85,330  
Deferred income taxes
     37,769       37,093  
Prepaid expenses
     8,113       6,257  
 
Total current assets
     368,134       364,272  
 
                
Property, plant and equipment - net
     112,524       111,607  
Goodwill - net
     332,426       331,659  
Other intangible assets - net
     17,019       17,331  
Other assets
     15,758       15,679  
 
 
   $ 845,861     $ 840,548  
 
Liabilities and shareholders’ equity
               
Current liabilities:
                
Notes payable
   $ 18,331     $ 15,301  
Accounts payable
     47,407       58,740  
Current maturities of long-term debt
     12,290       12,290  
Other current liabilities
     92,001       110,579  
 
Total current liabilities
     170,029       196,910  
 
                
Long-term debt
     147,612       148,033  
Other liabilities
     102,491       92,272  
 
                
Shareholders’ equity:
                
Common shares
     12,253       12,253  
Capital in excess of stated value
     179,081       174,440  
Retained earnings
     567,185       558,620  
Accumulated other comprehensive loss
     (4,625 )     (16,471 )
Common shares in treasury, at cost
     (324,740 )     (323,531 )
Deferred stock-based compensation
     (3,425 )     (1,978 )
 
Total shareholders’ equity
     425,729       403,333  
 
 
   $ 845,861     $ 840,548  
 

See accompanying notes.

Page 4

Table of Contents

Nordson Corporation

Condensed Consolidated Statement of Cash Flows

                 
Thirteen Weeks Ended   January 30, 2005     February 1, 2004  
(In thousands)                
Cash flows from operating activities:
                
Net income
   $ 14,366     $ 9,664  
Depreciation and amortization
     6,387       7,060  
Changes in operating assets and liabilities
     (21,145 )     4,440  
Other
     8,037       2,550  
 
 
                
Net cash provided by operating activities
     7,645       23,714  
 
                
Cash flows from investing activities:
                
Additions to property, plant and equipment
     (3,136 )     (2,504 )
Proceeds from sale of marketable securities
     59,275       5  
Purchases of marketable securities
     (45,276 )     —  
 
Net cash provided by (used in) investing activities
     10,663       (2,499 )
 
                
Cash flows from financing activities:
                
Net proceeds from (repayment of) short-term borrowings
     2,078       (34,650 )
Repayment of capital lease obligations
     (1,173 )     (1,055 )
Issuance of common shares
     2,239       29,868  
Purchase of treasury shares
     (710 )     (834 )
Tax benefit from the exercise of stock options
     55       —  
Dividends paid
     (5,800 )     (5,351 )
 
Net cash used in financing activities
     (3,311 )     (12,022 )
Effect of exchange rate changes on cash
     845       764  
 
Increase in cash and cash equivalents
     15,842       9,957  
Cash and cash equivalents:
                
Beginning of year
     11,176       6,945  
 
End of quarter
   $ 27,018     $ 16,902  
 

See accompanying notes.

Page 5

Table of Contents

Nordson Corporation

Notes to Condensed Consolidated Financial Statements

January 30, 2005

  1.   Basis of presentation. The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the quarter ended January 30, 2005 are not necessarily indicative of the results that may be expected for the full fiscal year. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company’s annual report on Form 10-K for the year ended October 31, 2004. Certain prior period amounts have been reclassified to conform to current period presentation.
 
  2.   Revenue recognition. Most of the Company’s revenues are recognized upon shipment, provided that persuasive evidence of an arrangement exists, the sales price is fixed or determinable, collectibility is reasonably assured, and title and risk of loss have passed to the customer. A limited number of the Company’s large engineered systems sales contracts are accounted for using the percentage-of-completion method. The amount of revenue recognized in any accounting period is based on the ratio of actual costs incurred through the end of the period to total estimated costs at completion. The remaining revenues are recognized upon delivery.
 
  3.   Use of estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual amounts could differ from these estimates.
 
  4.   Marketable Securities. During fiscal 2004, the Company began investing in auction rate securities, which are associated with municipal bond offerings, and have final maturity dates ranging from 2016 to 2046. These securities were previously classified as cash and cash equivalents because there is a mechanism in place to remarket them at least monthly, offering ready liquidity. The Company began to classify them as marketable securities in fiscal 2005. The accompanying October 31, 2004 Balance Sheet has been adjusted to reflect the reclassification of $49,075,000 from cash and cash equivalents to marketable securities. The amount of these investments at January 30, 2005 was $35,275,000 They are classified as available for sale and are recorded at quoted market prices that approximate cost. This reclassification will have no impact on the Company’s debt covenants or interest expense.
 
  5.   Accounting Changes. In November 2002, the FASB issued Interpretation No. 45, “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness to Others.” This interpretation addresses the disclosures to be made by a guarantor in its interim and annual financial statements regarding its obligations under guarantees and clarifies the requirements related to the recognition of liabilities by a guarantor for obligations undertaken in issuing guarantees. The initial recognition and measurement provisions of the interpretation are applicable to guarantees issued or modified after December 31, 2002 and did not have a material effect on the Company’s financial statements. The disclosure requirements are effective for financial statements for periods ending after December 31, 2002 and are applicable for all outstanding guarantees subject to the interpretation.
 
      The Company has issued guarantees to two banks to support the short-term borrowing facilities of a 49 percent-owned South Korean joint venture/distributor of the Company’s products. One guarantee is for Korean Won Three Billion (approximately $2,928,000) secured by land and building and expires on January 31, 2006. The other guarantee is for $2,300,000 and expires on October 31, 2005. As discussed below, the Company began consolidating this affiliate in the second quarter of 2004.
 
      In 2004, the Company issued a guarantee to a U.S. bank related to a five-year trade financing agreement for a sale to a customer in Turkey. The loan is secured by collateral with a current value well in excess of the amount due. The guarantee would be triggered upon a payment default by the customer to the bank. The amount of the guarantee at January 30, 2005 was Euro 2 million (approximately $2,609,000) and will decline ratably as semi-annual principal payments are made by the customer beginning in 2005. The Company has recorded $1,161,000 in other current liabilities related to this guarantee. The recorded amount will be adjusted as the customer makes payments.

Page 6

Table of Contents

Nordson Corporation

In January 2003, the FASB issued Interpretation No. 46, “Consolidation of Variable Interest Entities.” This Interpretation addresses consolidation by business enterprises of variable interest entities, which possess certain characteristics. The interpretation requires that if a business enterprise has a controlling financial interest in a variable interest entity, the assets, liabilities and results of operations of the variable interest entity must be included in the consolidated financial statements with those of the business enterprise. This interpretation applies immediately to variable interest entities created after January 31, 2003 and to variable interest entities in which an enterprise obtains an interest after that date. For variable interest entities created prior to January 31, 2003, this interpretation is effective for the first year or interim period beginning after March 15, 2004. In the second quarter of 2004, the Company began consolidating a 49 percent-owned South Korean joint venture/distributor of the Company’s products. Real estate with a net book value of approximately $750,000 serves as collateral for one of the bank loans noted above. Other than the bank guarantees noted above, creditors of the joint venture/distributor have no recourse against the Company. The Company’s initial investment in this distributor occurred in 1989. The effect of the consolidation on the Company’s financial statements was not material.

In May 2004, the FASB issued Staff Position No. FSP 106-2, “Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003,” in response to a new law that provides prescription drug benefits under Medicare (“Medicare Part D”) as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. Currently, Statement of Financial Accounting Standard No. 106, “Employers’ Accounting for Postretirement Benefits Other Than Pensions” (“No. 106”) requires that changes in relevant law be considered in current measurement of postretirement benefit costs. The Company’s measures of the accumulated postretirement benefit obligation and the net periodic postretirement benefit cost do not reflect the effects of the subsidy, because benefits under the Company’s plan are not actuarially equivalent to Medicare Part D. The adoption of FSP No. 106-2 had no effect on the Company’s financial condition or results of operations.

In November 2004, the FASB issued Statement of Financial Accounting Standard No. 151, “Inventory Costs.” No. 151 amends Accounting Research Bulletin No. 43, Chapter 4, “Inventory Pricing,” to clarify the accounting for abnormal amounts of idle facility expense, freight, handling costs, and wasted material. This Statement requires that those items be recognized as current-period charges and requires that allocation of fixed production overheads to the costs of conversion be based on the normal capacity of the production facilities. The adoption of No. 151 is effective for fiscal years beginning after June 15, 2005. The Company has not yet determined the impact of adoption on its consolidated financial position or results of operations.

In December 2004, the FASB issued Statement of Financial Accounting Standard No. 123 (revised 2004), Share-Based Payment. This Statement replaces FASB Statement No. 123 and supercedes APB Opinion No. 25. No. 123(R) eliminates the ability to account for share-based compensation transactions using the intrinsic method currently used by the Company. No. 123(R) requires such transactions be accounted for using a fair-value-based method that would result in expense being recognized in the Company’s financial statements. The Company will be required to adopt No. 123(R) in the fourth quarter of fiscal 2005 and has not yet determined the impact of adoption on its consolidated financial position or results of operations.

Page 7

Table of Contents

Nordson Corporation

  6.   Inventories. Inventories consisted of the following:

                 
    January 30, 2005     October 31, 2004  
 
(In thousands)
                
Finished goods
   $ 45,501     $ 42,929  
Work-in-process
     13,777       12,310  
Raw materials and finished parts
     43,228       43,254  
 
 
     102,506       98,493  
Obsolescence reserve
     (5,387 )     (4,401 )
LIFO reserve
     (8,710 )     (8,762 )
 
 
   $ 88,409     $ 85,330  
 

  7.   Goodwill and Other Intangible Assets. Changes in the carrying amount of goodwill for the quarter ended January 30, 2005 by operating segment are as follows:

                                 
    Adhesive Dispensing             Advanced        
    & Nonwoven Fiber     Coating &     Technology        
    Systems     Finishing Systems     Systems     Total  
 
(In thousands)
                                
Balance at October 31, 2004
   $ 30,715     $ 3,438     $ 297,506     $ 331,659  
Currency effect
     481       66       220       767  
 
Balance at January 30, 2005
   $ 31,196     $ 3,504     $ 297,726     $ 332,426  
 

Page 8

Table of Contents

Nordson Corporation

Information regarding the Company’s intangible assets subject to amortization is as follows:

                         
    January 30, 2005  
            Accumulated        
    Carrying Amount     Amortization     Net Book Value  
(In thousands)
                        
Core/Developed Technology
   $ 10,400     $ 2,887     $ 7,513  
Non-Compete Agreements
     4,102       1,484       2,618  
Patent Costs
     2,994       1,713       1,281  
Other
     6,847       6,131       716  
 
Total
   $ 24,343     $ 12,215     $ 12,128  
 
                         
    October 31, 2004  
            Accumulated        
    Carrying Amount     Amortization     Net Book Value  
(In thousands)
                        
Core/Developed Technology
   $ 10,400     $ 2,667     $ 7,733  
Non-Compete Agreements
     4,079       1,430       2,649  
Patent Costs
     2,966       1,628       1,338  
Other
     6,332       5,612       720  
 
Total
   $ 23,777     $ 11,337     $ 12,440  
 

At January 30, 2005 and October 31, 2004, $4,891,000 of intangible assets related to a minimum pension liability for the Company’s pension plans were not subject to amortization.

Amortization expense for the thirteen weeks ended January 30, 2005 was $437,000. Estimated amortization expense for each of the five succeeding fiscal years is as follows:

         
Fiscal Year   Amounts  
 
(In thousands)
2005
   $ 1,750  
2006
   $ 1,627  
2007
   $ 1,479  
2008
   $ 1,508  
2009
   $ 1,199  

Page 9

Table of Contents

Nordson Corporation

  8.   Comprehensive income. Comprehensive income for the thirteen weeks ended January 30, 2005 and February 1, 2004 is as follows:

                 
    January 30, 2005     February 1, 2004  
 
(In thousands)
                
Net income
   $ 14,366     $ 9,664  
Foreign currency translation adjustments
     11,846       6,069  
 
Comprehensive income
   $ 26,212     $ 15,733  
 

Accumulated other comprehensive loss at January 30, 2005 consisted of net foreign currency translation adjustment credits of $20,829,000 offset by $25,454,000 of minimum pension liability adjustments. At February 1, 2004 it consisted of net foreign currency translation adjustment credits of $8,577,000 offset by $22,804,000 of minimum pension liability adjustments. First quarter activity is as follows:

                 
    January 30, 2005     February 1, 2004  
(In thousands)
                
Beginning balance
   $ (16,471 )   $ (20,296 )
Current-period change
     11,846       6,069  
 
Ending balance
 ( $ 4,625 ) ( $ 14,227 )
 
 

  9.   Company Stock Plans. The Company accounts for its stock option plans under the recognition and measurement principles of APB Opinion No. 25, “Accounting for Stock Issued to Employees.” No stock option expense is reflected in net income, as all options granted under these plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table shows pro forma information regarding net income and earnings per share as if the Company had accounted for stock options granted since 1996 under the fair value method.

                 
    Thirteen Weeks Ended  
(In thousands, except for per share data)   January 30, 2005     February 1, 2004  
 
Net income, as reported
   $ 14,366     $ 9,664  
 
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of tax
     (548 )     (273 )
 
Pro forma net income
   $ 13,818     $ 9,391  
 
 
                
Earnings per share:
                
Basic - as reported
   $ 0.40     $ 0.28  
Basic - pro forma
   $ 0.38     $ 0.27  
 
                
Diluted - as reported
   $ 0.39     $ 0.27  
Diluted - pro forma
   $ 0.37     $ 0.26  

Page 10

Table of Contents

Nordson Corporation

  10.   Warranty Accrual. The Company offers warranty to its customers depending on the specific product and terms of the customer purchase agreement. Most of the Company’s product warranties are customer specific. A typical warranty program requires that the Company repair or replace defective products within a specified time period from the date of delivery or first use. The Company records an estimate for future warranty-related costs based on actual historical return rates. Based on analysis of return rates and other factors, the adequacy of the Company’s warranty provisions are adjusted as necessary. The liability for warranty costs is included in other current liabilities in the Consolidated Balance Sheet.
 
