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NORDSON CORPORATION
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NORDSON CORPORATION

 

Notice of

20172019 Annual Meeting

and Proxy Statement

 

 

LOGOLOGO


LOGO

LOGO

 

Nordson Corporation

28601 Clemens Road

Westlake, Ohio 44145

 

 

January 27, 201718, 2019

Dear Shareholder:

It is my pleasure, on behalf of the Board of Directors of Nordson Corporation (the “Board of Directors”), to invite you to attend our annual meeting of shareholders (the “Annual Meeting”), which will be held at the law offices of BakerHostetler LLP, 2000 Key Tower, 127 Public Square, Cleveland, Ohio 44114, at 8:00 a.m., Eastern Standard Time, on Tuesday, February 28, 2017.26, 2019.

The accompanying notice of Annual Meeting and proxy statementProxy Statement describe the items of business that will be discussed and voted upon during the Annual Meeting. It is important that you vote your shares of common stock whether or not you plan to attend the Annual Meeting. You have a choice of voting through the Internet, by telephone, or by returning the enclosed proxy/voting instruction card by mail. If you are a registered shareholder, you may also vote in person at the Annual Meeting. Please refer to the instructions in the enclosed materials.

On behalf of management and the Board of Directors, I want to thank you for your continued support and confidence in 2017.2019.

Sincerely,

JOSEPH P. KEITHLEYMICHAEL J. MERRIMAN, JR.

Chair of the Board of Directors


NORDSON CORPORATION

TABLE OF CONTENTS

 

Notice of Annual Meeting of Shareholders

   1 

Proxy Statement Summary

   2 

General Information

   2 

Voting Matters and Board Recommendations

   2 

Business Highlights

   4 

Compensation Highlights

   5 

Governance Highlights

6

Directors Serving on Boards of Other Public Companies

   7 

Proxy StatementDirectors Serving on Boards of Other Public Companies

   8 

Proposal 1: Election of Directors Whose Terms Expire in 2020Proxy Statement

   9 

Corporate GovernanceProposal 1: Election of Directors Whose Terms Expire in 2022

   1610 

Committees of the Board of DirectorsCorporate Governance

   2017 

Committees of the Board of Directors

21

Proposal 2: Ratify the Appointment of Independent Registered Public Accounting Firm

   2425 

Security Ownership of Nordson Common Shares by Directors, Director Nominees, Executive Officers, and Large Beneficial Owners

   2627 

Proposal 3: Advisory Vote to Approve the Compensation of Our Named Executive Officers


28

Proposal 4: Advisory Vote on the Frequency for Holding the Advisory Vote on the Compensation of Our Named Executive Officers

   3129 

Executive Compensation: Compensation Discussion and Analysis

   32 

Part I: Executive Summary

   33 

Part II: Setting Executive Compensation

   37 

Part III: Key Components of Our Executive Compensation Program

   41 

Part IV: Other Components of Our Executive Compensation Program

   52 

Part V: Compensation Committee Actions Related to 2017 Executive Compensation

55

Part VI: Policies Related to Executive Compensation

   56 

Compensation Committee Report

   58 

Risks Related to Executive Compensation Policies and Practices

   59 

Summary Compensation for Fiscal Year 20162018

   60 

Grants of Plan-Based Awards

   63 

Outstanding Equity Awards at October 31, 20162018

   65 

Stock Option Exercises and Stock Vested Tables

   68 

Pension Benefits Table

   69 

Non-Qualified Deferred Compensation

   71 

Potential Benefits Upon Termination

   73 

Questions and Answers About the Annual Meeting and these Proxy MaterialsCEO Pay Ratio

   77 

Appendix A: Audit Committee Report

   A-178��

Questions and Answers About the Annual Meeting and These Proxy Materials

79 


NORDSON CORPORATION

NOTICE OF ANNUAL MEETING

OF SHAREHOLDERS

To Be Held Tuesday, February 28, 201726, 2019

 

Date and Time:

  Tuesday, February 28, 2017,26, 2019, at 8:00 a.m., Eastern Standard Time.

Place:

  Law offices of BakerHostetler LLP, 2000 Key Tower, 127 Public Square, Cleveland, Ohio 44114.

Items of Business:

  

1. To elect as directors, three nominees named in this Proxy Statement and recommended by the Board of Directors, to serve until the 20202022 Annual Meeting and until their successors shall have been duly elected and qualified;

2. To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2017;2019;

3. To approve, on an advisory basis, the compensation of our named executive officers; and

4. To recommend, on an advisory basis, the frequency for holding the advisory vote on the compensation of our named executive officers; and

5.  To transact such other business as may properly come before the meeting or any adjournment or postponement thereof.

Record Date:

  Close of business on January 3, 2017.2, 2019.

A Proxy Statement, Proxy/Voting Instruction Card, and Annual Report to Shareholders, which includes our Annual Report on Form10-K for the fiscal year ended October 31, 2016,2018, accompany this Notice and are also available at:www.nordson.com/en/our-company/investors/annual-reports-and-presentations. The Board of Directors has determined that shareholders of record at the close of business on January 3, 20172, 2019 are entitled to notice of, and to vote during, the Annual Meeting.

By Order of the Board of Directors,

ROBERT E. VEILLETTEGINA A. BEREDO

Executive Vice President, General Counsel

and Secretary

January 27, 201718, 2019

Westlake, Ohio

 

Important Notice Regarding the Availability of Proxy Materials for the Annual

Meeting of Shareholders to be held on February 28, 2017:26, 2019:

The Proxy Statement, Proxy/Voting Instruction Card, and the Annual Report to Shareholders, which includes our Annual Report onForm 10-K for the fiscal year ended October 31, 2016,2018, are available at:www.nordson.com/en/our-company/investors/annual-reports-and-presentations.

 

Nordson Corporation – 20172019 Proxy Statement

 |  1


PROXY STATEMENT SUMMARY

This summary highlights information relating to the items to be voted on during the Annual Meeting and important business, compensation, and corporate governance matters. For additional information, please refer to the discussions contained in this Proxy Statement and in our Annual Report onForm 10-K for the fiscal year ended October 31, 20162018 filed with the United States Securities and Exchange Commission on December 15, 201614, 2018 (the “2016“2018 Annual Report”).

 

 

GENERAL INFORMATION

20172019 Annual Meeting Date and Time

  

Tuesday, February 28, 201726, 2019

8:00 a.m., Eastern Standard Time

Place

  

Law Offices of BakerHostetler LLP

2000 Key Tower

127 Public Square

Cleveland, Ohio 44114

USA

Record Date

  

Closeof

Close of business on January 3, 20172, 2019

Voting

  

Shareholders as of the record date are entitled to vote. Each share of common stock is entitled to one vote for the election of directors and one vote for each of the proposals to be voted on.

 

 

VOTING MATTERS AND BOARD RECOMMENDATIONS

Proposal Voting Options 

Vote Required forVote

Approval

 Broker Discretionary
Vote Permitted
 Board’s Voting
Recommendation

1. Election of directors

 

“FOR” all nominees or “WITHHOLD” your vote for one or more of the nominees.

 Plurality

Each nominee must receive a plurality of the votes cast by holders of common stock present in person or represented by proxy and entitled to vote in the election of directors.cast.

 No 

FOR

the election of each of the director nominees

2. Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 20172019

 

“FOR” or “AGAINST” or “ABSTAIN” from voting.

 Affirmative vote of the holders of a majority of the shares of common stock present

Thisnon-binding proposal will be considered approved if more votes are cast in person or represented by proxy and entitled to vote on the proposal.favor than against.

 Yes(1) FOR

3. Advisory vote to approve compensation of named executive officers

 

“FOR” or “AGAINST” or “ABSTAIN” from voting.

 Affirmative vote of the holders of a majority of the shares of common stock present

Thisnon-binding proposal will be considered approved if more votes are cast in person or represented by proxy and entitled to vote on the proposal.favor than against.

 No FOR
4. Advisory vote on the frequency for holding the advisory vote to approve compensation of named executive officersFor aone-year,two-year, or three-year frequency or “ABSTAIN” from voting.The frequency that receives the highest number of votes cast will be the recommended frequency.No

FOR

aone year frequency

 

(1)

This is considered to be a routine matter and, therefore, if you hold your shares in street name and do not provide voting instructions to the broker, banktrustee, or other nominee that holds your shares, the nominee has discretionary authority to vote on this Proposal but not any other Proposals since they are considered to be“non-routine” matters.

2  |Nordson Corporation – 2017 Proxy Statement


Abstentions as to any matter are counted in determining the presence of a quorum at the Annual Meeting. They are not included in the vote count for election of directors and do not have an impact on the outcome of the vote on Proposal 4.directors. However, abstentions will affect the outcome of the vote on Proposals 2 and 3, being equivalent to a vote “against” the Proposals.

2  |Nordson Corporation – 2019 Proxy Statement


We will also consider any other matters that may properly be brought before the Annual Meeting and any postponement(s) or
adjournment(s) thereof. As of the date of this Proxy Statement, we have not received notice of other matters that may be properly presented at the Annual Meeting.

The following table provides summary information about our director nominees:

 

Nominee

 

 

Primary
Occupation

 

 

Independent    

 

 

Board
Committee

Memberships

 

 

Key Attributes/
Qualifications

 

  Joseph P. Keithley

  Lee C. Banks

 RetiredYes  Governance & Nominating

President and CompensationChief Operating Officer, Parker Hannifin Corporation

 

International business and

Yes  

Compensation

Significant executive general management and leadership experience; extensive public company boardoperational experiences and governance experience.a unique perspective in identifying strategic and tactical risks attendant to a multi-national sales, distribution, manufacturing, and operational footprint.

 

  Michael J. Merriman, Jr.  

Private Equity AdvisorYes  

Audit (Chairperson)

  

*Financial ExpertRandolph W. Carson  

 

Strategy, corporate governance, acquisitions

Retired

Yes  

Audit and divestitures, financeGovernance & Nominating

Deep operational experience in global industrial businesses, strategic vision, and understanding of financial accounting and financial reporting, and international business and executive management and leadershipmatters; public company board experience.

 

  Mary G. Puma

  Victor L. Richey, Jr.

 

Chair of the Board, President, and Chief Executive Officer, AxcelisESCO Technologies Inc. (NASDAQ GS: ACLS)

Yes  Governance & Nominating and Compensation (Chairperson)

 

International business

Yes  

Compensation and Governance & Nominating

Extensive experience as chair, president, and chief executive officer of a diversified global producer and marketer of technology; significant executive management experience; corporate governance and strategy; compensationboard experience at public and talent management planning experience.

private companies.

All director nominees up for election received

at least 98% “FOR” votes at last year’s Annual Meeting.

 

Nordson Corporation – 20172019 Proxy Statement

 |  3


BUSINESS HIGHLIGHTS

Fiscal year 20162018 was a year of outstanding results in an uncertain andlow-growth global macroeconomic environment. The following highlights our performance for fiscal year 2016:2018:

 

RevenueRecord Sales

 

$1.81 billion

7% increase over 2015

    

Gross Margin

 

54.9%Record Operating Profit

 

Improvement of nearly one percentage point compared to 2015

 

Operating ProfitRecord Net Income

 

$388 Million2.3 Billion

 

22%9% increase over 2015

Operating Margin2017

 

22%

Improvement of three percentage points over 2015

    

GAAP Diluted Earnings per Share

$495 Million

 

$4.73

Increase of 37% compared to 20158% increase over 2017

 

Net Debt(1)

$377 Million

 

Approximately 2x times trailing-four

quarters EBITDA28% increase over 2017

    

Return on Total Capital(2)

16.3%Record Free Cash Flow(1)

Increase of three percentage points compared to 2015

    

Record GAAP Diluted

Earnings Per Share

Free Cash FlowRecord Full Year EBITDA(3)(2)

$415 Million

 

$272 million

100%110% of net income

 

Share Repurchases – One Year

$6.40

 

$32 million

Purchased 446,639 of our outstanding shares

Share Repurchases – Five Years

16%

Percentage of outstanding shares purchased26% increase over the last five years at an average price of $67.19 per share; a discount of approximately 33% compared to the 2016year-end closing price of $100.13 per share2017

 

Dividend

$605 Million

 

11% increase over 2017

Operating Margin

Dividends Paid

Total Shareholder Return(3)

22%

$5672 Million

 

Increase in quarterly dividend of 13%;

53rd55th consecutive year

dividend has increased

 

Total Shareholder Return(4)

1 year: 41.9%

2 year: 12.5%3 Year: 25.9%

5 Year: 17.5%66.8%

10 Year: 16.5%392.7%

 

(1)“Net Debt,” anon-GAAP measure, represents total debt disclosed on our consolidated balance sheet minus cash.

(2)“Return on Total Capital,” anon-GAAP measure, is the sum of net income (loss) plusafter-tax interest expense on debt as a percentage of the sum of average of quarterly debt (net of cash) plus average quarterly shareholders’ equity over five accounting periods.

(3)“Free cash flow,” anon-GAAP measure, is determined from our consolidated statement of cash flows and for 20162018 represents $331.1$504.6 million of net cash provided by operating activities minus $60.9$89.8 million of additions to property, plant, and equipment plus $1.3$0.5 million of proceeds from the sale of property, plant, and equipment.

 

(4)(2)

“EBITDA,” anon-GAAP measure, is defined as earnings before interest, taxes, depreciation, and amortization.

(3)

We define “Total Shareholder Return” as: (share price end of period – share price start of period + dividends paid) / share price start of period.

 

4  | Nordson Corporation – 20172019 Proxy Statement


COMPENSATION HIGHLIGHTS

The information below reflects highlights of our named executive officer compensation program for fiscal year 2016.2018. The tables are not substitutes for, nor do they reflect, all of the information provided in the Summary Compensation Table presented later in this Proxy Statement. During our 20162018 Annual Meeting, approximately 98.9%97.70% of shareholder votes cast were in favor of the compensation paid to our named executive officers. We value this positive endorsement by our shareholders of our executive compensation policies.

Additional information about our compensation philosophy and program, including the compensation awarded to each of our named executive officers, may be found in the”the “Executive Compensation: Compensation Discussion and Analysis” section of in this Proxy Statement.

 

Base Salary

Annual Cash Incentive Award

 

Represents 27.2%25.3% – 33.8%30.6% of the total target direct compensation opportunity of our named executive officer compensation other than our CEO; 17%14.7% for our CEO.

 

Base salary increases for 20162018 for the named

executive officers other than our CEO ranged from 3.48%3.0% to 10.14%4.6%; 3.03%5.7% for our CEO.

   

Annual Cash Incentive Award

 

Target bonus opportunity range for our named executive officers other than our CEO: 55%

65% – 70%75% of base salary.

 

Target bonus opportunity for CEO:

100% of base

salary. salary

Long-term Compensation

 

Performance Share Incentive Award

•  At target, represents approximately 40% of the long-term compensation opportunity.

 

Other Equity Awards

•  Stock Options represent approximately 40% of the long-term compensation opportunity.

•  Restricted Shares represent approximately 20% of the long-term compensation opportunity.

CEO CompensationThe tables below present FY20162016 OpportunityFY2018 reported results for the three primary drivers of incentive compensation for the named executive officers – Diluted Earnings per Share, Return on Total Capital, and Earned/RealizedRevenue:

 

Pay Component 2016 Compensation Opportunity 2016 Compensation Realized

Base Salary

 $850,000 $850,000

Annual Cash Incentive Award

 $850,000 (@target) $1,380,400

Long-Term Compensation

 

Ø  FY2014-2016 Performance Share Incentive Award 

 

 

 

 

Target # of shares:

 

14,600

Grant date fair value @target:

$1,011,050

 

 

 

# of shares earned:

 

23,491

Award settlement date value:

$2,664,349

Ø  Other FY 2016 Equity Awards

 

Stock Options:

 

72,800 shares

$1,416,040 grant date fair value

 

Restricted Shares:

 

9,200 shares

$652,372 grant date fair value

 

Stock Options:

 

0 options exercised in FY 2016

Value Realized: $0

 

Restricted Shares:

 

# of shares vested: 7,601

Value Realized: $548,628

LOGOLOGOLOGO

Diluted Earnings per Share* Return on Total Capital* Revenue (Billions)

*

This data includes the benefits inured to the Company from the Tax Cuts and Jobs Act that was passed in 2017. The Company’s 2018 data, excluding the benefits from the Tax Cuts and Jobs Act and utilizing a more normalized effective tax rate, are: Diluted Earnings per Share is $5.70 and Return on Total Capital is 14%.

 

Nordson Corporation – 20172019 Proxy Statement

 |  5


CEO Compensation – 2018 Opportunity and Earned/Realized

Pay Component 2018 Compensation Opportunity 2018 Compensation Realized

 Base Salary

 $925,000 $925,000

 Annual Cash Incentive
Award

 $925,000 (at target) $1,082,250

 Long-Term Compensation

 

Ø FY2016-2018 Performance Share Incentive Award 

 

 

 

 

Target # of performance share units:

 

18,400

Grant date fair value at target:

$1,245,496

 

 

 

 

# of performance share units earned:

 

34,095

Award settlement date value:

$3,844,552

 

Ø Other FY 2018 Equity Awards

 

Stock Options:

 

55,800 shares

$1,942,599 grant date fair value

 

Restricted Shares:

 

6,700 shares

$855,389 grant date fair value

 

 

Stock Options:

 

105,000 options exercised in FY 2018

Value Realized: $9,883,940

 

Restricted Shares:

 

# of shares vested: 8,049

Value Realized: $1,027,733

 

6  |Nordson Corporation – 2019 Proxy Statement


GOVERNANCE HIGHLIGHTS

The following summarizes the structure of our Board of Directors and key elements of our corporate governance framework:

 

Director Independence

  

Tenure of Independent Directors

Oversight of Risk

Director Independence

 

Eight of nine directors

are independent

 

Audit, Compensation, and

Governance &and Nominating

Committees all composed of

independent directors

  

Tenure of Independent Directors

46 years: George and Jaehnert

68 years: Banks and Richey

79 years: Carson

810 years: Merriman

1517 years: Keithley and Puma

 

Average tenure: 810 years

  

Average Age of Independent

DirectorsThe Board as a whole exercises its

oversight responsibilities with

respect to material risks

 

Age: 59.6 yearsThe Board has delegated

responsibility for the oversight of

specific risks to Board committees

    

Meeting of Independent Directors

  

Board Meeting Attendance

 

Board Leadership and Structure

Meeting of Independent Directors

 

Executive sessions of independent

directors are conducted during each

Board meeting

  

Board Meeting Attendance

 

Each of our directors met theattended at least 75%

attendance benchmark for of board and

committee meeting attendancemeetings

  

Board Leadership and Structure

 

Classified with three

classes of directors

 

Independent ChairmanChair –

Joseph P. KeithleyMichael J. Merriman, Jr.

    

Voting Standard for Election of Directors

 

Plurality voting

  

Share Ownership Guidelines

Board Self-Assessments

Plurality vote with director resignation policy for failure to receive a majority vote in uncontested director elections.

 

Share ownership guidelines for directors and executive officers:

•   Directors – 5x cash retainer

•   CEO – 5x base salary

•   CFO – 3x base salary

•   Other executive officers – 2x base salary

  

Board Self-Assessments

 

Board, Committee, and Peer self-assessmentsself- assessments on a regular basis

    

Chief Executive Officer

Performance

  

Hedging/Pledging Transactions

 

Clawback Policy

Chief Executive Officer

Performance

 

Annual review by independent directors

  

Hedging/Pledging Transactions

 

Strict policy of no pledging or

hedging of company shares

  

Clawback Policy

 

Robust policy

    

Advisory Vote on Named

Executive Officer Compensation

  

Shareholder Rights Plan

(“Poison Pill”)

 

Average Age of Independent

Directors

Advisory Vote on Named

Executive Officer Compensation

 

Annual Vote

  

Shareholder Rights Plan

(“Poison Pill”)

 

No shareholder rights plan in place

  

Oversight of Risk

Age: 62 years

 

The Board as a whole exercises its

oversight responsibilities with

respect to material risks

The Board has delegated

responsibility for the oversight of

specific risks to Board committees

 

6  |

Nordson Corporation – 20172019 Proxy Statement

|  7


DIRECTORS SERVING ON BOARDS OF OTHER PUBLIC COMPANIES

Board service by members of our Board of Directors is within the limits set by our Governance Guidelines:

“It is the Company’s policy that a Director who is not an executive officer of a public company may serve as a director on up to five other boards of public companies. For Directors who are also serving as an executive officer of a public company, the maximum number of public company boards on which the Director may serve is two in addition to serving as a director on the board of his or her company.”

 

Lee C. Banks

  

Parker-Hannifin Corporation (NYSE: PH)

Arthur L. George, Jr.

  

Axcelis Technologies, Inc. (NASDAQ(Nasdaq GS: ACLS)

Michael F. Hilton (CEO)

  

Ryder System, Inc. (NYSE: R)

Lincoln Electric Holdings, Inc. (NASDAQ:(Nasdaq: LECO)

Frank M. Jaehnert

  

Briggs & Stratton Corporation (NYSE: BGG)

Itron, Inc. (NASDAQ:(Nasdaq: ITRI)

Joseph P. Keithley (Chairman)

  

Axcelis Technologies, Inc. (NASDAQ(Nasdaq GS: ACLS)

Materion Corporation (NYSE: MTRN)

Michael J. Merriman, Jr. (Chair)

  

InvacareRegis Corporation (NYSE: IVC)RGS)

OMNOVA Solutions Inc. (NYSE: OMN)

Regis Corporation (NYSE: RGS)

Mary G. Puma

  

Axcelis Technologies, Inc. (NASDAQ(Nasdaq GS: ACLS)

Victor L. Richey, Jr.

  

ESCO Technologies Inc. (NYSE: ESE)

 

8  |

Nordson Corporation – 20172019 Proxy Statement

|  7


NORDSON CORPORATION

PROXY STATEMENT

FOR THE ANNUAL MEETING OF SHAREHOLDERS

FEBRUARY 28, 201726, 2019

The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) of Nordson Corporation for use at the 20172019 Annual Meeting. The Annual Meeting will be held at the law offices of BakerHostetler LLP, 2000 Key Tower, 127 Public Square, Cleveland, Ohio 44114 at 8:00 a.m., Eastern Standard Time, on Tuesday, February 28, 201726, 2019 for the following purposes:

 

 1.

To elect as directors three nominees, named in this Proxy Statement and recommended by the Board, to serve until the 20202022 Annual Meeting and until their successors shall have been duly elected and qualified;

 

 2.

To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2017;2019;

 

 3.

To approve, on an advisory basis, the compensation of our named executive officers; and

 

 4.To recommend, on an advisory basis, the frequency for holding the advisory vote on the compensation of our named executive officers; and

5.To transact such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.

This Proxy Statement and the accompanying proxy/voting instruction card were first mailed to shareholders on or about January 27, 2017.18, 2019. Our 20162018 Annual Report to Shareholders is enclosed with this Proxy Statement.

This Proxy Statement contains important information regarding our Annual Meeting, the proposals on which you are being asked to vote, information you may find useful in determining how to vote, and information about voting procedures. As used in this Proxy Statement, “we,” “us,” “our,” “Nordson” or the “Company” refers to Nordson Corporation.

 

8  |

Nordson Corporation – 20172019 Proxy Statement

|  9


PROPOSAL 1: ELECTION OF DIRECTORS WHOSE TERMS EXPIRE IN 20202022

The Governance and Nominating Committee is responsible for identifying and evaluating nominees for director and for recommending to the Board a slate of nominees for election at the Annual Meeting. The Governance and Nominating Committee has recommended, and the Board has approved, the persons named as nominees for terms expiring in 20202022 and, unless otherwise marked, a duly executed and properly submitted proxy will be voted for such nominees. Nominees Joseph P. Keithley, Michael J. Merriman,Lee C. Banks, Randolph W. Carson, and Victor L. Richey, Jr., and Mary G. Puma currently serve as directors. All nominees have agreed to stand for election for a three-year term.

In considering each director nominee and the composition of the Board as a whole, the Governance and Nominating Committee considers a diverse group of experiences, qualifications, attributes and skills,including diversity in gender, ethnicity, and race, which the Governance and Nominating Committee believes enables a director nominee to make significant contributions to the Board, Nordson, and our shareholders.

The current-serving directors, including the nominees, collectively have a mix of various skills and qualifications, some of which are listed in the table below. These collective attributes enable the Board to provide insightful leadership as it strives to advance our strategies and deliver returns to shareholders.

 

Global Business Experience

Mergers & Acquisitions Experience

Global Business Experience

 

Experience working outside the United States and/or with global

enterprises to help oversee the management of our global

operations.

  

Mergers & Acquisitions Experience

 

Experience working on M&A transactions, which provides insight

into developing and implementing strategies for growing our businesses.

  

Financial Experience

Public Company CEO Experience

Financial Experience

 

Experience with finance, accounting, and/or financial reporting to

help drive our operating and financial performance.

  

Public Company CEO Experience

 

Experience as a public company CEO to help us drive business

strategy, growth and performance, and create shareholder value.

  

Public Company Board Experience

Capital Allocation Experience

Public Company Board Experience

 

Experience working with publicly-traded companies and corporate governance issues to help us oversee an ever-changing mix of strategic, operational, and compliance-related matters.

  

Capital Allocation Experience

 

Experience with capital allocation decision-making to help us

allocate capital efficiently.

  

Strategy Development

Manufacturing Experience

Strategy Development

 

Experience with the development and oversight of long-term planning

planning.

  

Manufacturing Experience

 

Experience with manufacturing operations to help us drive

operating performance.

  

See director biographies beginning on page 1112 for further detail.

 

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Since 2009, Nordson has experienced a significant “refresh” of its independent directors, with four independent directors having six years or less of service with Nordson:

LOGO

The average tenure of our independent directors is 810 years and the average age of our independent directors is 59.662 years. 25%Twenty-five percent of our independent directors represent gender and racial diversity.

In determining whether to recommend a director forre-election, the Governance and Nominating Committee considers the director’s skills and expertise, participation in and contributions to the activities of the Board, the results of the annual Board evaluation, and past meeting attendance.

