NORDSON CORPORATION ASSURANCE TRUST
Exhibit 10-h
NORDSON CORPORATION
ASSURANCE TRUST
ASSURANCE TRUST
THIS TRUST AGREEMENT, made as of the 11th day of December, 1998 is between Nordson
Corporation, an Ohio corporation (“Nordson”), and [ ] (the “Trustee”).
WHEREAS, Nordson is obligated to provide certain supplemental pension benefits to certain of
its employees and to provide benefits pursuant to certain other deferred compensation and executive
compensation arrangements, including agreements with certain of its executives under which those
executives may become entitled to payments and benefits after a change in control of Nordson;
WHEREAS, Nordson desires to establish a trust (the “Trust”) and to contribute to the Trust
assets that shall be held therein and that shall be subject to the claims of the creditors of
Nordson in the event that Nordson becomes Insolvent (as defined in Section 5.1 below), until
distributed as provided herein or returned to Nordson; and
WHEREAS, it is the intention of the parties that the Trust shall constitute an unfunded
arrangement for purposes of Title I of the Employee Retirement Income Security Act of 1974, as
amended;
NOW, THEREFORE, Nordson and the Trustee do hereby establish the Trust and agree that the Trust
shall be comprised, held, and disposed of as follows:
Article 1. Establishment of Trust
1.1 Nordson hereby deposits with the Trustee in trust $100, which shall become the principal
of the Trust to be held, administered, and disposed of by the Trustee as provided in this Trust
Agreement.
1.2 The Trust hereby established may be revoked by Nordson at any time before the occurrence
of the first to occur of (a) a Funding Event (as defined in Section 15.6) and (b) a Change of
Control (as defined in Section 15.3). If any Funding Event occurs, the Trust hereby established may
not be revoked by Nordson until both that particular Funding Event and any other Funding Event that
may have also occurred have been “terminated” (as defined in Section 15.7) and the Trust then may
be revoked by Nordson if and only if no Change of Control has then occurred. Upon the occurrence of
a Change of Control, the Trust hereby established shall become irrevocable. Nordson’s General
Counsel shall notify the Trustee promptly upon the occurrence of any Funding Event and of any
Change of Control.
1.3 The Trust is intended to be a grantor trust, of which Nordson is the grantor, within the
meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code, and
shall be construed accordingly.
1.4 The principal of the Trust and any earnings thereon shall be held separate and apart from
other funds of Nordson and shall be used exclusively for the uses and purposes herein set forth. No
employee of Nordson shall have any preferred claim on, or any beneficial ownership interest in, any
assets of the Trust. Any rights created under any Covered Plan or
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under this Trust Agreement shall be mere unsecured contractual rights against Nordson. Any
assets held by the Trust will be subject to the claims of general creditors of Nordson under
federal and state law in the event Nordson becomes Insolvent.
Article 2. Additional Funding
2.1 Nordson, in its sole discretion, may at any time, or from time to time, make or cause to
be made, directly or indirectly, additional deposits of cash or other property in trust with the
Trustee to augment the principal to be held, administered, and disposed of by the Trustee as
provided in this Trust Agreement.
2.2 If a Funding Event occurs, Nordson shall, as soon as practicable and in no event later
than the day before the occurrence of any Change of Control related to that Funding Event,
contribute to the Trust an amount equal to the excess, if any, of the Full Funding Amount (as
defined in Section 15.5) over the sum of the value of the assets in the Trust (the “Current Trust
Asset Value”) immediately prior to the contribution.
2.3 Immediately upon the occurrence of the first Change of Control to occur after the
execution of this Trust Agreement and thereafter on each and every anniversary of that Change of
Control, Nordson shall contribute to the Trust an amount equal to the excess, if any, of the Full
Funding Amount over the Current Trust Asset Value immediately prior to the contribution.
2.4 Any contribution made under this Article 2 shall be subject to withdrawal by Nordson only
as provided in Article 3, dealing with discretionary withdrawals.
Article 3. Discretionary Withdrawals
3.1 Nordson, in its sole discretion, at any time before the occurrence of the first to occur
of a Funding Event or a Change of Control, may withdraw assets from the Trust provided that no such
withdrawal shall reduce the Current Trust Asset Value, immediately after the withdrawal, to an
amount below $100.
3.2 Nordson shall not be entitled to make any discretionary withdrawal of assets from the
Trust, after any Funding Event has occurred, until both that particular Funding Event and any other
Funding Event that may have also occurred have been terminated and Nordson may then make such a
discretionary withdrawal only if no Change of Control has then occurred. No discretionary
withdrawal under this Section 3.2 shall reduce the Current Trust Asset Value, immediately after the
withdrawal, to an amount below $100.