      Following is a reconciliation of the product warranty liability for the first quarter of 2005 and 2004:

                 
Thirteen weeks ended   January 30, 2005     February 1, 2004  
 
(In thousands)
Beginning balance
   $ 4,121     $ 3,030  
Accruals for warranties
     800       819  
Warranty payments
     (658 )     (665 )
Currency effect
     140       61  
 
Ending balance
   $ 4,403     $ 3,245  
 

  11.   Operating segments. The Company conducts business across three primary business segments: adhesive dispensing and nonwoven fiber systems, finishing and coating systems and advanced technology systems. The composition of segments and measure of segment profitability is consistent with that used by the Company’s chief operating decision maker. The primary focus is operating profit, which equals sales less operating costs and expenses. Operating profit excludes interest income (expense), investment income (net) and other income (expense). Items below the operating income line of the Condensed Consolidated Statement of Income are not presented by segment, since they are excluded from the measure of segment profitability reviewed by the Company’s chief operating decision maker. The accounting policies of the segments are generally the same as those described in Note 1, Significant Accounting Policies, of the Company’s annual report on Form 10-K for the year ended October 31, 2004.
 
      Nordson products are used in a diverse range of industries, including appliance, automotive, bookbinding, circuit board assembly, electronics, food and beverage, furniture, medical, metal finishing, nonwoven products, packaging, semiconductor and telecommunications. Nordson sells its products primarily through a direct, geographically dispersed sales force.

Page 11

Table of Contents

Nordson Corporation

      The following table presents information about the Company’s reportable segments:

                                         
    Adhesive                          
    Dispensing and     Finishing and     Advanced              
    Nonwoven Fiber     Coating     Technology     Corporate     Total  
 
(In thousands)
Thirteen weeks ended
                                        
January 30, 2005
                                        
Net external sales
   $ 114,962     $ 33,688     $ 41,516     $ —     $ 190,166  
Operating profit
     18,343       695       6,862       (2,150 )     23,750  
 
                                        
Thirteen weeks ended
                                        
February 1, 2004
                                        
Net external sales
   $ 106,101     $ 29,200     $ 35,339     $ —     $ 170,640  
Operating profit
     14,802       569       4,999       (2,230 )     18,140  

      A reconciliation of total segment operating income to total consolidated income before income taxes is as follows:

                 
Thirteen weeks ended   January 30, 2005     February 1, 2004  
 
(In thousands)
Total profit for reportable segments
   $ 23,750     $ 18,140  
Interest expense
     (3,296 )     (3,989 )
Interest and investment income
     346       174  
Other-net
     483       99  
 
Consolidated income before income taxes
   $ 21,283     $ 14,424  
 

      The Company has significant sales in the following geographic regions:

                 
Thirteen weeks ended   January 30, 2005     February 1, 2004  
 
(In thousands)
United States
   $ 60,285     $ 57,913  
Americas
     14,554       9,476  
Europe
     70,828       65,875  
Japan
     21,469       18,072  
Asia Pacific
     23,030       19,304  
 
Total net external sales
   $ 190,166     $ 170,640  
 

Page 12

Table of Contents

Nordson Corporation

  12.   Pension and other postretirement plans. The components of net periodic pension cost and the cost of other postretirement benefits for 2005 as compared with 2004 were:

                                 
    Pension Benefits     Other Postretirement Benefits  
Thirteen weeks ended   January 30, 2005     February 1, 2004     January 30, 2005     February 1, 2004  
     
(In thousands)
Service cost
   $ 1,323     $ 1,174     $ 331     $ 301  
Interest cost
     2,412       2,130       545       511  
Expected return on plan assets
     (2,355 )     (1,970 )     —       —  
Amortization of prior service cost
     152       55       (147 )     (139 )
Amortization of transition obligation
     —       23       —       —  
Recognized net actuarial loss (gain)
     588       398       272       169  
     
Total benefit cost
   $ 2,120     $ 1,810     $ 1,001     $ 842  
     

  13.   Contingencies. The Company is involved in pending or potential litigation regarding environmental, product liability, patent, contract, employee and other matters arising from the normal course of business. Including the environmental matter discussed below, it is the Company’s opinion, after consultation with legal counsel, that resolutions of these matters are not expected to result in a material effect on its financial condition, operating results, or cash flows.
 
      The Company has been identified as a potentially responsible party (PRP) at a Wisconsin municipal landfill and has voluntarily agreed with other PRP’s to share costs associated with (1) a feasibility study and remedial investigation (“FS/RI”) for the site and (2) providing clean drinking water to the affected residential properties through completion of the FS/RI phase of the project. The FS/RI is expected to be completed in 2005. The Company has committed $829,000 towards completing the FS/RI phase of the project and providing clean drinking water. This amount has been recorded in the Company’s financial statements. Against this commitment, the Company has made payments of $583,000 through the first quarter of 2005. The remaining amount of $246,000 is recorded in accrued liabilities in the January 30, 2005 Consolidated Balance Sheet. The total cost of the Company’s share for remediation efforts will not be ascertainable until the FS/RI is completed and a remediation plan is approved by the Wisconsin Department of Natural Resources, which is anticipated to occur in 2006. However, based upon current information, the Company does not expect that the costs associated with remediation will have a material effect on its financial condition or results of operations.
 
      The European Union (“EU”) has adopted two Directives to facilitate the recycling of electrical and electronic equipment sold in the EU. The first of these is the Waste Electrical and Electronic Equipment (“WEEE”) Directive which directs EU Member States to enact laws, regulations, and administrative provisions to ensure that producers of electrical and electronic equipment provide for the financing of the collection, treatment, recovery and environmentally sound disposal of WEEE from products placed on the market after August 13, 2005 and from products in use prior to that date that are being replaced. The second of these Directives is the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) Directive. The RoHS Directive addresses the restriction on use of certain hazardous substances such as mercury, lead, cadmium, and hexavalent cadmium in electrical and electronic equipment placed on the market after July 1, 2006. As of January 30, 2005, EU Member States continue to develop legislation to implement these Directives.
 
      During 2004, the Company established a project management team whose efforts are directed at assessing the impact of the Directives on the Company’s supply chain management and manufacturing processes and developing a strategy to permit the Company to react and comply with legislation enacted by Member States. The cost to the Company to comply with the Directives and Member States’ legislation will not be quantifiable until Member States have fully implemented the Directives.

Page 13

Table of Contents

Nordson Corporation

  14.   Subsequent events. On February 11, 2005, the Company announced it had reached an agreement to purchase hhs Leimauftrags-Systeme GmbH (“hhs”), a manufacturer of cold glue and hot melt adhesive dispensing technologies and quality control monitoring systems for the print finishing, paper and paperboard converting, and wood assembly industries. Headquartered in Germany, hhs has annual sales of approximately $32 million.

      On February 8, 2005, the Company exercised a purchase option it held on a manufacturing and office building in Dawsonville, Georgia. Cash of approximately $2.8 million was used to purchase the building.

     
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 
      The following is Management’s discussion and analysis of certain significant factors affecting the Company’s financial condition and results of operations for the periods included in the accompanying condensed consolidated financial statements.

      Results of Operations
 
      Sales
 
      Worldwide sales for the first quarter of 2005 were $190.2 million, an 11.4% increase from sales of $170.6 million for the comparable period of 2004. Volume gains made up 7.7% of the increase, with favorable currency effects traced to the weaker U.S dollar making up the remainder of the increase.
 
      Sales of the Company’s adhesive dispensing segment were up 3.8% on a currency-neutral basis. The effect of the weaker U.S. dollar added an additional 4.6% to sales. Increased sales in the packaging and automotive business were partially offset by lower fiber system sales. Advanced technology segment sales were up 17.5% from 2004. The increase can be traced to volume increases of 16.0% and 1.5% from currency effects. Within this segment, the Asymtek business, which sells to customers in the semiconductor, printed circuit board and electronic assembly industries, was especially strong, with volume up over 30 percent from 2004. Sales of the finishing and coating segment were up 15.4%. The increase consisted of volume gains of 12.1% and 3.3% due to currency effects. Higher sales of powder systems in Japan and Asia Pacific contributed to the increase.
 
      First quarter sales volume was up in all five geographic regions in which the Company operates, except for Europe, where volume decreased less than 1% due to lower fiber system sales. Volume was up 4.1% in the United States, 16.0% in Japan, 49.8% in the Americas and 18.2% in Asia Pacific.
 
      Operating Profit
 
      Operating profit, as a percentage of sales, was 12.5% in the first quarter of 2005, up from 10.6% in 2004. Operating profit, as a percent of sales, was higher across all three segments reflecting improved absorption effects relative to the relationship of higher revenue to operating cost levels. The largest improvement was seen in the Advanced Technology segment where operating profit as a percentage of sales increased to 16.5% in 2005 from 14.1% in 2004.

Page 14

Table of Contents

Nordson Corporation

      The first quarter gross margin percentage was 56.0% in 2005 compared to 54.4% in 2004. Favorable currency effects added .4 % to the gross margin rate. Margins in 2004 were negatively impacted by a low margin fiber engineered system sale of approximately $5 million.
 
      Selling and administrative expenses in 2005 were up 10.8% from 2004. Currency translation effects accounted for 3.3% of the increase, with the balance traced to compensation increases and higher employee benefit costs. Expenses as a percent of sales decreased slightly to 43.5% in 2005 from 43.8% for the first quarter of 2004.
 
      Net Income
 
      First quarter interest expense decreased $693,000 from the prior year, primarily as a result of lower borrowing levels. Other income in 2005 increased $384,000 from 2004 largely due to currency gains in the current year. The Company’s effective tax rate was 32.5% in the first quarter of 2005, down from 33.0% last year.
 
      Net income for the first quarter of 2005 was $14.4 million or $.39 per share on a diluted basis compared with $9.7 million or $.27 per share on a diluted basis in 2004.
 
      Foreign Currency Effects
 
      In the aggregate, average exchange rates for the first quarter of 2005 used to translate international sales and operating results into U.S. dollars compared favorably with average exchange rates existing during the comparable 2004 period. It is not possible to precisely measure the impact on operating results arising from foreign currency exchange rate changes, because of changes in selling prices, sales volume, product mix and cost structure in each country in which the Company operates. However, if transactions for the first quarter 2005 were translated at exchange rates in effect during the first quarter of 2004, sales would have been approximately $6.3 million lower while third-party costs and expenses would have been approximately $4.4 million lower.

      Financial Condition
 
      During the first quarter of 2005, net assets increased $22.4 million. This increase is primarily the result of translating foreign net assets at the end of the first quarter when the U.S. dollar was weaker against other currencies than at the prior year-end, as well as net income and issuance of common stock related to stock options. Offsetting these increases were dividend payments.
 
      Cash and cash equivalents increased $15.8 million in the first quarter of 2005. Cash provided by operations was $7.6 million, cash generated by the exercise of stock options was $2.2 million, net proceeds from the sale of marketable securities was $13.8 million, and proceeds from short-term borrowings were $2.1 million. Cash was used for dividend payments of $5.8 million, repayment of capital lease obligations of $1.2 million, and for capital expenditures of $3.1 million. Available lines of credit continue to be adequate to meet additional cash requirements over the next year.
 
      Receivables and accounts payable decreased as a result of the traditionally lower level of business activity in the Company’s first fiscal quarter compared its fourth fiscal quarter. Other current liabilities decreased as a result of bonus and profit sharing payments during the first quarter. In the first quarter of 2005, other long-term liabilities reflected higher deferred tax liabilities and an increase in deferred compensation, as compared to 2004 year-end.
 
      Cash provided by operations in the first quarter of 2005 was down $16.1 million from the first quarter of 2004. The decrease is primarily due to higher bonus and profit sharing payments in 2005 and to accounts payable, which decreased more than $11 million in the first quarter of 2005 but increased slightly in the first quarter of 2004.
 
      On February 11, 2005, the Company announced it had reached an agreement to purchase hhs Leimauftrags-Systeme GmbH (“hhs”), a manufacturer of cold glue and hot melt adhesive dispensing technologies and quality

Page 15

Table of Contents

Nordson Corporation

      control monitoring systems for the print finishing, paper and paperboard converting, and wood assembly industries. Headquartered in Germany, hhs has annual sales of approximately $32 million.
 
      On February 8, 2005, the Company exercised a purchase option it held on a manufacturing and office building in Dawsonville, Georgia. Cash of approximately $2.8 million was used to purchase the building.

      Critical Accounting Policies
 
      The Company’s consolidated financial statements and accompanying notes have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires the Company’s management to make estimates, judgments and assumptions that affect reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, the Company evaluates the accounting policies and estimates it uses to prepare financial statements. The Company bases its estimates on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates used by management.
 
      Certain accounting policies that require significant management estimates and are deemed critical to the Company’s results of operations or financial position were discussed in Item 7 of the 10-K for the year ended October 31, 2004. During the first quarter of 2005 there were no material changes in these policies.
 
      Outlook
 
      The Company expects sales volume to increase 5 to 6 percent in the second quarter of 2005 compared to the same quarter of 2004. The effect of the weaker U.S. dollar will add approximately 2 percent to reported sales, bringing the total expected sales increase to 7 to 8 percent. Gross margins and operating expenses as a percent of sales for the second quarter of 2005 should be approximately the same as the second quarter of 2004. This would result in diluted earnings per share in the $.50 to $.55 range for the second quarter. Sales volume for the full year is expected to be approximately 5 to 6 percent higher than 2004, excluding the effect of acquisitions.
 
      Safe Harbor Statements Under The Private Securities Litigation Reform Act Of 1995
 
      The statements in the paragraphs titled “Financial Condition” and “Outlook” that refer to anticipated trends, events or occurrences in, or expectations for, the future (generally indicated by the use of phrases such as “Nordson expects” or “Nordson believes” or words of similar import or by references to “risks”) are “forward-looking statements” intended to qualify for the protection afforded by the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations and involve risks and uncertainties. Consequently, the Company’s actual results could differ materially from the expectations expressed in the forward-looking statements. Factors that could cause the Company’s actual results to differ materially from the expected results include, but are not limited to: deferral of orders, customer-requested delays in system installations, currency exchange rate fluctuations, a sales mix different from assumptions and significant changes in local business conditions in geographic regions in which the Company conducts business.

Page 16

Table of Contents

Nordson Corporation

      ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 
      Information regarding the Company’s financial instruments that are sensitive to changes in interest rates and foreign currency exchange rates was disclosed in Form 10-K filed by the Company on January 14, 2005. The information disclosed has not changed materially in the interim period since October 31, 2004.