We believe that the tenure spectrum of our directors provides an effective mix of deep knowledge and new perspectives. We are strongly opposed toThe Board does not believe in aone-size-fits-all model specific limit for the overall length of corporate governancetime an independent director may serve. Directors who have served on the Board for an extended period can provide valuable insight into the operations and believe that each board should consider its own circumstancesfuture of the Company based on their experience with, and that a reasonable approach is likely to ensure an appropriate balance between long-tenuredunderstanding of, the Company’s history, policies, and more recently added board members.objectives. Our Governance Guidelines provide that a director is expected to retire at the conclusion of the Board meeting immediately prior to a director’s 72nd birthday. We do not, however, have a policy limiting the tenure of a director. In our view, the best method to ensure healthy board evolution is through rigorous and thoughtful consideration of the nomination of current directors prior to each election based on a variety of factors, including director performance, skills and expertise, the Company’s needs, and board diversity, as well as length of board service, both on a board average and stand-alone basis.

With respect to Mr. Keithley and Ms. Puma, we see a strategic advantage in theirsenior-in-service status. Not only do they bring experience, deep institutional knowledge, and historical context to the vitality and growth of Nordson, they serve as seasoned advisors to Mr. Hilton, who has been Nordson’s Chief Executive Officer for seven years.Hilton.

It is intended that proxies that are duly executed and properly submitted but do not withhold the authority to vote for any or all of the nominees will be voted for the election as directors of all of the nominees named below. At this time, the Board knows of no reason why any nominee might not be a candidate at the 20172019 Annual Meeting. However, in the event any one or more of such nominees becomes unavailable for election, proxies will be voted in accordance with the best judgment of the proxy holder.

The name and age (as of February 28, 2017)26, 2019) of each of the three nominees for election as directors for terms expiring in 2020,2022, as well as present directors whose terms will continue after the Annual Meeting, appear below, together with his or her principal occupation for at least the past five years, the year each became a director of the Company and certain other relevant information.

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Nominees for Terms Expiring in 2020

JOSEPH P.  KEITHLEYAge: 68      Director  Since 2001

Business Experience.    Mr. Keithley has served as chairman of the board of Nordson Corporation since February 2010. He served as chairman of the board of Keithley Instruments, Inc., a provider of measurement solutions to the semiconductor, fiber optics, telecommunications and electronics industries, from 1991, as well as a member of its board of directors from 1986 until December 2010 when Keithley Instruments was purchased by Danaher Corporation. He also served as Keithley Instruments’ chief executive officer from November 1993 to December 2010 and as president from May 1994 to December 2010.

Other Directorships in Previous 5 Years.    Mr. Keithley previously served as chairman of the board of Keithley Instruments. He is a director of Materion Corporation (NYSE: MTRN), an integrated producer of high performance engineered materials used in a variety of electrical, electronic, thermal and structural applications, and Axcelis Technologies, Inc. (NASDAQ GS: ACLS), a provider of equipment and service solutions for the semiconductor manufacturing industry.

Key Attributes, Experiences and Skills.    Mr. Keithley brings extensive, broad-based international business and executive management and leadership experience from his leadership roles at Keithley Instruments to his role as chairman of our board of directors. Among other things, Mr. Keithley draws upon his extensive knowledge in the global semiconductor and electronics industries garnered while leading Keithley Instruments. Mr. Keithley also has extensive public company board and governance experience.

MICHAEL J.  MERRIMAN, JR.Age: 60      Director  Since 2008

Business Experience.    Mr. Merriman has been an operating advisor of Resilience Capital Partners LLC since June 2008. Resilience is a private equity firm focused on principal investing in lower middle market underperforming and turnaround opportunities. Mr. Merriman is also a business consultant for Product Launch Ventures, LLC, a company that he founded in 2004 to pursue consumer product opportunities and provide business advisory services. Mr. Merriman served as president and chief executive officer of Lamson & Sessions Co.(formerly, NYSE: LMS), a manufacturer of thermoplastic conduit, fittings and electrical switch and outlet boxes, from November 2006 to November 2007. Mr. Merriman served as senior vice president and chief financial officer of American Greetings Corporation (formerly, NYSE: AM), a designer, manufacturer and seller of greeting cards and other social expression products, from September 2005 until November 2006.

Other Directorships in Previous 5 Years.    Mr. Merriman is a director of Invacare Corporation (NYSE: IVC), a global leader in the manufacture and distribution of innovative home and long-term care medical products that promote recovery and active lifestyles; Regis Corporation (NYSE: RGS), a company that owns, franchises and operates beauty salons, hair restoration centers and cosmetology education; and OMNOVA Solutions Inc. (NYSE: OMN), a technology-based company and an innovator of emulsion polymers, specialty chemicals, and decorative and functional surfaces for a variety of commercial, industrial and residential end uses. Mr. Merriman was a director of American Greetings from 2006 through August 2013 when American Greetings became a private company. Mr. Merriman also served as a director from 2004 until its sale in April 2011 for RC2 Corporation (formerly, NASDAQ: RCRC), a manufacturer ofpre-school toys and infant products.

 

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Key Attributes, Experiences and Skills.    Mr. Merriman’s prior experience as a public company chief executive officer and chief financial officer and his current service on the boards of directors of three publicly traded companies, as well as his experience at Resilience Capital Partners LLC, provides him with valuable experience and significant knowledgeNominees for Terms Expiring in the areas of executive management, strategy, corporate governance, acquisitions and divestitures, finance and financial reporting, product development expertise, and investor relations. Mr. Merriman has significant finance, financial reporting and accounting expertise and was formerly a certified public accountant, which provides the Board with valuable expertise and qualifies him as a “financial expert” on the Audit Committee, as described under the “Audit Committee” caption in the Corporate Governance section of this Proxy Statement.2022

 

MARY G.  PUMA

        LEE C. BANKS

 

Age: 5856

 

      Director Since 20012010

Business Experience.    Ms. Puma is president and chief executive officer of Axcelis Technologies, Inc. (NASDAQ GS: ACLS). Axcelis is a provider of equipment and service solutions for the semiconductor manufacturing industry. Ms. Puma has served as chief executive officer since January 2002.

Other Directorships in Previous 5 Years.    Ms. Puma serves as a director of Axcelis Technologies. From May 2005 to May 2016, Ms. Puma was chairman of the board of Axcelis.

Key Attributes, Experiences and Skills.    Ms. Puma contributes extensive executive management experience in an international, technology-driven business and possesses a thorough knowledge of corporate governance and strategy development. Ms. Puma brings valuable experience in compensation and talent management planning matters to our Compensation Committee.

Present Directors with Terms Expiring in 2018

ARTHUR L.  GEORGE, JR.Age: 55      Director  Since 2012

Business Experience.    Mr. George served as senior vice president and manager, Analog Engineering Operations of Texas Instruments Incorporated (NASDAQ GS: TXN) from 2011 until his retirement in March 2014. Texas Instruments is one of the world’s largest semiconductor companies and a highly innovative, high performing global leader in analog, embedded processing and wireless technologies. Mr. George was senior vice president and worldwide general manager, High Performance Analog of Texas Instruments from 2006 to 2011.

Other Directorships in Previous 5 Years.    Mr. George serves as director of Axcelis Technologies, Inc. (NASDAQ GS: ACLS), a provider of equipment and service solutions for the semiconductor manufacturing industry.

Key Attributes, Experiences and Skills.    Mr. George brings to the Board significant executive and general management experience as well as extensive operational and new product development experiences in high technology markets. Mr. George’s experience with high performance analog products used in a wide range of industrial products gives him insight on a diverse set of industries and affords the Board a unique perspective in identifying strategic and tactical risks attendant to the semiconductor electronics market.

MICHAEL F.  HILTONAge: 62      Director  Since 2010

Business Experience.    Mr. Hilton became Nordson’s President and Chief Executive Officer effective January 16, 2010. Prior to his joining Nordson, Mr. Hilton was senior vice president and general manager for Air Products and Chemicals, Inc. (NYSE: APD) from 2007 until 2010, with specific responsibility for leading the company’s $2 billion global Electronics and Performance Materials segment. Air Products and Chemicals serves customers in industrial, energy, technology and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services.

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Other Directorships in Previous 5 Years.    Mr. Hilton serves as a director of Ryder System, Inc. (NYSE: R), a FORTUNE® 500 provider of leading-edge transportation, logistics, and supply chain management solutions. He also serves as a director of Lincoln Electric Holdings, Inc. (NASDAQ: LECO). Lincoln Electric is the world leader in the design, development and manufacture of arc welding products, robotic arc welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market.

Key Attributes, Experiences and Skills.    Mr. Hilton is the only member of Nordson’s management serving on the Nordson Board. With over 30 years of global manufacturing industry experience, Mr. Hilton brings to the Board an intimate understanding of management leadership, strategy development, andday-to-day operations of a multi-national company, including product line management, new product technology and talent development, manufacturing, distribution and other sales channels, business processes, international operations, and global markets.

FRANK M.  JAEHNERTAge: 59      Director  Since 2012

Business Experience.    Mr. Jaehnert served as chief executive officer and president of Brady Corporation (NYSE: BRC) from April 1, 2003 through October 7, 2013. Brady Corporation is an international manufacturer and marketer of complete solutions that identify and protect premises, products and people. Brady’s core capabilities in manufacturing, channel management, printing systems, precision engineering and materials expertise make it a leading supplier to customers in general manufacturing, maintenance and safety, process industries, construction, electrical, telecommunications, electronics, laboratory/healthcare, airline/transportation, brand protection, education, governmental, public utility, and a variety of other industries.

Other Directorships in Previous 5 Years.    Mr. Jaehnert serves as a director of Briggs & Stratton Corporation (NYSE: BGG), a world leader in gasoline engines for outdoor power equipment, portable generators, and lawn and garden powered equipment and related accessories. He also serves as a director of Itron, Inc. (NASDAQ: ITRI), a world-leading technology and services company dedicated to the resourceful use of energy and water and providing comprehensive solutions that measure, manage, and analyze energy and water. Mr. Jaehnert served as a director of Brady Corporation from April 1, 2003 through October 7, 2013.

Key Attributes, Experiences and Skills.    Mr. Jaehnert has been the chief executive officer and president of a global manufacturing business. He also served as chief financial officer of that business. His prior work experience includes various financial positions in Germany and the United States for Robert Bosch GmbH, an international manufacturer of automotive, communications, industrial, and consumer products. Mr. Jaehnert received the equivalent of a master of business administration degree from the University of Stuttgart, Germany, and has been designated as a “financial expert” on the Audit Committee, as described under the “Audit Committee” caption in the Corporate Governance section of this Proxy Statement. Mr. Jaehnert’s experience as head of a diversified international business and his expertise in finance and operations enable him to make significant contributions to discussions regarding the Company’s strategy and the activities of the Audit Committee.

Present Directors with Terms Expiring in 2019

LEE C.  BANKSAge: 53      Director  Since 2010

Business Experience.    Mr. Banks has been president and chief operating officer of Parker-Hannifin Corporation (NYSE: PH) since February 2015. Parker-Hannifin Corporation (NYSE: PH) is the world’s leading diversified manufacturer of motion and control technologies and systems, providing precision-engineered solutions for a wide variety of mobile, industrial, and aerospace markets. Mr. Banks served as executive vice president and operating officer of Parker-Hannifin from 2008 to 20162015 and senior vice president and operating officer of Parker-Hannifin from 2006 to 2008.

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Other Directorships in Previous 5 Years.Current Directorships.    Mr. Banks is a director of Parker-Hannifin.

Key Attributes, Experiences, and Skills.    As a senior executive and director of a multi-national corporation, Mr. Banks provides the Board with significant executive general management and operational experiences and a unique perspective in identifying governance, strategic, and tactical risks attendant to a multi-national sales, distribution, manufacturing, and operational footprint.

 

RANDOLPH W. CARSON

 

Age: 6568

 

      Director Since 2009

Business Experience.    From 2000 to February 2009, Mr. Carson served as chief executive officer of Eaton Corporation’s (NYSE: ETN) Electrical Group. Eaton (NYSE: ETN) is a global, diversified industrial manufacturer and technology leader in electrical components and systems for power quality, distribution, and control. Mr. Carson retired from Eaton in May 2009 following ten years with the company. Prior to Eaton Corporation, Mr. Carson held several executive positions with Rockwell International.

Other Directorships in Previous 5 Years.Current Directorships. Mr. Carson is a director of Southwire Company, LLC, the leading North American supplier of wire and cable products.

Key Attributes, Experiences, and Skills.    Mr. Carson served as a director of Fairchild Semiconductor International, Inc. (NASDAQ:(formerly, Nasdaq: FCS), a leading global manufacturer of semiconductor devices, until September 16, 2016, when ON Semiconductor Corporation’s (NASDAQ:Corporation (Nasdaq: ON) closed its acquisition of Fairchild closed. Mr. Carson is also a director of Southwire Company, the leading North American supplier of wire and cable products.Fairchild. Mr. Carson served as chairmanchair of the board of GrafTech International, Ltd. (formerly, NYSE: GTI)(NYSE: EAF), a global manufacturer of carbon and graphite products, prior to GrafTech becoming an indirect wholly-owned affiliate of Brookfield Asset Management Inc. (NYSE:BAM) (TSX: BAM.A) (Euronext: BAMA). Brookfield is a global alternative asset manager with over $200 billion in assets under management.

Key Attributes, Experiences and Skills.Our Board believes that Mr. Carson’s deep operational experience in global industrial businesses enables him to provide unique insight to our Board with respect to meeting marketplace challenges, implementing Lean and other productivity initiatives, integrating business units, and anticipating and planning for commercial risk and uncertainties. Together with his experience, strategic vision, and understanding of financial accounting and financial matters, our Board believes Mr. Carson is well qualified to serve as a member of our Board. Mr. Carson’s public company board experience contributes to his familiarity with current issues and his ability to identify and address matters that come before the Governance & Nominating and Audit Committees on which he serves.

 

VICTOR L. RICHEY, JR.

 

Age: 5961

 

      Director Since 2010

Business Experience.    Mr. Richey has been chairmanchair of the board, president, and chief executive officer of ESCO Technologies Inc. (NYSE: ESE) since 2003. ESCO Technologies manufactures highly-engineered filtration and fluid control products for the aviation, space, and process markets worldwide; is the industry leader in RF shielding and EMC test products; provides diagnostic instruments, software, and services for the benefit of the electric utility industry and industrial power users; and produces custom thermoformed packaging, pulp basedpulp-based packaging, and specialty products for medical and commercial markets.

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Other Directorships in Previous 5 Years.Current Directorships.    Mr. Richey is chairmanchair of the board of ESCO Technologies.

Key Attributes, Experiences, and Skills.    TheOur Board believes Mr. Richey provides a breadth of skills critical to the Board’s ability to discharge its oversight responsibility. Mr. Richey has extensive experience as chairman,chair, president, and chief executive officer of a diversified global producer and marketer of technology, and he has significant executive management and board experience at public and private companies within some of our end markets, including the semiconductor industry.

Present Directors with Terms Expiring in 2020

        JOSEPH P. KEITHLEY

                             Age: 70

            Director Since 2001

Business Experience.    Mr. Keithley served as chair of the board of Keithley Instruments, Inc., a provider of measurement solutions to the semiconductor, fiber optics, telecommunications, and electronics industries, from 1991 until December 2010 when Keithley Instruments was purchased by Danaher Corporation (NYSE: DHR). He also served as Keithley Instruments’ chief executive officer from November 1993 to December 2010, as president from May 1994 to December 2010, and as a member of its board of directors from 1986 until December 2010.

Current Directorships.    Mr. Keithley is a director of Axcelis Technologies, Inc. (Nasdaq GS: ACLS), a provider of equipment and service solutions for the semiconductor manufacturing industry.

Key Attributes, Experiences, and Skills.    Mr. Keithley previously served as chair of our Board, as chair of the board of Keithley Instruments, and as a director of Materion Corporation (NYSE: MTRN), an integrated producer of high performance engineered materials used in a variety of electrical, electronic, thermal, and structural applications. Mr. Keithley brings extensive, broad-based international business and executive management and leadership experience from his leadership roles at Keithley Instruments to his role as a member of our Board. Among other things, Mr. Keithley draws upon his extensive knowledge of the global semiconductor and electronics industries garnered while leading Keithley Instruments. Mr. Keithley also has extensive public company board and governance experience.

        MICHAEL J. MERRIMAN, JR.

                              Age: 62

            Director Since 2008

Business Experience.    Mr. Merriman has served as chair of our Board since February 2018. Mr. Merriman was an operating advisor of Resilience Capital Partners LLC from June 2008 until June 2017, and currently serves on the board of one of Resilience’s portfolio companies. Resilience is a private equity firm focused on principal investing in lower middle market underperforming and turnaround opportunities. Mr. Merriman is also a business consultant for Product Launch Ventures, LLC, a company that he founded in 2004 to pursue consumer product opportunities and provide business advisory services. Mr. Merriman served as president and chief executive officer of Lamson & Sessions Co. (formerly, NYSE: LMS), a manufacturer of thermoplastic conduit, fittings and electrical switch and outlet boxes, from November 2006 to November 2007. Mr. Merriman served as senior vice president and chief financial officer of American Greetings Corporation (formerly, NYSE: AM), a designer, manufacturer and seller of greeting cards and other social expression products, from September 2005 until November 2006.

Current Directorships. Mr. Merriman is a director of Regis Corporation (NYSE: RGS), a company that owns, franchises, and operates beauty salons, hair restoration centers and cosmetology education facilities; and of OMNOVA Solutions Inc. (NYSE: OMN), a technology-based company and an innovator of emulsion polymers, specialty chemicals, and decorative and functional surfaces for a variety of commercial, industrial, and residential end uses.

Key Attributes, Experiences, and Skills.     Mr. Merriman was a director of Invacare Corporation (NYSE: IVC), a global leader in the manufacture and distribution of innovative home and long-term care medical products that promote recovery and active lifestyles, until May 2018, and a director of

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American Greetings from 2006 through August 2013 when American Greetings became a private company. Mr. Merriman also served as a director of RC2 Corporation (formerly, Nasdaq: RCRC), a manufacturer ofpre-school toys and infant products, from 2004 until its sale in April 2011.

Mr. Merriman’s prior experience as a public company chief executive officer and chief financial officer and his current service on the boards of directors of two publicly traded companies, as well as his experience at Resilience, provides him with valuable experience and significant knowledge in the areas of executive management, strategy, corporate governance, acquisitions and divestitures, finance and financial reporting, product development expertise, and investor relations. Mr. Merriman has significant finance, financial reporting, and accounting expertise and was formerly a certified public accountant, which provides the Board with valuable financial expertise.

        MARY G. PUMA

                              Age: 61

      Director Since 2001

Business Experience.    Ms. Puma is president and chief executive officer of Axcelis Technologies, Inc. (Nasdaq GS: ACLS). Axcelis is a provider of equipment and service solutions for the semiconductor manufacturing industry. Ms. Puma has served as chief executive officer of Axcelis since January 2002.

Current Directorships.    Ms. Puma is a director of Axcelis. From May 2005 to May 2015, Ms. Puma was chair of the board of Axcelis.

Key Attributes, Experiences, and Skills.    Ms. Puma contributes extensive executive management experience in an international, technology-driven business and possesses a thorough knowledge of corporate governance and strategy development. Ms. Puma brings valuable experience in compensation and talent management planning matters to our Compensation Committee.

Present Directors with Terms Expiring in 2021

        ARTHUR L. GEORGE, JR.

                              Age: 57

      Director Since 2012

Business Experience.    Mr. George served as senior vice president and manager, Analog Engineering Operations of Texas Instruments Incorporated from 2011 until his retirement in March 2014. Texas Instruments (Nasdaq: TXN) is one of the world’s largest semiconductor companies and a highly innovative, high performing global leader in analog, embedded processing, and wireless technologies. Mr. George was senior vice president and worldwide general manager, High Performance Analog of Texas Instruments from 2006 to 2011.

Current Directorships.    Mr. George is a director of Axcelis Technologies, Inc. (Nasdaq GS: ACLS), a provider of equipment and service solutions for the semiconductor manufacturing industry.

Key Attributes, Experiences, and Skills.    Mr. George brings to the Board significant executive and general management experience as well as extensive operational and new product development experiences in high technology markets. Mr. George’s experience with high performance analog products used in a wide range of industrial products gives him insight on a diverse set of industries and affords the Board a unique perspective in identifying strategic and tactical risks attendant to the semiconductor electronics market.

        MICHAEL F. HILTON

                              Age: 64

      Director Since 2010

Business Experience.    Mr. Hilton became Nordson’s president and chief executive officer effective January 2010. Prior to his joining Nordson, Mr. Hilton was senior vice president and general manager for Air Products and Chemicals, Inc. (NYSE: APD) from 2007 until 2010, with specific responsibility for leading the company’s $2 billion global Electronics and Performance Materials segment. Air Products and Chemicals serves customers in industrial, energy, technology, and healthcare markets worldwide with a unique portfolio of atmospheric gases, process and specialty gases, performance materials, and equipment and services.

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Current Directorships.    Mr. Hilton is a director of Ryder System, Inc. (NYSE: R), a FORTUNE® 500 provider of leading-edge transportation, logistics, and supply chain management solutions. He is also a director of Lincoln Electric Holdings, Inc. (Nasdaq: LECO). Lincoln Electric is the world leader in the design, development, and manufacture of arc welding products, robotic arc welding systems, plasma and oxyfuel cutting equipment and has a leading global position in the brazing and soldering alloys market.

Key Attributes, Experiences, and Skills.    Mr. Hilton is the only member of Nordson’s management serving on our Board. With over 30 years of global manufacturing industry experience, Mr. Hilton brings to the Board an intimate understanding of management leadership, strategy development, andday-to-day operations of a multi-national company, including product line management, new product technology and talent development, manufacturing, distribution and other sales channels, business processes, international operations, and global markets.

        FRANK M. JAEHNERT

                         Age: 61

      Director Since 2012

Business Experience.    Mr. Jaehnert served as chief executive officer and president of Brady Corporation (NYSE: BRC) from April 2003 through October 2013. Brady is an international manufacturer and marketer of complete solutions that identify and protect premises, products, and people. Brady’s core capabilities in manufacturing, channel management, printing systems, precision engineering and materials expertise make it a leading supplier to customers in general manufacturing, maintenance and safety, process industries, construction, electrical, telecommunications, electronics, laboratory/healthcare, airline/transportation, brand protection, education, governmental, public utility, and a variety of other industries.

Current Directorships.    Mr. Jaehnert is a director of Briggs & Stratton Corporation (NYSE: BGG), a world leader in gasoline engines for outdoor power equipment, portable generators, and lawn and garden powered equipment and related accessories. He is also a director of Itron, Inc. (Nasdaq: ITRI), a world-leading technology and services company dedicated to the resourceful use of energy and water and providing comprehensive solutions that measure, manage, and analyze energy and water.

Key Attributes, Experiences, and Skills.    Mr. Jaehnert served as a director of Brady from April 2003 through October 2013. Mr. Jaehnert has been the chief executive officer and president of a global manufacturing business. He also served as chief financial officer of that business. His prior work experience includes various financial positions in Germany and in the United States for Robert Bosch GmbH, an international manufacturer of automotive, communications, industrial, and consumer products. Mr. Jaehnert received the equivalent of a master of business administration degree from the University of Stuttgart, Germany, and has been designated as a “financial expert” on the Audit Committee, as described under the “Committees of the Board of Directors” section of this Proxy Statement. Mr. Jaehnert’s experience as head of a diversified international business and his expertise in finance and operations enable him to make significant contributions to discussions regarding the Company’s strategy and the activities of the Audit Committee.

No shareholder or group that beneficially owns 1% or more of our outstanding common shares has recommended a candidate for election as a director at the 20172019 Annual Meeting.

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Cumulative Voting

Voting for directors will be cumulative if any shareholder provides notice in writing to the President, aan Executive Vice President, or the Secretary of Nordson of a desire to have cumulative voting. The notice must be received at least 48 hours before the time set for the Annual Meeting, and an announcement of the notice must be made at the beginning of the meeting by the ChairmanChair or the Secretary, or by or on behalf of the shareholder giving the notice. If cumulative voting is in effect, each shareholder will be entitled to cast, in the election of directors, a number of votes equal to the product of the number of directors to be elected multiplied by the number of shares that the shareholder is voting. Shareholders may cast all of these votes for one nominee or distribute them among several

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nominees, as they see fit. If cumulative voting is in effect, shares represented by each properly submitted proxy will also be voted on a cumulative basis, with the votes distributed among the nominees in accordance with the judgment of the persons named on the proxy/voting instruction card.

To date, we have not received a notice from any shareholder of his, her, or its intention to request cumulative voting.

Majority Voting Policy

The Director nominees receiving the greatest number of votes will be elected (plurality standard). However, our majority voting policy states that any Director who fails to receive a majority of the votes cast in his/her favor is required to submit his/her resignation to the Board. The Governance and Nominating Committee of the Board would then consider each resignation and determine whether to accept or reject it. Abstentions and brokernon-votes will have no effect on the election of a Director and are not counted under our majority voting policy.

Required Vote

The election of directors requires the affirmative vote of the holders of a plurality of the shares of common stock voting at the Annual Meeting. Under the plurality voting standard, the nominees receiving the most “for” votes will be elected, regardless of whether any nominee received a majority of the votes. Only shares that are voted in favor of a particular nominee will be counted toward such nominee’s achievingachievement of a plurality. Shares present at the meeting that are not voted for a particular nominee or shares present by proxy where the shareholder properly withheld authority to vote for such nominee (including brokernon-votes) will not be counted toward such nominee’s achievingachievement of a plurality, but will be counted for quorum purposes.

 

 

RECOMMENDATION REGARDING PROPOSAL 1:

 

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE “FOR”

ALL NOMINEES AS DIRECTORS.

 

PROXIES RECEIVED BY THE BOARD WILL BE VOTED FOR ALL NOMINEES UNLESS

SHAREHOLDERS SPECIFY A CONTRARY VOTE.

 

 

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CORPORATE GOVERNANCE

Corporate Governance Documents

The following corporate governance documents are available at:www.nordson.com/en/our-company/corporate-governance.