3.3 After a Change of Control has occurred, Nordson may not make any discretionary withdrawal
from the Trust. Nothing in this Article 3 shall restrict the right of Nordson to receive a
reversion of excess assets under Article 6.
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Article 4. Payments to Participants
4.1 Not later than 120 days after the occurrence of a Funding Event and again not later than
10 days following the occurrence of a Change of Control, Nordson shall deliver to the Trustee a
schedule (the “Payment Schedule”) that lists the names and addresses of all Participants and
indicates the amounts payable and to become payable to each Participant and/or provides a formula
or other instructions acceptable to the Trustee for determining the amounts so payable and that
indicates the form in which such amounts are to be paid, as provided for or available under each
Covered Plan, and the time of commencement for payment of such amounts. At the same time as Nordson
delivers the Payment Schedule to the Trustee, Nordson shall deliver to each Participant that
portion of the Payment Schedule that pertains to amounts that may become payable to that particular
Participant. After the occurrence of a Change of Control, Nordson shall update the Payment
Schedule, provide revised versions thereof to the Trustee, and provide the relevant portions
thereof to each Participant from time to time and at such times so that each termination of the
employment of any Participant (or the occurrence of any other fact or circumstance that alters the
payments due or to become due to any Participant under any of the Covered Plans) is taken into
account in a current revised Payment Schedule that has been appropriately delivered to the Trustee
and to each Participant (to the extent relevant to each such Participant) not later than ten days
after its occurrence. Except as otherwise provided herein, the Trustee shall make payments to the
Participants in accordance with the Payment Schedule as it may be revised from time to time. The
Trustee shall make provision for the reporting and withholding of any federal, state, or local
taxes that may be required to be withheld with respect to the payment of benefits pursuant to the
terms of each Covered Plan and shall pay amounts withheld to the appropriate taxing authorities or
determine that such amounts have been reported, withheld, and paid by Nordson.
4.2 Except as otherwise specifically provided herein, the entitlement of a Participant to
payments from Nordson under a particular Covered Plan shall be determined under the terms of the
particular Covered Plan at issue. It is Nordson’s intention that any and all amounts that may
become payable to Participants under the Covered Plans will be paid to the Participants at the
times and in the amounts specified in the relevant Covered Plan.
4.3 In order to provide added assurances to the Participants that the amounts to which they
may be entitled under the Covered Plans will be calculated in good faith and paid promptly at the
times and in the amounts specified in the respective Covered Plans, the following procedure shall
be followed:
(a) If, concurrently with or after the occurrence of a Change of Control, Nordson delivers to
the Trustee a Payment Schedule indicating that a Participant is entitled to payments under a
Covered Plan, the Trustee shall promptly thereafter deliver a copy of the relevant portion of the
Payment Schedule to the Participant and shall make the payments so indicated in the Payment
Schedule.
(b) If, after the occurrence of a Change of Control, a Participant (either because no Payment
Schedule has been delivered to the Trustee or because the Participant believes that the amounts
specified in the Payment Schedule are incorrect) delivers written notice (a “Participant Payment
Notice”) to the Trustee that the Participant is entitled to payments under a Covered Plan
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and requesting that the Trustee make payments to the Participant pursuant to that Covered
Plan, the Trustee shall promptly deliver a copy of the Participant Payment Notice to Nordson and
thereafter:
(i) if Nordson has not, within ten business days of the delivery of the
Participant Payment Notice to the Trustee, delivered to the Trustee a notice (a
“Nordson Stop Payment Notice”) in which Nordson asserts that the Participant is not
entitled to the payments set forth in the Participant Payment Notice, the Trustee
shall make the payments set forth in the Participant Payment Notice, or,
alternatively,
(ii) if Nordson has, within ten business days of the delivery of the Participant
Payment Notice to the Trustee, delivered to the Trustee a Nordson Stop Payment Notice,
the disparity between the Participant Payment Notice and the Nordson Stop Payment
Notice shall be resolved as provided in Section 4.4 below and any payments
or portions thereof that are not in dispute shall be paid by the Trustee as and when
due to the Participant.
4.4 If the Trustee has received both a Participant Payment Notice and a Nordson Stop Payment
Notice with regard to the same Covered Plan:
(a) the Trustee shall engage the Accounting Firm (as defined in Section 15.1), at Nordson’s
expense, to determine what payments the Participant is entitled to under the particular Covered
Plan, which determination shall be made by the Accounting Firm as promptly as practicable but in
all events within 30 days of the engagement of the Accounting Firm by the Trustee,
(b) Nordson shall cooperate with the Accounting Firm and provide to it all information that is
available to Nordson and is required by the Accounting Firm to make the determination referred to
in (a) above within the time frame set forth therein, and
(c) unless and until ordered to do otherwise by an award of arbitrators following arbitration
proceedings instituted pursuant to Section 4.5 below, the Trustee shall make payments to the
Participant in the amount or amounts and at the time or times determined by the Accounting Firm.