      ITEM 4. CONTROLS AND PROCEDURES
 
      An evaluation was performed under the supervision and with the participation of the Company’s management, including its Chief Executive Officer, or CEO, and Chief Financial Officer, or CFO, of the effectiveness of the Company’s disclosure controls and procedures as of January 30, 2005. Based on that evaluation, the Company’s management, including its CEO and CFO, have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. There were no changes in the Company’s internal controls over financial reporting during the quarter ended January 30, 2005 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Page 17

Table of Contents

Nordson Corporation

Part II – Other Information

      ITEM 1. LEGAL PROCEEDINGS
 
      The Company has been identified as a potentially responsible party (PRP) at a Wisconsin municipal landfill and has voluntarily agreed with other PRP’s to share costs associated with (1) a feasibility study and remedial investigation (“FS/RI”) for the site and (2) providing clean drinking water to the affected residential properties through completion of the FS/RI phase of the project. The FS/RI is expected to be completed in 2005. The Company has committed $829,000 towards completing the FS/RI phase of the project and providing clean drinking water. This amount has been recorded in the Company’s financial statements. Against this commitment, the Company has made payments of $583,000 through the first quarter of 2005. The remaining amount of $246,000 is recorded in accrued liabilities in the January 30, 2005 Consolidated Balance Sheet. The total cost of the Company’s share for remediation efforts will not be ascertainable until the FS/RI is completed and a remediation plan is approved by the Wisconsin Department of Natural Resources, which is anticipated to occur in 2006. However, based upon current information, the Company does not expect that the costs associated with remediation will have a material effect on its financial condition or results of operations.
 
      The European Union (“EU”) has adopted two Directives to facilitate the recycling of electrical and electronic equipment sold in the EU. The first of these is the Waste Electrical and Electronic Equipment (“WEEE”) Directive which directs EU Member States to enact laws, regulations, and administrative provisions to ensure that producers of electrical and electronic equipment provide for the financing of the collection, treatment, recovery and environmentally sound disposal of WEEE from products placed on the market after August 13, 2005 and from products in use prior to that date that are being replaced. The second of these Directives is the Restriction on the Use of Certain Hazardous Substances in Electrical and Electronic Equipment (“RoHS”) Directive. The RoHS Directive addresses the restriction on use of certain hazardous substances such as mercury, lead, cadmium, and hexavalent cadmium in electrical and electronic equipment placed on the market after July 1, 2006. As of January 30, 2005, EU Member States continue to develop legislation to implement these Directives.
 
      During 2004, the Company established a project management team whose efforts are directed at assessing the impact of the Directives on the Company’s supply chain management and manufacturing processes and developing a strategy to permit the Company to react and comply with legislation enacted by Member States. The cost to the Company to comply with the Directives and Member States’ legislation will not be quantifiable until Member States have fully implemented the Directives.
 
      In addition, the Company is involved in various other legal proceedings arising in the normal course of business. Based on current information, the Company does not expect that the ultimate resolution of pending and threatened legal proceedings, including the environmental matter described above, will have a material adverse effect on its financial condition, results of operations or cash flows.

      ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
 
      In October 2003, the Board of Directors authorized the Company to repurchase up to two million shares of the Company’s common stock on the open market. Expected uses for repurchased shares include the funding of benefit programs including stock options, restricted stock and 401(k) matching. Shares purchased will be treated as treasury shares until used for such purposes. The repurchase program will be funded using the Company’s working capital. During the first quarter of 2005, no shares were purchased under this program or otherwise.

Page 18

Table of Contents

Nordson Corporation

      ITEM 6. EXHIBITS
 
      Exhibits: The Company filed a Form 8-K report on January 6, 2005 disclosing certain nonqualified deferred compensation arrangements for directors and executive officers. The arrangements are presented in this Form 10-Q as Exhibits 10.1 through 10.3.

      Exhibit Number:

  10.1   The Nordson Corporation 2005 Deferred Compensation Plan.
 
  10.2   The Nordson Corporation 2005 Excess Defined Benefit Pension Plan.
 
  10.3   Compensation Committee Rules of the Nordson Corporation 2004 Long Term Performance Plan governing directors’ deferred compensation.
 
  31.1   Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 by the Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
  31.2   Certification pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934 by the Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
 
  32.1   Certification of CEO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
  32.2   Certification of CFO pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Page 19

Table of Contents

Nordson Corporation

SIGNATURES

      Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

         
  Date: March 7, 2005   Nordson Corporation
       
    By: /s/ PETER S. HELLMAN
    Peter S. Hellman
President, Chief Financial and
Administrative Officer
(Principal Financial Officer)
       
    /s/ NICHOLAS D. PELLECCHIA
    Nicholas D. Pellecchia
Vice President, Finance and Controller
(Principal Accounting Officer)