 

•  Governance Guidelines

  

•  Related Persons Transaction Policy

•  Committee Charters

  

•  Share Ownership Guidelines

•  Director Recruitment and Performance Guidelines

  

•  Code of Ethics and Business Conduct

•  Suppliers Code of Conduct

•  Conflict Minerals Policy

The Governance Guidelines contain general principles regarding the functions of Nordson’s Board of Directors (the “Board”) and Board committees. The Annual Report to Shareholders, which includes the 20162018 Annual Report and this Proxy Statement, are available at:www.nordson.com/en/our-company/investors/annual-reports-and-presentations. Upon request, copies of the Annual Report to Shareholders will be mailed to you (at no charge) by contacting Nordson Corporation, Attn: Corporate Communications, 28601 Clemens Road, Westlake, Ohio 44145. The information in, or that can be accessed through, our internet site is not part of this Proxy Statement, and all references herein to our internet site are for reference purposes only.

Director Independence

In accordance with the listing standards of The NASDAQNasdaq Stock Market LLC (“NASDAQ”Nasdaq”), and our Governance Guidelines, the Board must consist of a majority of independent directors. The Board has determined that Ms. Puma and Messrs. Banks, Carson, George, Jaehnert, Keithley, Merriman, and Richey each satisfy the definition of “independent director” under these listing standards. Mr. Hilton is not an independent director asbecause he serves as our President and Chief Executive Officer.

In determining independence, each year the Board affirmatively determines, among other things, whether directors have a “material relationship” with Nordson. When assessing the “materiality” of a director’s relationship with Nordson, the Board considers all relevant facts and circumstances, including a consideration of the persons or organizations with which the director has an affiliation. Where an affiliation is present, the Board considers the frequency or regularity of the provision of services, whether the services are being carried out at arm’s length in the ordinary course of business and whether the services are being provided substantially on the same terms to Nordson as those prevailing at the time from unrelated parties for comparable transactions. With respect to Audit Committee members, the Board must affirmatively determine that such directors, in addition to the general independence requirements described above, satisfy certain financial education requirements and do not, among other things, accept any consulting, advisory, or other compensatory fee from Nordson.

As part of our commitment to ensuring director independence, we have a monitoring and reporting program with respect to purchases of products supplied by, or to, a company which may employ a director to ensure the avoidance of any conflicts of interest resulting from our relationship. Mr. Banks, a director, serves as president and chief operating officer of Parker-Hannifin Corporation. Mr. Jaehnert,Richey, a director, serves as a director of Briggs & Stratton Corporation.ESCO Technologies Inc. These two companies purchase components manufactured by a number of our business units in volumes that are insignificant when compared to the respective companies’ and Nordson’s annual revenue for fiscal year 2016.2018. The Board does not believe that these relationships impair the independence of Messrs. Banks or JaehnertRichey or that they have any material interest in any transaction between Nordson and Parker-HannifinParker and Briggs & Stratton Corporation,ESCO, respectively. For more information on our review standards for related party transactions, see “Review of Transactions with Related Persons” below.

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Director Qualifications

Through its selection and vetting process, the Governance and Nominating Committee seeks not only to identify directors that meet basic criteria, but also to enhance the diversity of the Board in such areas

16  |Nordson Corporation – 2017 Proxy Statement


as professional experience, race, gender, ethnicity, and age and to obtain a variety of occupational, educational, and personal backgrounds on the Board in order to provide a range of viewpoints and perspectives. As a whole, we believe that the Board should possess a combination of skills, professional experience, and diversity of backgrounds necessary to oversee the Company’s business. Diversity of background includes racial and gender diversity. Twenty-five percent of our independent directors are women or racially diverse individuals.

The Governance and Nominating Committee also periodically evaluates the composition of the Board to assess the skills and experience that are currently represented on the Board, as well as the skills and experience that the Board will find valuable in the future, givenconsidering the Company’s current situation and strategic plans. We believe that this focus on finding qualified directors from diverse backgrounds has allowed the Company to assemble a Board comprised of directors of the highest caliber and with a wide range of viewpoints.

Consideration of Director Candidates Recommended by Shareholders

Under its charter, the Governance and Nominating Committee is responsible for vetting shareholder nominations forof directors. The Committee does not have a formal policy with respect to the consideration of director candidates recommended by shareholders. However, its practice is to consider those candidates on the same basis and in the same manner as it considers recommendations from other sources. For more information on how a shareholder can recommend a candidate, see the “Questions and Answers About the Annual Meeting and These Proxy Materials” section of this proxy statement.

Code of Ethics and Business Conduct

We have a Code of Ethics and Business Conduct (the “Code”) that applies to all Nordson directors, officers, and employees, and its subsidiaries, wherever located. Our Code contains the general guidelines and principles for conducting Nordson’s business consistent with the highest standards of business ethics. Our Code embodies our five guiding values, which form the foundation of our Company: Integrity, Excellence, Passion for Our Customers, Energy, and Respect for People. Our employees are expected to report all suspected violations of Company policies and the law, including incidents of harassment or discrimination. We will take appropriate steps to investigate all such reports and will take appropriate action. Under no circumstances will employees be subject to any disciplinary or retaliatory action for reporting, in good faith, a possible violation of our Code or applicable law or for cooperating in any investigation of a possible violation.

Board Leadership Structure

Our Governance Guidelines require us to have either an independent ChairmanChair of the Board or a presiding independent director if the ChairmanChair is not an independent director. The Governance Guidelines set forth the responsibilities of the ChairmanChair of the Board and the Presiding Director when the ChairmanChair of the Board is not an independent director. At present, the ChairmanChair of the Board position is separate from the Chief Executive Officer position. The Board’s role in risk oversight does not affect the Board’s leadership structure.

This structureWe believe that separating the Chair of the Board and Chief Executive Officer positions provides independent oversight of management while permitting our Chief Executive Officer, Michael Hilton, to focus his time and energy on setting the strategic direction for the Company, overseeing daily operations, engaging with external constituents, developing and mentoring our future leaders, and promoting employee engagement at all levels of the organization. Our independent ChairmanChair of the Board, of Directors, Joseph Keithley,Michael J. Merriman, Jr., leads the Board in the performance of its duties by establishing

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agendas and ensuring appropriate meeting content (in collaboration with Mr. Hilton), presiding during regularly held executive sessions with our independent directors, actively engaging with all independent directors and Mr. Hilton between Board meetings, and providing overall guidance to Mr. Hilton as to the Board’s views and perspectives, particularly on the strategic direction of the Company.

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Meetings of the Board of Directors

The Board held sixtwelve meetings during fiscal year 2016.2018. In addition, there were a total of 17eighteen meetings of our committees. Nordson’s policy is to require attendance and active participation by directors at Board and committee meetings. Each director attended at least 75% of the total number of meetings of the Board and the committees on which the director served during fiscal year 2016.2018. Directors are encouraged to attend the Annual Meeting. All of Nordson’s directors attended the 20162018 Annual Meeting of Shareholders held on March 1, 2016.February 27, 2018.

Executive Sessions of Independent Directors

Pursuant to our Governance Guidelines, independent directors meet in regularly scheduled executive sessions without management. The ChairmanChair of the Board of Directors (or, when our ChairmanChair is not an independent director, the Presiding Director) chairs all regularly scheduled executive sessions of the Board, and also has authority to convene meetings of the independent directors at any time with appropriate notice.

Oversight of Risk

The Board plays an active role, both as a whole and also at the committee level, in overseeing management of the Company’s risks. Management is responsible for the Company’sday-to-day risk management activities. The Company has established an enterprise risk framework for identifying, aggregating, and evaluating risk across the enterprise. The risk framework is integrated with the Company’s annual planning, audit scoping, and control evaluation management by its internal auditor.

The involvement of the Board in assessing our business strategy at least annually is a key part of its oversight of risk management, its assessment of management’s appetite for risk, and its determination of what constitutes an appropriate level of risk for Nordson. The Board regularly receives updates from management and outside advisors regarding this oversight responsibility.

In addition, our Board committees each oversee certain aspects of risk management as presented below:

 

Audit Committee

      

Compensation Committee

      

Governance &and Nominating
Committee

Risks associated with financial matters, particularly financial reporting, accounting, disclosure, and internal controls.

  

Risks associated with the establishment and administration of executive compensation and equity-based compensation programs and performance management of officers.

 

  

Risks associated with Board independence, effectiveness and organization, corporate governance matters, and director succession planning.

Senior management attends Board and Board committee meetings at the invitation of the Board or its committees and is available to address any questions or concerns raised by the Board on risk management and any other matters.

The Audit Committee and Compensation Committees rely also on the advice and counsel of our independent auditors and independent compensation consultant, respectively, to raise awareness of any risk issues that may arise during their regular reviews of our financial statements, audit work, and executive compensation policies and practices. The Board is kept abreast of its Committees’updated on each committee’s risk oversight and other activities via meeting reports of the Committee Chairpersonsfrom each committee chair to the full Board.

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Review of Transactions with Related Persons

The Board has adopted a written policy regarding the review and approval of transactions involvingbetween the Company and its subsidiaries and certain persons that are required to be disclosed in proxy statements, which are commonly referred to

18  |Nordson Corporation – 2017 Proxy Statement


as “related persons transactions.” Related persons include our directors, nominees for election as a director, persons controlling over 5% of our common shares, executive officers, and the immediate family members of each of these individuals. Under the written policy, Nordson’s Audit Committee is responsible for reviewing any related persons transactions and will consider factors it deems appropriate.appropriate, including but not limited to, whether the transaction is on terms no less favorable than terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction. To the extent any member of the Audit Committee is involved in any transaction under review, such member recuses themselves.

We have a monitoring and reporting program with respect to transactions with products supplied by, or to, a company which may employ a director, to ensure the avoidance of any conflicts of interest resulting from our relationship. This program includes all such transactions collectively over $120,000 in one annual period. Under the program, we reviewed transactions with all companies which employ a director or have one of our directors serving as a member of its board. The review determined that any related persons transactions were neither material nor significant to either Nordson or the respective director’s company. All such transactions were conducted at arms-length. Information on the related persons transaction review is set forth under the caption “Director Independence” above.

The Board’s Role in Talent Development

A primary Board responsibility is to ensure that we have the appropriate management talent to successfully execute our strategies. Our Board believes that effective talent development is critical to Nordson’s continued success. Our Board’s involvement in leadership development and succession planning is systematic and ongoing. The Board plans for CEO succession and oversees management’s planning for succession of other key executive positions. Our Board calendar includes at least one meeting each year during which the Board conducts a detailed review of the Company’s talent strategies, leadership pipeline, and succession plans for key executive positions. The Compensation Committee oversees the process of succession planning and implements programs to retain and motivate key talent. To assist the Board, the CEO annually provides the Board with anin-depth assessment of senior managers and their potential to succeed to the position of CEO or other key executive positions.

Self-Assessments

On a regular basis, the Board conducts a self-assessment of the Board as a whole to determine, among other matters, whether the Board is functioning effectively. The independent directors also undertake a peer assessment of other independent directors as part of this self-assessment process. Each committee of the Board also conducts a self-assessment of the committee’s effectiveness. The Board considers this process to be the primary means of determining whether incumbent directors continue to demonstrate the attributes that should be reflected on the Board, or whether changes to membership are appropriate.

 

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COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors has three standing committees – Audit Committee, Compensation Committee, and Governance and Nominating Committee – and an Executive Committee. Respective committee functions, memberships and number of meetings held during fiscal year 2018 are listed below. All members of the Audit Committee, Compensation Committee, and Governance and Nominating Committee are independent under the independence standards of NASADQNasdaq and our Governance Guidelines. A more detailed discussion of the purposes, duties, and responsibilities of the committees is found in the respective committee charters which are available at:www.nordson.com/en/our-company/corporate-governance.

 

Committee  Function 

Members for

20162018(1)

 

Meetings in

20162018

    
Audit  

•   Reviewing the proposed audits (including both independent and internal audits) for each fiscal year, the results of these audits, and the adequacy of our systems of internal accounting control;

•   Appointing, compensating, and overseeing the independent auditors for each fiscal year;

•   Approving all permissible audit andnon-audit services to be performed by the independent registered public accounting firm;

•   Establishing procedures for the receipt, retention, and treatment of complaints received by us regarding accounting, internal accounting controls, or auditing matters; and

•   Reviewing and approving all related-persons transactions; and

•   Overseeing the adequacy of financial statements pertaining to our benefit plans, including reserves, statement of funding obligations, and underlying economic assumptions.transactions.

 

Merriman*Jaehnert*

Carson

George

JaehnertKeithley

 9
    

Compensation

  

•   SettingReviewing and approving compensation for our executive officers;

•   Administering the incentive and equity participation plans under which we compensate our executive officers; and

•   Providing oversight to executive talent and management succession planning, other than chief executive officer succession, which is a responsibility of the entire Board.

 

 

Puma*

Banks

KeithleyMerriman

Richey

 5
   

The Compensation Committee takes significant steps to ensure that we maintain strong links between executive compensation and performance of our business. Examples of these steps are:

 

•   Holding executive sessions (without management present) at every regularly scheduled committee meeting;

•   Engaging an independent compensation consultant to advise on executive compensation issues, including peer benchmarking data;

•   Aligning compensation structures based on examination of peer group compensation structures, goals, and financial performance; and

•   Strengthening the link between executive officer compensation and shareholder value by basing incentive/variable pay on the achievement of financial and operating performance goals to foster alignment with shareholder interests.

    

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CommitteeFunction

Members for

2018(1)

Meetings in

2018

    
Governance &and Nominating  

•   Assisting the Board by identifying individuals qualified to serve as directors, and to recommend to the Board the director nominees for each annual meeting of shareholders;

•   Reviewing and recommending to the Board qualifications for committee membership and committee structure and operations;

•   Recommending to the Board directors to serve on each committee and a chairpersonchair for such committee;

•   Developing and recommending to the Board a set of corporate governance policies and procedures; and

•   Developing, administering, and overseeing the self-assessment process for the Board and its committees.

•   Overseeing management’s development of an orientation program for new directors.

•   Reviewing Director’s compensation.

 

Richey*

Carson

Keithley

Puma

 34

 

*

Committee chairpersonchair

 

(1)
20  |Nordson Corporation – 2017 Proxy Statement

In February 2018, Mr. Merriman was elected Chair of the Board and Mr. Jaehnert was elected chair of the Audit Committee. In May 2018, Mr. Merriman was appointed as a member of the Compensation Committee and removed as a member of the Audit Committee and Mr. Keithley was appointed as a member of the Audit Committee and removed as a member of the Compensation Committee.


The Board has designated Messrs.Mr. Jaehnert, and Merriman, who are eachis an independent directorsdirector under the NASDAQNasdaq listing standings and the SEC’s audit committee requirements, as an “audit committee financial experts”expert” pursuant to the SEC’s final rules implementing Section 407 of the Sarbanes-Oxley Act. Shareholders should understand that the designation of Messrs.Mr. Jaehnert and Merriman each as an “audit committee financial expert” is an SEC disclosure requirement and that it does not impose upon themhim any duties, obligations, or liabilities that are greater than those imposed on themhim as members of the Audit Committee and the Board in the absence of such designation.

The Audit Committee has confirmed Ernst & Young LLP’s independence from management and the Company, including compatibility ofnon-audit services with the auditors’ independence. The Audit Committee Report to the Board is at Appendix A topage 78 of this Proxy Statement.

Director Compensation

Objectives of Director Compensation

Qualitynon-employee directors are critical to our success. We believe that the two primary duties ofnon-employee directors are (1) to effectively represent the long-term interests of our shareholders and (2) to provide guidance to management. As such, our compensation program fornon-employee directors is designed to meet several key objectives:

 

Adequately compensate directors for their responsibilities and time commitments and for the personal liabilities and risks that they face as directors of a public company;

 

Attract the highest calibernon-employee directors by offering a compensation program consistent with those at companies of similar size, complexity, and business character;

 

Align the interests of directors with our shareholders by providing a significant portion of compensation in equity and requiring directors to own our stock;

 

Provide compensation that is simple and transparent to shareholders and reflects corporate governance best practices; and

 

Where possible, provide flexibility in the form and timing of payments.

Elements of Director Compensation

We believe that the following components of our director compensation program support the objectives above:

 

We provide cash compensation through retainers for board and committee service, as well as additional cash retainers to the ChairmanChair of the Board and chairpersonschairs of our standing Board committees. We do not provide board and committee meeting fees. Compensating our directors in this manner simplifies the administration of our program and creates greater equality in rewarding service on committees of the Board. The additional retainers compensate directors for the additional responsibilities and time commitments involved with chairperson responsibilities.

 

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We do not provide board and committee meeting fees. Compensating our directors in this manner simplifies the administration of our program and creates greater equality in rewarding service on committees of the Board. The additional retainers compensate directors for the additional responsibilities and time commitments involved with chair responsibilities.

All of thenon-employee directors receive annual awards of restricted share units which vest 100% on the last day of the fiscal year.

 

We pay for, provide, or reimburse directors for expenses incurred to attend Board and committee meetings and director education programs.

 

Directors do not have a retirement plan but are afforded business travel and accident insurance coverage.

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Determining Director Compensation.    The Governance and Nominating Committee of the Board of Directors provides oversight on director compensation. The Committee oversees, reviews, and reports to the Board on director compensation. The Committee annually reviews competitive market data fornon-employee director compensation and makes recommendations to the Board of Directors for its approval. The Committee is assisted in performing its duties by Exequity Inc.LLP (“Exequity”), the Compensation Committee’s independent compensation consultant.

Exequity’s review for 2016fiscal year 2018 consisted of an analysis of competitive market data from a selected peer group of companies. The peer group is consistent with the peer group Exequity used for the executive compensation review conducted during fiscal 2016.year 2018.

The components and respective amounts ofnon-employee director compensation for fiscal year 20162018 were:

 

                     Type  Annual Amount ($)

•  Annual Cash Retainer

  65,000

•  Annual Chair Cash Retainer:

¡Chairman of the Board

  50,000

¡Audit Committee Chair

  12,000

¡Compensation Committee Chair

  10,000

¡Governance & Nominating Committee Chair

    5,000

•  Annual Equity Award (Restricted Share Units) (1)

120,000

(1)The number of restricted share units granted is determined by the closing share price on the date of grant.

In August 2016, the Governance and Nominating Committee conducted its annual review of independent director compensation. Based on benchmarking data and the analysis provided by Exequity, the components and respective amounts of compensation for fiscal year 2017 are:

                     TypeAnnual Amount ($)

•  Annual Cash Retainer

    75,000

•  Annual Chair Cash Retainer:

   

¡  ChairmanChair of the Board

    60,000

¡  Audit Committee Chair

    15,000

¡  Compensation Committee Chair

    10,000

¡  Governance & Nominating Committee Chair

      8,000

•  Annual Equity Award (Restricted Share Units) (1)

  125,000

 

(1)

The number of restricted share units granted is determined by the closing share price on the date of grant.

Annual Cash Retainer.    The cash retainers are paid in equal quarterly installments. For directors who join the Board after the commencement of a fiscal year, the annual retainer is prorated based on the number of months remaining in the fiscal year. Due to Committee membership changes during fiscal year 2018, the director cash retainers for Messrs. Jaehnert, Keithley, and Merriman were prorated.

Annual Equity Award.    Restricted share unit awards are granted annually and are effective the first business day of the fiscal year. The awards vest 100% on the last day of the fiscal year. If a director retires from the Board prior to the vesting date, restricted share units are forfeited on apro-rata basis, based on the number of months served prior to retirement. If a director is elected by the Board or shareholders after the commencement of a fiscal year, the restricted share unit award is prorated based on the number of months remaining in the fiscal year. If restricted share units are not deferred, then the units and accrued dividend equivalents convert to Nordson common shares on aone-for-one basis on the vesting date.

Deferred Compensation Program.    Under the directors deferred compensation plan,non-employee directors may defer all or a portion of their annual cash retainer into anon-qualified, unfunded deferred compensation account in the form of deferred cash or share equivalent units. Amounts deferred (i) as cash will earn a return equivalent to the return on an investment in an interest-bearing account, earning interest based on the10-year Treasury bill constant maturity interest rate, or (ii) as share equivalent units will earn a return based on our common share price and accruingaccrued dividend equivalents. We do not pay above market or preferential interest rates under this deferred compensation plan.

 

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Directors may elect to defer the receipt of restricted share units prior to the grant date. If receipt is deferred, the restricted share units and accrued dividend equivalents will convert to share equivalent units on aone-for-one basis on the vesting date and are not subject to forfeiture.

After retirement from our Board, the share equivalent units and any cash retainers that were deferred as share equivalent units are paid out in our common shares in predetermined quarterly installments over a four yearfour-year period. Any cash retainers that were deferred as cash, and accrued interest thereon, will be paid out in cash in predetermined quarterly installments over a four yearfour-year period.

Share Ownership Guidelines.    The Board believes that ournon-employee directors should have a meaningful ownership interest in the Company and has implemented share ownership guidelines for ournon-employee directors. The ownership guidelines requirenon-employee directors to own a minimum of five times their annual cash retainer in common shares. Shares held in the form of share equivalent units or restricted share units qualify as shares owned under the guidelines. Newly elected directors have five years within which to achieve the share ownership requirement. Allnon-employee directors currently meet the guideline.

Charitable Gifts Matching Program.    Current and retirednon-employee directors may participate in our employeecharitable matching gift program that is available to all current and retired employees. Directors Banks, George, Jaehnert, Keithley, Puma, and Richey, Jr. participated in this program in fiscal year 2016.2018. During fiscal year 2016,2018, we made matching contributions totaling $39,750 for our directors who served in fiscal year 2016.$49,500 under this program.

Indemnity Agreements.    We have indemnification agreements for directors in order to attract and retain highly qualified candidates to serve as our directors. The indemnification agreements are intended to secure the protection for our directors contemplated by our Regulations and to the full extent permitted by Ohio law.

Director Compensation Table for Fiscal Year 20162018

The following table sets forth the total compensation of eachnon-employee director for services provided as a director for fiscal year 2016.2018. Due to Committee membership changes the director fees for Messrs. Jaehnert, Keithley, and Merriman were prorated.

 

Name  Fees Earned or Paid
in Cash
($)
   Stock Awards (1)
($)
   All Other
Compensation (2)
($)
   Total
($)
   Fees Earned or Paid
in Cash
($)
  Stock Awards (1)
($)
  All Other
Compensation (2)
($)
  

Total  

($)  

Lee C. Banks

   65,000     120,000     11,711     196,711    

 

  75,000

 

  

 

125,000

 

  

 

11,293

 

  

 

211,293  

 

Randolph W. Carson

   65,000     120,000     11,545     196,545    

 

  75,000

 

  

 

125,000

 

  

 

21,077

 

  

 

221,077  

 

Arthur L. George, Jr.

   65,000     120,000     5,858     190,858    

 

  75,000

 

  

 

125,000

 

  

 

18,110

 

  

 

218,110  

 

Frank M. Jaehnert

   65,000     120,000     6,220     191,220    

 

  85,112

 

  

 

125,000

 

  

 

11,238

 

  

 

221,350  

 

Joseph P. Keithley

   115,000     120,000     54,144     289,144    

 

  94,551

 

  

 

125,000

 

  

 

69,724

 

  

 

289,275  

 

Michael J. Merriman, Jr.

   77,000     120,000     32,837     229,837  

Michael J. Merriman, Jr. (3)

  

 

120,337

 

  

 

125,000

 

  

 

42,669

 

  

 

288,006  

 

Mary G. Puma

   75,000     120,000     10,344     205,344    

 

  85,000

 

  

 

125,000

 

  

 

  9,363

 

  

 

219,363  

 

Victor L. Richey, Jr.

   70,000     120,000     20,353     210,353    

 

  83,000

 

  

 

125,000

 

  

 

24,333

 

  

 

232,333  

 

 

(1)

This column represents the grant date fair value of the restricted share unit awards as calculated under FASB ASC Topic 718 and do not reflect whether the recipient has actually received a financial gain from these awards. The assumptions made in valuing share awards reported in this column for 20162018 are discussed in Note 15,14 Stock-based Compensation in the “Notes to the consolidated financial statements included inConsolidated Financial Statements” section of our 2016 Annual Report.Form10-K for 2018.

 

(2)

This column includes the value of dividends on restricted shares, restricted share units, and share equivalent units, premiums for business travel accident insurance, and matching gifts made during fiscal year 2016.2018.

 

(3)

Mr. Merriman participates in our company-sponsored health care plan under a legacy program which affords health care coverage to anon-employee director on the same terms as our employees. We imputed $15,856$17,940 in income to Mr. Merriman for insurance premiums for coverage based on the full COBRA premium value for 2016.2018. No othernon-employee directors participate in this legacy, and now discontinued, program.

 

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PROPOSAL 2: RATIFY THE APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

Appointment of Independent Registered Public Accounting Firm for Fiscal Year Ending October 31, 20172019

Ernst & Young LLP served as our independent registered public accounting firm for the fiscal year ended October 31, 2016.2018. The Audit Committee has appointed Ernst & Young LLP to serve as our auditors for the fiscal year ending October 31, 2017.2019. Representatives of Ernst & Young LLP are expected to be present at the Annual Meeting, will have an opportunity to make a statement if they so desire, and are expected to be available to respond to appropriate shareholder questions. Although ratification of the appointment of the independent auditors is not required by law, the Audit Committee and the Board of Directors believe that shareholders should be given the opportunity to express their views on the subject. While not binding on the Audit Committee or the Board of Directors, the failure of the shareholders to ratify the appointment of Ernst & Young LLP as our independent auditors would be considered by the Board of Directors in determining whether or not to continue the engagement of Ernst & Young LLP. Ultimately, the Audit Committee retains full discretion and will make all determinations with respect to the appointment of independent auditors, whether or not our shareholders ratify the appointment.

As provided in the Audit Committee’s charter, the Audit Committee is responsible for directly appointing, retaining, terminating, and overseeing our independent registered public accounting firm. Our Audit Committee continuously evaluates the independence and effectiveness of Ernst & Young LLP and its personnel, and the cost and quality of its audit and audit-related services.

Pre-Approval of Audit andNon-Audit Services

At the start of each fiscal year, our Audit Committeepre-approves the audit services and audit-related services, if any, together with specific details regarding such services anticipated being required for such fiscal year including, as available, estimated fees. The Audit Committee reviews the services provided to date and actual fees against the estimates and such fee amounts may be updated for presentation at the regularly scheduled meetings of the Audit Committee. Additionalpre-approval is required before actual fees for any service can exceed the originallypre-approved amount. The Audit Committee may also revise the list ofpre-approved services and related fees from time to time. All of the services described below under the captions “Audit Fees” and “Audit-Related Fees” with respect to fiscal years 20152017 and 20162018 were approved in accordance with this policy.