4.5 In the event of any dispute between a Participant and Nordson with respect to whether the
Participant is entitled to payments (or the amounts thereof) under a Covered Plan and/or to payment
thereof from the assets of the Trust, either party (Nordson or the Participant) may deliver to the
other a demand for binding arbitration. If either party delivers any such demand to the other, the
dispute shall be determined by binding arbitration conducted in Cleveland, Ohio according to the
Commercial Arbitration Rules of the American Arbitration Association. In any such arbitration the
arbitrators may consider, with such weight as they may deem appropriate, any determination by the
Accounting Firm that may have been made as provided in Section 4.4 above. The award of the
arbitrators will be final and binding and judgment on the award may be entered in any court having
jurisdiction over the subject matter and the parties.
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4.6 In order to discourage Nordson from disputing, otherwise than in good faith, any amounts
properly due to a Participant, the costs and expenses related to any arbitration proceeding
referred to in Section 4.5 shall be borne as provided in this Section 4.6. Nordson shall bear the
cost of its own attorneys and other representatives and all of the fees and expenses of the
arbitrators and the arbitration proceedings. The reasonable fees and expenses of the Participant’s
attorneys relating to the subject matter of the arbitration shall be paid by Nordson unless and to
the extent the arbitrators determine (which determination shall be final and binding upon the
parties) that the positions advanced by the Participant in any such arbitration have no reasonable
basis (which determination need not be made simply because the arbitrators decide against the
Participant on any or all substantive points). If Nordson fails to pay any of the costs and
expenses related to any arbitration as specified in this Section 4.6, the Trustee shall pay such
amounts from the assets of the Trust.
4.7 Nordson may make payments under any Covered Plan directly to or on behalf of a Participant
as they become due under the terms of the Covered Plan. If Nordson makes any such payment it shall
notify the Trustee of its decision to make such payments directly prior to the time amounts are
payable to or on behalf of the Participant. In addition, if the principal of the Trust and any
earnings thereon are not sufficient to make any payments that are due and payable under any Covered
Plan in accordance with its terms, Nordson shall make the balance of each such payment as it falls
due. The Trustee shall notify Nordson whenever principal and earnings are not sufficient.
4.8 When making any payment to a Participant under a Covered Plan that is overdue, the Trustee
shall increase the amount of the payment to include interest on the overdue payment from the date
due to the date of the distribution calculated on a daily basis, compounded as of the end of each
calendar month, and using as the interest rate for each calendar month or part thereof during the
period with respect to which interest is due the prime lending rate published by KeyBank National
Association or its successor and in effect on the first day of that calendar month.
4.9 Whenever a payment under a Covered Plan with respect to a participant is payable to a
beneficiary of the Participant rather than to the Participant, the beneficiary shall be entitled to
all of the rights of the Participant under all of the provisions of this Trust Agreement with
respect to that payment.
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Article 5. Trustee Responsibility when Nordson Is Insolvent
5.1 The Trustee shall cease payments to Participants from the Trust if Nordson is Insolvent.
Nordson shall be considered “Insolvent” for purposes of this Trust Agreement if (a) it is unable to
pay its debts as they become due, or (b) it is subject to a pending proceeding as a debtor under
the United States Bankruptcy Code. In determining whether Nordson is Insolvent for purposes of this
Trust Agreement, the Trustee may engage the service of legal, accounting, financial and other
advisors, which may be advisors to Nordson, to assist it in the determination. Nordson agrees to
cooperate fully with any reasonable inquiry of the Trustee or such advisors in making the
determination of Nordson’s Insolvency. During the determination of Nordson’s Insolvency, the
Trustee may, in its discretion, suspend any transfer or distribution of assets. To the extent that
the Trustee engages the services of an advisor, the Trustee may rely, without further inquiry, on
the written determination of that advisor as to the solvency or Insolvency of Nordson. All costs
reasonably incurred by the Trustee in making the determination of Nordson’s Insolvency shall be
reimbursed to the Trustee by Nordson, and if not so reimbursed, shall be chargeable against the
Trust.
5.2 At all times during the continuance of the Trust, the principal and income of the Trust
shall be subject to claims of general creditors of Nordson under federal and state law as set forth
below.