Page 20

EX-10.1 2 l12457aexv10w1.txt EX-10.1 NORDSON 2005 DEFERRED COMPENSATION PLAN EXHIBIT 10.1 NORDSON CORPORATION 2005 DEFERRED COMPENSATION PLAN EFFECTIVE JANUARY 1, 2005 . . . TABLE OF CONTENTS
PAGE ---- PURPOSE........................................................................................... 1 ARTICLE 1 DEFINITIONS......................................................................... 1 ARTICLE 2 SELECTION, ENROLLMENT, ELIGIBILITY.................................................. 7 ARTICLE 3 DEFERRAL COMMITMENTS/COMPANY MATCHING/CREDITING/TAXES............................... 8 ARTICLE 4 SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION......... 14 ARTICLE 5 RETIREMENT BENEFIT.................................................................. 15 ARTICLE 6 PRE-RETIREMENT SURVIVOR BENEFIT..................................................... 16 ARTICLE 7 TERMINATION BENEFIT................................................................. 16 ARTICLE 8 DISABILITY BENEFIT.................................................................. 17 ARTICLE 9 BENEFICIARY DESIGNATION............................................................. 18 ARTICLE 10 LEAVE OF ABSENCE.................................................................... 19 ARTICLE 11 TERMINATION, AMENDMENT OR MODIFICATION.............................................. 19 ARTICLE 12 ADMINISTRATION...................................................................... 20 ARTICLE 13 OTHER BENEFITS AND AGREEMENTS....................................................... 21 ARTICLE 14 CLAIMS PROCEDURES................................................................... 21 ARTICLE 15 TRUST............................................................................... 23 ARTICLE 16 MISCELLANEOUS....................................................................... 23
-i- 2005 DEFERRED COMPENSATION PLAN Effective January 1, 2005 PURPOSE The purpose of this 2005 Deferred Compensation Plan, established effective as of January 1, 2005, is to provide specified benefits to a select group of management and highly compensated Employees who contribute materially to the continued growth, development, and future business success of Nordson Corporation, and its subsidiaries, if any, that sponsor this Plan. This Plan shall be unfunded for tax purposes and for purposes of Title I of ERISA. This Plan applies to compensation earned, deferred, or vested on and after January 1, 2005; the Nordson Corporation Deferred Compensation Plan, dated November 3, 2000, as amended on January 22, 2003, and as in effect on October 3, 2004 (the "2000 Plan"), applies to compensation earned, deferred, and vested on or before December 31, 2004. No provisions of this Plan shall alter, affect, or amend any provisions of the 2000 Plan applicable to compensation earned, deferred, and vested on or before December 31, 2004. ARTICLE 1 DEFINITIONS For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings: 1.1 "Account Balance" shall mean, with respect to a Participant, a credit on the records of the Company equal to the sum of (i) the Deferral Account balance, (ii) the vested Company Contribution Account balance, (iii) the Rollover Account balance, and (iv) the Unilateral Committee Contribution Account balance. The Account Balance, and each other specified account balance, shall be a bookkeeping entry only and shall be utilized solely as a device for the measurement and determination of the amounts to be paid to a Participant, or his or her designated Beneficiary, pursuant to this Plan. 1.2 "Annual Company Contribution Amount" shall mean, for any one Plan Year, the amount determined in accordance with Section 3.5. 1.3 "Annual Installment Method" shall be an annual installment payment over the number of years selected by the Participant in accordance with this Plan, calculated as follows: (i) for the first annual installment, the vested Account Balance of the Participant shall be calculated as of the close of business on or around (a) the last business day of the Plan Year in which the Participant Retires or is deemed to have Retired in accordance with Section 8.1, or (b) the date on which the Participant experiences a Termination of Employment or is deemed to have experienced a Termination of Employment in accordance with Section 8.1, and (ii) for remaining annual installments, the vested Account Balance of the Participant shall be calculated on every applicable anniversary of (a) the last business day of the Plan Year in which the Participant Retires is deemed to have Retired in accordance with Section 8.1, or (b) the date on which the Participant experiences a Termination of Employment or is deemed to have experienced a Termination of Employment in -1- accordance with Section 8.1. Each annual installment shall be calculated by multiplying this balance by a fraction, the numerator of which is one and the denominator of which is the remaining number of annual payments due the Participant. By way of example, if the Participant elects a ten (10) year Annual Installment Method, the first payment shall be 1/10 of the vested Account Balance, calculated as described in this definition. The following year, the payment shall be 1/9 of the vested Account Balance, calculated as described in this definition. 1.4 "Base Salary" shall mean the annual cash compensation relating to services performed during any calendar year, whether or not paid in such calendar year or included on the Federal Income Tax Form W-2 for such calendar year, excluding bonuses, commissions, overtime, fringe benefits, stock options, relocation expenses, incentive payments, non-monetary awards, fees, automobile and other allowances paid to a Participant for employment services rendered (whether or not such allowances are included in the Employee's gross income). Base Salary shall be calculated before reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and shall be calculated to include amounts not otherwise included in the Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; provided, however, that all such amounts will be included in compensation only to the extent that, had there been no such plan, the amount would have been payable in cash to the Employee. 1.5 "Beneficiary" shall mean one or more persons, trusts, estates or other entities, designated in accordance with Article 9, that are entitled to receive benefits under this Plan upon the death of a Participant. 1.6 "Beneficiary Designation Form" shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to designate one or more Beneficiaries. 1.7 "Board" shall mean the board of directors of the Company. 1.8 "Bonus" shall mean any compensation relating to services performed during any calendar year(s), whether or not paid in a calendar year or included on the Federal Income Tax Form W-2 for a calendar year, payable to a Participant as an Employee under any Employer's written bonus or cash compensation incentive plans, excluding stock options and restricted stock. 1.9 "Change in Control" shall mean an event described below occurring at any time after the date of the adoption of this Plan: (i) any person (other than the Company, any of its subsidiaries, any employee benefit plan or employee stock ownership plan of the Company, or any Person organized, appointed, or established by the Company for or pursuant to the terms of any such plan), alone or together with any of its Affiliates or Associates, becomes the Beneficial Owner of 20% or more of the Common Shares then outstanding, or any such Person commences or publicly announces an intent to commence a tender offer or exchange offer the -2- consummation of which would result in the Person becoming the Beneficial Owner of 20% or more of the Common Shares then outstanding (provided, however, that, for purposes of determining whether Eric T. Nord or Evan W. Nord, together with each of their Affiliates or Associates, is the Beneficial Owner of 20% or more of the Common Shares then outstanding, the Common Shares then held by the Walter G. Nord trust, by the Nord Family Foundation (or any successor to the Nord Family Foundation), and by the Eric and Jane Nord Foundation shall be excluded; for purposes of determining whether the Walter G. Nord Trust, the Nord Family Foundation (or any successor), or the Eric and Jane Nord Foundation, together with each of their Affiliates and Associates, is the Beneficial Owner of 20% or more of the Common Shares then outstanding, the Common Shares then held by Eric T. Nord and by Evan W. Nord shall be excluded; for purposes of determining whether the Nord Family Foundation (or any successor), together with its Affiliates and Associates, is the Beneficial Owner of 20% or more of the Common Shares then outstanding, the Common Shares then held by the Eric and Jane Nord Foundation will be excluded; and, for purposes of determining whether the Eric and Jane Nord Foundation, together with its Affiliates and Associates, is the Beneficial Owner of 20% or more of the Common Shares then outstanding, the Common Shares then held by the Nord Family Foundation (or any successor) will be excluded. For purposes of this Section 1.9, the terms "Affiliates," "Associates," "Beneficial Owner," and "Person" will have the meanings given to them in the Restated Rights Agreement, dated as of November 7, 1997, between the Company and National City Bank, as Rights Agent, as amended from time to time. (ii) At any time during a period of 24 consecutive months, individuals who were directors of the Company at the beginning of the period no longer constitute a majority of the members of the Board, unless the election, or the nomination for election by the Company's shareholders, of each director who was not a director at the beginning of the period is approved by at least a majority of the directors who were members of the Board at the time of the election or nomination and were directors at the beginning of the period. (iii) A record date is established for determining shareholders entitled to vote upon (A) a merge or consolidation of the Company with another corporation in which the Company is not the surviving or continuing corporation or in which all or part of the outstanding Common Shares are to be converted into or exchanged for cash, securities, or other property, (B) a sale or other disposition of all or substantially all of the assets of the Company, or (C) the dissolution of the Company. (iv) Any person who proposes to make a "control share acquisition" of the Company, within the meaning of the applicable Section of the Ohio General Corporation Law, submits or is required to submit an acquiring person statement to the Company. 1.10 "Claimant" shall have the meaning set forth in Section 14.1. 1.11 "Code" shall mean the Internal Revenue Code of 1986, as it may be amended from time to time. -3- 1.12 "Committee" shall mean the Compensation Committee of the Board of Directors of the Company. 1.13 "Company" shall mean Nordson Corporation, an Ohio corporation, and any successor to all or substantially all of the Company's assets or business. 1.14 "Company Contribution Account" shall mean (i) the sum of the Participant's Annual Company Contribution Amounts, plus (ii) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant's Company Contribution Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to the Participant's Company Contribution Account. 1.15 "Deduction Limitation" shall mean the following described limitation on a benefit that may otherwise be distributable pursuant to the provisions of this Plan. Except as otherwise provided, this limitation shall be applied to all distributions that are "subject to the Deduction Limitation" under this Plan. If an Employer determines in good faith prior to a Change in Control that there is a reasonable likelihood that any compensation paid to a Participant for a taxable year of the Employer would not be deductible by the Employer solely by reason of the limitation under Code Section 162(m), then to the extent deemed necessary by the Employer to ensure that the entire amount of any distribution to the Participant pursuant to this Plan prior to the Change in Control is deductible, the Employer may defer all or any portion of a distribution under this Plan. Any amounts deferred pursuant to this limitation shall continue to be credited/debited with additional amounts in accordance with Section 3.9 below, even if such amount is being paid out in installments. The amounts so deferred and amounts credited thereon shall be distributed to the Participant or his or her Beneficiary (in the event of the Participant's death) at the earliest possible date, as determined by the Employer in good faith, on which the deductibility of compensation paid or payable to the Participant for the taxable year of the Employer during which the distribution is made will not be limited by Section 162(m), or if earlier, the effective date of a Change in Control. Notwithstanding anything to the contrary in this Plan, the Deduction Limitation shall not apply to any distributions made after a Change in Control. 1.16 "Deferral Account" shall mean (i) the sum of all of a Participant's Deferral Amounts, plus (ii) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant's Deferral Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Deferral Account. 1.17 "Deferral Amount" shall mean that portion of a Participant's Base Salary and Bonus that a Participant elects to have, and is deferred, in accordance with Article 3, for any one Plan Year. In the event of a Participant's Retirement, Disability, death or a Termination of Employment prior to the end of a Plan Year, such year's Deferral Amount shall be the actual amount withheld prior to such event. -4- 1.18 "Disability" shall mean a period of disability during which a Participant (a) is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, or (b) is, by reason of any medically determinable physical or mental impairment which can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than 3 months under an accident and health plan covering employees of the Participant's employer. 1.19 "Disability Benefit" shall mean the benefit set forth in Article 8. 1.20 "Election Form" shall mean the form established from time to time by the Committee that a Participant completes, signs and returns to the Committee to make an election under the Plan. 1.21 "Employee" shall mean a person who is an employee of any Employer. 1.22 "Employer(s)" shall mean the Company and any of its subsidiaries (now in existence or hereafter formed or acquired) that have been selected by the Committee to participate in the Plan and have adopted the Plan as a sponsor. 1.23 "ERISA" shall mean the Employee Retirement Income Security Act of 1974, as it may be amended from time to time. 1.24 "Excess Cash Compensation" shall mean, for any Plan Year, that portion of a Participant's cash compensation relating to services performed during any Plan Year, including, without limitation, Base Salary, Bonus or payments from any cash compensation incentive plan, that the Committee, in its sole discretion, determines is in excess of the amount set forth in Code Section 162(m)(1). For purposes of this Section 1.24, a Participant's cash compensation: (i) shall be calculated after reduction for compensation voluntarily deferred or contributed by the Participant pursuant to all qualified or non-qualified plans of any Employer and any amounts not otherwise included in the Participant's gross income under Code Sections 125, 402(e)(3), 402(h), or 403(b) pursuant to plans established by any Employer; and (ii) shall not include any distributions from this Plan. 1.25 "Fair Market Value," with respect to a common share of the Company as of any given day, shall mean the last reported closing price for a common share on the National Association of Securities Dealers Automated Quotation System ("NASDAQ") for that day or, if there was no sale of common shares so reported for that day, on the most recently preceding day on which there was such a sale. If the common shares are not listed or admitted to trading on NASDAQ on any given day, the Fair Market Value on that day will be as determined by the Committee. 1.26 " NEST" shall mean the Nordson Corporation Employees Savings Trust Plan. 1.27 "Participant" shall mean any Employee (i) who is selected to participate in the Plan, (ii) who elects to participate in the Plan, (iii) who signs a Plan Agreement, an Election -5- Form and a Beneficiary Designation Form, (iv) whose signed Plan Agreement, Election Form and Beneficiary Designation Form are accepted by the Committee, (v) who commences participation in the Plan, and (vi) whose Plan Agreement has not terminated. A spouse or former spouse of a Participant shall not be treated as a Participant in the Plan or have an account balance under the Plan, even if he or she has an interest in the Participant's benefits under the Plan as a result of applicable law or property settlements resulting from legal separation or divorce. 1.28 "Plan" shall mean the Nordson Corporation 2005 Deferred Compensation Plan, as amended from time to time. 1.29 "Plan Agreement" shall mean a written agreement, as may be amended by the Committee from time to time, which is entered into by and between an Employer and a Participant. Should there be more than one Plan Agreement, the Plan Agreement bearing the latest date of acceptance by the Employer shall supersede all previous Plan Agreements in their entirety and shall govern such entitlement. 1.30 "Plan Year" shall, except for the First Plan Year, mean a period beginning on January 1 of each calendar year and continuing through December 31 of such calendar year. 1.31 "Pre-Retirement Survivor Benefit" shall mean the benefit set forth in Article 6. 1.32 "Retirement", "Retire(s)" or "Retired" shall mean, with respect to an Employee, severance from employment from all Employers for any reason other than a leave of absence, death or Disability on or after the attainment of age fifty-five (55). 1.33 "Retirement Benefit" shall mean the benefit set forth in Article 5. 1.34 "Short-Term Payout" shall mean the payout set forth in Section 4.1. 1.35 "Stock" shall mean the common shares of the Company or any other equity securities of the Company designated by the Committee. 1.36 "Termination Benefit" shall mean the benefit set forth in Article 7. 1.37 "Termination of Employment" shall mean the severing of employment with the Company or an Employer, voluntarily or involuntarily, for any reason other than Retirement, Disability, or death. 1.38 "Trust" shall mean one or more rabbi trusts established by the Company or an Employer in accordance with Article 15 of this Plan as amended from time to time. 1.39 "Unforeseeable Financial Emergency" shall mean a severe financial hardship to the Participant resulting from an illness or accident of the Participant, the Participant's spouse, or a dependent (as defined in Section 152(a) of the Code) of the Participant, loss of the Participant's property due to casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. -6- 1.40 "Unilateral Committee Contribution Account" shall mean: (i) the sum of all of the Participant's Unilateral Committee Contribution Amounts, plus (ii) amounts credited in accordance with all the applicable crediting provisions of this Plan that relate to the Participant's Unilateral Committee Contribution Account, less (iii) all distributions made to the Participant or his or her Beneficiary pursuant to this Plan that relate to his or her Unilateral Committee Contribution Account. 1.41 "Unilateral Committee Contribution Amount" shall mean, for any one Plan Year, the amount determined in accordance with Section 3.6. 