If we seek to engage our independent registered public accounting firm for other services that are not considered subject to general approval as described above, then the Audit Committee must approve such specific engagement as well as the estimated fees. Such engagement will be presented to the Audit Committee for approval at its next regularly scheduled meeting. If the timing of the project requires an expedited decision, then we may ask the chairpersonchair of the Audit Committee to approve such engagement. Any such approval by the chairpersonchair is then reported to the full Audit Committee for ratification at the next Audit Committee meeting. In any event, approval of any engagement by the Audit Committee or the chairpersonchair of the Audit Committee is required before our independent registered public accounting firm may commence any engagement. Additional approval is required before any fees can exceed approved fees for any such specifically-approved services.

 

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Fees Paid to Ernst & Young

The following table shows the fees we paid or accrued for audit and other services provided by Ernst & Young LLP for the fiscal years ended October 31, 20162018 and October 31, 2015:2017:

 

Services  Fiscal Year 2016   Fiscal Year 2015   

 

Fiscal Year 2018

 

  

 

Fiscal Year 2017  

 

Audit Fees (1)

  $1,762,731    $1,789,607    

 

$2,204,684

 

  $1,919,363  

Audit-Related Fees (2)

  $50,000    $135,000    

 

$     18,000

 

  

 

$   240,000  

 

Other Fees (3)

  $    $35,000    

 

$             —

 

  

 

$            —  

 

 

(1)

Audit services of Ernst & Young LLP consisted of the audit of our annual consolidated financial statements, the quarterly review of interim financial statements, the audit of internal control over financial reporting, and statutory audits required internationally.

 

(2)

Audit-Related Fees generally include fees for employee benefit plans, business acquisitions, accounting consultations, and services related to SEC registration statements.

(3)Related to conflict mineral reporting compliance.

 

RECOMMENDATION REGARDING PROPOSAL 2:

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE

“FOR” RATIFICATION OF THE

AUDIT COMMITTEE’S APPOINTMENT OF ERNST & YOUNG LLP AS OUR INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING

OCTOBER 31, 2017.2019.

 

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Nordson Corporation – 20172019 Proxy Statement

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SECURITY OWNERSHIP OF NORDSON COMMON SHARES BY DIRECTORS, DIRECTOR

NOMINEES, EXECUTIVE OFFICERS, AND LARGE BENEFICIAL OWNERS

The following table sets forth the number and percentage of issued and outstanding Nordson common shares beneficially owned as of January 3, 20172, 2019 by directors, director nominees, each named executive officer, and all directors and executive officers as a group. There were 57,440,35257,609,588 shares of common stock outstanding as of January 3, 2017.2, 2019. The business address for matters related to Nordson for each of our directors, director nominees, and executive officers is 28601 Clemens Road, Westlake, Ohio, 44145.

This beneficial ownership information is based on information furnished by the directors, director nominees, and named executive officers. Beneficial ownership is determined in accordance with Rule13d-3 under the Exchange Act for purposes of this Proxy Statement and is not necessarily to be construed as beneficial ownership for other purposes.

 

Name of Beneficial
Owner
 

Total
Number

of Shares
Beneficially
Owned

 Percent of
Outstanding
Shares
 Direct
Ownership (1)
 

Employee

Plan (2)

 

Right to

Acquire (3)

 

Restricted Share
Units and Share

Equivalent

Units (4)

  

Total
Number

of Shares
Beneficially
Owned

 Percent of
Outstanding
Shares
 Direct
Ownership (1)
 

Employee

Plan (2)

 

Right to

Acquire (3)

 

Restricted Share  

Units and Share  

Equivalent  

Units (4)  

 

Lee C. Banks

  12,442    *    12,442               

 

 

 

 

14,735

 

 

 

 

 

 

*

 

 

 

 

 

 

14,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Randolph W. Carson

  24,251    *    12,093            12,158   

 

 

 

 

26,786

 

 

 

 

 

 

*

 

 

 

 

 

 

12,093

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,693

 

 

 

 

Arthur L. George, Jr.

  9,426    *    4,536            4,890   

 

 

 

 

11,823

 

 

 

 

 

 

*

 

 

 

 

 

 

4,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,287

 

 

 

 

Frank M. Jaehnert

  11,451    *    9,916            1,535   

 

 

 

 

13,773

 

 

 

 

 

 

*

 

 

 

 

 

 

12,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,564

 

 

 

 

Joseph P. Keithley

  46,379    *    1,518            44,861   

 

 

 

 

48,010

 

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

48,010

 

 

 

 

Michael J. Merriman, Jr.

  19,926    *    2,701            17,225   

 

 

 

 

22,555

 

 

 

 

 

 

*

 

 

 

 

 

 

2,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,854

 

 

 

 

Mary G. Puma

  20,573    *    18,149            2,424   

 

 

 

 

18,829

 

 

 

 

 

 

*

 

 

 

 

 

 

16,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,470

 

 

 

 

Victor L. Richey, Jr.

  10,989    *                10,989   

 

 

 

 

13,501

 

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,501

 

 

 

 

Michael F. Hilton

  453,157    *    19,801        291,993    141,363   

 

 

 

 

401,350

 

 

 

 

 

 

*

 

 

 

 

 

 

24,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

233,550

 

 

 

 

 

 

 

 

 

143,669

 

 

 

 

Gregory A. Thaxton

  123,761    *    10,757    8,493    75,975    28,536   

 

 

 

 

130,171

 

 

 

 

 

 

*

 

 

 

 

 

 

10,899

 

 

 

 

 

 

 

 

 

8,646

 

 

 

 

 

 

 

 

 

81,625

 

 

 

 

 

 

 

 

 

29,001

 

 

 

 

John J. Keane

  138,043    *    38,818    882    86,675    11,668   

 

 

 

 

127,150

 

 

 

 

 

 

*

 

 

 

 

 

 

23,469

 

 

 

 

 

 

 

 

 

897

 

 

 

 

 

 

 

 

 

90,925

 

 

 

 

 

 

 

 

 

11,859

 

 

 

 

Gregory P. Merk

  92,838    *    37,397    360    52,000    3,081   

 

 

 

 

105,495

 

 

 

 

 

 

*

 

 

 

 

 

 

41,370

 

 

 

 

 

 

 

 

 

367

 

 

 

 

 

 

 

 

 

59,800

 

 

 

 

 

 

 

 

 

3,958

 

 

 

 

Robert E. Veillette

  107,874    *    23,485    2,604    62,225    19,560  

Directors, director nominees and executive officers as a Group (17 persons)

  1,233,710    2.15  249,560    17,004    653,793    313,353  

Jeffrey A. Pembroke

 

 

 

 

 

22,434

 

 

 

 

 

 

*

 

 

 

 

 

 

4,544

 

 

 

 

 

 

 

 

 

140

 

 

 

 

 

 

 

 

 

17,750

 

 

 

 

 

 

 

 

 

 

 

 

 

Directors, director nominees, and executive officers as a Group (18 persons)

 

 

 

 

 

 

1,133,365

 

 

 

 

 

 

 

 

1.97%

 

 

 

 

 

 

 

 

215,631

 

 

 

 

 

 

 

 

 

 

 

 

13,616

 

 

 

 

 

 

 

 

 

 

 

 

591,290

 

 

 

 

 

 

 

 

 

 

 

 

312,828

 

 

 

 

 

 

*

Less than 1%

 

(1)

Except as otherwise stated, beneficial ownership of the shares held by each of the directors, director nominees, and executive officers consists of sole voting power and/or sole investment power, or of voting power and investment power that is shared with the spouse of the director, director nominee, or executive officer.

 

(2)

This column shows indirect shares held in our Employee Stock Ownership Plan and 401(k) Plan, for which the individuals indicated have sole voting power and limited investment power.

 

(3)

This column shows shares covered by stock options that currently are exercisable or will be exercisable by March 3, 2017.1, 2019.

 

(4)

This column shows the direct share unit ownership held by directors and director nominees, either as deferred ornon-deferred, and executive officers under the deferred compensation plans described in this Proxy Statement.

 

26  |

Nordson Corporation – 20172019 Proxy Statement

|  27


Five Percent Beneficial Owners

The following table lists each person we know to be an owner of more than 5% of our common shares as of January 3, 2017.2, 2019.

 

Beneficial Owner  

Total Number

of Shares
Beneficially Owned

   Percent of
Outstanding
Shares
 

Jennifer A. Savage (1)

   4,597,171     8.0

Capital Research Global Investors (2)

   4,155,500     7.2

The Vanguard Group, Inc. (3)

   4,004,157     7.0

BlackRock, Inc. (4)

   3,921,655     6.8

Jane Nord (5)

   3,072,876     5.3
Beneficial Owner  

Total Number

of Shares
Beneficially Owned

  Percent of  
Outstanding  
Shares  

 

   The Vanguard Group, Inc. (1)

 

   

 

 

 

 

4,560,618

 

 

 

   

 

 

 

 

7.9

 

 

%

 

 

   BlackRock, Inc. (2)

 

   

 

 

 

 

4,311,022

 

 

 

   

 

 

 

 

7.5

 

 

%

 

 

   Jennifer A. Savage (3)

 

   

 

 

 

 

4,038,708

 

 

 

   

 

 

 

 

7.0

 

 

%

 

 

   Jane B. Nord (4)

 

   

 

 

 

 

3,272,213

 

 

 

   

 

 

 

 

5.7

 

 

%

 

 

(1)

The information set forth is based solely on the filing on Schedule 13G/A filed January 8, 2016 with the SEC by Jennifer A. Savage, an individual, 1301 East 9th Street — Suite 3500, Cleveland, OH 44114-1821, wherein she reported beneficial ownership of 4,597,171 shares and stated that she has sole voting power and sole investment power over 3,097,148 of the reported shares. According to the Schedule 13G/A, the amount of shares beneficially owned by Ms. Savage includes (a) 1,151,178 shares owned by Nord Irrevocable Trusts held for the benefit of Nord family descendants, of which Jennifer A. Savage is the sole trustee, (b) 1,945,970 shares collectively owned by several GRATs, of which Jennifer A. Savage is the sole trustee, (c) 1,262,536 shares owned by Eric T. Nord Trusts, of which Jennifer A. Savage is aco-trustee, and (d) 237,487 shares owned by Nord Trusts held for the benefit of Nord family descendants, of which Jennifer A. Savage is aco-trustee. Ms. Savage has shared voting and investment power with respect to all shares held by trusts for which she serves as aco-trustee.

(2)The information set forth is based solely on the filing on Schedule 13G filed February 16, 2016 with the SEC by Capital Research Global Investors, a division of Capital Research and Management Company (CRMC), 333 South Hope Street, Los Angeles, CA 90071, wherein it reported beneficial ownership of 4,155,500 shares. In the Schedule 13G, Capital Research Global Investors reported that it is deemed to be the beneficial owner of the shares reported therein as a result of CRMC acting as investment adviser to various investment companies registered under Section 8 of the Investment Company Act of 1940. According to the Schedule 13G, one or more clients of Capital Research Global Investors have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares.

(3)The information set forth is based solely on the filing on Schedule 13G/A filed February 11, 20169, 2018 with the SEC by The Vanguard Group, Inc., 100 Vanguard Blvd., Malvern, PA 19355, wherein it stated that it is a registered investment advisor, reported beneficial ownership of 4,004,1574,560,618 shares and stated that it has sole voting power over 41,25830,140 of the reported shares, sole investment power over 4,528,123 of the reported shares, shared voting power over 6,519 of the reported shares, and soleshared investment power over 3,963,39932,495 of the reported shares. According to the Schedule 13G/A, Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 37,758 of the reported25,976 shares as a result of its serving as an investment manager of collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly-ownedwholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 6,500 of the reported10,683 shares as a result of its serving as an investment manager of Australian investment offerings.

 

(4)(2)

The information set forth is based solely on the filing on Schedule 13G/A filed January 27, 201629, 2018 with the SEC by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055, wherein it isreported beneficial ownership of 4,311,022 shares and stated that it is a parent holding company or control person, has beneficial ownership of 3,921,655 shares and has sole voting power over 3,709,2084,108,770 of the reported shares and sole investment power over all of the reported shares.

 

(5)(3)

The information set forth is based solely on the filing on Schedule 13G filed October 26, 201617, 2018 with the SEC by Jennifer A. Savage, an individual, 1375 East 9th Street, Suite 900, Cleveland, OH 44114, wherein she reported beneficial ownership of 4,038,708 shares and stated that she has sole voting and investment power over 2,792,697 of the reported shares and shared voting and investment power over 1,246,011 of the reported shares. According to the Schedule 13G, the amount of shares beneficially owned by Ms. Savage includes (a) 1,147,155 shares owned by Nord Irrevocable Trusts held for the benefit of Nord family descendants, of which Ms. Savage is the sole trustee, (b) 1,645,142 shares collectively owned by several GRATs and a CLAT, of which Ms. Savage is the sole trustee, (c) 892,536 shares owned by Eric T. Nord Trusts, of which Ms. Savage is aco-trustee, and (d) 353,475 shares owned by Nord Trusts held for the benefit of Nord family descendants, of which Ms. Savage is aco-trustee. Ms. Savage has shared voting and investment power with respect to all shares held by trusts for which she serves asco-trustee.

(4)

The information set forth is based solely on the Schedule 13G/A filed February 8, 2018 with the SEC by Jane B. Nord, an individual, P. O.P.O. Box 457, Oberlin, OH 44074, wherein Ms. Nordshe reported beneficial ownership of 3,072,8763,272,213 shares which includes (a) 1,810,340and stated that she has sole voting and investment power over 2,379,677 of the reported shares heldand shared voting and investment power over 892,536 of the reported shares. According to the Schedule 13G/A, the amount of shares beneficially owned by Ms. Nord as trustee and sole beneficiary ofincludes (a) 2,379,677 shares owned by the Jane B. Nord Grantor Trust, over which Ms. Nord hasis the sole voting and sole investment power,trustee, and (b) 1,262,536892,536 shares owned by Eric T. Nord Trusts, of which Ms. Nord is aco-trustee. Ms. Nord has shared voting and investment power with respect to all shares held by the trusts for which she serves as aco-trustee..

We are party to an agreement that, with some exceptions, gives us a right of first refusal with respect to proposed sales of our common shares by certain members of the Nord family and The Nord Family Foundation.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires our directors, and executive officers, and persons who ownbeneficial owners of more than ten percent of our outstanding common shares to file reports of beneficial ownership and changes in beneficial ownership of our common shares held by them with the SEC. CopiesSEC, and to furnish copies of thesethose reports must also be provided to us. BasedTo our knowledge, based solely on oura review of these reports, we believe that, during the Forms 3, 4, and 5 and amendments thereto with respect to fiscal year ended October 31, 2016,2018, we believe that for the year 2018 all reportsfiling requirements were filedmet on a timely basis by reporting persons.

basis.

 

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Nordson Corporation – 20172019 Proxy Statement

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PROPOSAL 3: ADVISORY VOTE TO APPROVE THE COMPENSATION OF OUR NAMED

EXECUTIVE OFFICERS

During our 20162018 Annual Meeting, we asked our shareholders to approve the compensation of our named executive officers, commonly referred to as a“Say-on-Pay” vote. Approximately 98.9%97.7% of shareholder votes cast were in favor of our executive officer compensation program. We value thisthe positive endorsement by our shareholders of our executive compensation policies and believe that the outcome signals our shareholders’ support of our executive compensation program. As a result, our Compensation Committee decided to retain our general approach to named executive officer compensation, with an emphasis on performance-based short and long-term incentive compensation that rewards our most senior executives when they deliver value for our long-term shareholders. At our 2017 Annual Meeting, our shareholders voted in favor of holding our“Say-on-Pay” vote annually, which our Board subsequently approved. Our next shareholder vote on the frequency of our“Say-on-Pay” vote is expected to be held at our 2023 Annual Meeting.

Nordson’s consistent long-term shareholder value creation is attributed to a rigorously-applied management process implemented over the years by successive teams of talented and committed executives. Our executive compensation program underpins and reinforces this process and the performance it generates. We believe the program strikes the appropriate balance between utilizing responsible, measured pay practices and effectively incentivizing our executives to dedicate themselves fully to creating value for our shareholders. In support of this belief, and reflective of the Compensation Committee’s diligent oversight of the executive compensation program, the Compensation Committee urges you to consider the following factors:

 

WHAT WE DO

 

 

Pay-for-Performance. A significant portion of executive pay is not guaranteed, but rather tied to key financial and operating measures that are disclosed to our shareholders. For fiscal year 2016,2018, an average of 77%72% of the total target direct compensation (base salary, annual cash incentive, and grant date value of long-term incentives) components for our named executive officers (83%(85% for our CEO) was tied to incentive-based measures and performance.

 

Committee Independence.Each member of the Compensation Committee meets the independence requirements under SEC rules and NASDAQNasdaq listing standards.

 

Independent Compensation Consultant. The Compensation Committee engages an independent compensation consultant, Exequity Inc.LLP.

 

Peer Group Benchmarking. We review annually our compensation peer group and make adjustments as needed.

 

Balanced Compensation Structure. We utilize a balanced approach to compensation, which combines fixed and variable, short-term and long-term, and cash and equity compensation.

 

Total Target Direct Compensation atGenerally Approximating the Median. WeIn general, we establish total target direct compensation for our named executive officers, excluding the CEO, to approximate to the median total target direct compensation for executives in comparable positions at companies in our peer group.group, although the Compensation Committee may vary from this approach for particular executives. Actual financial and operating performance and share price performance drive amounts earned. Consistent with our “pay-for-performance” philosophy, we established the CEO’s total direct compensation to approximate the 75th percentile of other CEOs in our peer group, which is aligned with the Company’s TSR performance in the top quartile relative to our peers.

 

Responsibly Administered Incentive Compensation Programs. We have diversified incentive compensation goals without steep payout cliffs. Vesting periods for annual equity awards encourage consistent behavior and reward long-term, sustained performance. Incentive award payouts generally have been structured and are intended to qualify as performance-based compensation under Section 162(m) of the Internal Revenue Code and to be deductible for tax purposes.

 

Certify Performance. The Compensation Committee certifies performance based uponpre-established financial and operating measures before any incentive award payouts are made.

 

Capped Award Payouts. Cash payments that can be earned under the Annual Cash Incentive Award, as well as shares under the longer-term Performance Share Incentive Award, are capped.

 

Consistent Equity Award Policy. Equity awards are made on a consistent schedule and are not made in anticipation of significant developments that may impact the price of our common shares. Similarly, we do not time the release of material,non-public information based on equity award dates.

 

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Nordson Corporation – 20172019 Proxy Statement

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WHAT WE DO

 

  Evaluate Share Utilization. We review ongoing awards, forfeitures, overhang levels (dilutive impact of equity compensation on our shareholders), and annual run rates (the aggregate shares awarded as a percentage of total outstanding shares).

Include Recoupment and Other Forfeiture Provisions in our Equity and Annual Cash Incentive Awards.Our Annual Cash Incentive Award and equity-based compensation awards are subject to recoupment and forfeiture (“clawbacks”) that allows the Company to cancel all or any outstanding portion of equity awards and recover the payouts under the Annual Cash Incentive Award.

  

Share Ownership Guidelines. There are restrictions on sales of vested awards until an executive officer has attained ownership of the Company’s stock as follows: CEO — five times base salary; CFO — three times base salary; and Corporate Executive Vice Presidents — two times base salary.

  

Equity and Cash Incentive Award Plan Best Practice Features:

Evaluate Share Utilization. We review ongoing awards, forfeitures, overhang levels (dilutive impact of equity compensation on our shareholders), and annual run rates (the aggregate shares awarded as a percentage of total outstanding shares);

Double-Trigger forChange-in-Control Severance Payments. SeveranceCash severance payments for our executive officers require a “double-trigger” — achange-in-control and involuntary termination without cause within two years following a change-in-control.change-in-control, and new equity awards granted after December 27, 2017 under our Amended and Restated 2012 Stock Incentive and Award Plan (the “Plan) also provide for “double-trigger” vesting;

Minimum Vesting Period Requirement:We require a minimum vesting period of at least one year for all types of awards granted under the Plan, with an exception for awards covering up to 5% of the Plan’s share reserve;

Share Repricing. We prohibit repricing of underwater stock options and other awards without shareholder approval; and

No Dividends or Dividend Equivalents on Unearned Performance Share Units. Performance share awards do not earn or pay dividends until the shares are earned, and effective for awards granted after December 27, 2017, dividends and dividend equivalents on time based awards are required to be deferred until vesting of the underlying awards.

  

Talent Management. We engage in an ongoing, rigorous review of executive talent and succession plans for key operating and corporate roles.

 

WHAT WE DO NOT DO

 

  ☒    

  No Share Repricing. We prohibit repricing of underwater stock options and other awards without shareholder approval.

No Significant Perquisites. The benefits our executive officers receive in the form of health insurance, life insurance, and Company matching contributions to the 401(k) Plan are the same benefits generally available to all of our employees. Our executive officers are reimbursed for airline club membership (up to two); financial, estate, and tax planning services (up to $5,000 a year); and executive physicals.

  ☒    

  

No Above-Market or Preferential Earnings. We do not pay above-market or preferential earnings onnon-qualified deferred compensation.

  ☒    

  

No Hedging, Pledging or Short Sales Transactions Permitted. We prohibit directors and executive officers from pledging Nordson common shares as collateral. Also prohibited isare trading in derivative securities of Nordson’s common shares, engaging in short sales of Nordson securities, or purchasing any other financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset any decrease in the market value of any Nordson securities.

  ☒    

  No Dividends or Dividend Equivalents on Unearned Performance Shares. Performance share awards do not earn or pay dividends until the shares are earned.

NoChange-in-Control Severance TaxGross-Ups.For executive officers elected after November 1, 2015, we have eliminated tax gross up on any severance benefits.

We urge you to read the “Compensation“Executive Compensation: Compensation Discussion and Analysis” of the Proxy Statement, which describes in more detail how our executive compensation policies and procedures operate and are designed to achieve our compensation objectives. Also, we encourage you to review the Summary Compensation Table and related compensation tables and narrative of this Proxy Statement, which provide detailed information on the compensation of our named executive officers.

 

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Nordson Corporation – 20172019 Proxy Statement

|  29


We are asking our shareholders to indicate their support for compensation paid to our named executive officers as described in this Proxy Statement by voting “FOR” the following resolution at the 20172019 Annual Meeting:

“RESOLVED, that the Company’s shareholders approve, on an advisory basis, the compensation of our named executive officers, as disclosed in the Company’s Proxy Statement for the 20172019 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Compensation Discussion and Analysis, the executive compensation tables, and related narrative.”

This advisory resolution, commonly referred to as a“Say-on-Pay” resolution, is being presented to our shareholders for a vote pursuant to Section 14A of the Exchange Act and isnon-binding on the Board. Althoughnon-binding, the Board and the Compensation Committee will carefully review and consider the voting results when evaluating our executive compensation program.

 

RECOMMENDATION REGARDING PROPOSAL 3:

THE BOARD OF DIRECTORS RECOMMENDS THAT, ON AN ADVISORY BASIS, YOU VOTE

“FOR” THE APPROVAL OF

THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

30  |Nordson Corporation – 2017 Proxy Statement


PROPOSAL 4: ADVISORY VOTE ON THE FREQUENCY FOR HOLDING THE ADVISORY VOTE ON THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS

In addition to requiring a periodicSay-on-Pay vote of shareholders, as set forth in Proposal 3 above, current SEC rules enable our shareholders to indicate how frequently we should seek aSay-on-Pay vote. By voting on this Proposal 4, shareholders may indicate whether they would prefer aSay-on-Pay advisory vote every year, every two years, or every three years.

At our 2011 annual meeting, a plurality of our shareholders voted for annualSay-on-Pay advisory votes on compensation paid to our named executive officers. We have conductedSay-on-Pay votes at every subsequent annual meeting. We are required to hold aSay-on-Frequency vote every six years.

After careful consideration, the Board has determined that continuing to hold an advisory vote on compensation paid to our named executive officers every year remains the most appropriate policy for us at this time, and recommends that shareholders vote for future advisory votes on compensation paid to our named executive officers to occur every year.

In formulating its recommendation, our Board considered the current policy of conducting an annualSay-on-Pay advisory vote, which has allowed our shareholders to provide us with direct input on our compensation philosophy, policies and practices as disclosed in the Proxy Statement every year. Additionally, an annualSay-on-Pay advisory vote is consistent with our policy of regularly seeking input from, and engaging in discussions with, our shareholders on corporate governance matters and our executive compensation philosophy, policies and practices. We understand that our shareholders may have different views as to what is the best approach for Nordson, and we look forward to hearing from our shareholders on this Proposal.

You may cast your vote on your preferred voting frequency for aSay-on-Pay advisory vote by choosing the option of one year, two years, three years or abstain from voting when you vote in response to the resolution set forth below. Your vote is not considered a vote “FOR” or “AGAINST” the Board of Directors’ recommendation of an annual vote, but rather a vote for your preferred frequency.

“RESOLVED, that the option of one year, two years, or three years that receives the highest number of votes cast for this resolution will be determined to be the preferred frequency with which the Company is to hold a shareholder vote to approve the compensation of our named executive officers, as disclosed pursuant to the Securities and Exchange Commission’s compensation disclosure rules (which disclosure shall include the Compensation Discussion and Analysis, the Summary Compensation Table, and the other related tables and disclosure).”

The choice among the three options included in the resolution which receives the highest number of votes will be deemed the shareholders’ preferred frequency of theSay-on-Pay vote. While our Board of Directors strongly values the opinions of our shareholders, the votes cast on Proposal 4 are advisory in nature and not binding on the Company or the Board of Directors. The Board of Directors will carefully consider the results of the votes on this Proposal, but it may decide that it is in the best interests of our shareholders and the Company to hold aSay-on-Pay advisory vote more or less frequently than the option preferred by our shareholders.

RECOMMENDATION REGARDING PROPOSAL 4:

THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE

“FOR” THE OPTION OF ONCE EVERY YEAR AS THE FREQUENCY WITH WHICH

SHAREHOLDERS APPROVE, ON AN ADVISORY BASIS,

THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS.