(a) The Board of Directors and the Chief Executive Officer of Nordson shall have the duty to
inform the Trustee in writing of Nordson’s Insolvency. If a person claiming to be a creditor of
Nordson alleges in writing to the Trustee that Nordson has become Insolvent, the Trustee shall
determine whether Nordson is Insolvent and, pending such determination, the Trustee shall not
transfer any Trust assets to any other party.
(b) Unless the Trustee has actual knowledge of Nordson’s Insolvency, or has received notice
from Nordson or a person claiming to be a creditor alleging that Nordson is Insolvent, the Trustee
shall have no duty to inquire whether Nordson is Insolvent. The Trustee may in all events rely on
such evidence concerning Nordson’s solvency as may be furnished to the Trustee and that provides
the Trustee with a reasonable basis for making a determination concerning Nordson’s solvency.
(c) If at any time the Trustee has determined that Nordson is Insolvent, the Trustee shall
hold the assets of the Trust for the benefit of the general creditors of Nordson. Nothing in this
Trust Agreement shall in any way diminish any rights of Participants to pursue their rights as
general creditors of Nordson.
(d) The Trustee shall resume the making of payments to Participants in accordance with Section
4 of this Trust Agreement only after the Trustee has determined that Nordson is not Insolvent (or
is not any longer Insolvent).
5.3 Provided that there are sufficient assets, if the Trustee discontinues payments under the
Covered Plans from the Trust pursuant to Section 5.2 hereof and subsequently resumes such payments,
the first payment following such discontinuance shall include the aggregate
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amount of all payments due to Participants under the terms of the Covered Plans for the period
of such discontinuance, less the aggregate amount of any payments made to the Participants by
Nordson in lieu of the payments provided for hereunder during any such period of discontinuance.
Article 6. Reversion of Excess Assets
From time to time after the third anniversary of the first Change of Control occurring after
the execution of this Trust Agreement, if and when requested by Nordson to do so, the Trustee shall
engage the services of the Accounting Firm, at the expense of Nordson, to determine the Aggregate
Plan Liability (as defined in Section 15.2). If the Current Trust Asset Value at the time of the
calculation exceeds 150% of the dollar amount of the Aggregate Plan Liability and the Trustee is
requested to do so by Nordson, the Trustee shall pay the amount of any such excess over 150% to
Nordson. The Trustee shall determine, in its sole discretion, how the funds necessary to make any
such payment are to be raised from Trust assets.
Article 7. Payments to Nordson
Except as provided in Article 3 or in Article 6, Nordson shall not have any right or power to
direct the Trustee to return to Nordson or to divert to others any of the Trust assets before all
payments that may become payable to any and all Participants under the Covered Plans (as defined in
Section 15.4) have been made to Participants. At such point in time as no further payments are
payable or may become payable in the future to or with respect to any Participant under any Covered
Plan, the remaining assets of the Trust shall be paid to Nordson.
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Article 8. Investment Authority
8.1 The Trustee shall invest and reinvest the trust property, including any income accumulated
and added to principal, only in (a) annuity or life insurance contracts that either have been
contributed to the trust property by Nordson or are issued by one or more insurance companies that
are rated at least A++ by Best Life Insurance Reports; (b) interest-bearing deposit accounts or
certificates issued or offered by any one or more Federal Deposit Insurance Corporation insured
financial institutions having in each case a high credit rating and a capital and surplus of at
least $1,000,000,000 in the aggregate; (c) direct obligations of the United States of America, or
obligations the payment of which is guaranteed, as to both principal and interest, by the
government or an agency of the government of the United States of America; (d) readily marketable
debt securities listed on a United States national securities exchange (other than securities of
Nordson) that are rated at least “investment grade” by one or more nationally recognized rating
agencies; or (e) shares or other units of participation in any mutual fund, investment trust, or
common trust fund maintained by the Trustee, which are invested exclusively or predominantly in
assets described in the foregoing clauses (a) through (d) of this Section 8.1. In no event may the
Trustee invest in securities (including stock or the right to acquire stock) or obligations issued
by Nordson, other than a de minimis amount held in common investment vehicles in which the Trustee
invests. All rights associated with assets of the Trust shall be exercised by the Trustee or the
person designated by the Trustee. The Trustee shall not be liable to any Participant for any
insufficiency of the Trust property to discharge all benefits due the same under the Covered Plans;
rather, the liability for all such benefits shall be and remain the primary and ultimate
responsibility of Nordson.
8.2 The Trustee is empowered to register securities, and to take and hold title to other
property, in the name of the Trustee or in the name of a nominee without disclosing the Trust.