1.42 "Years of Vested Service" shall have the meaning as that term is defined in the NEST. ARTICLE 2 SELECTION, ENROLLMENT, ELIGIBILITY 2.1 SELECTION BY COMMITTEE. Participation in the Plan shall be limited to those employees of an Employer who (i) are officers or key employees of an Employer, (ii) received, or would have received but for an election to defer compensation under this Plan and any other plan of the Company, from the Employer aggregate cash compensation for the prior Plan Year (or calendar year for purposes of the initial Plan Year) of not less than $100,000, or such higher amount as the Committee may decide from time to time, and (iii) are, upon recommendation of the President and Chief Executive Officer of the Company, approved for such participation by the Committee, in its sole discretion, 2.2 ENROLLMENT REQUIREMENTS. As a condition to participation, each selected Employee shall complete, execute and return to the Committee a Plan Agreement, an Election Form and a Beneficiary Designation Form, all within 30 days (or such shorter time as the Committee may determine) after he or she is selected to participate in the Plan. In addition, the Committee shall establish from time to time such other enrollment requirements as it determines in its sole discretion are necessary. 2.3 ELIGIBILITY; COMMENCEMENT OF PARTICIPATION. Provided an Employee selected to participate in the Plan has met all enrollment requirements set forth in this Plan and required by the Committee, including returning all required documents to the Committee within thirty (30) days (or such shorter time as the Committee may determine) after he or she is selected to participate in the Plan, that Employee shall commence participation in the Plan on the first day of the month following the month in which the Employee completes all enrollment requirements. If an Employee fails to meet all such requirements within the period required, that Employee shall not be eligible to participate in the Plan until the first day of the Plan Year following the delivery to and acceptance by the Committee of the required documents. 2.4 TERMINATION OF PARTICIPATION AND/OR DEFERRALS. If the Committee determines in good faith that a Participant no longer qualifies as a member of a select group of management or highly compensated employees, as membership in such group is determined in accordance -7- with Sections 201(2), 301(a)(3) and 401(a)(1) of ERISA, the Committee shall have the right, in its sole discretion, to prevent the Participant from making future deferral elections. ARTICLE 3 DEFERRAL COMMITMENTS/COMPANY MATCHING/CREDITING/TAXES 3.1 MINIMUM DEFERRALS. (a) BASE SALARY AND BONUS. For each Plan Year, a Participant may elect to defer, as his or her Deferral Amount, a minimum of at least Five Thousand dollars ($5,000) between his Base Salary and Bonus. If an election is made for less than stated minimum amounts, or if no election is made, the amount deferred shall be zero. (b) SHORT PLAN YEAR. Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, or in the case of the first Plan Year of the Plan itself, the minimum Base Salary deferral shall be an amount equal to the minimum set forth above, multiplied by a fraction, the numerator of which is the number of complete months remaining in the Plan Year and the denominator of which is 12. 3.2 MAXIMUM DEFERRAL. (a) BASE SALARY AND BONUS. For each Plan Year, a Participant may elect to defer, as his or her Deferral Amount, Base Salary and/or Bonus up to the following maximum percentages for each deferral elected:
MAXIMUM DEFERRAL PERCENTAGE - -------------- ---------- Base Salary 100% Bonus 100%
(b) Notwithstanding the foregoing, if a Participant first becomes a Participant after the first day of a Plan Year, or in the case of the first Plan Year of the Plan itself, the maximum Deferral Amount, with respect to Base Salary and/or Bonus shall be limited to the amount of compensation not yet earned by the Participant as of the date the Participant submits a Plan Agreement and Election Form to the Committee for acceptance. 3.3 ELECTION TO DEFER; EFFECT OF ELECTION FORM. (a) FIRST PLAN YEAR. In connection with a Participant's commencement of participation in the Plan, the Participant shall make an irrevocable deferral election for the Plan Year in which the Participant commences participation in the Plan, along with such other elections as the Committee deems necessary or desirable under the Plan. For these elections to be valid, the Election Form must be completed and signed by the -8- Participant, timely delivered to the Committee (in accordance with Section 2.2 above) and accepted by the Committee. (b) SUBSEQUENT PLAN YEARS. For each succeeding Plan Year, an irrevocable deferral election for that Plan Year, and such other elections as the Committee deems necessary or desirable under the Plan, shall be made by timely delivering to the Committee, in accordance with its rules and procedures, before the end of the Plan Year preceding the Plan Year for which the election is made, or at such other time as the Committee may determine from time to time, a new Election Form. If no such Election Form is timely delivered for a Plan Year, the Deferral Amount shall be zero for that Plan Year. 3.4 WITHHOLDING OF DEFERRAL AMOUNTS. For each Plan Year, the Base Salary portion of the Deferral Amount shall be withheld from each regularly scheduled Base Salary payroll in equal amounts, as adjusted from time to time for increases and decreases in Base Salary. The Bonus portion of the Deferral Amount shall be withheld at the time the Bonus is or otherwise would be paid to the Participant, whether or not this occurs during the Plan Year itself. 3.5 ANNUAL COMPANY CONTRIBUTION AMOUNT. For each Plan Year, the Committee, in its sole discretion, may, but is not required to, credit any amount it desires to any Participant's Company Contribution Account under this Plan, which amount shall equal any Annual Company Contribution Amount for that Participant for that Plan Year. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive an Annual Company Contribution Amount for that Plan Year. The Annual Company Contribution Amount described in this Section 3.5, if any, shall be credited on a date or dates to be determined by the Committee, in its sole discretion. 3.6 UNILATERAL COMMITTEE CONTRIBUTION AMOUNT. For each Plan Year, the Committee, in its sole discretion, may, but is not required to, credit any amount, including any Excess Cash Compensation, to a Participant's Unilateral Committee Contribution Account under this Plan, which amount shall be the Participant's Unilateral Committee Contribution Amount for that Plan Year. The amount so credited to a Participant may be smaller or larger than the amount credited to any other Participant, and the amount credited to any Participant for a Plan Year may be zero, even though one or more other Participants receive a Unilateral Committee Contribution Amount for that Plan Year. The Unilateral Committee Contribution Amount described in this Section 3.6, if any, shall be credited on a date or dates to be determined by the Committee, in its sole discretion. 3.7 INVESTMENT OF TRUST ASSETS. The Trustee of the Trust shall be authorized, upon written instructions received from the Committee or investment manager appointed by the Committee, to invest and reinvest the assets of the Trust in accordance with the applicable Trust Agreement, including the disposition of Stock and reinvestment of the proceeds in one or more investment vehicles designated by the Committee. -9- 3.8 VESTING. (a) A Participant shall at all times be 100% vested in his or her Deferral Account, Rollover Account and Unilateral Committee Contribution Account. A Participant shall vest in his or her Company Contribution Account in accordance with the same vesting schedule as set forth in the NEST. (b) Notwithstanding anything to the contrary contained in this Section 3.8, in the event of a Change in Control, a Participant's Company Contribution Account shall immediately become 100% vested (if it is not already vested in accordance with the above vesting schedules). (c) Notwithstanding subsection (a), the vesting schedule for a Participant's Company Contribution Account shall not be accelerated to the extent that the Committee determines that such acceleration would cause the deduction limitations of Section 280G of the Code to become effective. In the event that all of a Participant's Company Contribution Account is not vested pursuant to such a determination, the Participant may request independent verification of the Committee's calculations with respect to the application of Section 280G. In such case, the Committee must provide to the Participant within 15 business days of such a request an opinion from a nationally recognized accounting firm selected by the Participant (the "Accounting Firm"). If the Accounting Firm's opinion is in agreement with the Committee's determination, the opinion shall state that any limitation in the vested percentage hereunder is necessary to avoid the limits of Section 280G and contain supporting calculations. The cost of such opinion shall be paid for by the Company. 3.9 CREDITING/DEBITING OF ACCOUNT BALANCES. In accordance with, and subject to, the rules and procedures that are established from time to time by the Committee, in its sole discretion, amounts shall be credited or debited to a Participant's Account Balance in accordance with the following rules: (a) ALLOCATION OF DEFERRALS. A Participant, in connection with his or her deferral election made in accordance with Section 3.3(a) or 3.3(b) above, shall elect, on the Election Form, one or more Measurement Fund(s) (as described in Section 3.9(c) below) to be used to determine the additional amounts to be credited to his or her Account Balance for each business day thereof in which the Participant commences participation in the Plan and continuing thereafter for each subsequent business day in which the Participant participates in the Plan. Thereafter, the Participant may (but is not required to) elect, either by submitting an Election Form to the Committee that is accepted by the Committee or through any other manner approved by the Committee, to add or delete one or more Measurement Fund(s) to be used to determine the additional amounts to be credited to his or her Account Balance, or to change the portion of his or her Account Balance allocated to each previously or newly elected Measurement Fund, all in a manner permitted by the Committee. Notwithstanding the foregoing, however, any election made in -10- accordance with Section 3.3(a) or 3.3(b) and this Section 3.9(a) to allocate any portion of his Deferral Amount to the Nordson Stock Measurement Fund shall not be effective unless such election is completed prior to the end of the Plan Year preceding the Plan Year for which the election is made, provided, however, that a Participant may change his or her Measurement Fund election with respect to amounts already in his or her Deferral Account at such times and in such manner as the Committee shall provide. (b) PROPORTIONATE ALLOCATION. In making any election described in Section 3.9(a) above, the Participant shall specify on the Election Form, in increments of five percentage points (5%), the percentage of his or her Account Balance to be allocated to a Measurement Fund (as if the Participant was making an investment in that Measurement Fund with that portion of his or her Account Balance). (c) MEASUREMENT FUNDS. The following measurement funds (each a "Measurement Fund") will be used for the purpose of crediting or debiting amounts to the Participant's Account Balance in accordance with this Article 3. The Committee may, in its sole discretion, discontinue, substitute or add a Measurement Fund(s), and shall maintain appropriate accounts with respect to each. Each such action will take effect seven (7) days following the day on which the Committee gives Participants advance written notice of such change, provided, however, that prior to such date the prior restrictions of the Plan apply. The following funds shall be Measurement Funds under the Plan: - Equity Index Fund - Large Cap Value Fund - Large Cap Growth Fund - International Equity Index - Money Market Fund - Investment Contract Fund - Nordson Stock Measurement Fund Amounts deferred or transferred by a Participant to the Nordson Stock Measurement Fund shall be in the form of stock equivalent units (hereinafter referred to as "Stock Equivalent Units"), the number of which shall be determined by dividing the amount so deferred or transferred by the Fair Market Value of one of the Company's common shares at the time the Participant's compensation would otherwise have been paid to the Participant or the transfer is otherwise made, as the case may be. Dividends on the Stock Equivalent Units credited to a Participant's Nordson Stock Measurement Fund account shall be credited to the Participant's -11- Nordson Stock Measurement Fund account in the form of additional Stock Equivalent Units, based on the Fair Market Value of one of the Company's common shares on the date the dividend is otherwise payable. (d) CREDITING OR DEBITING METHOD. The performance of each elected Measurement Fund (either positive or negative) will be determined by the Committee, in its reasonable discretion, based on the performance of the Measurement Funds themselves. A Participant's Account Balance (whether or not vested, for purposes of making the adjustments described in this Section 3.9(d)) shall be credited or debited on a schedule as determined by the Committee in its sole discretion, as though (i) a Participant's Account Balance were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such business day, as of the close of business on the business day, at the closing price on such date; (ii) the portion of the Deferral Amount that was actually deferred during any business day were invested in the Measurement Fund(s) selected by the Participant, in the percentages applicable to such business day, no later than the close of business on that business day after the day on which such amounts are actually deferred from the Participant's Base Salary through reductions in his or her payroll, at the closing price on such date; and (iii) any distribution made to a Participant that decreases such Participant's Account Balance ceased being invested in the Measurement Fund(s), in the percentages applicable to such business day, no earlier than one business day prior to the distribution, at the closing price on such date. The Participant's Company Contributions Amount shall be credited to his or her Company Contribution Account for purposes of this Section 3.9(d) as of the date(s) determined by the Company, in its sole discretion. The Participant's Unilateral Committee Contribution Amount shall be credited to his or her Unilateral Committee Contribution Account for purposes of this Section 3.9(d) as of the date(s) determined by the Company, in its sole discretion. Notwithstanding the foregoing, in the case of the Nordson Stock Measurement Fund, adjustments shall be made each day to the portion of a Participant's Account Balance which is expressed in Stock Equivalent Units to reflect as of that date the number of additional Stock Equivalent Units resulting from additional deferrals allocated by the Participant to the Nordson Stock Measurement Fund, transfer allocations by the Participant to the Nordson Stock Measurement Fund, dividend credits to the Nordson Stock Measurement Fund, and distributions to the Participant that decrease the portion of such Participant's Account Balance reflected by Stock Equivalent Units. (e) NO ACTUAL INVESTMENT. Notwithstanding any other provision of this Plan that may be interpreted to the contrary, the Measurement Funds are to be used for measurement purposes only, and a Participant's election of any such Measurement Fund, the allocation to his or her Account Balance thereto, the calculation of additional amounts and the crediting or debiting of such amounts to a Participant's Account Balance shall not be considered or construed in any manner as an actual investment of his or her Account Balance in any such Measurement Fund. In the event that the Company or the Trustee (as that term is defined in the Trust), in its -12- own discretion, decides to invest funds in any or all of the Measurement Funds, no Participant shall have any rights in or to such investments themselves. Without limiting the foregoing, a Participant's Account Balance shall at all times be a bookkeeping entry only and shall not represent any investment made on his or her behalf by the Company or the Trust; the Participant shall at all times remain an unsecured creditor of the Company. (f) SPECIAL RULES FOR NORDSON STOCK MEASUREMENT FUND. Notwithstanding any provision of this Plan that may be construed to the contrary, an election to allocate deferrals to the Nordson Stock Measurement Fund may not be revoked and any amounts allocated to the Nordson Stock Measurement Fund by a Participant can never be reallocated to any other Measurement Fund(s) in this Plan. Moreover, no distribution of amounts allocated to the Nordson Stock Measurement Fund shall be made other than (i) on a fixed date more than six months following the date of the Participant's election with respect to the Deferral Amount allocated to the Nordson Stock Measurement Fund, or (ii) automatically on an earlier date pursuant to the Plan on the Participant's death, Disability while eligible to Retire, Retirement, or Termination, provided that in the event of Termination such amount shall be paid in a lump sum, notwithstanding the provisions of Section 7.2 of the Plan. Accordingly, the provisions of Sections 4.3 and the second and third sentences of Section 5.2 of this Plan shall not be applicable to any portion of the Participant's Account Balance allocated to the Nordson Stock Measurement Fund, nor shall the provisions of Section 8.1 of this Plan be applicable to any portion of the Participant's Account Balance allocated to the Nordson Stock Measurement Fund in the case of a Participant suffering a Disability prior to the date he is eligible to Retire. Finally, when distribution is to be made of amounts allocated to the Nordson Stock Measurement Fund, Stock Equivalent Units credited to the Participant's Account Balance shall be converted to the same number of common shares of Stock for distribution to the Participant. Except in the case of a fractional Stock Equivalent Unit, which shall be paid in cash, all distributions from the Nordson Stock Measurement Fund shall be made only in the form of Stock. 3.10 FICA AND OTHER TAXES. (a) DEFERRAL AMOUNTS. For each Plan Year in which a Deferral Amount is being withheld from a Participant, the Participant's Employer(s) shall withhold from that portion of the Participant's Base Salary and Bonus that is not being deferred, in a manner determined by the Employer(s), the Participant's share of FICA and other employment taxes on such Deferral Amount. If necessary, the Committee may reduce the Deferral Amount in order to comply with this Section 3.10. (b) COMPANY CONTRIBUTION AMOUNTS. When a Participant becomes vested in a portion of his or her Company Contribution Account, the Participant's Employer(s) shall withhold from the Participant's Base Salary and/or Bonus that is not deferred, -13- in a manner determined by the Employer(s), the Participant's share of FICA and other employment taxes. If necessary, the Committee may reduce the vested portion of the Participant's Company Contribution Account in order to comply with this Section 3.10. (c) UNILATERAL COMMITTEE CONTRIBUTION AMOUNTS. When the Participant's Employer(s) credits a Unilateral Committee Contribution Amount to a Participant's Unilateral Committee Contribution Account, the Participant's Employer(s) shall withhold from the Participant's Base Salary and/or Bonus that is not deferred, in a manner determined by the Employer(s), the Participant's share of FICA and other employment taxes. If necessary, the Committee may reduce the Participant's Unilateral Committee Contribution Amount in order to comply with this Section 3.10. 