 

Nordson Corporation – 20172019 Proxy Statement

 |  31


EXECUTIVE COMPENSATIONCOMPENSATION:

COMPENSATION DISCUSSION AND ANALYSIS

All references in this Compensation Discussion and Analysis section of the Proxy Statement to “year” or “years” are references tofiscal years unless otherwise noted. Our fiscal year ends October 31.

This Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy and program, the compensation decisions made under this program, and the specific factors we considered in making those decisions. This CD&A focuses on the compensation of our named executive officers for 2016, those being:2018:

 

 

Name

 

  

 

Title

 

  Michael F. Hilton

  

President and Chief Executive Officer

  Gregory A. Thaxton

  

SeniorExecutive Vice President, Chief Financial Officer

  John J. Keane

  

SeniorExecutive Vice President

  Gregory P. Merk

  

SeniorExecutive Vice President

  Robert E. VeilletteJeffrey A. Pembroke

  

Executive Vice President General Counsel & Secretary

This CD&A is presented in sixfive parts:

Part I:    Executive Summary.    In this section we discuss: (a) highlights of our financial and operating performance that supported, in part, compensation awarded to our named executive officers for 2016;2018; (b) our compensation objectives, including ourpay-for-performance philosophy; (c) Mr. Hilton’s compensation for 2016;2018; and (d) how compensation was tied to performance.

Part II:    Setting Executive Compensation.    In this section we explain our processes and procedures and the roles the Compensation Committee, management, and the Compensation Committee’s independent advisorcompensation consultant have in setting our executive compensation program.

Part III:    Key Components of Our Executive Compensation Program.    In this section we provide details of the key components of the compensation we pay to our named executive officers, including base salary, annual cash incentive award, long-term incentive award, and other equity-based awards. We also discuss and analyze actions taken with respect to these components in 2016.2018.

Part IV:    Other Components of Our Executive Compensation Program.    In this section we provide details of other components of the compensation we provide to our named executive officers, including perquisites, welfare and retirement benefits, andchange-in-control benefits.

Part V:Compensation Committee Actions Related to 2017 Executive Compensation.    In this section we discuss briefly actions taken during the November 21, 2016 Compensation Committee meeting with respect to the compensation of our named executive officers that will be effective in 2017.

Part VI:    Policies Related to Executive Compensation.    In this section we review the policies we have adopted that relate to our executive compensation program, including our equity award practices, clawback policy, prohibition against pledging shares or engaging in the hedging of Nordson common shares, and shareholder ownership guidelines for executive officers.

In this CD&A we use the terms “the Committee,” “we,” “us,” and “our” interchangeably in reference to the Compensation Committee, or in the proper context, Nordson Corporation.

This CD&A contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to certain risks and uncertainties, which could cause actual results to differ materially from the results, performance or achievements expressed or implied thereby. For a detailed discussion of these risks, see Part I, Item 1a.1A. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 20162018 Annual Report. Shareholders should note that statements contained in this CD&A regarding our company and business group performance targets and goals should not be interpreted as management’s expectations, estimates of results or other guidance.

 

32  | Nordson Corporation – 20172019 Proxy Statement


PART I: EXECUTIVE SUMMARY

2016 Business2018 Financial Performance Highlights

Fiscal year 20162018 was a year of outstandingstrong financial performance. The tables below present FY2016 – FY2018 reported results for the three primary drivers of incentive compensation for the named executive officers – Diluted Earnings per Share, Return on Total Capital, and Revenue. The Compensation Committee elected to exclude any financial benefits the Company received as a result of the Tax Cuts and Jobs Act that was passed in an uncertain2017. As a result, all calculations for executive compensation in this section, except for the graph below (see footnote), exclude the financial benefit to the Company as a result of the Tax Cuts andlow-growth global macroeconomic environment. The following highlights our performance for fiscal year 2016: Jobs Act.

 

LOGO  LOGO  LOGO

Revenue

Diluted Earnings per Share* Return on Total Capital* Revenue (Billions)

 

$1.81 billion

7% increase over 2015

*

Gross Margin

54.9%

Improvement of nearly one percentage point comparedThis data includes the benefits inured to 2015

Operating Profit

$388 Million

22% increase over 2015

Operating Margin

22%

Improvement of three percentage points over 2015

GAAPthe Company from the Tax Cuts and Jobs Act that was passed in 2017. The Company’s 2018 data, excluding the benefits from the Tax Cuts and Jobs Act and utilizing a more normalized effective tax rate, are: Diluted Earnings per Share

$4.73

Increase of 37% compared to 2015

Net Debt(1)

Approximately 2x times trailing-four

quarters EBITDA

is $5.70 and Return on Total Capital(2)

16.3%

Increase of three percentage points compared to 2015

Free Cash Flow(3)

$272 million

100% of net income

Share Repurchases – One Year

$32 million

Purchased 446,639 of our outstanding shares

Share Repurchases – Five Years

16%

Percentage of outstanding shares purchased over the last five years at an average price of $67.19 per share; a discount of approximately 33%

compared to the 2016year-end closing price of $100.13 per share

Dividend

$56 Million

Increase in quarterly dividend of 13%;

53rd consecutive year dividend has increased

Total Shareholder Return(4)

1 year: 41.9%

2 year: 12.5%

5 Year: 17.5%

10 Year: 16.5% is 14%.

(1)“Net Debt,” anon-GAAP measure, represents total debt disclosed on our consolidated balance sheet minus cash.

(2)“Return on Total Capital,” anon-GAAP measure is the sum of net income (loss) plusafter-tax interest expense on debt as a percentage of the sum of average of quarterly debt (net of cash) plus average quarterly shareholders’ equity over five accounting periods

(3)“Free cash flow,” anon-GAAP measure, is determined from our consolidated statement of cash flows and for 2016 represents $331.1 million of net cash provided by operating activities minus $60.9 million of additions to property, plant, and equipment plus $1.3 million of proceeds from the sale of property, plant, and equipment.

(4)We define “Total Shareholder Return” as: (share price end of period – share price start of period + dividends paid) / share price start of period.

Nordson Corporation – 2017 Proxy Statement

|  33


Compensation Objectives

We provide a straightforward, uncomplicated compensation structure for our named executive officers, one which is designed to support three primary objectives:

 

 

  Objective

 

  

 

How Objective is Achieved

 

     Alignment with Shareholder Interests

  

A substantial portion of our executive compensation program is provided in the form of equity-based long-term awards, which directly tie to share price appreciation.

 

We impose share ownership requirements, which encourage our executives to maintain a meaningful equity interest in the Company.

 

  Pay-for-Performance

  

Our incentive awards are based on performance against a balanced mix of long-standing, consistent andpre-established financial measures as well as quantitative operating performance measures.

 

  Talent Retention

  

Total direct compensation opportunities generally are targeted to approximate the median of the peer group that we compete with for talent.

 

The vesting periods for equity-based compensation (performance share units, stock options and restricted shares) support this objective.

Nordson Corporation – 2019 Proxy Statement

|  33


Mr. Hilton’s Compensation

The compensation paid to our Chief Executive Officer, Mr. Hilton, is consistent with our“pay-for-performance” compensation philosophy that applies to all of our named executive officers. GivenConsidering Mr. Hilton’s tenure, experience, and performance, his total target direct compensation is betweenapproximates the median and 75th percentile total target direct compensation of other chief executive officers in our peer group and hisgroup. Mr. Hilton’s actual annual and long-term incentive awards are aligned with our earnings per share growth, return on total capital, and revenue growth.

During its November 23, 201520, 2017 meeting, the Compensation Committee, with input from its independent executive compensation consultant, Exequity LLP, established Mr. Hilton’s 20162018 total target direct compensation, taking into account a number of factors, including a competitive market review, tenure and experience, relative internal pay equity, the Board’s assessment of Mr. Hilton’s multi-year performance, and the Company’s overall financial and operating performance:

 

 

20162018 Compensation Element

 

  

 

Value

 

  Base Salary

  $850,000 (3.03%925,000 (5.7% increase over 2015)2017)

  Annual Cash Incentive Award Target Opportunity

  $850,000925,000 (100% of base salary)salary, same target percentage as 2017)

  2016-20182018-2020 Performance Share Incentive Award

  Target Opportunity

  

18,40013,400 share units

$1,245,4961,654,230 grant date fair value

  Stock Options

  

72,80055,800 shares

$1,416,0401,942,599 grant date fair value

  Restricted Shares

  

9,2006,700 shares

$652,372855,389 grant date fair value

34  |Nordson Corporation – 2017 Proxy Statement


The combination of target payout opportunity for the Annual Cash Incentive Award and Performance Share Incentive Award plus the grant date fair value of restricted share and stock option awards represented approximately 83%85% of Mr. Hilton’s target total direct compensation for 2016,2018, which further reinforces ourpay-for-performance culture.

During its November 21, 201626, 2018 meeting, shortly after our 20162018 fiscal year ended, the Board reviewed Mr. Hilton’s performance for 2016.2018. In assessing Mr. Hilton’s performance, the Board considered Mr. Hilton’s impact on the Company’sone-year operating plan and longer-term strategic plans. The Board concluded that Mr. Hilton delivered outstanding performance with respect to both his short and long-term goals. In particular, the Board noted the following:

 

The Company’s outstandingstrong financial and operating results in an uncertainperformance, including achieving multiple record financial metrics, andlow-growth global macroeconomic environment; top percentile performance among the peer group companies;

 

Mr. Hilton’s leadership of the Company, specifically the progress made toward strengthening the Company’s overall long-term growth profile through organic initiatives, acquisitions, and driving continuous improvement through the global organization; and

 

Continued development and execution on senior leadership and management succession plans.

Based on the Board’s assessment and reflective of the performance noted above, the Compensation Committee, without Mr. Hilton present during its deliberations, and consistent with its“pay-for-performance” philosophy, took the following actions with respect to Mr. Hilton’s 20162018 incentive compensation:

 

 

Incentive Award

 

  

Payout

 

  

Percent of Target

 

  Annual Cash Incentive

  $1,380,400  162.4
  2014-2016 Performance Share Incentive  

23,491 shares(1)

 

  

160.9

 

 

Incentive Award

 

  

 

Payout

 

  

 

Percent of Target

 

  2018 Annual Cash Incentive

  $1,082,250  117.0%

  2016-2018 Performance Share Incentive

 

  

34,095 shares(1)

 

  

185.3%

 

 

(1)

Settlement of the Performance Share Incentive Award occurred on January 3, 2017.2019. Based on the closing price of our common shares on January 3, 20172019 ($113.42/112.76 per share), value of the payout in dollars was $2,664,349.$3,844,552.

No

34  |Nordson Corporation – 2019 Proxy Statement


Except for excluding the financial benefits the Company received from the Tax Cuts and Jobs Act, no discretion was exercised by the Compensation Committee to increase or decrease the formulaic incentive award payouts to Mr. Hilton.

How Compensation Correlates to Performance

Our executive compensation program is structured so that a significant portion of the compensation paid to our named executive officers is dependent upon the performance of our business. The program is not overly weighted toward cash incentive compensation and does not otherwise have the potential to threaten long-term shareholder value by promoting unnecessary or excessive risk-taking by our executive officers.

For incentive compensation awards that are based on the Company’s performance, our specific decisions around setting performance measures and goals and other actions impacting executive compensation focus on certain areas that are tied directly to our business plan and are what we believe are the most critical value drivers of the business, such as revenue and earnings growth and return on total capital.

The Annual Cash Incentive Award payout is tied to diluted earnings per share growth and return on total capital. The Performance Share Incentive Award payout is based on cumulative diluted earnings per share growth and cumulative revenue growth over a three-year period. The Performance Share Incentive Award payout is also impacted by share price performance, as the payout value (in dollars) is based on the settlement date share price.

 

Nordson Corporation – 20172019 Proxy Statement

 |  35


The graph below compares Nordson’s total shareholder return* for the fiveten year period endingended October 31, 20162018 with that of the S&P MidCap 400 Index, the S&P MidCap 400 Industrial Machinery Index, and the median return of our peer group companies (assuming the reinvestment of all dividends).

 

 

LOGOCOMPARISON OF CUMULATIVE RETURN

LOGO

 

*

We define Total Shareholder Return (“TSR”) as: (share price end of period share price start of period + dividends paid) / share price start of period.

ASSUMES $100 INVESTED ON NOVEMBER 1, 20112008

ASSUMES DIVIDENDS REINVESTED

FISCAL YEAR ENDINGENDED OCTOBER 31, 20162018

 

   

Company/Market/Peer Group

  

 

2011

 

   

 

2012

 

   

 

2013

 

   

 

2014

 

   

 

2015

 

   

 

2016

 

  

2008

  

2009

  

2010

  

2011

  

2012

  

2013

  

2014

  

2015

  

2016

  

2017

  

2018

 

Nordson Corporation

  $100.00    $129.96    $160.22    $171.87    $161.91    $230.59   $100.00  $149.23  $226.27  $274.10  $356.22  $439.17  $471.10  $443.80  $632.04  $807.21  $788.83 

S&P MidCap 400

  $100.00    $112.11    $149.64    $167.08    $172.80    $183.61   $100.00  $118.18  $150.84  $163.74  $183.57  $245.03  $273.58  $282.95  $300.65  $371.23  $375.02 

S&P MidCap 400 Ind. Machinery

  $100.00    $109.21    $151.63    $160.68    $134.50    $157.85   $100.00  $123.61  $160.67  $182.73  $199.57  $277.07  $293.61  $245.77  $288.44  $413.70  $404.98 

Peer Group

  $100.00    $113.38    $157.20    $173.54    $165.40    $173.92   $100.00  $108.45  $133.57  $150.02  $171.39  $238.19  $262.44  $252.27  $259.27  $388.10  $399.03 

Source: Zack’s Investment Research

We place significant emphasis on long-term growth in our share price, and believe the information provided in the graph and tables above to be important in understanding our compensation philosophy and its role in the achievement of our long-term objectives.

 

36  | Nordson Corporation – 20172019 Proxy Statement


PART II: SETTING EXECUTIVE COMPENSATION

Role of the ShareholderSay-on-Pay Vote

The Committee believes that the results of the advisory“say-on-pay” shareholder vote represent an affirmation of our current pay practices and philosophies and, as a result, no significant changes were made to our executive compensation pay practices for 2016.2018. The Committee will continue to consider the outcome of thesay-on-pay vote when making future compensation decisions for the named executive officers. The results of oursay-on-pay vote for the past five years are as follows:

 

Annual Meeting Year

  

 

FOR Vote (%)

 

   

 

  FOR Vote (%)  

 

2012

   94.63  

2013

   97.13  

2014

   97.90     97.90

2015

   98.50     98.50

2016

   98.97     98.97

2017

   98.11

2018

   97.70

At the 2017 Annual Meeting, the Company’s shareholders voted in favor of an annual frequency for holding our“say-on-pay” vote, which the Board subsequently approved. The next shareholder vote on the frequency of our advisory“say-on-pay” vote is expected to be held at our 2023 Annual Meeting.

Role of the Compensation Committee

The Committee is made up entirely of independent directors as defined by our Governance Guidelines and NASDAQNasdaq listing standards and has responsibility for establishing our executive compensation program and for making compensation decisions under the program. In fulfilling its duties and responsibilities for 2016,2018, the Committee sought input, advice, and recommendations from an independent executive compensation consultant as well as recommendations from our Chief Executive Officer, Mr. Hilton. At all times, however, wethe Compensation Committee exercised independent judgment in making executive compensation decisions.

Role of the Executive Compensation Consultant

The Committee retained Exequity Inc.LLP (“Exequity”) as the executive compensation consultant reporting directly to the Committee. Exequity provides research, data analyses, survey information, and design expertise in developing compensation programs for our executive officers. In addition, Exequity informs the Committee of regulatory developments and market trends related to executive compensation practices. The Committee has assessed the independence of Exequity in light of SEC rules and NASDAQNasdaq listing standards and concluded that no conflict of interest would prevent Exequity from independently and objectively advising the Committee.

Role of Executive Management

Mr. Hilton and Ms. Shelly Peet, Executive Vice President, Human Resources & Information Systems, provide additional information and analysis as requested by the Committee. More specifically, Mr. Hilton and Ms. Peet provided support for Committee meetings and made recommendations about designs for and, if warranted, changes to our Annual Cash Incentive Award and long-term equity-based awards. In addition to the responsibilities above, Mr. Hilton also: (a) provided to the Board of Directors a self-assessment of his performance for the fiscal year; (b) provided an assessment of each executive officer’s performance; and (c) recommended annual base salary adjustments, payouts under theof Annual Cash Incentive AwardAwards and Performance Share Incentive Award,Awards, and equity awards for executive officers other than himself.

 

Nordson Corporation – 20172019 Proxy Statement

 |  37


Setting Goals and Compensation

In setting threshold,order to focus on delivering growth and value for shareholders over time and to communicate consistently with investors and other stakeholders, we take a longer term approach to incentive compensation wherein our incentive plan targets remain consistent for a multi-year period of time, which is more aligned with our five year strategic plan cycle. We annually assess measures and performance goals (threshold, target, and maximummaximum) to validate they are set appropriately based on internal and external factors, such as historic peer performance, long-term growth projections for Nordson, our own past and current performance, and market conditions and expectations.

The most heavily weighted component of our annual review of incentive goals is the historical performance of our peers, particularly our proxy peers, though we also review a group ofmid-cap industrial peers for reference. For each corporate measure, we review theone-, three-, and five-year median performance of our peers in comparison to our performance goals. In general, if our performance goals fall outside a corridor around the median peer performance for two consecutive years, we first review historical peer group performance in conjunction with our assessment of what is achievable and what is expected from our shareholders, infurther evaluate the contextappropriateness of our goals.

Using two consecutive years outside our range of peer median performance measures:for a metric as our guideline, we complete a full review to determine whether we should make a change. We look at additional internal and external data to develop our recommendation.

 

Annual diluted earnings per share growthNordson expected future performance based on our five-year strategic plan: This allows us to assess whether our future expected performance continues to align with existing incentive targets and return on total capital (Annual Cash Incentive Award),therefore would indicate that our goals should stayas-is, or whether our five-year plan expected performance projections are more in line with the movement in peer performance, and suggest we consider an adjustment.

 

Cumulative three-year revenue growth and cumulative diluted earnings per share growth (Performance Share Incentive Award)

We utilize two peer groups in this analysis — our proxy peer companies and a broader group of industrial companies. We review our revenue and earnings per share growth and return on total capitalNordson historic performance: Our historic performance is reviewed along with projected future performance to help us assess whether we believe targets should be changed.

Other external factors: Consideration of economic conditions, investor and shareholder expectations, pay for performance alignment, and other factors also contribute to our final recommendation as to whether or not our target should be adjusted.

Based on a qualitative analysis of all factors, and considering input from the total shareholder return (TSR), relative to the performance of companies in these peer groups over one, three, and five year performance periods. We also segment these companies based on TSR performance — 25th percentile, median and 75th percentile. We employ this segmented TSR analysis as an important input when setting threshold, target and maximum performance goals. On a biannual basis, we include a review of our operating margin performance against the peer groups and the S&P 400 Machinery Index.

Generally, we set ourindependent executive compensation consultant, the Compensation Committee may change goals or to beretain the targets currently in line with benchmark data using companies selected as our proxy peers through an annual review process. We set total target direct compensation to generally pay at the median of this peer group when incentive awards pay at target, noting that individual executive officers may be paid above or below the median depending on level of experience and responsibility, internal pay equity, and individual performance. In line with ourpay-for-performance philosophy, we would expect that, over time, incentive awards would pay out above target for performance that outperforms our peer group median, and below target for performance that falls short of peer group performance.

place.

 

38  | Nordson Corporation – 20172019 Proxy Statement


Peer Group and Compensation Surveys

Our compensation peer group for 2016,2018, which was developed in consultation with Exequity, consisted of the 1918 publicly-traded companies listed below. The Committee believes the listed companies serve as the appropriate peer group because they have revenues generally within the range of .5x0.5x — 2.0x Nordson’s revenue; a global scope and business complexity; a focus on precision industrial manufacturing; innovation and technology; global growth strategies; and profiles or business models similar to Nordson’s, based on industries or diverse markets served. The Committee regularly reviews the peer group and makes appropriate modifications from time to time so that the group closely resembles our competitive market for executive talent.

 

Company

  

 

Revenue
($MMs)

 

 

 

 

Market Cap

As of Dec. 15, 2015
($MMs)

 

 

   

 

Revenue*
($MMs)

 

 

 

 

Market Cap

As of Dec. 2017
($MMs)

 

 

 

Actuant Corporation

  $

 

1,249

 

  

 

 $

 

1,418

 

  

 

  $

 

1,096

 

 

 

 $

 

1,517

 

 

 

Albany International Corp.

  $

 

710

 

  

 

 $

 

1,053

 

  

 

  $

 

864

 

 

 

 $

 

1,976

 

 

 

AMETEK Inc.

  $

 

3,974

 

  

 

 $

 

12,748

 

  

 

  $

 

4,300

 

 

 

 $

 

16,749

 

 

 

Barnes Group Inc.

  $

 

1,194

 

  

 

 $

 

1,943

 

  

 

  $

 

1,436

 

 

 

 $

 

3,392

 

 

 

Chart Industries Inc.

  $

 

1,040

 

  

 

 $

 

549

 

  

 

  $

 

989

 

 

 

 $

 

1,442

 

 

 

CLARCOR, Inc.

  $

 

1,481

 

  

 

 $

 

2,479

 

  

 

Donaldson Company, Inc.

  $

 

2,371

 

  

 

 $

 

3,802

 

  

 

  $

 

2,372

 

 

 

 $

 

6,359

 

 

 

Entegris, Inc.

  $

 

1,081

 

  

 

 $

 

1,865

 

  

 

  $

 

1,343

 

 

 

 $

 

4,306

 

 

 

Esterline Technologies Corp.

  $

 

1,774

 

  

 

 $

 

2,398

 

  

 

  $

 

2,002

 

 

 

 $

 

2,220

 

 

 

FLIR Systems, Inc.

  $

 

1,557

 

  

 

 $

 

3,877

 

  

 

  $

 

1,800

 

 

 

 $

 

6,460

 

 

 

Graco, Inc.

  $

 

1,286

 

  

 

 $

 

4,030

 

  

 

  $

 

1,475

 

 

 

 $

 

7,615

 

 

 

IDEX Corporation

  $

 

2,021

 

  

 

 $

 

5,862

 

  

 

  $

 

2,287

 

 

 

 $

 

10,083

 

 

 

ITT Corporation

  $

 

2,486

 

  

 

 $

 

3,251

 

  

 

  $

 

2,585

 

 

 

 $

 

4,697

 

 

 

Keysight Technologies, Inc.

  $

 

2,862

 

  

 

 $

 

4,840

 

  

 

  $

 

3,189

 

 

 

 $

 

7,791

 

 

 

Lincoln Electric Holdings, Inc.

  $

 

2,536

 

  

 

 $

 

3,760

 

  

 

  $

 

2,624

 

 

 

 $

 

6,022

 

 

 

Roper Technologies, Inc.

  $

 

3,582

 

  

 

 $

 

19,132

 

  

 

  $

 

4,607

 

 

 

 $

 

26,512

 

 

 

Teradyne, Inc.

  $

 

1,640

 

  

 

 $

 

4,248

 

  

 

  $

 

2,137

 

 

 

 $

 

8,213

 

 

 

Watts Water Technologies, Inc.

  $

 

1,468

 

  

 

 $

 

1,397

 

  

 

  $

 

1,457

 

 

 

 $

 

2,594

 

 

 

Woodward, Inc.

  $

 

2,038

 

  

 

 $

 

3,140

 

  

 

  $

 

2,099

 

 

 

 $

 

4,688

 

 

 

75th Percentile

  $2,428   $4,139    $

 

2,532

 

 

 

 $

 

7,747

 

 

 

Average

  $1,913   $4,305    $

 

2,148

 

 

 

 $

 

6,813

 

 

 

Median

  $1,640   $3,251    $

 

2,050

 

 

 

 $

 

5,359

 

 

 

25th Percentile

  $

 

1,268

 

  

 

 $

 

1,904

 

  

 

  $

 

1,442

 

 

 

 $

 

2,793

 

 

 

Nordson Corporation

  $

 

1,689

 

  

 

 $

 

4,086

 

  

 

  $

 

2,067

 

 

 

 $

 

8,454

 

 

 

 

*

Revenue and market cap values are as of the most recent fiscal year end prior to or before December 15, 2015.2017.

Prior to the date 2016that 2018 compensation was set, GrafTech International Ltd.CLARCOR, Inc. was acquired by Parker-Hannifin (NYSE: PH) and Pall Corporationit ceased to be an independent public entitiesentity and werewas removed from our peer group. The Committee, with input from Exequity, added Keysight Technologies, Inc. to the peer group for setting fiscal year 2016 executive compensation.

Nordson Corporation – 2017 Proxy Statement

|  39


Where peer group proxy data was not available, and as a reference and a primary source of data for the functional leaders, we utilized survey data published by Aon Hewitt for the position or positions that most closely match the job description of each named executive officer or executive officer position.

Nordson Corporation – 2019 Proxy Statement

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Allocation of Executive Compensation

Our executive compensation program does not prescribe a specific formula for the mix of base salary and annual and long-term incentive components so that we have flexibility in developing an appropriate compensation mix. The table below reflects the approximate allocation mix at target among the three elements of total target direct compensation — base salary, Annual Cash Incentive Award opportunity, and long-term equity-based incentive award opportunity — for our named executive officers at the time we set compensation for 2016:2018:

 

 

LOGOLOGO

83%Hilton Thaxton KeaneMerkPembrokeLong-Term Incentive70.6%Annual Cash Incentive 14.7%Base Salary 14.7%56.2%18.0%25.8%56.9%17.7%25.3%51.8%19.0%29.2%49.6%19.9%30.6%

85% of the total direct compensation for Mr. Hilton and approximately 66%69% - 73%75% for the other named executive officers is delivered through awards that link pay to financial and operational performance. Incentive payouts under our Annual Cash Incentive Award are based on growth in diluted earnings per share, return on capital, and operating unit results. Equity-based compensation consists of performance shares,share units,non-qualified stock options, and service-based restricted shares, all of which align compensation with the long-term interests of our shareholders.

 

40  | Nordson Corporation – 20172019 Proxy Statement


PART III: KEY COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

The table below summarizes the components and objectives of our 20162018 compensation program for executive officers, including our named executive officers, and the actions taken by the Compensation Committee relative to each component.