Securities also may be held in bearer form and may be held in bulk with certificates of the same
class and issuer which are assets of other fiduciary accounts. The Trustee shall be responsible for
any wrongful acts of any nominee of the Trustee.
8.3 The Trustee is empowered to take all actions necessary or advisable in order to collect
any life insurance, annuity, or other benefits or payments of which the Trustee is the designated
beneficiary.
8.4 Nordson may maintain in force all life insurance policies held in the Trust by paying
premiums and other charges due thereon. If any such premiums or other charges are not paid directly
by Nordson, the Trustee shall, to the extent it has cash or its equivalent readily available for
the payment of premiums due or policy loans and/or dividends are available for such purpose, pay
premiums due with such cash or its equivalent or policy loans and/or dividends, as the Trustee may
deem best; but if the Trustee does not have sufficient cash or its equivalent readily available and
policy loans and dividends are not available, then the Trustee shall dispose of or otherwise use
other assets held by it in the Trust to generate the necessary cash or, if no such other assets are
available, the Trustee may surrender one or more of the life insurance policies in order to
generate cash with which to pay premiums on one or more of the other life insurance policies. The
Trustee shall have no liability to Nordson or any other person if, as a result of an insufficiency
of cash or its equivalent, policy loans and dividends, and assets that can be disposed of or
otherwise used to generate cash, the Trustee is unable to pay premiums
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as they become due.
8.5 The Trustee shall be named sole owner and beneficiary of each life insurance policy held
in the Trust and shall have full authority and power to exercise all rights of ownership relating
to the policy, except that the Trustee shall have no power to name a beneficiary of the policy
other than the Trust, to assign the policy (as distinct from conversion of the policy to a
different form) other than to a successor Trustee, or to loan to any person the proceeds of any
borrowing against such policy.
8.6 The Trustee shall have the power to acquire additional life insurance coverage on
Participants through application for new life insurance. Prior to a Change in Control, the Trustee
shall acquire any additional life insurance from the agent or agents designated by Nordson. After a
Change in Control, the Trustee may acquire any additional life insurance from any agent or agents
that it, in its sole discretion, deems appropriate.
Article 9. Accounting by Trustee
The Trustee shall keep accurate and detailed records of all investments, receipts,
disbursements, and other transactions required to be made, including such specific records as shall
be agreed upon in writing between Nordson and the Trustee. All such accounts, books, and records
shall be open to inspection and audit at all reasonable times by Nordson. Within 60 days following
the close of each calendar year and within 60 days after the removal or resignation of the Trustee,
the Trustee shall deliver to Nordson a written account of its administration of the Trust during
such year or during the period from the close of the last preceding year to the date of such
removal or resignation, setting forth all investments, receipts, disbursements, and other
transactions effected by it, including a description of all securities and investments purchased
and sold with the cost or net proceeds of such purchases or sales, and showing all cash,
securities, and other property held in the Trust at the end of such year or as of the date of such
removal or resignation, as the case may be.
Article 10. Calculations of Current Trust Asset Value and Aggregate Plan Liability
10.1 Any determination of the Current Trust Asset Value that is to be made before the
occurrence of any Change of Control shall be made by Nordson. After the occurrence of a Change of
Control, all determinations of the Current Trust Asset Value shall be made by the Trustee and may
be based on the determination of one or more qualified independent appraisers, consultants, or
other experts retained by the Trustee for that purpose.
10.2 Any determination of the Aggregate Plan Liability that is to be made before the
occurrence of any Change of Control shall be made by Nordson. After the occurrence of a Change of
Control, all determinations of the Aggregate Plan Liability (as defined in Section 15.2) shall be
made by the Trustee and may be based on the determination of one or more qualified independent
actuaries, consultants, or other experts retained by the Trustee for that purpose. All such
determinations shall be based on the terms of the Covered Plans and the actuarial assumptions and
methodology set forth in Exhibit B.
10.3 Nordson shall pay all costs incurred in determining from time to time the Current
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Trust Asset Value and/or the Aggregate Plan Liability. If not so paid, these costs shall be
paid from the Trust. Nordson shall reimburse the Trust within 30 days after receipt of a ▇▇▇▇ from
the Trustee for any such costs paid out of the Trust.
Article 11. Responsibility of Trustee
11.1 The Trustee shall act with the care, skill, prudence, and diligence under the
circumstances then prevailing that a prudent person acting in a like capacity and familiar with
such matters would use in the conduct of an enterprise of a like character and with like aims;
provided, however, that the Trustee shall incur no liability to any person for any action taken
pursuant to a direction, request, or approval that is contemplated by, and in conformity with, the
terms of the Trust and is given in writing by Nordson prior to the occurrence of any Change of
Control. In the event of a dispute between Nordson and any other party, the Trustee may apply to a
court of competent jurisdiction to resolve the dispute.