3.11 DISTRIBUTIONS. The Participant's Employer, or the trustee of the Trust, shall withhold from any payments made to a Participant under this Plan all federal, state and local income, employment and other taxes required to be withheld by the Employer, or the trustee of the Trust, in connection with such payments, in amounts and in a manner to be determined in the sole discretion of the Employer and the trustee of the Trust. ARTICLE 4 SHORT-TERM PAYOUT; UNFORESEEABLE FINANCIAL EMERGENCIES; WITHDRAWAL ELECTION 4.1 SHORT-TERM PAYOUT. In connection with each election to defer a Deferral Amount, a Participant may irrevocably elect to receive a Short-Term Payout from the Plan with respect to all or a portion of such Deferral Amount. The Short-Term Payout shall be a lump sum payment in an amount that is equal to the portion of the Deferral Amount that the Participant elected to have distributed as a Short-Term Payout, plus amounts credited or debited in the manner provided in Section 3.9 above on that amount, calculated as of the close of business on or around the date on which the Short-Term Payout becomes payable, as determined by the Committee in its sole discretion. Subject to the Deduction Limitation and other terms and conditions of this Plan, each Short-Term Payout elected shall be paid out during a sixty (60) day period commencing immediately after the last day of any Plan Year designated by the Participant. The Plan Year designated by the Participant must be at least five (5) Plan Years after Plan Year in which the Deferral Amount is actually deferred. By way of example, if a Short-Term Payout is elected for Deferral Amounts that are deferred in the Plan Year commencing January 1, 2005, the Short-Term Payout would become payable during a sixty (60) day period commencing January 1, 2011. 4.2 OTHER BENEFITS TAKE PRECEDENCE OVER SHORT-TERM. Should an event occur that triggers a benefit under Article 5, 6, 7 or 8, any Deferral Amount, plus amounts credited or debited thereon, that is subject to a Short-Term Payout election under Section 4.1 shall not be paid in accordance with Section 4.1 but shall be paid in accordance with the other applicable -14- Article. Moreover, any Short-Term Payout shall be adjusted to take into account any contribution under Section 3.5 above. 4.3 PAYOUT/SUSPENSIONS FOR UNFORESEEABLE FINANCIAL EMERGENCIES. If the Participant experiences an Unforeseeable Financial Emergency, the Participant may petition the Committee to receive a partial or full payout from the Plan. The payout shall not exceed the lesser of the Participant's Account Balance, calculated as if such Participant were receiving a Termination Benefit, or the amount reasonably needed to satisfy the Unforeseeable Financial Emergency plus amounts necessary to pay taxes reasonably anticipated as a result of the payout, after taking into account the extent to which such Unforeseeable Financial Emergency is or may be relieved through reimbursement or compensation by insurance or otherwise or by liquidation of the Participant's assets (to the extent such liquidation would not itself cause severe financial hardship). If, subject to the sole discretion of the Committee, the petition for a suspension and/or payout is approved, suspension shall take effect upon the date of approval and any payout shall be made within 60 days of the date of approval. The payment of any amount under this Section 4.3 shall not be subject to the Deduction Limitation. ARTICLE 5 RETIREMENT BENEFIT 5.1 RETIREMENT BENEFIT. Subject to the Deduction Limitation, a Participant who Retires shall receive, as a Retirement Benefit, his or her Account Balance. 5.2 PAYMENT OF RETIREMENT BENEFIT. A Participant, in connection with his or her commencement of participation in the Plan, shall elect on an Election Form to receive the Retirement Benefit with respect to the compensation deferred pursuant to such Election Form in a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years. Notwithstanding the preceding sentence, if the Participant's Account Balance at the time of his or her Retirement is less than $10,000, payment of his or her Retirement Benefit shall be paid in a lump sum on or before the later of (a) December 31 of the calendar year in which occurs the Participant's separation from service or (b) the date 2-1/2 months after the Participant's separation from service. If a Participant does not make any election with respect to the payment of the Retirement Benefit, then such benefit shall be payable in a lump sum. The lump sum payment shall be made, or installment payments shall commence, no later than 60 days after the last day of the Plan Year which the Participant Retires. Any payment made shall be subject to the Deduction Limitation. 5.3 DEATH PRIOR TO COMPLETION OF RETIREMENT BENEFIT. If a Participant dies after Retirement but before the Retirement Benefit is paid in full, the Participant's unpaid Retirement Benefit payments shall continue and shall be paid to the Participant's Beneficiary over the remaining number of years and in the same amounts as that benefit would have been paid to the Participant had the Participant survived. 5.4 CHANGE IN TIME OR FORM OF PAYMENT. Notwithstanding the method of payment for the Retirement Benefit elected by a Participation on an Election Form with respect to the -15- Compensation deferred pursuant to such Election Form, the Participant may elect to change the time or Form of such payment under a subsequent election that meets the following requirements: (a) The subsequent election may not take effect until at least 12 months after the date on which the subsequent election is made. (b) The first payment with respect to which the subsequent election is made must be deferred for a period of not less than five years from the date such payment would otherwise have been made. (c) The subsequent election may not accelerate the time of any payment. The form of payment elected in a subsequent election must be a lump sum or an Annual Installment Method of 5, 10, or 15 years. 5.5 LIMITATION ON KEY EMPLOYEES. Notwithstanding any other provision of the Plan to the contrary, the payment of a Retirement Benefit with respect to a "key employee" of the Company, within the meaning of Section 416(i)(1) of the Code, shall not be made within six months following his separation from service with the Company, except in the event of death. ARTICLE 6 PRE-RETIREMENT SURVIVOR BENEFIT 6.1 PRE-RETIREMENT SURVIVOR BENEFIT. Subject to the Deduction Limitation, the Participant's Beneficiary shall receive a Pre-Retirement Survivor Benefit equal to the Participant's Account Balance if the Participant dies before he or she Retires, experiences a Termination of Employment or suffers a Disability. 6.2 PAYMENT OF PRE-RETIREMENT SURVIVOR BENEFIT. A Participant's Beneficiary shall receive the Pre-Retirement Survivor Benefit in a lump sum. The lump sum payment shall be made no later than 60 days after the last day of the Plan Year in which the Committee is provided with proof that is satisfactory to the Committee of the Participant's death. Any payment made shall be subject to the Deduction Limitation. ARTICLE 7 TERMINATION BENEFIT 7.1 TERMINATION BENEFIT. Subject to the Deduction Limitation, the Participant shall receive a Termination Benefit, which shall be equal to the Participant's Account Balance if a Participant experiences a Termination of Employment prior to his or her Retirement, death or Disability. 7.2 PAYMENT OF TERMINATION BENEFIT. If the Participant's Account Balance at the time of his or her Termination of Employment is less than $10,000, payment of his or her Termination Benefit shall be paid in a lump sum on or before the later of (a) December 31 of the -16- calendar year in which occurs the Participant's separation from service or (b) 2-1/2 months after the Participant's separation from service. If his or her Account Balance at such time is equal to or greater than that amount, the Termination Benefit shall be paid in a lump sum or pursuant to an Annual Installment Method of 5, 10 or 15 years as elected by the Participant for the payment of the Retirement Benefit with respect to such amount. The lump sum payment shall be made, or installment payments shall commence, no later than 60 days after the Participant experiences the Termination of Employment. Any payment made shall be subject to the Deduction Limitation. 7.3 CHANGE IN TIME OR FORM OF PAYMENT. Notwithstanding the method of payment elected by a Participant on an Election Form with respect to Compensation deferred pursuant to such Election Form, the Participant may elect to change the form of payment for Termination Benefits under a subsequent election that meets the following requirements: (a) The subsequent election may not take effect until at least 12 months after the date on which the subsequent election is made. (b) The subsequent election may not accelerate the time or schedule of any payment. The form of payment elected in a subsequent election must be a lump sum or an Annual Installment Method of 5, 10, or 15 years. 7.4 LIMITATION ON KEY EMPLOYEES. Notwithstanding any other provision of the Plan to the contrary, the payment of a Termination Benefit with respect to a "key employee" of the Company, within the meaning of Section 416(i)(1) of the Code, shall not be made within six months following his separation from service with the Company, except in the event of death. ARTICLE 8 DISABILITY BENEFIT 8.1 DISABILITY BENEFIT. A Participant suffering a Disability shall, for benefit purposes under this Plan, be deemed to have experienced a Termination of Employment, or in the case of a Participant who is eligible to Retire to have Retired, as soon as practicable after such Participant is determined to be suffering a Disability, in which case the Participant shall receive a Disability Benefit equal to his or her Account Balance provided, however, that should the Participant otherwise have been eligible to Retire, he or she shall be paid in accordance with Article 5. The Disability Benefit shall be paid in a lump sum within sixty (60) days of the Participant's deemed Termination of Employment. Any payment made shall be subject to the Deduction Limitation. 8.2 LIMITATION ON KEY EMPLOYEES. Notwithstanding any other provision of the Plan to the contrary, the payment of a Disability Benefit with respect to a "key employee" of the Company, within the meaning of Section 416(i)(1) of the Code, shall not be made within six months following his separation from service with the Company, except in the event of death. -17- ARTICLE 9 BENEFICIARY DESIGNATION 9.1 BENEFICIARY. Each Participant shall have the right, at any time, to designate his or her Beneficiary(ies) (both primary as well as contingent) to receive any benefits payable under the Plan to a beneficiary upon the death of a Participant. The Beneficiary designated under this Plan may be the same as or different from the Beneficiary designation under any other plan of an Employer in which the Participant participates. 9.2 BENEFICIARY DESIGNATION; CHANGE; SPOUSAL CONSENT. A Participant shall designate his or her Beneficiary by completing and signing the Beneficiary Designation Form, and returning it to the Committee or its designated agent. A Participant shall have the right to change a Beneficiary by completing, signing and otherwise complying with the terms of the Beneficiary Designation Form and the Committee's rules and procedures, as in effect from time to time. If the Participant names someone other than his or her spouse as a Beneficiary, a spousal consent, in the form designated by the Committee, must be signed by that Participant's spouse and returned to the Committee. Upon the acceptance by the Committee of a new Beneficiary Designation Form, all Beneficiary designations previously filed shall be canceled. The Committee shall be entitled to rely on the last Beneficiary Designation Form filed by the Participant and accepted by the Committee prior to his or her death. 9.3 ACKNOWLEDGMENT. No designation or change in designation of a Beneficiary shall be effective until received and acknowledged in writing by the Committee or its designated agent. 9.4 NO BENEFICIARY DESIGNATION. If a Participant fails to designate a Beneficiary as provided in Sections 9.1, 9.2 and 9.3 above or, if all designated Beneficiaries predecease the Participant or die prior to complete distribution of the Participant's benefits, then the Participant's designated Beneficiary shall be deemed to be his or her surviving spouse. If the Participant has no surviving spouse, the benefits remaining under the Plan to be paid to a Beneficiary shall be payable to the Participant's estate. 9.5 DOUBT AS TO BENEFICIARY. If the Committee has any doubt as to the proper Beneficiary to receive payments pursuant to this Plan, the Committee shall have the right, exercisable in its discretion, to cause the Participant's Employer to withhold such payments until this matter is resolved to the Committee's satisfaction. 9.6 DISCHARGE OF OBLIGATIONS. The payment of benefits under the Plan to a Beneficiary shall fully and completely discharge all Employers and the Committee from all further obligations under this Plan with respect to the Participant, and that Participant's Plan Agreement shall terminate upon such full payment of benefits. -18- ARTICLE 10 LEAVE OF ABSENCE 10.1 PAID LEAVE OF ABSENCE. If a Participant is authorized by the Participant's Employer for any reason to take a paid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer and the Deferral Amount shall continue to be withheld during such paid leave of absence in accordance with Section 3.3. 10.2 UNPAID LEAVE OF ABSENCE. If a Participant is authorized by the Participant's Employer for any reason to take an unpaid leave of absence from the employment of the Employer, the Participant shall continue to be considered employed by the Employer and the Participant shall be excused from making deferrals until the Participant returns to a paid employment status. Upon such return, deferrals shall resume for the remaining portion of the Plan Year in which the return occurs, based on the deferral election, if any, made for that Plan Year. If no election was made for that Plan Year, no deferral shall be withheld. ARTICLE 11 TERMINATION, AMENDMENT OR MODIFICATION 11.1 TERMINATION. Although the Company anticipates that it will continue the Plan for an indefinite period of time, there is no guarantee that the Company will continue the Plan or will not terminate the Plan at any time in the future. Accordingly, the Company reserves the right to terminate the Plan at any time with respect to any or all of its participating Employees, by action of the Committee. Upon the termination of the Plan with respect to any Employer, the Plan Agreements of the affected Participants who are employed by that Employer shall terminate and their Account Balances, determined as if they had experienced a Termination of Employment on the date of Plan termination or, if Plan termination occurs after the date upon which a Participant was eligible to Retire, then with respect to that Participant as if he or she had Retired on the date of Plan termination, shall be paid to the Participants in accordance with the elections made by the Participants. 11.2 AMENDMENT. The Company may, at any time, amend or modify the Plan in whole or in part by the action of the Committee; provided, however, that: (i) no amendment or modification shall be effective to decrease or restrict the value of a Participant's Account Balance in existence at the time the amendment or modification is made, calculated as if the Participant had experienced a Termination of Employment as of the effective date of the amendment or modification or, if the amendment or modification occurs after the date upon which the Participant was eligible to Retire, the Participant had Retired as of the effective date of the amendment or modification, and (ii) no amendment or modification of this Section 11.2 or Section 12.2 of the Plan shall be effective. The amendment or modification of the Plan shall not affect any Participant or Beneficiary who has become entitled to the payment of benefits under the Plan as of the date of the amendment or modification. The Company specifically reserves the right to amend the Plan to conform the provisions of the Plan to the guidance issued by the Secretary of the Treasury with respect to Section 409A of the Code, in accordance with such guidance. -19- 11.3 EFFECT OF PAYMENT. The full payment of the applicable benefit under Articles 4, 5, 6, 7 or 8 of the Plan shall completely discharge all obligations to a Participant and his or her designated Beneficiaries under this Plan and the Participant's Plan Agreement shall terminate. ARTICLE 12 ADMINISTRATION 12.1 COMMITTEE DUTIES. This Plan will be administered by the Committee. The Committee will, subject to the terms of this Plan, have the authority to: (i) approve for participation employees who are recommended for participation by the president and Chief Executive Officer of the Company, (ii) adopt, alter, and repeal administrative rules and practices governing this Plan, (iii) interpret the terms and provisions of this Plan, and (iv) otherwise supervise the administration of this Plan. All decisions by the Committee will be made with the approval of not less than a majority of its members. The Committee may delegate any of its authority to any other person or persons that it deems appropriate, provided the delegation does not cause this Plan or any awards granted under this Plan to fail to qualify for the exemption provided by Rule 16b-3, or, if applicable, to meet the requirements of the regulations under Section 162(m) of the Code. 12.2 ADMINISTRATION UPON CHANGE IN CONTROL. For purposes of this Plan, the Company shall be the "Administrator" at all times prior to the occurrence of a Change in Control. Upon and after the occurrence of a Change in Control, the "Administrator" shall be an independent third party selected by the Trustee and approved by the individual who, immediately prior to such event, was the Company's Chief Executive Officer or, if not so identified, the Company's then highest ranking officer (the "Ex-Chief Executive Officer"). The Administrator shall have the discretionary power to determine all questions arising in connection with the administration of the Plan and the interpretation of the Plan and Trust including, but not limited to benefit entitlement determinations; provided, however, upon and after the occurrence of a Change in Control, the Administrator shall have no power to direct the investment of Plan or Trust assets or select any investment manager or custodial firm for the Plan or Trust. Upon and after the occurrence of a Change in Control, the Company must: (1) pay all reasonable administrative expenses and fees of the Administrator; (2) indemnify the Administrator against any costs, expenses and liabilities including, without limitation, attorney's fees and expenses arising in connection with the performance of the Administrator hereunder, except with respect to matters resulting from the gross negligence or willful misconduct of the Administrator or its employees or agents; and (3) supply full and timely information to the Administrator or all matters relating to the Plan, the Trust, the Participants and their Beneficiaries, the Account Balances of the Participants, the date of circumstances of the Retirement, Disability, death or Termination of Employment of the Participants, and such other pertinent information as the Administrator may reasonably require. Upon and after a Change in Control, the Administrator may be terminated (and a replacement appointed) by the Trustee only with the approval of the Ex-Chief Executive Officer. Upon and after a Change in Control, the Administrator may not be terminated by the Company. -20- 12.3 AGENTS. In the administration of this Plan, the Committee may, from time to time, employ agents and delegate to them such administrative duties as it sees fit (including acting through a duly appointed representative) and may from time to time consult with counsel who may be counsel to any Employer. 12.4 BINDING EFFECT OF DECISIONS. All decisions by the Committee, and by any other person or persons to whom the Committee has delegated authority, shall be final and conclusive and binding upon all persons having any interest in the Plan. 12.5 INDEMNITY OF COMMITTEE. The Company shall indemnify and hold harmless the members of the Committee, and any Employee to whom the duties of the Committee may be delegated, and the Administrator against any and all claims, losses, damages, expenses or liabilities arising from any action or failure to act with respect to this Plan, except in the case of willful misconduct by the Committee, any of its members, any such Employee or the Administrator. 