 

 

  Component

 

 

 

Link to Compensation
Objectives

 

 

 

Compensation2017 Committee
Actions – 2016
Executive Compensation
Program

 

  Base Salary

Fixed cash element of total direct compensation.

 Provides market-competitive salaries to attract and retain exceptional executive talent. Base salary increases for our named executive officers other than the CEO ranged from 3.48%3.0% to 10.14%4.6%. The CEO’s increase was 3.03%5.7%.

  Annual Cash Incentive Award

Cash payments tied to year-over-year growth in earnings per share and return on total capital.

 Provides incentive to achieve and exceed critical business objectives, with payouts based on attainment ofpre-established corporate financial and business unit operational measures. Payouts of Annual Cash Incentive Awards to our named executive officers other than the CEO ranged from 152.4%106.5% to 180.7%144.5% of target. The CEO’s payout was 162.4%117.0% of target.

  Long-Term Incentive Awards

Includes performance shares,share units, stock options, and restricted shares.

 Provides strong incentive to meet or exceedpre-established long-term financial goals, which align with long-term shareholder interests; and to attract, retain, and motivate executive talent. Payouts for the 2014-20162016-2018 Performance Share Incentive Award to our named executive officers, including the CEO, were 160.9%185.3% of target.

Below is a depiction of the elements of the pay components outlined above. A detailed discussion of these elements is found under the captions “Key Components of Our Executive Compensation Program” and “Other Components of Our Executive Compensation Program” in Parts III and IV of this Compensation Discussion and Analysis, respectively.

 

LOGO

Base Salary (fixed)Cash Incentive (variable; 0-200% of target; target varies by position)Long-Term Incentives (variable)PerquisitesCorporate Measures (50% of total payout)Operating Unit Measures (50% of total payout)Restricted Stock (20% of total target LTI)Stock Options (40% of total target LTI)Performance Shares (40% of total target LTI)Executive Physical Tax Assistance / Financial Planning (up to $5K) 2 Airline Club MembershipsProfitability: EPS GrowthReturn on Total CapitalRevenue Op. Profit Op. Margin DSI Asset TurnsProfitability: 3-year Cumulative EPS (50% of total payout)Growth: 3-year Cumulative Revenue (50% of total payout)

Base Salary

The Committee determines annually the base salaries of our executive officers, including whether to award base salary increases from the previous year and, if so, the magnitude of the increase, based on the following factors:

 

level of experience and responsibility;

 

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company,Company, business segment, and individual performance during the prior year;

 

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market and survey data;

 

internal pay equity;

 

the Committee’s assessment of other elements of compensation provided to the executive officer; and

 

our Chief Executive Officer’s recommendation for all executive officers other than himself.

20162018 Actions and Analysis

Considering Exequity’s input and analysis and the recommendations of our Chief Executive Officer, we set individual base salaries of our named executive officers for 20162018 at a level consistent with the general objective of paying total target direct compensation to approximate the median of our peer group.group; however, each executive officer’s position relative to median may vary depending on a consideration of factors such as tenure, experience, future potential, internal pay equity, and performance.

The following table reflects the annualized base salaries of our named executive officers for 20162018 and 20152017(year-end):

 

    

Name

  

 

Base Salary
2016 ($)

 

   

 

Base Salary
2015 ($)

 

   

 

Increase in Base
Salary (%)

 

   

 

Base Salary
2018 ($)

 

  

 

Base Salary
2017 ($)

 

  

 

 Increase in Base 

Salary (%)

 

Michael F. Hilton

   

 

850,000

 

  

 

   

 

825,000

 

  

 

   

 

3.03

 

  

 

    

 

925,000

 

 

    

 

875,000

 

 

    

 

5.7

 

 

Gregory A. Thaxton

   

 

435,000

 

  

 

   

 

420,000

 

  

 

   

 

3.57

 

  

 

    

 

470,000

 

 

    

 

450,000

 

 

    

 

4.4

 

 

John J. Keane

   

 

420,000

 

  

 

   

 

405,000

 

  

 

   

 

3.70

 

  

 

    

 

455,000

 

 

    

 

435,000

 

 

    

 

4.6

 

 

Gregory P. Merk

   

 

380,000

 

  

 

   

 

345,000

 

  

 

   

 

10.14

 

  

 

    

 

420,000

 

 

    

 

403,000

 

 

    

 

4.2

 

 

Robert E. Veillette

   

 

357,000

 

  

 

   

 

345,000

 

  

 

   

 

3.48

 

  

 

Jeffrey A. Pembroke

    

 

415,000

 

 

    

 

403,000

 

 

    

 

3.0

 

 

Annual Cash Incentive Award

Purpose

The purpose of the Annual Cash Incentive Award is to drive high-performance results year-over-year based on the achievement ofpre-established quantitative performance goals which focus our executives on key business strategies and align the interests of our executive officers with our shareholders. Through the Annual Cash Incentive Award, executive officers are provided the opportunity to earn a significantly higher payout if target performance is exceeded but bear the risk of a lower payout if target performance is not achieved, and no payout if threshold performance is not achieved.

Measures

Performance and payouts under the Annual Cash Incentive Award are determined based on quantitative corporate financial measures — diluted earnings per share growth and return on total capital — and quantitative operating measures. As noted above, the Compensation Committee voted to exclude from the executive compensation analysis, including calculation of the 2018 annual incentive awards, all financial benefits the Company received as a result of the Tax Cuts and Jobs Act passed in 2017.

We consider diluted earnings per share growth and return on total capital to be measures critical to our success. We believe these measures offer the proper balance between growth and profitability. We also believe that achieving greater return on total capital and earnings per share growth over time will drive improved shareholder return and foster maximum value for our assets. More specifically:

 

Diluted earnings per share growth measures the rate at which management has succeeded in increasing the profits per unit of ownership by shareholders. Earnings per share growth is easily compared among peers and the measure is commonly used by the investment community to evaluate performance. The formula we utilize for diluted earnings per share is net income divided by weighted average common diluted shares outstanding.

 

42  | Nordson Corporation – 20172019 Proxy Statement


by weighted average common diluted shares outstanding. For this year’s calculations, we utilized a more normalized effective tax rate in calculating the diluted earnings per share and excluded the benefits of the Tax Cuts and Jobs Act.

Return on total capital measures the amount of profitability per unit of capital invested by management to generate earnings. We have adopted a definition of return on total capital that is consistent with financial disclosure in our Report on Form10-K: the sum of net income (loss) plusafter-tax interest expense on debt as a percentage of the sum of average of quarterly debt (net of cash) plus average quarterly shareholders’ equity over five accounting periods.

For named executive officers that have responsibility for certain corporate functions (including our Chief Executive Officer and Chief Financial Officer), the corporate financial measures account for 50% of any payout with a weighted average of the business unit quantitative operating measures accounting for the other 50% of the payout. For the operating unit named executive officers, the corporate financial measures account for 50% of any payout with the respective operating unit’s quantitative operating measures accounting for the other 50% of the payout.

Effect of Currency Fluctuation

The Committee, after considering a number of factors, including peer and survey group practices and receiving input from Exequity, has determined that management should be held accountable for some, but not all, of the effect of currency fluctuation on corporate financial and operating unit performance results. Accordingly, in determining Annual Cash Incentive Award payouts, the Committee adopted a policy whereby management will be held accountable for the first 10% of the impact on payouts due to currency fluctuation. Under the policy, payout rates (as a percent of target) for the Annual Cash Incentive Award are calculated at actual foreign currency rates and currency neutral rates for the USU.S. Dollar during the fiscal year. The difference between total payout rates under these two translation methods is all currency related, and the Committee has determined that the first 10% of this difference should not affect final payouts. The final payout includes a currency adjustment equal to the difference between these two payout rates less 10%, which represents a corridor or range of fluctuation in currency rates for which management is accountable. We believe this policy is appropriate because it requires management to respond to currency fluctuations within a specified range. However, it does not unfairly benefit or harm management if currency impact is beyond what may be considered normal and not under management’s control.

As an example of the policy in practice, if the difference between the two payout percentage rates is equal to or less than +/- 10 percentage points, the Annual Cash Incentive Award payout will be based on the calculation at actual currency rates, with no adjustment. When the payout percentage at actual currency rates is more than 10 percentage points lower than the payout percentage rate at currency neutral rates, the final payout will be based on the currency neutral calculation adjusted downward by 10 percentage points. Conversely, when the payout percentage rate at actual currency rates is more than 10 percentage points higher than the payout percentage rate at currency neutral rates, the final payout rate will be based on the currency neutral calculation adjusted upward by 10 percentage points.

Foreign Currency Translation Methodology

For purposes of applying the currency adjustment policy, current year financial statements and supplemental schedules are retranslated at prior year exchange rates using the same methodology as disclosed in footnoteNote 1 in the “Notes to Consolidated Financial Statements” section of our Report on Form10-K for 20162018 to determine the currency neutral result, with the exception that we do not attempt to remeasurere-measure gains and losses, based on a retranslation at prior year exchange rates, from foreign currency transactions, including forward contracts, of Nordson’s subsidiaries and the United States parent, in order to include the effect in net income. All currency rates are determined from published sources. Monthly average rates are the average of daily spot rates of currency exchange. The annual measurement period is the sum of each month translated at monthly average rates.

 

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Section 162(m) Considerations

We intend the Annual Cash Incentive Award payouts to be deductible for federal income tax purposes under Section 162(m) of the Internal Revenue Code. In order to achieve this, we establish an Annual Cash Incentive Award payout pool and a maximum payout amount from the pool for each named executive officer subject to Section 162(m). Under the terms of the shareholder-approved 2012 Stock Incentive and Award Plan, the maximum permitted payout to any executive officer is $5,000,000. The Committee has the authority to decrease payouts below the Annual Cash Incentive Award maximum payout amount (e.g., exercise “negative discretion”), but may not increase payouts above this maximum amount.

20162018 Actions and Analysis

During our November 23, 201520, 2017 meeting, and taking into consideration Exequity’s analysis of the peer group annual incentive opportunities, we set a target payout opportunity for our named executive officers as well as the threshold and maximum payout opportunity as a percentage of annualized base salaries. The following table reflects the payout opportunities as a percentage of base salary:

 

  Incentive Amount as a
Percentage (%) of Base Salary
   Incentive Amount as a
Percentage (%) of Base Salary

Name

  

 

Threshold

 

   

 

Target

 

   

 

Maximum

 

   

 

Threshold

 

  

 

Target

 

  

 

Maximum  

 

Michael F. Hilton

   

 

50

 

  

 

   

 

100

 

  

 

   

 

200

 

  

 

  

 

50.0

 

  

 

100

 

  

 

200

 

Gregory A. Thaxton

   

 

35

 

  

 

   

 

70

 

  

 

   

 

140

 

  

 

  

 

35.0

 

  

 

  70

 

  

 

140

 

John J. Keane

   

 

35

 

  

 

   

 

70

 

  

 

   

 

140

 

  

 

  

 

35.0

 

  

 

  70

 

  

 

140

 

Gregory P. Merk

   

 

30

 

  

 

   

 

60

 

  

 

   

 

120

 

  

 

  

 

32.5

 

  

 

  65

 

  

 

130

 

Robert E. Veillette

   

 

27.5

 

  

 

   

 

55

 

  

 

   

 

110

 

  

 

Jeffrey A. Pembroke

  

 

32.5

 

  

 

  65

 

  

 

130

 

We then set the Section 162(m) payout pool at 1.5% of the Company’s cash flow from operating activities, to be determined with reference to our Report on Form10-K for 2016, and a maximum payout from the pool for the named executive officers subject to Section 162(m): Mr. Hilton — 55% and Messrs. Keane, Merk and Veillette — 15% each. We then established quantitative corporate financial performance measures and goals, which measures account for 50% of the Annual Cash Incentive Award payout (if any):

 

Measure

  

 

Threshold

 

  

 

Target

 

  

 

Maximum

 

  

 

Weighting

 

  

 

Threshold

 

  

 

Target

 

  

 

Maximum

 

  

 

Weighting   

 

Diluted Earnings Per Share Growth

  0%  10%  20%  50%  

 

0%

 

  

 

8%

 

  

 

20%

 

  

 

50%

 

Return on Total Capital

  8.0%  11.5%  16%  50%  

 

8.0%

 

  

 

11.5%

 

  

 

16%

 

  

 

50%

 

 

*

Straight line interpolation applies to performance between designated goals.

Operating unit performance measures and respective weighting were set through a collaborative effort between the Committee and Mr. Hilton:

 

 

Measure

 

  

Weighting (%)

 

 

Revenue Growth (year-over-year)

  

20

Operating Profit Growth (year-over-year)

   

40

 

Operating Margin (as % of revenue)

   

20

 

Asset Turns (% achieved)

   

10

 

Days of Inventory

   10 

44  |Nordson Corporation – 2017 Proxy Statement


Individual operating unit performance goals and results are not disclosed in this CD&A because we believe that the disclosure would result in competitive harm to us by potentially disrupting our customer, vendor and supplier relationships and providing our competitors with insight into our business strategies beyond what is disclosed publicly. We also do not believe that the disclosure of individual operating unit performance goals and results for 20162018 is material to an understanding of our 20162018 executive compensation program as covered by this Proxy Statement.

The Committee met following the conclusion of the 2016 fiscal year and first determined the Section 162(m) Annual Cash Incentive Award payout pool — $4,967,000 (1.5% of the Company’s cash flow from operating activities) — and then allocated the pool based on the allocation described above, thus establishing the Section 162(m) maximum payout opportunity for Mr. Hilton ($2,732,000) and Messrs. Keane, Merk and Veillette ($745,000 each).

44  |Nordson Corporation – 2019 Proxy Statement


Determining Payout Amounts

Determination of the Annual Cash Incentive Award payout is atwo-step process:

Step 1: Calculation of the Payout Rate (as a % of Target) on an Actual Currency and Currency Neutral Basis

Prior to applying the currency adjustment policy described above, the Committee first certified performance and calculated payouts as a percentpercentage of target for the corporate financial measures:

Actual Currency — Performance Unadjusted for Effect of Currency Fluctuation, and

Currency Neutral — Performance Adjusted for Effect of Currency Fluctuation

The results are reflected in the following table:

 

Measures  

Target

Performance

   Performance
at Actual
Currency
   

Payout at
Actual
Currency

(% of Target)

   

Performance
at Currency

Neutral

   

Payout at
Currency
Neutral

(% of Target)

   

Target

Performance

  Performance
at Actual
Currency
 

Payout at
Actual
Currency

(% of Target)

  

Performance
at Currency

Neutral

 

Payout at  

Currency  

Neutral  

(% of Target)  

 

Diluted Earnings Per Share Growth

   

 

$3.80

 

  

 

   

 

$4.73

 

  

 

   

 

200

 

  

 

   

 

$4.92

 

  

 

   

 

200

 

  

 

  

 

$5.49

 

  

 

$5.70*

 

 

 

134.4

 

  

 

$5.41*

 

 

 

 

 

 

90.2       

 

 

 

 

Return on Total Capital

   

 

11.5%

 

  

 

   

 

16.3%

 

  

 

   

 

200

 

  

 

   

 

17%

 

  

 

   

 

200

 

  

 

  

 

11.5%

 

  

 

13.7%*

 

 

 

148.9

 

  

 

13.1%*

 

 

 

 

 

 

135.6       

 

 

 

 

Combined Corporate Factor

         

 

200

 

  

 

      

 

200

 

  

 

       

 

141.6

 

    

 

 

 

 

112.9       

 

 

 

 

*

As noted on Page 33, this data excludes the benefits from the Tax Cuts and Jobs Act.

The Committee next certified the operating units’ results, at actual currency and at currency neutral. The range of results, as a percent of target, were:

Operating Unit Results

 

Currency Calculation Method

  

% of Target (Range)

Actual Currency

  79.5 - 161.4

50.7 – 185.5

Currency Neutral

  100.6 - 177

41.5 – 158.1

Step 2: Calculation of Payouts to Named Executive Officers Applying the Currency Adjustment Policy

For named executive officers who have responsibility for certain corporate functions (including our Chief Executive Officer and Chief Financial Officer), the corporate financial measures account for 50% of any payout with a weighted average of the business unit quantitative operating measures accounting for the other 50% of the payout. For the operating unit named executive officers, the corporate financial measures account for 50% of any payout with the respective operating unit’s quantitative operating measures accounting for the other 50% of the payout.

 

Nordson Corporation – 20172019 Proxy Statement

 |  45


Following the process outlined in Step 1, the Committee determined the combined factor payouts, as a percent of target, and applied the currency adjustment policy. The results are presented in the tables below:

Actual Currency:

 

Named Executive Officer  

Target

Payout
Opportunity ($)

   

Corporate
Factor

(% of Target))

   

Operating Unit
Factor

(% of Target)

  

Combined
Factor
Payout

(% of Target)

   

Target

Payout
Opportunity ($)

  

Corporate
Factor

(% of Target))

  

Operating Unit
Factor

(% of Target)

  

Combined  

Factor  

Payout  

(% of Target)  

 

Michael F. Hilton

   

 

850,000

 

  

 

   

 

200

 

  

 

  124.7 (Weighted)

 

   

 

162.4

 

  

 

  

 

925,000

 

  

 

141.6

 

  

 

127.6 (Weighted)

 

  

 

 

 

 

134.6       

 

 

 

Gregory A. Thaxton

   

 

304,500

 

  

 

   

 

200

 

  

 

  124.7 (Weighted)

 

   

 

162.4

 

  

 

  

 

329,000

 

  

 

141.6

 

  

 

127.6 (Weighted)

 

  

 

 

 

 

134.6       

 

 

 

John J. Keane

   

 

294,000

 

  

 

   

 

200

 

  

 

  104.7

 

   

 

152.4

 

  

 

  

 

318,500

 

  

 

141.6

 

  

 

95.1

 

  

 

 

 

 

118.4       

 

 

 

Gregory P. Merk

   

 

228,000

 

  

 

   

 

200

 

  

 

  161.4

 

   

 

180.7

 

  

 

  

 

273,000

 

  

 

141.6

 

  

 

185.5

 

  

 

 

 

 

163.6       

 

 

 

Robert E. Veillette

   

 

196,350

 

  

 

   

 

200

 

  

 

  124.7 (Weighted)

 

   

 

162.4

 

  

 

Jeffrey A. Pembroke

  

 

269,750

 

  

 

141.6

 

  

 

157.3

 

  

 

 

 

 

149.5       

 

 

 

Currency NeutralNeutral::

 

Named Executive Officer  

Target

Payout
Opportunity ($)

   

Corporate
Factor

(% of Target)

   

Operating Unit
Factor

(% of Target)

  

Combined
Factor
Payout

(% of Target)

   

Target

Payout
Opportunity ($)

  

Corporate
Factor

(% of Target)

  

Operating Unit
Factor

(% of Target)

  

Combined  

Factor  

Payout  

(% of Target)  

 

Michael F. Hilton

   

 

850,000

 

  

 

   

 

200

 

  

 

  133.8 (Weighted)

 

   

 

166.9

 

  

 

  

 

925,000

 

  

 

112.9

 

  

 

101.0 (Weighted)

 

  

 

 

 

 

107.0       

 

 

 

Gregory A. Thaxton

   

 

304,500

 

  

 

   

 

200

 

  

 

  133.8 (Weighted)

 

   

 

166.9

 

  

 

  

 

329,000

 

  

 

112.9

 

  

 

101.0 (Weighted)

 

  

 

 

 

 

107.0       

 

 

 

John J. Keane

   

 

294,000

 

  

 

   

 

200

 

  

 

  106.3

 

   

 

153.2

 

  

 

  

 

318,500

 

  

 

112.9

 

  

 

80.0

 

  

 

 

 

 

96.5       

 

 

 

Gregory P. Merk

   

 

228,000

 

  

 

   

 

200

 

  

 

  177.0

 

   

 

188.5

 

  

 

  

 

273,000

 

  

 

112.9

 

  

 

114.3

 

  

 

 

 

 

113.6       

 

 

 

Robert E. Veillette

   

 

196,350

 

  

 

   

 

200

 

  

 

  133.8 (Weighted)

 

   

 

166.9

 

  

 

Jeffrey A. Pembroke

  

 

269,750

 

  

 

112.9

 

  

 

156.0

 

  

 

 

 

 

134.5       

 

 

 

 

Under the currency adjustment policy, withbecause the difference between the two combined factor payout rates as a percent of target being equal to or lesscalculation at actual currency was higher than +/- 10payout at currency neutral by more than ten percentage points, for each named executive officer, thefinal payouts were based on actualadjusted upward by ten percentage points from the currency results,neutral calculation, reflecting the Committee’s position that managementpayouts should be held accountable foraffected by only the first 10%ten percentage points of the impact on payouts due toof currency fluctuation:

 

Named Executive Officer

  Target Payout
Opportunity ($)
   Actual
Payout ($)
   

Target Payout
Opportunity ($)

  

Actual  

Payout ($)  

 

Michael F. Hilton

   850,000     1,380,400    

 

925,000

 

  

 

 

 

 

1,082,250  

 

 

 

Gregory A. Thaxton

   304,500     494,508    

 

329,000

 

  

 

 

 

 

384,930  

 

 

 

John J. Keane

   294,000     448,056    

 

318,500

 

  

 

 

 

 

339,203  

 

 

 

 

Gregory P. Merk

   228,000     411,996    

 

273,000

 

  

 

 

 

 

337,428  

 

 

 

Robert E. Veillette

   196,350     318,872  

Jeffrey A. Pembroke

  

 

269,750

 

  

 

 

 

 

389,789  

 

 

 

 

NoExcept for excluding the financial benefits the Company received from the Tax Cuts and Jobs Act, no discretion was exercised to increase or decrease the formulaic incentive award payouts to the named executive officers.All payouts were below the Section 162(m) of the Internal Revenue Code funding formula and the 2012 Stock Incentive and Award Plan $5,000,000 maximum payout for the Annual Cash Incentive Award.

46  |Nordson Corporation – 2019 Proxy Statement


Long-Term Incentive Awards

Our long-term incentive awards are delivered through a combination of three forms of equity: (i) incentive-based performance shares;share units; (ii) stock options; and (iii) service-based restricted shares. This

46  |Nordson Corporation – 2017 Proxy Statement


combination of awards balances the opportunity between performance share units, which are earned based on multi-year financial performance, and stock options and restricted shares, the value of which is based on performance of our common shares.

The Committee begins the process of determining equity awards by comparing our equity compensation programs to those of our peer group. The Committee also reviews market compensation data based on survey data provided by Aon Hewitt.

In reaching a final decision on the mix and amount of equity compensation our named executive officers should receive, the Committee takes numerous factors into consideration. As referenced above, market alignment and competitiveness are key factors the Committee considers in setting equity compensation levels. Other factors considered are current industry trends, practices among our peer group, and the behaviors the awards are intended to drive. In addition to these factors, the Committee places significant weight on the dilutive impact equity issuances have on our shareholders. In assessing dilution, the Committee considers the annualized effect of equity compensation by analyzing the equity “burn rate” over oneone- and three yearthree-year periods. Burn rate, in its simplest form, is determined by dividing the projected number of shares to be issued to employees by the weighted average number of shares outstanding. The Committee also considers the aggregate impact of all past equity compensation grants by looking at the company’s equity compensation “overhang.” Overhang is determined by dividing all outstanding equity grants and shares available for future grants by the total number of shares outstanding. The resulting percentage provides the Committee with insight into the long-term cost of the company’sCompany’s equity compensation programs.

Approximate allocation of the three equity components (as a percent of the long-term incentive compensation opportunity) is as follows:

 

Equity Form  % of Opportunity  

Performance SharesShare Units

  

40

Stock Options

  

40

Restricted Shares

  

20

Performance Share Incentive Award

A portion of each named executive officer’s total direct compensation opportunity is in the form of performance share units which convert toare settled in unrestricted Nordson Common Stock at time of payout.

Purpose

The purpose of the Performance Share Incentive Award is to drive high-performance results over a longer period (three-years)(three years) based on the achievement ofpre-established quantitative performance goals which focus our executives on key business strategies and align the interests of our executive officers with our long-term shareholders. Executive officers are provided the opportunity to earn a significantly higher payout if target performance is exceeded but bear the risk of a lower payout if target performance is not achieved, and no payout if threshold performance is not achieved.

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Measures and Goals

In selecting the quantitative performance measures and goals, the Committee considers whether the measures are appropriately aligned with those in the Annual Cash Incentive Award so that the overall compensation design does not unintentionally encourage our executive officers to take unnecessary or excessive risk or actions that are inconsistent with our year-over-year and long-term objectives. Performance and payouts under the Performance Share Incentive Awardare determined based on quantitative corporate financial measures — cumulative diluted earnings per share growth and

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cumulative revenue growth. We believe these measures offer the proper balance between growth and profitability over a longer term. More specifically:

 

Cumulative diluted earnings per share growth measures the rate at which management has succeeded in growing profits on a sustained basis over a three-year period. We believe it is the constant percentage by which diluted earnings per share would need to grow over a base period amount during a three-year period such that the sum of diluted earnings per share calculated at such a constant growth rate for such three years is equal to the sum of the actual diluted earnings per share earned over the same three-year period. We believe it is a superior measure of sustained earnings growth because it is influenced by the earnings performance during each year of the performance period rather than simply a compound growth rate that compares the final year’s earnings to the base period amount.

 

Cumulative revenue growth measures the rate at which management has succeeded in growing revenue on a sustained basis over a three-year period. We believe it is the constant percentage by which revenue would need to grow over a base period amount during a three-year period such that the sum of revenue growth calculated at such a constant growth rate for such three years is equal to the sum of the actual revenue growth over the same three-year period. We believe it is a superior measure of sustained revenue growth because it is influenced by revenue performance during each year of the performance period rather than simply a compound growth rate that compares the final year’s revenues to the base period amount. While the growth in profits and profitability are of primary importance, management is also expected to grow the size and scale of the enterprise and cumulative revenue growth is an effective measure of their success in doing so.

As noted above, the Compensation Committee voted to exclude from the executive compensation analysis, including calculation of the 2018 long term incentive awards, all financial benefits the Company received as a result of the Tax Cuts and Jobs Act passed in 2017.

Effect of Foreign Currency Fluctuation

The Committee has determined that the currency adjustment policy described in the “Annual Cash Incentive Award” section above should also apply to the determination of Performance Share Incentive Award payouts.