11.2 If the Trustee undertakes or defends any litigation arising in connection with the Trust,
Nordson agrees to indemnify the Trustee against the Trustee’s costs, expenses, and liabilities
(including, without limitation, attorneys’ fees and expenses) relating thereto and to be primarily
liable for such payments. If such costs, expenses, and liabilities are not paid by Nordson in a
reasonably timely manner, the Trustee may obtain payment from the Trust. Nordson shall reimburse
the Trust within 30 days after receipt of a ▇▇▇▇ from the Trustee for any such costs, expenses, and
liabilities paid out of the Trust.
11.3 The Trustee may consult with legal counsel (who may also be counsel for the Trustee
generally) with respect to any of its duties or obligations hereunder.
11.4 The Trustee may hire agents, accountants, actuaries, investment advisors, financial
consultants, or other professionals to assist it in performing any of its duties or obligations
hereunder, including, without limitation, to assist it in enforcing against Nordson any of the
obligations of Nordson under this Trust Agreement.
11.5 The Trustee shall have, without exclusion, all powers conferred on trustees by applicable
law, unless expressly provided otherwise herein.
11.6 Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or to
applicable law, the Trustee shall not have any power that could give the Trust the objective of
carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2
of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code.
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Article 12. Compensation and Expenses of Trustee
The Trustee shall be entitled to receive reasonable compensation for its services in
accordance with its published fee schedule as in effect from time to time. The Trustee shall be
entitled to receive its reasonable expenses incurred with respect to the administration of the
Trust, including fees incurred by the Trustee pursuant to Sections 11.3 and 11.4 of this Trust
Agreement. Such compensation and expenses shall be payable by Nordson. If not so paid, the fees and
expenses shall be paid from the Trust. Nordson shall reimburse the Trust within 30 days after
receipt of a ▇▇▇▇ from the Trustee for any such fees or expenses paid out of the Trust.
Article 13. Tenure and Succession of Trustee
13.1 Nordson may remove any trustee from time to time serving under this Trust Agreement at
any time upon giving 60 days written notice to such trustee, and each trustee from time to time
serving under this instrument shall have the right to resign by delivering a written notice of
resignation to Nordson, except that: (a) Nordson shall not have any power to remove the Trustee at
any time after a Change of Control, and (b) no such removal or resignation shall become effective
until the acceptance of the trust by a successor trustee designated in accordance with Section
13.2.
13.2 If [ ], or any successor to it designated in accordance with this Section 13.2, for
any reason shall decline, cease, or otherwise fail to serve as trustee, the vacancy in the
trusteeship shall be filled by such bank or trust company, wherever located, having a capital and
surplus of at least $25,000,000 in the aggregate, as shall be designated by Nordson (if the
designation is made prior to the occurrence of any Change of Control) or by the resigning Trustee
(if the designation is made after the occurrence of any Change of Control).
13.3 Upon acceptance of the Trust, each successor trustee shall be vested with the title to
the Trust property possessed by the trustee that it succeeds and shall have all the powers,
discretion, and duties of such predecessor trustee. No successor trustee shall be required to
furnish bond.
13.4 Each successor trustee may accept as complete and correct and may rely upon any
accounting by any predecessor trustee and upon any statement or representation by any predecessor
trustee as to the assets comprising or any other matter pertaining to the administration of the
Trust. No successor trustee shall be liable for any act or omission of any predecessor trustee or
have any duty to enforce or seek to enforce any claim of any kind against any predecessor trustee
on account of any such act or omission.
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Article 14. Amendment or Termination
14.1 Except as provided in the second sentence of this Section 14.1, at any time before the
occurrence of the first Change of Control to occur after the execution of this Agreement, Nordson,
in its sole discretion, may amend this Trust Agreement (including the exhibits hereto) in any
manner and may terminate this Trust Agreement. If at any particular point in time (a) one or more
Funding Events have occurred, (b) one or more of those Funding Events has not yet been terminated,
and (c) no Change of Control has occurred, then Nordson may not, at that particular time, terminate
this Trust Agreement and may amend this Trust Agreement only if and to the extent permitted by
Section 14.2 below.