12.6 EMPLOYER INFORMATION. To enable the Committee and/or Administrator to perform its functions, the Company and each Employer shall supply full and timely information to the Committee and/or Administrator, as the case may be, on all matters relating to the compensation of its Participants, the date and circumstances of the Retirement, Disability, death or Termination of Employment of its Participants, and such other pertinent information as the Committee or Administrator may reasonably require. ARTICLE 13 OTHER BENEFITS AND AGREEMENTS 13.1 COORDINATION WITH OTHER BENEFITS. The benefits provided for a Participant and Participant's Beneficiary under the Plan are in addition to any other benefits available to such Participant under any other plan or program for employees of the Participant's Employer. The Plan shall supplement and shall not supersede, modify or amend any other such plan or program except as may otherwise be expressly provided. ARTICLE 14 CLAIMS PROCEDURES 14.1 PRESENTATION OF CLAIM. Any Participant or Beneficiary of a deceased Participant (such Participant or Beneficiary being referred to below as a "Claimant") may deliver to the Committee a written claim for a determination with respect to the amounts distributable to such Claimant from the Plan. If such a claim relates to the contents of a notice received by the Claimant, the claim must be made within 60 days after such notice was received by the Claimant. All other claims must be made within 180 days of the date on which the event that caused the claim to arise occurred. The claim must state with particularity the determination desired by the Claimant. 14.2 NOTIFICATION OF DECISION. The Committee shall consider a Claimant's claim within a reasonable time, and shall notify the Claimant in writing: -21- (a) that the Claimant's requested determination has been made, and that the claim has been allowed in full; or (b) that the Committee has reached a conclusion contrary, in whole or in part, to the Claimant's requested determination, and such notice must set forth in a manner calculated to be understood by the Claimant: (i) the specific reason(s) for the denial of the claim, or any part of it; (ii) specific reference(s) to pertinent provisions of the Plan upon which such denial was based; (iii) a description of any additional material or information necessary for the Claimant to perfect the claim, and an explanation of why such material or information is necessary; and (iv) an explanation of the claim review procedure set forth in Section 14.3 below. 14.3 REVIEW OF A DENIED CLAIM. Within 60 days after receiving a notice from the Committee that a claim has been denied, in whole or in part, a Claimant (or the Claimant's duly authorized representative) may file with the Committee a written request for a review of the denial of the claim. Thereafter, but not later than 30 days after the review procedure began, the Claimant (or the Claimant's duly authorized representative): (a) may review pertinent documents; (b) may submit written comments or other documents; and/or (c) may request a hearing, which the Committee, in its sole discretion, may grant. 14.4 DECISION ON REVIEW. The Committee shall render its decision on review promptly, and not later than 60 days after the filing of a written request for review of the denial, unless a hearing is held or other special circumstances require additional time, in which case the Committee's decision must be rendered within 120 days after such date. Such decision must be written in a manner calculated to be understood by the Claimant, and it must contain: (a) specific reasons for the decision; (b) specific reference(s) to the pertinent Plan provisions upon which the decision was based; and (c) such other matters as the Committee deems relevant. -22- 14.5 LEGAL ACTION. A Claimant's compliance with the foregoing provisions of this Article 14 is a mandatory prerequisite to a Claimant's right to commence any legal action with respect to any claim for benefits under this Plan. ARTICLE 15 TRUST 15.1 ESTABLISHMENT OF THE TRUST. The Company may establish one or more Trusts to which the Company may transfer such assets as the Company determines in its sole discretion to assist in meeting its obligations under the Plan. 15.2 INTERRELATIONSHIP OF THE PLAN AND THE TRUST. The provisions of the Plan and the Plan Agreement shall govern the rights of a Participant to receive distributions pursuant to the Plan. The provisions of the Trust shall govern the rights of the Company, Participants and the creditors of the Employers to the assets transferred to the Trust. 15.3 DISTRIBUTIONS FROM THE TRUST. Each Employers obligations under the Plan may be satisfied with Trust assets distributed pursuant to the terms of the Trust, and any such distribution shall reduce the Company's obligations under this Plan. 15.4 STOCK TRANSFERRED TO THE TRUST. Notwithstanding any other provision of this Plan or the Trust, any Stock transferred to the Trust in accordance with Section 3.7 may not be otherwise distributed or disposed of by the Trustee until at least 6 months after the date such Stock is transferred to the Trust. ARTICLE 16 MISCELLANEOUS 16.1 STATUS OF PLAN. The Plan is intended to be a plan that is not qualified within the meaning of Code Section 401(a) and that "is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employee" within the meaning of ERISA Sections 201(2), 301(a)(3) and 401(a)(1). The Plan shall be administered and interpreted to the extent possible in a manner consistent with that intent. 16.2 UNSECURED GENERAL CREDITOR. Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable rights, interests or claims in any property or assets of the Company or an Employer. For purposes of the payment of benefits under this Plan, any and all of the Company's or an Employer's assets shall be, and remain, the general, unpledged unrestricted assets of the Company or an Employer, respectively. The Company's or an Employer's obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future. 16.3 EMPLOYER'S LIABILITY. An Employer's liability for the payment of benefits shall be defined only by the Plan and the Plan Agreement, as entered into between the Employer and a Participant. An Employer shall have no obligation to a Participant under the Plan except as expressly provided in the Plan and his or her Plan Agreement. -23- 16.4 NONASSIGNABILITY. Neither a Participant nor any other person shall have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage or otherwise encumber, transfer, hypothecate, alienate or convey in advance of actual receipt, the amounts, if any, payable hereunder, or any part thereof, which are, and all rights to which are expressly declared to be, unassignable and non-transferable. No part of the amounts payable shall, prior to actual payment, be subject to seizure, attachment, garnishment or sequestration for the payment of any debts, judgments, alimony or separate maintenance owed by a Participant or any other person, be transferable by operation of law in the event of a Participant's or any other person's bankruptcy or insolvency or be transferable to a spouse as a result of a property settlement or otherwise. 16.5 NOT A CONTRACT OF EMPLOYMENT. The terms and conditions of this Plan shall not be deemed to constitute a contract of employment between any Employer and the Participant, either expressed or implied. Such employment is hereby acknowledged to be an "at will" employment relationship that can be terminated at any time for any reason, or no reason, with or without cause, and with or without notice, unless expressly provided in a written employment agreement. Nothing in this Plan shall be deemed to give a Participant the right to be retained in the service of any Employer, or to interfere with the right of any Employer to discipline or discharge the Participant at any time. 16.6 FURNISHING INFORMATION. A Participant or his or her Beneficiary will cooperate with the Committee by furnishing any and all information requested by the Committee and take such other actions as may be requested in order to facilitate the administration of the Plan and the payments of benefits hereunder, including but not limited to taking such physical examinations as the Committee may deem necessary. 16.7 TERMS. Whenever any words are used herein in the masculine, they shall be construed as though they were in the feminine in all cases where they would so apply; and whenever any words are used herein in the singular or in the plural, they shall be construed as though they were used in the plural or the singular, as the case may be, in all cases where they would so apply. 16.8 CAPTIONS. The captions of the articles, sections and paragraphs of this Plan are for convenience only and shall not control or affect the meaning or construction of any of its provisions. 16.9 GOVERNING LAW. Subject to ERISA, the provisions of this Plan shall be construed and interpreted according to the internal laws of the State of Ohio without regard to its conflicts of laws principles. 16.10 NOTICE. Any notice or filing required or permitted to be given to the Committee under this Plan shall be sufficient if in writing and hand-delivered, or sent by registered or certified mail, to the address below: -24- Robert E. Veillette Secretary and Assistant General Counsel Nordson Corporation 28601 Clemens Road Westlake, Ohio 44145 Such notice shall be deemed given as of the date of delivery or, if delivery is made by mail, as of the date shown on the postmark on the receipt for registration or certification. Any notice or filing required or permitted to be given to a Participant under this Plan shall be sufficient if in writing and hand-delivered, or sent by mail, to the last known address of the Participant. 16.11 SUCCESSORS. The provisions of this Plan shall bind and inure to the benefit of the Company Employer and its successors and assigns and the Participant and the Participant's designated Beneficiaries. 16.12 SPOUSE'S INTEREST. The interest in the benefits hereunder of a spouse of a Participant who has predeceased the Participant shall automatically pass to the Participant and shall not be transferable by such spouse in any manner, including but not limited to such spouse's will, nor shall such interest pass under the laws of intestate succession. 16.13 VALIDITY. In case any provision of this Plan shall be illegal or invalid for any reason, said illegality or invalidity shall not affect the remaining parts hereof, but this Plan shall be construed and enforced as if such illegal or invalid provision had never been inserted herein. 16.14 INCOMPETENT. If the Committee determines in its discretion that a benefit under this Plan is to be paid to a minor, a person declared incompetent or to a person incapable of handling the disposition of that person's property, the Committee may direct payment of such benefit to the guardian, legal representative or person having the care and custody of such minor, incompetent or incapable person. The Committee may require proof of minority, incompetence, incapacity or guardianship, as it may deem appropriate prior to distribution of the benefit. Any payment of a benefit shall be a payment for the account of the Participant and the Participant's Beneficiary, as the case may be, and shall be a complete discharge of any liability under the Plan for such payment amount. 16.15 COURT ORDER. The Committee is authorized to make any payments directed by court order in any action in which the Plan or the Committee has been named as a party. In addition, if a court determines that a spouse or former spouse of a Participant has an interest in the Participant's benefits under the Plan in connection with a property settlement or otherwise, the Committee, in its sole discretion, shall have the right, notwithstanding any election made by a Participant, to immediately distribute the spouse's or former spouse's interest in the Participant's benefits under the Plan to that spouse or former spouse. 16.16 INSURANCE. The Company, on its own behalf or on behalf of the trustee of the Trust, and, in its sole discretion, may apply for and procure insurance on the life of the Participant, in -25- such amounts and in such forms as the Trust may choose. The Company or the trustee of the Trust, as the case may be, shall be the sole owner and beneficiary of any such insurance. The Participant shall have no interest whatsoever in any such policy or policies, and at the request of the Company shall submit to medical examinations and supply such information and execute such documents as may be required by the insurance company or companies to whom the Company has applied for insurance. 16.17 LEGAL FEES TO ENFORCE RIGHTS AFTER CHANGE IN CONTROL. The Company is aware that upon the occurrence of a Change in Control, the Board or a shareholder of the Company, or of any successor corporation might then cause or attempt to cause the Company, or such successor to refuse to comply with its obligations under the Plan and might cause or attempt to cause the Company to institute, or may institute, litigation seeking to deny Participants the benefits intended under the Plan. In these circumstances, the purpose of the Plan could be frustrated. Accordingly, if, following a Change in Control, it should appear to any Participant that the Company or any successor corporation has failed to comply with any of its obligations under the Plan or any agreement thereunder or, if the Company or any other person takes any action to declare the Plan void or unenforceable or institutes any litigation or other legal action designed to deny, diminish or to recover from any Participant the benefits intended to be provided, then the Company hereby irrevocably authorizes such Participant to retain counsel of his or her choice at the expense of the Company to represent such Participant in connection with the initiation or defense of any litigation or other legal action, whether by or against the Company or any director, officer, shareholder or other person affiliated with the Company or any successor thereto in any jurisdiction. 16.18 NO ACCELERATION OF BENEFITS. The acceleration of the time or schedule of any payment under the Plan is not permitted, except as provided in regulations by the Secretary of the Treasury. 16.19 COMPLIANCE WITH SECTION 409A OF THE CODE. The Plan is intended to provide for the deferral of compensation in accordance with Section 409A of the Code for compensation earned, vested, or deferred after December 31, 2004. Notwithstanding any provisions of the Plan, any Plan Agreement, or any Election Form to the contrary, no otherwise permissible election under the Plan shall be given effect that would result in the taxation of any amount under Section 409A of the Code. To the extent permitted in guidance issued by the Secretary of the Treasury and in accordance with procedures established by the Committee, a Participant may be permitted to terminate participation in the Plan or cancel an election with respect deferral elections made under the Plan prior to January 1, 2005. -26- IN WITNESS WHEREOF, the Company has signed this Plan document on _________________, 2004. NORDSON CORPORATION Nordson Corporation, an Ohio corporatio By: ____________________________ Title: ____________________________ -27- EX-10.2 3 l12457aexv10w2.txt EX-10.2 2005 EXCESS DEFINED BENEFIT PENSION PLAN EXHIBIT 10.2 NORDSON CORPORATION 2005 EXCESS DEFINED BENEFIT PENSION PLAN Nordson Corporation hereby establishes, effective as of January 1, 2005, the Nordson Corporation 2005 Excess Defined Benefit Pension Plan ("Plan") to supplement the pension benefits of certain salaried employees designated by the Compensation Committee of the Board of Directors or its designee eligible to participate in the Plan in accordance with the terms hereof, as permitted by Section 3(36) of the Employee Retirement Income Security Act of 1974 ("ERISA"), with respect to compensation earned for services performed by such employees for the Company or vested after December 31, 2004. The Nordson Corporation Excess Defined Benefit Pension Plan established effective as of November 1, 1985 (the "1985 Plan") supplements the pension benefits of such employees with respect to compensation earned for services performed for the Company and vested before January 1, 2005. No provisions of this Plan shall alter, affect, or amend any provisions of the 1985 Plan applicable to compensation earned, deferred, and vested on or before December 31, 2004. ARTICLE I DEFINITIONS 1.1 Definitions. The following words and phrases shall have the meanings indicated, unless a different meaning is plainly required by the context: (a) The term "Beneficiary" shall mean an Employee's beneficiary or contingent annuitant. (b) The term "Company" shall mean Nordson Corporation, an Ohio corporation, its corporate successors and the surviving corporation resulting from any merger of Nordson Corporation with any other corporation or corporations. (c) The term "Employee" shall mean any person employed by the Company on a salaried basis who is designated by the Compensation Committee of the Board of Directors or its designee to participate in the Plan and who has not waived participation in the Plan. (d) The term "Plan" shall mean the excess defined benefit pension plan as set forth herein, together with all amendments hereto, which Plan shall be called the "Nordson Corporation 2005 Excess Defined Benefit Pension Plan." (e) The term "Salaried Pension Plan" shall mean the Nordson Corporation Salaried Employees Pension Plan in effect on the date of an employee's retirement, death, or other termination of employment. (f) The term "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. Reference to a section of the Code shall include such section and any comparable section or sections of any future legislation that amends, supplements, or supersedes such section. 1 1.2 Additional Definitions. All other words and phrases used herein shall have the meanings given them in the Salaried Pension Plan, unless a different meaning is clearly required by the context. ARTICLE II EXCESS PENSION BENEFIT 2.1 Eligibility. An Employee who retires, dies, or otherwise terminates his employment with the Company under conditions which make such Employee or Beneficiary eligible for a benefit under the Salaried Pension Plan, and whose benefits under the Salaried Pension Plan are limited by Section 415 or Section 401(a)(17) of the Code shall be eligible for an excess pension benefit determined by Section 2.2. 2.2 Amount. Subject to the provisions of Article III, the monthly excess pension benefit payable to an Employee or Beneficiary shall be such an amount which, when added to the sum of the monthly pension payable (before any reduction applicable to an optional method of payment) under the Salaried Pension Plan to such person plus the monthly benefit payable under the 1985 Plan to such person, equals the monthly pension benefit that would have been payable (before any reduction applicable to an optional method of payment) under the Salaried Pension Plan to such person if the limitations of Section 415 and Section 401(a)(17) of the Code were not in effect. 