Foreign Currency Translation Methodology

In certifying the results for the financial performance measures employed in calculation ofcalculating the Performance Share Incentive Award, the Committee applies the same methodology described in the “Annual Cash Incentive Award” section above, with the revenue and earnings per share at currency neutral rates reflecting the cumulative effect of differences from actual exchange rates over the three-year versusone-year performance period.

Section 162(m) Considerations

We intend Performance Share Incentive Award payouts to be deductible for federal income tax purposes under Section 162(m) of the Internal Revenue Code. In order to achieve this, we establish a Performance Share Incentive Award pool and a maximum payout amount from the pool for each named executive officer subject to Section 162(m). The Committee has the authority to decrease payouts below the maximum payout amount (e.g., exercise “negative discretion”) but may not increase payouts above this maximum amount.

2016 Actions and Analysis

During its November 25, 2013 meeting, the Committee established quantitative performance measures and goals for the 2014-2016 Performance Share Incentive Award. These measures are equally-weighted.

Measure  Threshold  Target  Maximum

Cumulative Diluted Earnings Per Share Growth

  4%  8%  14%

Cumulative Revenue Growth

  5%  7%  11%

 

48  | Nordson Corporation – 20172019 Proxy Statement


For2018 Actions and Analysis

During its November 23, 2015 meeting, the 2014-2016Committee established quantitative performance period, each of our executive officers was eligible to receive a maximum aggregate payout value in common shares equal to 1.75% of our total operating cash flowmeasures and goals for the three-year performance period, by reference to our 2014, 2015, and 2016 Form10-K Reports, subject to the 750,000 share limit (250,000 per year for each year of the performance period) provided for in our shareholder-approved 2012 Stock Incentive and Award Plan. After the close of 2016, we confirmed that the maximum aggregate payout to any executive officer could not exceed 154,020 shares (the share equivalent value of 1.75% of our operating cash flow over a three year period). We then determined the maximum payout of the2016-2018 Performance Share Incentive Award pool for the named executive officers subject to Section 162(m): Mr. Hilton – 92,402 shares (60%) and Messrs. Keane, Merk and Veillette – 20,482 shares (13.3% each).Award. These measures are equally-weighted.

  Measure  Threshold  Target  Maximum  

  Cumulative Diluted Earnings Per Share Growth

 

  4%

 

  8%

 

  14%  

 

  Cumulative Revenue Growth

  5%  7%  11%  

Determination of Payout Amounts

Determination of the Performance Share Incentive Award payouts is atwo-step process:

Step 1: Calculation of the Payout Rate (as a % of Target) on an Actual Currency and Currency Neutral Basis

Prior to applying the Currency Adjustment Policy described above, the Committee first certified performance for the Cumulative Earnings per Share Growth and Cumulative Revenue measures:

 

Actual Currency – performance unadjusted for the effect of currency fluctuation, and

 

Currency Neutral – performance adjusted for the effect of currency fluctuation.

Following this certification process, the Committee calculated the payouts as a percent of target. The results are reflected in the following table:

 

Measures  

Target

Performance

  Performance
at Actual
Currency
  

Payout at
Actual
Currency

(% of Target)

  Performance
at Currency
Neutral
  

Payout at
Currency
Neutral

(% of Target)

  

Target

Performance

 

  

Performance
at Actual
Currency

 

  

 

Payout at
Actual
Currency

(% of Target)

 

  

Performance
at Currency
Neutral

 

  

 

Payout at
Currency
Neutral

(% of Target)

 

Cumulative Diluted Earnings per Share Growth  $11.99  $12.02  51.1%  $13.71  100%  

 

$12.10

 

  

 

$15.51^

 

  

 

100%

 

  

 

$15.85^

 

  

100%

 

Cumulative Revenue

  $5,307.5*  $5,201.7*  36.8%  $5,481.5*  70.9%  

 

$5,809*

 

  

 

$6,130.7*

 

  

 

85.3%

 

  

 

$6,174.9*

 

  

 

90.2%

 

Combined Factor

        87.9%     170.9%        

 

185.3%

 

     190.2%

 

^

As noted on Page 33, this data excludes the benefits from the Tax Cuts and Jobs Act.

*

millions

Step 2: Calculation of Payouts to Named Executive Officers Applying the Currency Adjustment Policy

Under the currency adjustment policy, withbecause the difference between the two payout percentage rates is equal to or less than +/- 10 percentage points, the final payouts for the 2016-2018 performance period are based on the calculation at actual currency (87.9% of target) being lower than payout at currency neutral (170.9% of target) by more than 10 percentage points, final payouts are adjusted 10 percentage points less than the currency neutral calculation (170.9% – 10% = 160.9%):rates, with no adjustments:

 

Named Executive Officer  Target Payout
Opportunity (# of
Shares)
   

 

Post-Currency
Adjustment Policy
Combined Factor
Payout

(% of Target)

   

Payout

(# of Shares)

 

Michael F. Hilton

   14,600     160.9     23,491  

Gregory A. Thaxton

   3,700     160.9     5,953  

John J. Keane

   3,900     160.9     6,275  

Gregory P. Merk

   2,600     160.9     4,183  

Robert E. Veillette

   2,300     160.9     3,701  

  Named Executive Officer  Target Payout
Opportunity (# of
Shares)
   

 

Post-Currency
Adjustment Policy
Combined Factor
Payout

(% of Target)

   

Payout

(# of Shares)

 

 

 Michael F. Hilton

 

  

 

 

 

 

18,400

 

 

 

  

 

 

 

 

185.3

 

 

 

 

  

 

 

 

 

34,095

 

 

 

 

 Gregory A. Thaxton

 

  

 

 

 

 

4,800

 

 

 

  

 

 

 

 

185.3

 

 

 

 

  

 

 

 

 

8,894

 

 

 

 

 John J. Keane

 

  

 

 

 

 

4,800

 

 

 

  

 

 

 

 

185.3

 

 

 

 

  

 

 

 

 

8,894

 

 

 

 

 Gregory P. Merk

 

  

 

 

 

 

3,400

 

 

 

  

 

 

 

 

185.3

 

 

 

 

  

 

 

 

 

6,300

 

 

 

 

 Jeffrey A. Pembroke

 

  

 

 

 

 

1,800

 

 

 

  

 

 

 

 

185.3

 

 

 

 

  

 

 

 

 

3,335

 

 

 

 

Nordson Corporation – 20172019 Proxy Statement

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NoExcept for excluding the financial benefits the Company received from the Tax Cuts and Jobs Act, no discretion was exercised by the Compensation Committee to increase or decrease the formulaic incentive award payouts to the named executive officers.All payouts were below the Section 162(m) of the Internal Revenue Code funding formula and the 2012 Stock Incentive and Award Plan maximum share payout for the Performance Share Incentive Award noted above.

In-Progress Performance Share Incentive Awards

The following tables summarize the key elements and share payout amounts for the named executive officers on a cumulative basis at threshold, target, and maximum performance for the 2015-20172017-2019 and 2016-20182018-2020 Performance Share Incentive Awards.

2015-20172017-2019 Performance Share Incentive Award

 

Performance Measure  Threshold Target Maximum   

Threshold

 

   

Target

 

   

Maximum

 

 

Cumulative Diluted Earnings Per Share Growth

   4  8  14  

 

 

 

 

4%    

 

 

 

  

 

 

 

 

8%  

 

 

 

  

 

 

 

 

14%    

 

 

 

Cumulative Revenue Growth

   5  7  11  

 

 

 

 

5%    

 

 

 

  

 

 

 

 

7%  

 

 

 

  

 

 

 

 

11%    

 

 

 

 

Grant Date  

Grant Date
Valuation

Share
Price

   

Threshold
Payout

(# Shares)

   

Target
Payout

(# Shares)

   

Maximum
Payout

(# Shares)

   

Target Earned

Date

   Actual Payout   

 

Grant Date

Share
Price

  

Threshold
Payout

(# Shares)

  

Target
Payout

(# Shares)

  

Maximum
Payout

(# Shares)

  

Target Earned

Date

  Actual Payout

11/24/2014

  $76.48     14,000     28,000     56,000     October 31, 2017     Not determined  

11/21/2016

  

 

$107.65  

 

  

 

13,240  

 

  

 

26,480  

 

  

 

52,960  

 

  

 

October 31, 2019

 

  

 

Not determined

 

2016-20182018-2020 Performance Share Incentive Award

 

Performance Measure  Threshold Target Maximum   

 

Threshold

  

 

Target

  

 

Maximum 

Cumulative Diluted Earnings Per Share Growth

   4  8  14  

 

2%

 

  

 

8%  

 

  

 

14%

 

Cumulative Revenue Growth

   5  7  11  

 

2%

 

  

 

5%  

 

  

 

8%

 

 

Grant Date  

Grant Date
Valuation

Share
Price

   

Threshold
Payout

(# Shares)

   

Target
Payout

(# Shares)

   

Maximum
Payout

(# Shares)

   

Target Earned

Date

   Actual Payout   

 

Grant Date

Share
Price

  

Threshold
Payout

(# Shares)

  

Target
Payout

(# Shares)

  

Maximum
Payout

(# Shares)

  

Target Earned

Date

   Actual Payout 

11/23/2015

  $67.69     17,100     34,200     68,400     October 31, 2018     Not determined  

11/20/2017

  

 

$127.67

 

  

 

11,950  

 

  

 

23,900  

 

  

 

47,800  

 

  

 

 

 

 

October 31, 2020

 

 

 

 

  

 

 

 

 

Not determined

 

 

 

 

Stock Options

Stock options align the interests of the named executive officers with those of shareholders because the stock options only have value if the price of the Company’s stock increases after the stock options are awarded. Stock options vest in 25% increments over a four-year period (on the first four anniversaries of the grant date) and generally expire ten years from the grant date. We fix the exercise price of an option at the fair market value on the grant date. Stock options are a valuable retention tool because our option awards vest over a four-year period and unvested options are forfeited if an executive officer voluntarily terminates employment.

We granted stock options to our executive officers on November 23, 2015,20, 2017, at the same time we granted stock options to other key employees under our Key Employee Stock Option Program. We have historically granted stock options during the Compensation Committee’s November meeting, which is scheduled at this time of year, to permit us to verify prior fiscal year performance results, to determine incentive award payouts, and to set compensation and performance measures and goals for the next fiscal year.

 

50  | Nordson Corporation – 20172019 Proxy Statement


The following table provides the number of stock options granted to our named executive officers for 2016:2018:

 

Named Executive Officer  Options Granted (#)   Grant Date
Fair Value ($) (1)
   Options Granted (#)   

 

Grant Date
Fair Value ($) (1)

 

Michael F. Hilton

   72,800     1,416,040    

 

 

 

 

55,800    

 

 

 

  

 

 

 

 

1,942,599    

 

 

 

Gregory A. Thaxton

   17,200     334,559    

 

 

 

 

12,500    

 

 

 

  

 

 

 

 

435,170    

 

 

 

John J. Keane

   17,200     334,559    

 

 

 

 

12,500    

 

 

 

  

 

 

 

 

435,170    

 

 

 

Gregory P. Merk

   13,400     260,645    

 

 

 

 

9,000    

 

 

 

  

 

 

 

 

313,322    

 

 

 

Robert E. Veillette

   11,000     213,962  

Jeffrey A. Pembroke

  

 

 

 

 

8,400    

 

 

 

 

  

 

 

 

 

292,434    

 

 

 

 

(1)

The grant date fair value was determined using the Black-Scholes option pricing model. The actual value of stock option awards will be determined by the value of our common shares on the date of exercise.

Restricted Shares

Restricted shares are designed to align executive officers’ interest with that of our long-term shareholders. The Committee also views these service-based awards as an important management succession planning, retention, and recognition tool, tieingtying our executive officers’ compensation to the goal of increasing the value of our shareholders’ investment. Restricted shares generally will vest over a three-year period and cannot be transferred until vesting. Restricted shares provide participants with dividends and voting rights beginning on the grant date.

We granted restricted shares to executive officers on November 23, 2015.20, 2017. The share price on the grant date was the closing price on November 23, 201520, 2017 – $70.91.$127.67. The following table provides information regarding the 20162018 restricted share awards:

 

Named Executive Officer  Restricted
Shares
Granted (#)
   Grant
Date
Value ($)
 

Michael F. Hilton

   9,200     652,372  

Gregory A. Thaxton

   2,400     170,184  

John J. Keane

   2,400     170,184  

Gregory P. Merk

   1,700     120,547  

Robert E. Veillette

   1,400     99,274  

   Named Executive Officer  

 

Restricted
Shares
Granted (#)

   Grant     
Date     
Value ($)     
 

 

  Michael F. Hilton

 

  

 

 

 

 

6,700    

 

 

 

  

 

 

 

 

855,389     

 

 

 

 

  Gregory A. Thaxton

 

  

 

 

 

 

1,600    

 

 

 

  

 

 

 

 

204,272     

 

 

 

 

  John J. Keane

 

  

 

 

 

 

1,600    

 

 

 

 

  

 

 

 

 

204,272     

 

 

 

 

  Gregory P. Merk

 

  

 

 

 

 

1,200    

 

 

 

  

 

 

 

 

153,204     

 

 

 

 

  Jeffrey A. Pembroke

 

  

 

 

 

 

1,000    

 

 

 

 

  

 

 

 

 

127,670     

 

 

 

 

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PART IV: OTHER COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

In addition to base salary, the Annual Cash Incentive Award, and long-term equity-based incentive awards, we offer other forms of compensation, including: (i) executive perquisites; (ii) welfare and retirement benefits; and(iii) change-in-control benefits.

Executive Perquisites

We provide limited and modest perquisites to each of our executive officers to promote the business objectives facilitated by each perquisite described below. We also use these perquisites to provide a competitive executive compensation program, which allows us to attract and retain top executive talent.

 

  

Business Clubs.    We do not reimburse any executive officer for fees or dues associated with personal country club memberships. We reimburse Mr. Hilton for twoone private business club membershipsmembership to encourage entertainment of business colleagues and customers, engaging in social interaction with peers from other companies, local leadership in the community, and holding business meetings at a convenient offsite location. In addition, we provide all executive officers with memberships in up to two airline travel clubs that allow them to be more productive when traveling on commercial airlines.

 

  

Financial, Estate, and Tax Planning and Preparation.    We pay for financial, estate, and tax planning and preparation fees and expenses. The maximum amount is $5,000 for each named executive officer per calendar year. We provide this perquisite to assist our executive officers in obtaining financial counseling, enabling them to concentrate on business matters rather than on personal financial planning.

 

  

Executive Physicals.    We pay for annual physicals for our executive officers. We provide this benefit to preserve our investment in our executive officers by encouraging them to maintain healthy lifestyles and be proactive in their preventative healthcare.

 

  

Relocation Expense Reimbursement.    We maintain a general relocation policy under which the Company provides reimbursement for certain relocation expenses to new employees and to employees whose job function requires relocation. We believe it is important to maintain market competitive relocation benefits in order to fill positions that are critical to Nordson’s business needs.

 

52  | Nordson Corporation – 20172019 Proxy Statement


Welfare and Retirement Benefits

The following summarizes the welfare and retirement benefits available to our named executive officers:

 

Qualified Defined Contribution [401(k)]401(k) Plan

 

•  Our executive officers are eligible to participate in a Company-sponsored 401(k)tax-qualified retirement savings plan for all U.S.-based employees.

 

•  We match employee contributions $0.50 on the dollar for the first 6% of contributed compensation. Employee contributions to the 401(k) Plan vest immediately, while matching contributions vest in increments based on years of service, with participants being fully vested after three years of service.

 

Non-Qualified Deferred Compensation Plan

 

•  We maintain anon-qualified, unfunded, and unsecured deferred compensation plan for the benefit of eligible management employees whose benefits under the 401(k) Plan are limited by the benefit restrictions of Section 415 of the Internal Revenue Code.

 

•  Participants are able to defer up to 100% of their base salary and Annual Cash Incentive Award payout, and up to 90% of their Performance Share Incentive Award payout.

 

Defined Benefit Pension Plan

•  Our executive officers participate in a Company-sponsoredtax-qualified pension plan for U.S.-based salaried employees. The pension plan is designed to work together with social security benefits to provide employees with 30 years of service retirement income that is approximately 55% of eligible compensation, subject to the Internal Revenue ServiceCode maximum monthly benefit.

 

Excess Defined Benefit Pension Plan

 

•  We maintain a supplemental executive retirement benefit restoration plan which is an unfunded,non-qualified plan that is designed to provide retirement benefits to U.S.-based eligible participants as a replacement for those retirement benefits limited by regulations under the Internal Revenue Code.

 

•  Together, the defined benefit pension plan and excess defined benefit pension plan are intended to provide executive officers with retirement income at a level equivalent to that provided to other employees under the defined benefit pension plan.

 

Severance Agreements

Mr. Hilton is the only executive for which we have any obligation to pay severance other than following achange-in-control. As part of the negotiated employment agreement with Mr. Hilton and consistent with an agreement we had with his predecessor, we agreed to provide Mr. Hilton with a cash severance and other benefits in the event his employment is terminated by us without “Cause” or Mr. Hilton terminates his employment with us for “Good Reason” (each such term as defined in Mr. Hilton’s employment agreement).

Upon a termination by us without Cause or by Mr. Hilton for Good Reason, in addition to payment of any accrued and unpaid compensation and benefits, Mr. Hilton is entitled to post-termination payments and benefits as follows:

 

an amount equal to two (2) times the sum of his annual base salary and the greater of (x) ninety percent (90%) of his annual base salary or (y) his target cash incentive opportunity;

 

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apro-rata payout of his Annual Cash Incentive Award, based on actual performance;

 

apro-rata payout of long-term performance share awards granted to Mr. Hilton for any performance period(s) not completed on the date of termination, based upon actual performance in each such applicable performance period, as determined at the end of the applicable performance period;

 

full vesting of restricted share awards; and

 

continuation of health care and welfare benefits for a period of twenty-four (24) months following the date of termination.

We will notgross-up any tax imposed upon any payment received by Mr. Hilton under his employment agreement.

Change-in-Control

We believe that the occurrence, or potential occurrence, of achange-in-control transaction in which we are the target could create substantial uncertainty regarding the continued employment of our executive officers. Therefore, we have entered intochange-in-control retention agreements with our executive officers that provide severance and other benefits in the event of a qualifying termination following achange-in-control. The primary purpose of these agreements is to keep senior executives focused on pursuing all corporate transaction activity that is in the best interests of shareholders, regardless of whether those transactions may result in their own job loss. The Committee has determined thatchange-in-control retention agreements executed after November 1, 2015 will not provide for“gross-up” payments to cover any federal excise taxes that may be owed onchange-in-control severance payments and benefits.Change-in-control retention agreements executed prior to November 1, 2015, which do provide for agross-up for any excess federal excise taxes that may be owed on change in control-related severance payments and benefits, remain in effect.

Severance and Other Benefits

Severance benefits payable underchange-in-control retention agreements are conditioned upon the occurrence of a “double trigger” event (meaning there must be both achange-in-control of the Company and, within the following 24 months, a termination of employment by either the Company without Cause, or by the officer for Good Reason, as defined in the respectivechange-in-control retention agreements). We opted for a double-trigger, rather than a “single trigger” that provides for severance payments solely on the basis of achange-in-control, since a double trigger is consistent with the purpose of encouraging the continued employment of the executive following achange-in-control.

In the event of achange-in-control and a qualifying termination of employment, an executive officer will be entitled to receive:

 

accrued but unpaid compensation, including apro-rata payout of the Annual Cash Incentive Award;

 

a lump sum payment in an amount equal to two (2) times the sum of (x) annual base salary in effect at the time of termination of employment plus (y) target Annual Cash Incentive Award opportunity for the year in which termination of employment occurs;

 

continuation of coverage for the executive officer and his or her eligible spouse and dependents under the Company’s group health plans for 24 months following termination of employment or until the date he or she becomes covered under similar benefit plans;

 

professional outplacement services; and

 

54  |Nordson Corporation – 2017 Proxy Statement


two additional years of age and two additional years of service credit under the Company-sponsored qualified andnon-qualified pension plans, the benefit being paid from the Excess Defined Benefit Pension Plan.

54  |Nordson Corporation – 2019 Proxy Statement


Treatment of Share-based Awards

To provide our executive officers with the same opportunity as our shareholders to realize the value created by achange-in-control, the shareholder-approved Amended and Restated 2012 Nordson Corporation Share and Incentive Award Plan provideshistorically has provided for full vesting of all outstanding share-based Awards upon achange-in-control.

PART V: COMPENSATION COMMITTEE ACTIONS RELATED TO However, effective for awards granted under that plan after December 27, 2017,

EXECUTIVE COMPENSATION

We engaged Exequity to assist us equity awards generally will vest on a “double-trigger” basis, in establishing 2017 compensation for our executive officers. During our November 21, 2016 meeting, after we reviewed with Exequity competitive benchmarking studiesthe event of achange-in-control and proxy peer group and Aon Hewitt survey data, and considered other factors such as internal equity, experience and future potential, we set 2017 base salaries, the annual cash incentive compensation opportunity, and granted equity awards.

Base Salary

The base salary increases for the named executive officers range from 2.03 to 4.48%. Mr. Hilton’s base salary increase was 2.94%.

Annual Cash Incentive Award

Performance measures and goals for the quantitative corporate financial elementa qualifying termination of the Annual Cash Incentive Award are:

 

Measure

  Threshold  Target  Maximum

Diluted Earnings per Share Growth

  0%  10%  20%

Return on Total Capital

  8%  11.5%  16%

Performance Share Incentive Award

For the 2017-2019 Performance Share Incentive Award, we established the following cumulative diluted earnings per share growth and cumulative revenue growth threshold, target, and maximum goals:

 

Measure

  Threshold  Target  Maximum

Cumulative Diluted Earnings per Share Growth

  4%  8%  14%

Cumulative Revenue Growth

  5%  7%  11%

We granted stock options, performance share units for the 2017-2019 Performance Share Incentive Award, and restricted shares to our executive officers consistent with our equity award policy in the following amounts:

Named Executive Officer  Options
(# Shares)
   

 

Performance
Share Units
at Target (#)

   Restricted
Shares (#)
 

Michael F. Hilton

   60,400     14,900     7,450  

Gregory A. Thaxton

   14,000     3,600     1,800  

John J. Keane

   14,000     3,600     1,800  

Gregory P. Merk

   10,000     2,700     1,350  

Robert E. Veillette

   8,600     2,200     1,100  
participant’s employment.

 

Nordson Corporation – 20172019 Proxy Statement

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PART VI:V: POLICIES RELATED TO EXECUTIVE COMPENSATION

Equity Award Policy

We grant equity on a consistent schedule, generally at the first Committee meeting following the closeend of the fiscal year. We do not grant performance share units, stock options, or restricted shares to our executive officers in anticipation of the release of significant earnings announcements or other materialnon-public information likely to result in changes to the price of our common shares. Similarly, we do not time the release of materialnon-public information based on equity award grant dates. Awards generally are effective on the date that we grant the award. The Committee may also make occasional grants of stock options and other equity-based awards at other times to recognize, retain or recruit executive officers and key employees. We have delegated limited authority to Mr. Hilton to grant equity awards, excluding awards made to executive officers. Equity awards granted by Mr. Hilton in any quarter will be effective the first day of the month following public disclosure of quarterly earnings for that quarter.

Incentive Compensation Forfeiture (Clawback) Policy

We have a formal “clawback” policy for incentive awards that is broader in its reach than that imposed by Section 304 of the Sarbanes-Oxley Act. Under the policy, we may require our executive officers to repay cash-based incentive compensation and/or equity incentive awards in the event of a material restatement of the consolidated financial statements of the Company, other than any restatement required pursuant to a change in applicable accounting rules. Recovery is limited to amounts paid or realized by an executive officer during the three-year period preceding the date that we are required to prepare a restatement.

Additionally, our Board of Directors, upon the Committee’s recommendation, may, to the extent permitted by law and to the extent it determines that it is in our best interests to do so, require reimbursement or payment by the executive officer to the Company of equity-based compensation and performance-based compensation in an amount determined by the Board of Directors to be attributable to: (i) conduct that violates our Code of Ethics and Business Conduct, or (ii) willful misconduct or fraud that causes harm to the Company.

The Committee will revise the policy as appropriate once final rules are issued under the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Share Ownership Guidelines

We require share ownership by our executive officers to emphasize our executive compensation program’s objective of aligning the individual financial interests of our executive officers with the investment interests of our long-term shareholders. We require our executive officers to own the following multiples of base salary in the equivalent number of common shares:

 

Chief Executive Officer

  5 times base salary

President (other than the Chief Executive Officer)

  

3 times base salary

Chief Financial Officer

  3 times base salary

Other Executive Officers

  

2 times base salary

The number of shares required to be held varies according to our common share price movement. Newly elected executive officers will have up to five years to meet the ownership requirements after their election.

Executive officers who have not satisfied the share ownership requirements by the end of the five-year period or who have not shown progress (as subjectively determined by the Committee) toward the required ownership level prior to the end of such five-year period will be expected to retain 100% of the shares acquired through exercise of options, lapse of transfer restrictions on restricted shares or

 

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Performance Share Incentive Award payouts, net of shares withheld to cover the taxes due, until the share ownership requirement is achieved or there is progress towards the ownership requirement. We review the share ownership of each executive officer compared to the applicable share ownership guidelines, including the number of vested stock options, share equivalent units in deferred compensation plans and share ownership in the Nordson Corporation Employee Stock Ownership Plan and 401(k) Plan, each of which count as valid forms of share ownership under the ownership guidelines. As of October 31, 2016,2018, all named executive officers, exceedexcept Jeffrey Pembroke, met or exceeded their respective ownership guidelines. Mr. Pembroke was named an executive officer in November 2015 and is required to meet the share ownership requirement by November 2020.

Anti-Pledging/Anti-Hedging Policy

We prohibit directors and executive officers from pledging Nordson common shares as collateral. Also prohibited isare trading in derivative securities of Nordson’s common shares, engaging in short sales of Nordson securities, or purchasing any other financial instruments (including prepaid variable forward contracts, equity swaps, collars, and exchange funds) that are designed to hedge or offset any decrease in the market value of Nordson securities.