14.2 Whenever (a) one or more Funding Events have occurred, (b) one or more of those Funding
Events has not yet been terminated, and (c) no Change of Control has occurred, Nordson may not
terminate this Trust Agreement but may add one or more additional plans or agreements to the class
of Covered Plans and may amend this Trust Agreement (including the exhibits hereto), provided that
(x) Nordson determines, in the exercise of its reasonable discretion, that the amendment is in the
best interests of the Participants, taken as a group, (y) no such amendment shall remove any plan
or agreement from the class of Covered Plans unless the plan has been terminated and there are no
further obligations due or to become due thereunder to any Participant, and (z) no such amendment
shall have the effect of adding circumstances under which a Funding Event shall be deemed to have
terminated, affect the determination of the Aggregate Plan Liability or the Full Funding amount so
as to reduce these amounts, or in any manner permit the withdrawal or diversion of assets from the
Trust.
14.3 After a Change of Control has occurred, this Trust Agreement (including the exhibits
hereto) may not be amended or terminated except as provided in Section 14.5.
14.4 Unless earlier revoked pursuant to Section 1.2, the Trust shall not terminate until the
date on which Participants are no longer entitled to any further payments pursuant to the terms of
any Covered Plans. Upon termination of the Trust on or after that date, any assets remaining in the
Trust shall be returned to Nordson.
14.5 Upon written approval of all Participants who are or may in the future be entitled to
receive any payment pursuant to the terms of any of the Covered Plans, Nordson may terminate the
Trust prior to the time all payments that are or may become due in the future under the Covered
Plans have been made. All assets in the Trust at any such termination shall be returned to Nordson.
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Article 15. Certain Definitions
Certain capitalized terms not defined elsewhere in this Trust Agreement are defined in Article
15 below.
15.1 From and after the occurrence of the first Change of Control to occur after the execution
of this Trust Agreement, the term “Accounting Firm” shall mean the independent auditors of Nordson
for the fiscal year preceding the first year in which there occurred either (a) that Change of
Control or (b) any Funding Event that had not terminated before the occurrence of that Change of
Control and such firm’s successor or successors; provided, however, if such firm is unable or
unwilling to serve and perform in the capacity contemplated by this Trust Agreement, those members
of the Board of Directors of Nordson (as constituted immediately before the Change of Control) who
are not and have never been employees of Nordson shall select another national accounting firm of
recognized standing to serve and perform in that capacity under this Trust Agreement, except that
such other accounting firm shall not be the then independent auditors for Nordson or any of its
affiliates (as defined in Rule 12b-2 promulgated under the 1934 Act).
15.2 The term “Aggregate Plan Liability” as at any time shall mean the maximum amount of
payments that have not yet been paid but could become payable in the future under the Covered
Plans, determined as provided in Section 10.2.
15.3 A “Change of Control” shall be deemed to occur if and when there occurs any of the
circumstances set forth in any of clauses (a) through (d) of this Section 15.3.
| A. | Any Person or group commences a tender offer for more than 50% of the outstanding shares that is not recommended by the Board of Directors of Nordson and one of the following occurs: |
| (i) | More than 50% of the outstanding shares are acquired. | ||
| (ii) | While the tender offer remains open, Nordson is sold or agrees to be sold, whether by sale of assets, sale of stock, merger, or otherwise. |
| B. | Any Person or group solicits proxies for the election of individuals who are not nominated or approved by the Board of Directors of Nordson and either: |
| (i) | the solicitation results in the election of directors that constitute a majority of any class of directors or a majority of the full Board, or | ||
| (ii) | the solicitation results in the election of two or more directors, but less than a majority of any class of directors or a majority of the full Board, and while at least two of those directors remain in office Nordson is sold or agrees to be sold. |
| C. | Any Person or group becomes the beneficial owner of 50% or more of the outstanding shares without prior Board approval. |
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| D. | Any Person or group becomes the beneficial owner of 15% or more of the outstanding shares without prior Board approval and, while the Person or group continues to own 15% or more of the outstanding shares, Nordson is sold or agrees to be sold. |
15.4 The term “Covered Plan” means any one of the plans and agreements identified on Exhibit
A, as the same may be amended from time to time in accordance with Sections 14.1 and 14.2 above.
15.5 The term “Full Funding Amount” as of any point in time shall mean an amount equal to 125%
of the Aggregate Plan Liability as of that point in time.