2.3 Payments. All payments under the Plan to an Employee or Beneficiary shall be made by the Company from its general assets. The terms of payment of the excess pension benefit shall be identical to those specified in the Salaried Pension Plan for the type of benefit the Employee or Beneficiary receives under the Salaried Pension Plan; provided, however, that the payment of a benefit under the Plan with respect to a "key employee" of the Company, within the meaning of Section 416(i)(1) of the Code, shall not be made within six months following his separation of service from the Company, except in the event of death. ARTICLE III OPTIONAL METHODS OF PAYMENT Payment of the excess pension benefit to an Employee or Beneficiary shall be made in accordance with the terms and provisions of any method of payment under the Salaried Pension Plan whether by option or by operation of law, applicable to such Employee or Beneficiary, or in a lump sum payment. The amount of the excess pension benefit payable to an Employee or Beneficiary shall be reduced to reflect any such optional method of payment. In making the determination and reductions provided for in this Article III, the Company may rely upon calculations made by the independent actuaries for the Salaried Pension Plan, who shall apply the assumptions then in use in connection with the Salaried Pension Plan. 2 ARTICLE IV ADMINISTRATION The Company shall be responsible for the general administration of the Plan, for carrying out its provisions, and for making any required excess benefit payments. The Company shall have any powers as may be necessary to administer and carry out the provisions of the Plan. Actions taken and decisions made by the Company shall be final and binding upon all interested parties. In accordance with the provisions of Section 503 of ERISA, the Company shall provide a procedure for handling claims of Employees and Beneficiary for benefits under the Plan. The procedure shall be in accordance with regulations issued by the Secretary of Labor and provide adequate written notice within a reasonable period of time with respect to a claim denial. The procedure shall also provide for a reasonable opportunity for a full and fair review by the Company of any claim denial. The Company shall be the "administrator" for purposes of ERISA. ARTICLE V AMENDMENT AND TERMINATION The Company reserves the right to amend or terminate the Plan at any time by action of its Board of Directors. No such action shall, however, adversely affect any Employee or Beneficiary who is receiving excess pension benefits under the Plan, unless an equivalent benefit is provided under the Salaried Pension Plan or another plan sponsored by the Company. The Company specifically reserves the right to amend the Plan to conform the provisions of the Plan to the guidance issued by the Secretary of the Treasury with respect to Section 409A of the Code, in accordance with such guidance. ARTICLE VI MISCELLANEOUS 6.1 Non-Alienation of Retirement Rights or Benefits. Employees or Beneficiaries are not permitted to assign, transfer, alienate or otherwise encumber the right to receive payments under the Plan. Any attempt to do so or to permit the payments to be subject to garnishment, attachment or levy of any kind will permit the Company to make payments directly to and for the benefit of the Employee, Beneficiary or any other person. Each such payment may be made without the intervention of a guardian. The receipt of the payee shall constitute a complete acquittance to the Company with respect to any payments, and the Company shall have no responsibility for the proper application of any payment. 6.2 Incapacity. The Company shall be permitted to make payments in the same manner as provided for in Section 6.1 if in the judgment of the Company, an Employee or Beneficiary is incapable of attending to his financial affairs. 6.3 Plan Non-Contractual. This Plan shall not be construed as a commitment or agreement on the part of any person employed by the Company to continue his employment 3 with the Company, nor shall it be construed as a commitment on the part of the Company to continue the employment or the annual rate of compensation of any such person for any period. All Employees shall remain subject to discharge to the same extent as if the Plan had never been established. 6.4 Interest of Employee. The obligation of the Company under the Plan to provide an Employee or Beneficiary with an excess pension benefit merely constitutes the unsecured promise of the Company to make payments as provided herein, and no person shall have any interest in, or a lien or prior claim upon, any property of the Company. 6.5 Controlling Status. No Employee or Beneficiary shall be eligible for a benefit under the Plan unless such Employee is an Employee on the date of his retirement, death, or other termination of employment. 6.6 Claims of Other Persons. The provisions of the Plan shall in no event be construed as giving any person, firm or corporation any legal or equitable right as against the Company, its officers, employees, or directors, except any such rights as are specifically provided for in the Plan or are hereafter created in accordance with the terms and provisions of the Plan. 6.7 No Competition. The right of any Employee or Beneficiary to an excess pension benefit will be terminated, or, if payment thereof has begun, all further payments will be discontinued and forfeited in the event the Employee or Beneficiary at any time subsequent to the effective date hereof: (i) wrongfully discloses any secret process or trade secret of the Company or any of its subsidiaries, or (ii) becomes involved directly or indirectly as an officer, trustee, employee, consultant, partner, or substantial shareholder, on his own account or in any other capacity, in a business venture that within the two-year period following his retirement or termination of employment of the Employee, the Company's Board of Directors determines to be competitive with the Company. 6.8 Severability. The invalidity or unenforceability of any particular provision of the Plan shall not effect any other provision hereof, and the Plan shall be construed in all respects as if such invalid or unenforceable provision were omitted therefrom. 6.9 Governing Law. The provisions of the Plan shall be governed and construed in accordance with the laws of the State of Ohio. 6.10 No Acceleration of Benefits. The acceleration of the time or schedule of any payment under the Plan is not permitted, except as provided in regulations by the Secretary of the Treasury. 6.11 Compliance with Section 409A of the Code. The Plan is intended to provide for the deferral of compensation in accordance with the provisions of Section 409A of the Code, for compensation earned, vested, or deferred after December 31, 2004. 4 Notwithstanding any provisions of the Plan to the contrary, no benefit shall be paid under the Plan in a manner that would result in the taxation of any amount under Section 409A of the Code. ARTICLE VII SPECIAL CONTINGENT SUPPLEMENT 7.1 Eligibility. Each Employee who has in effect a written employment agreement with the Company with provisions designed to become effective upon a change in control shall be eligible for a Special Contingent Supplemental Benefit ("SCSB"), provided that on the date any change in control occurs under the terms of such employment agreement the Employee has completed 10 years of Vesting Service with the Company and attained age 55. 7.2 Amount and Payment. The SCSB shall be payable to the eligible Employee for each month after the date of his retirement or other termination of employment following a change in control entitling him to benefits under an employment agreement and during his lifetime in which the Company (including any of its successors) fails to provide such Employee with coverage under a program of medical benefit coverage substantially the same as that in effect with respect to retired employees of the Company or its successors immediately prior to the change in control. The amount of each monthly SCSB benefit payment shall be $750. EXECUTED this _____________ day of _________________, 2004. NORDSON CORPORATION By:___________________________ Title: 5 EX-10.3 4 l12457aexv10w3.txt EX-10.3 2005 DIRECTORS DEFERRED COMPENSATION EXHIBIT 10.3 Committee Rules VII. 2005 DIRECTORS' DEFERRED COMPENSATION The provisions of the Plan and these Rules apply to Directors' Compensation deferred after December 31, 2004. Directors' Compensation deferred before January 1, 2005, remains subject to the provisions of the Plan and the Rules as in effect on October 3, 2004. 1. DEFINITIONS. The following definitions apply to Directors' deferred compensation: (a) "Directors' Compensation" means all or a portion of the fees (including quarterly retainer fees, meeting fees, and such special or other fees as may be authorized by the Board of Directors, but excluding Director Options) paid to the Directors by reason of their serving on the Board and, if applicable, on Committees of the Board. 2. DIRECTORS' COMPENSATION. Each Director will have the option to defer his or her Directors' Compensation and have it either (i) credited to an account maintained for him or her by Nordson as cash or (ii) allocated to an account maintained for him or her by Nordson as Stock Equivalent Units. 3. ELECTIONS TO DEFER DIRECTORS' COMPENSATION. (a) Time of Election. Any person who is appointed to fill a vacancy on the Board, or is newly elected as a Director, may elect within thirty days after the commencement of his or her term as a Director to defer the receipt of all or a specified portion of his or her Directors' Compensation earned for services performed for the balance of the year in which the election is made and for succeeding years. (b) Duration of an Election. An election to defer Directors' Compensation will be irrevocable and will continue from year to year until a Director terminates the election by written request or until the end of the year preceding the initial distribution to the Director under the schedule set forth in Section 5(a), whichever first occurs, but, in the event of a termination, the amount theretofore deferred will not be paid to the Director until the dates specified in the schedule set forth in Section 5(a). Any termination of an election by written request shall be effective as of the first day of the year following the year in which the written request is made. (c) Election to Defer Less than All Directors' Compensation. In the event that any Director elects to defer less than all of the Directors' Compensation payable to him or her for any period, Nordson will first pay the non-deferred portion of the Directors' Compensation to the Director in cash and will only commence to defer his or her Directors' Compensation, whether as cash or as Stock Equivalent Units, VII-1 Committee Rules at such time as the entire non-deferred portion has been paid to the Director in cash. 4. ELECTION OF CASH OR STOCK EQUIVALENT UNITS. (a) Designation as Cash or Stock Equivalent Units. At the time that each Director makes an election to defer the receipt of all or a specified portion of his or her Directors' Compensation, the Director will designate whether the amount of the Directors' Compensation he or she elects to defer will be credited to his or her account as cash or allocated as Stock Equivalent Units. (b) Change of Designation from Cash to Stock Equivalent Units. Each Director who previously designated cash may at any time elect to have his or her designation changed from cash to Stock Equivalent Units (but not from Stock Equivalent Units to cash) and all or a portion of the cash credited to his or her account converted to Stock Equivalent Units; provided that no such election may be made relating to all or a portion of the cash credited to his or her account within six months of (i) an election to receive an early distribution under Section 5(b) hereof (if such distribution is funded by the conversion of Stock Equivalent Units), (ii) an election to make an intra-plan transfer under Nordson's Employees' Savings Trust Plan ("NEST") of funds held in a Nordson Common Share Fund account into any other Fund under the NEST, or (iii) an election to receive a cash distribution from the NEST, including a loan or hardship withdrawal, which is funded in whole or in part by the liquidation of Common Shares in the participant's Nordson Common Share Fund account. Upon making such an election, all or the designated portion of the cash credited to a Director's account will be converted into Stock Equivalent Units based on the Fair Market Value of the Common Shares at the date of conversion. "Fair Market Value" for purposes of this Section 4(b) means the average of the high and low price quoted for Common Shares as reported in the NASDAQ National Market System on the date of conversion. (c) Cash Credits. Nordson will maintain an account for each Director who elects to defer Directors' Compensation as cash and will credit his or her account (i) on the last day of each month with the amount of Directors' Compensation he or she elects to defer which otherwise would have been paid to him or her during the month and (ii) on the last day of each quarter with interest on the balance in this account at a rate equal to the rate of interest of Ten Year Treasury Securities as reported in the Federal Reserve Bank Constant Maturity Series H-15 Report for the last business day of the quarter, paid on the average daily balance in the account during the quarter. A Director whose account is credited with cash shall receive all distributions in cash. (d) Stock Equivalent Units. Nordson will maintain an account for each Director who elects to defer Directors' Compensation as Stock Equivalent Units. After a Director makes such an election, Nordson will credit his or her account (i) on the VII-2 Committee Rules last day of each month with a number of Stock Equivalent Units equal to the quotient of the amount of Directors' Compensation he or she elects to defer which otherwise would have been paid to him or her during the month divided by the Fair Market Value of the Common Shares on that day and (ii) on dividend payment dates with an additional number of Stock Equivalent Units equal to the product of the number of Stock Equivalent Units credited to this account immediately prior to the dividend payment date multiplied by a fraction, the numerator of which is the amount of the dividend per Common Share and the denominator of which is the Fair Market Value of the Common Shares on the dividend payment date. A Director whose account is credited with Stock Equivalent Units shall receive all distributions in Common Shares. "Fair Market Value" for purposes of this Section 4(d) means the average of the high and low price quoted for Common Shares as reported in the NASDAQ National Market System on the day the Directors account is credited. (e) Subject to Claims of General Creditors. All Directors' Compensation deferred and amounts credited to accounts as cash or Stock Equivalent Units under the terms of this Section 4 will remain part of the assets of Nordson and will be subject to the claims of its general creditors. 5. DISTRIBUTION. (a) Normal Distribution. The account maintained for each Director who elects to defer Directors' Compensation will be distributed in 16 quarterly installments (the amount of each to equal the balance in his or her account at the particular time divided by the number of remaining installments) beginning with the first day of the month immediately succeeding the month in which that Director ceases to be a Director. The undistributed balance of any account will bear interest at the rate specified in Section 4(c)(ii), or be credited with additional Stock Equivalent Units upon the payment of dividends as provided in Section 4(d), until the account has been completely distributed. (b) Early Distribution in Event of Financial Emergency. Notwithstanding the provisions of Section 5(a), a Director may, with the consent of the Committee, withdraw all or a portion of his or her accounts in the event of a financial emergency that is beyond the Director's control, would cause the Director great hardship if early withdrawal were not permitted, and qualifies as an "unforeseeable emergency" within the meaning of Code Section 409A(a)(2)(B)(ii); provided that, no election to receive such an early withdrawal will be permitted if it would be funded, in whole or in part, by the conversion of Stock Equivalent Units into cash and such election occurs within six months of an election to have all or any portion of the Director's cash account converted into Stock Equivalent Units or an election to make an intra-plan transfer under the NEST of funds from any Fund into the participant's Nordson Common Share Fund account. Any such early withdrawal shall be in the form of a cash distribution, with any Stock Equivalent Units converted into cash on the basis set VII-3 Committee Rules forth in Section 5(b), and will be limited to the amount necessary to meet the emergency. 6. DEATH OF A DIRECTOR. A Director may elect whether, in the event of his or her death prior to the expiration of the period during which his or her account balance is distributable, the account balance will be distributed to his or her estate (or designated beneficiary) in a single distribution or in the installments contemplated by Section 5(a). Such election will be made at the time of the election contemplated by Section 3; if no such election is made, the account balance will be distributed in a single distribution. 7. NON-COMPETITION. In the event a Director ceases to be a Director and becomes a proprietor, officer, partner, or employee of, or otherwise becomes affiliated with, any business that is in competition with the Company, his or her account balance will be distributed immediately to him or her in a single cash distribution. Any Stock Equivalent Units allocated to the Director's account will be converted into an amount of cash equal to the product of the number of Stock Equivalent Units allocated to his or her account multiplied by the Fair Market Value of the Common Shares on the date of the distribution. "Fair Market Value" for purposes of this Section 7 means the average of the high and low price quoted for Common Shares as reported in the NASDAQ National Market System on the date of distribution. VII-4 EX-31.1 5 l12457aexv31w1.txt EX-31.1 302 CERT. FOR CEO EXHIBIT 31.1 CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Edward P. Campbell, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Nordson Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 7, 2005 /s/ EDWARD P. CAMPBELL ---------------------------------- Edward P. Campbell, Chairman of the Board of Directors and Chief Executive Officer EX-31.2 6 l12457aexv31w2.txt EX-31.2 302 CERT. FOR CFO EXHIBIT 31.2 CERTIFICATION PURSUANT TO RULE 13a-14(a)/15d-14(a) OF THE SECURITIES EXCHANGE ACT OF 1934, AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002 I, Peter S. Hellman, certify that: 1. I have reviewed this quarterly report on Form 10-Q of Nordson Corporation; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) for the registrant and have: a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function): a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: March 7, 2005 /s/ PETER S. HELLMAN -------------------------- Peter S. Hellman, President, Chief Financial and Administrative Officer EX-32.1 7 l12457aexv32w1.txt EX-32.1 906 CERT. FOR CEO EXHIBIT 32.1 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350, Chapter 63 of Title 18, United States Code), I, Edward P. Campbell, President and Chief Executive Officer of Nordson Corporation, an Ohio corporation (the "Company"), do hereby certify that: 1. The Quarterly Report on Form 10-Q for the quarter ended January 30, 2005 of the Company (the "Form 10-Q") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 7, 2005 /s/ Edward P. Campbell ---------------------------------- Edward P. Campbell Chairman of the Board of Directors and Chief Executive Officer EX-32.2 8 l12457aexv32w2.txt EX-32.2 906 CERT FOR CFO EXHIBIT 32.2 CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 (SECTION 1350, CHAPTER 63 OF TITLE 18, UNITED STATES CODE) Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Section 1350, Chapter 63 of Title 18, United States Code), I, Peter S. Hellman, Executive Vice President and Chief Financial and Administrative Officer of Nordson Corporation, an Ohio corporation (the "Company"), do hereby certify that: 1. The Quarterly Report on Form 10-Q for the quarter ended January 30, 2005 of the Company (the "Form 10-Q") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. Information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company. Dated: March 7, 2005 /s/ Peter S. Hellman ----------------------------------- Peter S. Hellman President, Chief Financial and Administrative Officer -----END PRIVACY-ENHANCED MESSAGE-----