15.6 A “Funding Event” shall be deemed to occur if and when there occurs any of the
circumstances set forth in any of the following clauses (a) through (c):
| A. | Any Person or group commences a tender offer for more than 50% of the outstanding shares that is not recommended by the Board of Directors of Nordson. | ||
| B. | Any Person or group solicits proxies for the election of two or more directors not nominated or approved by the Board of Directors of Nordson. | ||
| C. | Any Person or group becomes the beneficial owner of 15% or more of the outstanding shares without prior Board approval. |
15.7 A Funding Event shall be deemed to have “terminated:”
| A. | If funding of the Trust was required by reason of an unsolicited tender offer or exchange offer, either: |
| (i) | the tender offer or exchange offer is withdrawn or terminated without the acquisition of 15% or more of the outstanding shares, or | ||
| (ii) | if the Person or group acquires 15% or more, but less than a majority, of the outstanding shares, the Person or group subsequently disposes of enough shares so that beneficial ownership falls below 15%. |
| B. | If funding of the Trust was required by reason of a solicitation of proxies for the election of directors, either: |
| (i) | the solicitation results in the election of less than two directors, or | ||
| (ii) | the solicitation results in the election of more than two directors, but less than a majority of any class of directors or a majority of the full Board, and enough of those directors leave office so that fewer than two remain as directors. |
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| C. | If funding of the Trust was required by reason of the acquisition of beneficial ownership of 15% or more, but less than a majority, of the outstanding shares without prior Board approval, if the percentage of shares beneficially owned by the Person or group subsequently falls below 15%. |
15.8 The term “Internal Revenue Code” shall mean the Internal Revenue Code of 1986, as
amended.
15.9 The term “Person” shall mean a “person” as used in Section 13(d) and Section 14(d)(2) of
the ▇▇▇▇ ▇▇▇.
15.10 The term “Participant” shall mean a person who is a participant in or party to any of
the Covered Plans.
15.11 The term “1934 Act” shall mean the Securities Exchange Act of 1934, as amended.
16. Miscellaneous
16.1 Any action to be taken by Nordson hereunder shall be by action of the Chief Executive
Officer or any Vice President of Nordson, except that the actions described in Sections 1.2, 13.1,
14.1, and 14.2 may be taken only by the Board of Directors of Nordson.
16.2 Any provision of this Trust Agreement prohibited by law shall be ineffective to the
extent of any such prohibition, without invalidating the remaining provisions hereof.
16.3 This Trust Agreement shall be governed by and construed in accordance with the laws of
the State of Ohio.
IN WITNESS WHEREOF, Nordson and the Trustee have executed this Trust Agreement as of the date
first above written.
| [ ] Nordson Corporation | ||||||||||
By
|
By | |||||||||
| The “Trustee” | ||||||||||
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EXHIBIT A
Covered Plans
Nordson Corporation Excess Defined Benefit Pension Plan
Nordson Corporation Excess Defined Contribution Retirement Plan
Nordson Corporation Officers’ Deferred Compensation Plan
Supplemental pension payments pursuant to employment agreements with Messrs. [ ].
Retirement payments to retired officer, [ ].
[Amounts payable under employment agreements with [ ].]
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EXHIBIT B
Assumptions and Methodology for
Determining Aggregate Plan Liability
Determining Aggregate Plan Liability
1. The liability for benefits under each Covered Plan will be calculated using two different
assumptions as to when Participants terminate service:
(a) As of the date of the first Change of Control occurring after the execution of this Trust
Agreement.
(b) Thirty months after the first Change of Control occurring after the execution of this
Trust Agreement, assuming future compensation continues at current levels, and future deferrals
under deferred compensation plans continue pursuant to prior elections.
The liability for accrued benefits under each Covered Plan will be the greater of the
liabilities calculated in accordance with (a) and (b) above.
2. Calculations will be based upon the most valuable optional form of payment available to the
Participant.
3. The liability for benefits under deferred compensation or other defined contribution
Covered Plans shall be equal to the deferral or other account balances (vested and unvested) of
Participants as of the applicable date, plus projected deferrals expected to be made within 30
months after the applicable date pursuant to prior elections. Account balances of Participants
under a Plan shall be calculated based on crediting the highest rate of interest which may become
payable to Participants under the Plan.
4. The liability for benefits under other Covered Plans shall be equal to the present value of
accrued benefits (vested and unvested) of Participants as of the relevant dates under 1(a) or (b)
above.
5. No mortality is assumed prior to the commencement of benefits. Future mortality is assumed
to occur in accordance with the 1983 Group Annuity Table Unisex Rates after the commencement of
benefits.
6. The present value of amounts shall be determined using a discount rate equal to the then
current Pension Benefit Guaranty Corporation immediate annuity rate for a nonmultiemployer plan.
7. In determining the dollar cost of providing any benefit that is to be provided in stock or
the value of which is dependent upon the value of common shares of Nordson, the dollar cost shall
of providing those benefits shall be determined using a value for common shares of Nordson equal to
140% of the highest closing price for common shares of Nordson at any time within the six month
period ending on the determination date.
8. Where left undefined above, calculations will be performed in accordance with generally
accepted actuarial principles.