DeductibilityTax and Accounting Treatment of Executive Compensation

The Committee takes into account the tax and accounting treatment of executive compensation arrangements when structuring our executive compensation program. One of those considerations is Section 162(m) of the Internal Revenue Code, which sets a limit of $1,000,000$1 million on the amount we can deduct for compensation paid to eachour “covered employees”. Historically, compensation meeting the requirements of the chief executive officer and the three other most highly compensated executive officers other than the chief financial officer. Compensation that qualifies as “performance-based” compensation“qualified performance-based compensation” under Section 162(m) doesdid not count toward the $1,000,000$1 million limit. PaymentsHowever, the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, made a number of base salarychanges to Section 162(m), generally effective for taxable (fiscal) years beginning after December 31, 2017, including the repeal of the “qualified performance-based compensation” exemption and service-based restricted shares would not be excludablethe expansion of the definition of “covered employees” (for example, by including both the chief financial officer and thus, the payment of those amounts in excess of $1,000,000 in one fiscal year would, generally, benon-deductible.certain former named executive officers as covered employees).

Our general philosophy ishas been to attempt to qualify compensation for tax deductibility under Section 162(m) of the Internal Revenue Code, wherever we deem appropriate, recognizing that, under certain circumstances, the limitations may be exceeded. Qualification isHistorically, treatment as “qualified performance-based compensation” has been sought to the extent practicable and only to the extent that it is consistent with our overall compensation objectives. TheHowever, due to uncertainties regarding the scope of relief under the Tax Cuts and Jobs Act, there can be no guarantee that any compensation paid to our covered employees in excess of $1 million will be or remain exempt from Section 162(m).

In any event, the Committee however retains full discretion to construct compensation packages that will best attract, retain, and reward successful executive officers. Therefore, the Committee may award compensation that is not fully deductible under Section 162(m) if the Committee believes it will contribute to the achievement of our business objectives.

As discussed above, for 2016, payouts under Moreover, given the Annual Cash Incentive Award and 2014-2016 Performance Share Incentive Award to executive officers subjectnature of the changes to Section 162(m) were made in accordance with performance-basedunder the recent Tax Cuts and Jobs Act, the Compensation Committee expects that, after Nordson’s 2018 fiscal year, thetax-deductible portion of our executive compensation arrangements that were intended to qualify as tax deductible.

program will decrease.

 

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COMPENSATION COMMITTEE REPORT

We have reviewed and discussed with management the Compensation Discussion and Analysis that appears in this Proxy Statement. Based on such review and discussion, we recommended to the Board of Directors that the Compensation Discussion and Analysis be included in the Company’s definitive Proxy Statement on Schedule 14A and incorporated by reference into the Company’s 20162018 Annual Report, each as filed with the SEC.

Compensation Committee,

Mary G. Puma, Chair

Lee C. Banks

Joseph P. KeithleyMichael J. Merriman, Jr.

Victor L. Richey, Jr.

January 27, 201718, 2019

The above Compensation Committee Report does not constitute soliciting material and should not be deemed filed with the SEC or subject to Regulation 14A or 14C (other than as provided in Item 407 of RegulationS-K) or to the liabilities of Section 18 of the Exchange Act, except to the extent that the Company specifically requests that the information in this Report be treated as soliciting material or specifically incorporates it by reference into a document filed under the Securities Act of 1933 (the “Securities Act”) or the Exchange Act. If this Report is incorporated by reference into the Company’s Annual Report on Form10-K, such disclosure will be furnished in such Annual Report on Form10-K and will not be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act as a result of furnishing the disclosure in this manner.

 

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RISKS RELATED TO EXECUTIVE COMPENSATION POLICIES AND PRACTICES

The Committee believes that the design of the executive compensation program as outlined in the “Compensation Discussion and Analysis” above places emphasis on long-term incentives and competitive base salaries. While the Annual Cash Incentive Award is tied to short-term performance, the Committee concluded that emphasis on long-term incentives appropriately balances risk and management’s motivations for our long-term success, including share price performance, with the interests of our long-term shareholders. Although our executive compensation program is designed topay-for-performance and provide incentive-based compensation, the incentive-driven elements of our executive compensation program contain various mitigating features that are designed to discourage management from taking unnecessary risks in managing the business that could maximize short-term results at the expense of long-term value.

The Committee has the authority to set performance measures and goals, monitor performance, and to exercise negative discretion in determining incentive award payouts to our executive officers.

We believe that our compensation policies and practices do not encourage our executive officers to take excessive or unnecessary risks and are not reasonably likely to have a material adverse effect on the Company.

The table below summarizes the risk mitigation factors applicable to the primary elements of the Company’s executive compensation program.

 

Base Salary Risk Mitigation Factors

 

Fixed Amount.    Base salary does not encourage risk-taking as it is a fixed amount.

 

Small Percentage of Total Compensation.    Base salary is a relatively small percentage of total direct compensation for executive officers.

Annual Cash Incentive Award Risk Mitigation Factors

 

Multiple Performance Factors.    The Annual Cash Incentive Award features multiple quantitative performance measures that encourage executives to focus on the overall strength of the business rather than a single financial measure.

 

Award Cap.    Awards payable to any individual are capped.

 

Management Processes.    Board and management processes are in place to oversee risks associated with the Annual Cash Incentive Award, including, but not limited to, monthly and quarterly business performance reviews by management and regular business performance reviews by the Board of Directors and the Audit Committee.

 

Clawback Provision.    Robust forfeiture (“clawback”) terms accompany cash-based incentive awards for our executive officers.

Long-Term Equity Compensation Risk Mitigation Factors

 

Share Ownership Guidelines.    Share ownership guidelines align the executive interests with those of our long-term shareholders.

 

Vesting Schedule Overlaps.    The vesting schedules for long-term incentives overlap and, therefore, reduce an executive officer’s motivation to maximize performance in any one period.

 

Service-based Vesting.    Service-based vesting aligns with long-term shareholder interests.

 

Anti-Hedging/Anti-Pledging Policy.    The Company’s anti-hedging policy prohibits directors and our executive officers from purchasing any financial instrument that is designed to hedge or offset any decrease in the market value of our common stock, including prepaid variable forward contracts, equity swaps, collars, and exchange funds. Our anti-pledging policy prohibits our directors and executive officers from pledging our common stock as collateral.

 

Clawback Provision.    Robust forfeiture (“clawback”) terms accompany equity-based awards for our executive officers.

 

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SUMMARY COMPENSATION FOR FISCAL YEAR 20162018

All references in this section to years are references to fiscal years unless otherwise noted. Our fiscal year ends October 31.

The following narratives, tables, footnotes, and supplemental tables present the components of compensation for our named executive officers for the fiscal year ended October 31, 2016.2018. The individual components of the compensation reflected in the Summary Compensation Table (“SCT”) for 20162018 and the prior two fiscal years are:

 

Salary.    Base salary earned by a named executive officer. Any amount of base salary deferred by a named executive officer is identified in footnote 1 to the“Non-Qualified Deferred Compensation” table.

 

Bonus.    We did not award any discretionary cash bonus to any named executive officer.

 

  

Stock Awards.    The awards disclosed in the “Stock Awards” column consist of restricted share awards and performance share awards for the 2016-2018, 2015-2017,2018-2020, 2017-2019, and 2014-20162016-2018 performance periods. The calculations are based upon the grant date fair value of restricted shares and performance share units as calculated under FASB ASC Topic 718 for 2016, 2015,2018, 2017, and 2014.2016. Details about the Performance Share Incentive Awardsperformance share incentive awards made during 2018 are included in the narrative accompanying the “Grants of Plan-Based Awards” table below. For performance share awards, grant date fair value disclosed in the SCT is based on the level at which the award is expected to pay out, rather than at the maximum possible payout. The maximum payout appears in a footnote to the table.

 

Option Awards.    The awards disclosed in the “Option Awards” column consist of option awards for our common stock. The award amounts represent the grant date fair value of stock options as calculated under FASB ASC Topic 718. Details about the option awards made during 20162018 are included in the narrative accompanying the “Grants of Plan-Based Awards” table.

 

Non-Equity Incentive Plan Compensation.    The amounts disclosed under the“Non-Equity Incentive Plan Compensation” column represent compensation earned under the Annual Cash Incentive Award. Further information concerning the Annual Cash Incentive Award may be reviewed in Part III of the Compensation Discussion and Analysis section of this Proxy Statement under the caption “Key Components of Our Executive Compensation Program.”

 

Change in Pension Value andNon-Qualified Deferred Compensation Earnings.    The amounts disclosed in the “Change in Pension Value andNon-Qualified Deferred Compensation Earnings” column represent any actuarial increase during the fiscal year in the pension value provided under our qualified defined benefit pension plan andnon-qualified excess defined benefit pension plan. We do not pay above-market or preferential rates on thenon-qualified deferred compensation of our named executive officers. A narrative discussion of our defined benefit pension plan and excess defined benefit pension plan accompanies the “Pension Benefits” table.

 

All Other Compensation.    The amounts disclosed in the “All Other Compensation” column include the combined value of theeach named executive officer’s perquisites, our matching contributions to the qualified deferred compensation 401(k) plan andnon-qualified deferred compensation plan and other noted payments.

 

60  | Nordson Corporation – 20172019 Proxy Statement


Summary Compensation Table

In this section we provide certain tabular and narrative information regarding the compensation of our principal executive and financial officers and our three other most highly compensated executive officers for 2016.2018.

 

Name and

Principal Position

 Fiscal
Year
 

Salary

(1) $

 Bonus
$
 

Stock
Awards

(2) $

 Option
Awards
(3) $
 Non-Equity
Incentive Plan
Compensation
(4) $
 Change in
Pension Value
& Non-
Qualified
Deferred
Compensation
Earnings (5) $
 All Other
Compensation
(6) $
 Total $  

Fiscal
Year

 

 

Salary

(1) $

 

 

Bonus
$

 

 

Stock
Awards

(2) $

 

 

Option
Awards
(3) $

 

 

Non-Equity
Incentive Plan
Compensation
(4) $

 

 

Change in
Pension Value

& Non-
Qualified
Deferred
Compensation
Earnings (5) $

 

 

All Other
Compensation
(6) $

 

 

Total $

 

 

Michael F. Hilton

  2016    850,000        1,897,868    1,416,040    1,380,400    775,637    108,904    6,428,849    2018   925,000      2,509,619   1,942,599   1,082,250   454,746   82,876   6,997,090 

President and Chief

  2015    825,000        1,752,298    1,425,589    800,000    761,474    75,158    5,639,519    2017 �� 875,000      2,347,868   1,829,045   1,103,375   505,485   87,542   6,748,315 

Executive Officer

  2014    800,000        1,534,825    1,233,462    1,294,000    535,762    96,057    5,494,106    

 

2016

 

 

 

  

 

850,000

 

 

 

  

 

 

 

 

  

 

1,897,868

 

 

 

  

 

1,416,040

 

 

 

  

 

1,380,400

 

 

 

  

 

775,637

 

 

 

  

 

108,904

 

 

 

  

 

6,428,849

 

 

 

Gregory A. Thaxton

  2016    435,000        495,096    334,559    494,508    618,576    41,600    2,419,339    2018   470,000      586,967   435,170   384,930   47,260   37,854   1,962,181 

Senior Vice President,

  2015    420,000        434,012    354,220    326,340    514,429    34,511    2,083,512  

Executive Vice President,

  2017   450,000      567,270   423,951   397,215   407,504   42,123   2,288,063 

Chief Financial Officer

  2014    390,000        385,375    317,754    410,036    702,369    43,509    2,249,043    

 

2016

 

 

 

  

 

435,000

 

 

 

  

 

 

 

 

  

 

495,096

 

 

 

  

 

334,559

 

 

 

  

 

494,508

 

 

 

  

 

618,576

 

 

 

  

 

41,600

 

 

 

  

 

2,419,339

 

 

 

John J. Keane

  2016    420,000        495,096    334,559    448,056    473,781    43,015    2,214,507    2018   455,000      586,967   435,170   339,203      32,662   1,848,855 

Senior Vice President

  2015    405,000        449,308    362,930    283,500    337,997    34,990    1,873,725  

Executive Vice President

  2017   435,000      567,270   423,951   395,850   161,304   38,577   2,021,952 
 

 

2016

 

 

 

  

 

420,000

 

 

 

  

 

 

 

 

  

 

495,096

 

 

 

  

 

334,559

 

 

 

  

 

448,056

 

 

 

  

 

473,781

 

 

 

  

 

43,015

 

 

 

  

 

2,214,507

 

 

 

Gregory P. Merk

  2018   420,000      430,967   313,322   337,428      24,764   1,394,239 

Executive Vice President

  2017   403,000      425,453   302,822   351,799   364,368   23,766   1,871,208 
 

 

2016

 

 

 

  

 

380,000

 

 

 

  

 

 

 

 

  

 

350,693

 

 

 

  

 

260,645

 

 

 

  

 

411,996

 

 

 

  

 

483,320

 

 

 

  

 

26,570

 

 

 

  

 

1,913,224

 

 

 

Jeffrey A. Pembroke

  2018   415,000      380,743   292,434   389,789   37,374   38,794   1,554,134 

Executive Vice President

          
  2014    380,000        568,080    332,197    353,461    478,693    37,665    2,150,096                     

Gregory P. Merk

  2016    380,000        350,693    260,645    411,996    483,320    26,570    1,913,224  

Senior Vice President

  2015    345,000        318,020    240,986    291,249    204,056    17,904    1,417,215  
  2014    320,000        273,325    219,539    282,269    617,601    30,046    1,742,780  

Robert E. Veillette

  2016    357,000        288,806    213,962    318,872    447,031    33,993    1,659,664  

Vice President,

  2015    345,000        279,144    220,661    210,623    431,046    33,134    1,519,608  

General Counsel & Secretary

  2014    330,000        245,375    199,318    293,576    613,162    25,983    1,707,414  

 

 

(1)

This column includes amounts of base salary deferred into the 2005 Deferred Compensation Plan. These deferrals are noted in footnote 1 to the“Non-Qualified Deferred Compensation” table.

 

(2)

This column represents the grant date fair value of restricted shares and performance share units as calculated under FASB ASC Topic 718. The grant date fair value disclosed for performance share awards is based on target performance. The maximum performance share award amount with respect to each of the named executive officers is shown in the table below. The assumptions made in valuing share awards reported in this column for 20162018 are discussed in Note 15,14 Stock-based Compensation in the “Notes to the consolidated financial statements included inConsolidated Financial Statements” section of our Report on Form10-K for 2016 .2018.

 

Named Executive Officer  Fiscal
Year
   Maximum
Payout (# of Units)
   Maximum
Grant Date Fair
Value Payout
($)
   

Fiscal
Year

 

  

Maximum
Payout (# of Units)

 

  

 Maximum     

 Grant Date Fair     

 Value Payout     

 

Michael F. Hilton

   2016     36,800    $2,490,992    2018  26,800  $3,308,460    
   2015     30,200    $2,309,696    2017  29,800  $3,091,750    
   2014     29,200    $2,022,100    2016

 

  36,800

 

  $2,490,992    

 

Gregory A. Thaxton

   2016     9,600    $649,824    2018    6,200  $   765,390    
   2015     7,600    $581,248    2017    7,200  $   747,000    
   2014     7,400    $512,450    2016

 

    9,600

 

  $   649,824    

 

John J. Keane

   2016     9,600    $649,824    2018    6,200  $   765,390    
   2015     8,000    $611,840    2017    7,200  $   747,000    
   2014     7,800    $540,150    2016

 

    9,600

 

  $   649,824    

 

Gregory P. Merk

   2016     6,800    $460,292    2018    4,500  $   555,525    
   2015     5,400    $412,992    2017    5,400  $   560,250    
   2014     5,200    $360,100    2016

 

    6,800

 

  $   460,292    

 

Robert E. Veillette

   2016     5,600    $379,064  

Jeffrey A. Pembroke

  2018    4,100  $   506,145    
   2015     4,800    $367,104           
   2014     4,600    $318,550  

 

(3)

This column represents the grant date fair value of the stock option award as calculated under FASB ASC Topic 718 as of the respective grant date for each award. The grant date fair value was determined using the Black-Scholes valuation model. For additional information regarding such awards, see the “Grants of Plan-Based Awards” table below. The aggregate grant date fair value may not correspond to the actual value that may be recognized by the named executive officer. The actual amount, if any, realized upon the exercise of stock options will depend upon the market price of our common shares relative to the exercise price per share at the time of exercise.

 

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The table below lists the assumptions used to estimate the grant date fair value of stock options awarded to the named executive officers and included in this column as of October 31, 2016:2018:

 

Fiscal Year  Number of Shares
Awarded
   Exercise Price   Expected Life
(in years)
   Dividend Yield Volatility   Risk-Free Rate  Number of Shares
Awarded
 Exercise Price Expected Life
(in years)
 Dividend Yield Volatility  Risk-Free Rate 

2012

   102,800    $43.73     6.1     1.20  0.4540     1.23

2013

   80,600    $61.59     6.1     1.01  0.4530     0.90

2014

   79,700    $71.75     6.1     1.03  0.4417     1.79   76,000

 

 $  71.75

 

 6.1

 

 1.03%

 

 0.4419

 

 1.78%

 

2015

   89,700    $79.66     6.1     1.10  0.3954     1.85   85,900

 

 $  79.66

 

 6.1

 

 1.10%

 

 0.3919

 

 1.84%

 

2016

   131,600    $70.91     6.2     1.54  0.3037     1.90 127,800

 

 $  70.91

 

 6.2

 

 1.54%

 

 0.3037

 

 1.90%

 

2017

 104,900

 

 $107.65

 

 6.2

 

 1.17%

 

 0.2918

 

 2.01%

 

2018

   98,200

 

 $127.67

 

 6.2

 

 0.97%

 

 0.2670

 

 2.20%

 

The assumptions listed above differ slightly from those presented in Note 15,14 Stock-based Compensation in the “Notes to the consolidated financial statements included inConsolidated Financial Statements” section of our 2016 Annual Report.Form10-K for 2018. The assumptions in Note 1514 represent awards to all executive officers and key employees and grant dates during each year.

See the “Grants of Plan-Based Awards” table for information with respect to the stock options awarded in 20162018 and the “Outstanding Equity Awards” table for information with respect to the stock options awarded prior to 2016.2018.

 

(4)

The amounts in this column represent the totalnon-equity incentive plan compensation we recognized in the respective fiscal year under our Annual Cash Incentive Award and also include the portion of the Annual Cash Incentive Award payout that was deferred by our named executive officers. These deferrals are noted in footnote 1 to the“Non-Qualified Deferred Compensation” table.

 

(5)

The amounts entered in this column include the aggregate change in the actuarial present value of the named executive officer’s accumulated benefits under the Nordson Corporation Salaried Employees Defined Benefit Pension Plan and Excess Defined Benefit Pension Plan. There were no above-market or preferential earnings onnon-qualified deferred compensation. The present value amounts of the accumulated benefits were determined using assumptions discussed in Note 7,6 Retirement, Pension and other Post-retirement Plans in the “Notes to the consolidated financial statements included inConsolidated Financial Statements” section of our 2016 Annual Report.Form10-K for 2018.

The following table provides further details to the increases by plan for 2016:2018:

 

Named Executive Officer  Change in Pension
Plan Value ($)
   Change in Excess
Pension Plan Value ($)
   Change in Pension
Plan Value ($)
 Change in Excess
 Pension Plan Value ($) 

Michael F. Hilton

   70,698     704,939      

 

37,095

 

 

  

 

417,651

 

 

Gregory A. Thaxton

   151,304     467,272      

 

(45,626

 

)

 

  

 

  92,886

 

 

John J. Keane

   137,867     335,914      

 

(35,831

 

)

 

  

 

  35,684

 

 

Gregory P. Merk

   39,378     443,942      

 

(2,794

 

)

 

  

 

(129,449

 

)

 

Robert E. Veillette

   137,350     309,681  

Jeffrey A. Pembroke

    

 

(18,955

 

)

 

  

 

  56,329

 

 

 

(6)

The following tables describe each component of the “All Other Compensation” column in the Summary Compensation Table:

 

Named Executive Officer  Total
Perquisites
($) (a)
   

Company
Contributions to

Tax-Qualified  and
Non-Qualified
Plans
($)

   Dividends
Related to
Share-
Based
Plans ($)
   Company
Match of
Charitable
Contributions
($)
   Total All
Other
Compensation
($)
 Total
Perquisites
($) (a)

Company
Contributions to

Tax-Qualified and
Non-Qualified
Plans
($)

Dividends
Related to
Share-
Based
Plans ($)
Company
Match of
Charitable
Contributions
($)

Total All
Other
 Compensation 

($)

Michael F. Hilton

   11,604     64,502     16,468     16,330     108,904   

 

9,800

 

 

 

 

49,927

 

 

 

 

18,419

 

 

 

 

4,730

 

 

 

 

82,876

 

 

Gregory A. Thaxton

   7,016     22,799     4,158     7,627     41,600   

 

6,637

 

 

 

 

21,628

 

 

 

 

  4,500

 

 

 

 

5,089

 

 

 

 

37,854

 

 

John J. Keane

   5,694     23,149     6,172     8,000     43,015   

 

6,681

 

 

 

 

21,481

 

 

 

 

  4,500

 

 

 

 

      —

 

 

 

 

32,662

 

 

Gregory P. Merk

   2,450     21,083     3,037          26,570   

 

  875

 

 

 

 

20,554

 

 

 

 

  3,335

 

 

 

 

      —

 

 

 

 

24,764

 

 

Robert E. Veillette

   5,270     17,489     2,574     8,660     33,993  

Jeffrey A. Pembroke

 

 

4,518

 

 

 

 

16,951

 

 

 

 

  2,325

 

 

 

 

15,000

 

 

 

 

38,794

 

 

 

 (a)

Total perquisites for 2016:2018:

 

  Named Executive Officer  Financial
Planning
($)
   Business
and Airline
Club Dues
($)
   Executive
Physicals
($)
   Total
Perquisites
($)
 

  Michael F. Hilton

   5,000     5,177     1,428     11,604  

  Gregory A. Thaxton

   5,000     500     1,516     7,016  

  John J. Keane

   4,500     450     744     5,694  

  Gregory P. Merk

   2,450               2,450  

  Robert E. Veillette

   4,200     1,070          5,270  

  Named Executive OfficerFinancial
Planning
($)
Business
and Airline
Club Dues
($)
Executive
Physicals
($)

Total
 Perquisites 

($)

 

  Michael F. Hilton

 

 

 

5,000

 

 

 

 

4,800

 

 

 

 

 

 

 

 

9,800

 

 

 

  Gregory A. Thaxton

 

 

 

4,000

 

 

 

 

1,250

 

 

 

 

1,387

 

 

 

 

6,637

 

 

 

  John J. Keane

 

 

 

4,300

 

 

 

 

 

 

 

 

2,381

 

 

 

 

6,681

 

 

 

  Gregory P. Merk

 

 

 

875

 

 

 

 

 

 

 

 

 

 

 

 

875

 

 

 

  Jeffrey A. Pembroke

 

 

 

2,400

 

 

 

 

 

 

 

 

2,118

 

 

 

 

4,518

 

 

 

62  | Nordson Corporation – 20172019 Proxy Statement


GRANTS OF PLAN-BASED AWARDS

We granted the following awards to our executive officers in 2016:2018:

 

Annual Cash Incentive Awards — The Compensation Committee establishes quantitative corporate financial and operating unit measures and performance goals at the beginning of a fiscal year. Any payouts are determined by actual fiscal year performance against thepre-established corporate financial and business operating performance measures for our named executive officers that lead our businesses. These awards are referred to in the following table as “ACIA.”

 

Performance Share Incentive Awards — The Compensation Committee establishes performance share incentive awards for executive officers based on three-year cumulative performance measures. The award is in the form of performance share units which are settled in unrestricted Nordson common shares on aone-for-one basis or share equivalent units on aone-for-one basis for payouts that are deferred. The payout will vary based upon the actual level of performance over a three-year period. However, the threshold performance level must be achieved before any payout is made. These awards are referred to in the following table as “PSIA.”

 

Restricted Share Awards — Restricted shares are awarded subject to restrictions on transferability. The shares may be voted but not sold or transferred during the restriction period. Cash dividends are paid on the restricted shares during the restriction period. Restricted shares vest on apro-rata basis annually each year for three years following the date of award. These awards are referred to in the following table as “RS.”

 

Stock Option Awards — Stock options have a term of ten years, become exercisable over a four-year period at the rate of 25% per year beginning one year from the grant date, and have an exercise price equal to the closing price of our common shares on the grant date. Under the terms of award, the exercise price andtax-withholding obligations may be paid with previously owned common shares or with shares acquired upon exercise. Information with respect to each of these awards on anaward-by-award basis is set forth in the table below. These awards are referred to in the following table as “Options.”

 

Nordson Corporation – 20172019 Proxy Statement

 |  63


Grants of Plan-Based Awards

The following table and footnotes present the components of the plan-based awards made to our named executive officers during 2016.2018.

Grants of Plan-Based Awards Table

 

       

 

Estimated Future Payouts Under
Non-equity
Incentive Plan Awards (1)

 

 

Estimated Future Payouts
Under Equity
Incentive Plan Awards (2)

 

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units

(#)

  

All Other
Option
Awards:
Number of
Securities
Underlying
Options

(#)

  

Exercise
or Base
Price of
Option
Awards

($/sh)

  

Grant
Date
Fair Value
of Stock
and
Option
Awards (3)

($)

 
   Threshold Target Maximum Threshold Target Maximum        

 

Estimated Future Payouts Under
Non-equity
Incentive Plan Awards (1)

 

 

Estimated Future Payouts
Under Equity
Incentive Plan Awards (2)

  

All Other
Stock
Awards:
Number
of Shares
of Stock
or Units

(#)

 

All Other
Option
Awards:
Number of
Securities
Underlying
Options

(#)

 

Exercise
or Base
Price of
Option
Awards

($/sh)

 

Grant
Date

Fair Value
of Stock
and
Option
Awards (3)

($)

 
Name Plan Grant Date ($) ($) ($) (#) (#) (#)  

Plan

 

 

Grant Date

 

 

Threshold

($)

 

 

Target

($)

 

 

Maximum

($)

 

 

Threshold

(#)

 

 

Target

(#)

 

 

Maximum

(#)

 

 

Hilton

 ACIA  11/23/2015    425,000    850,000    1,700,000                               ACIA 11/20/2017  462,500  925,000  1,850,000                      
 PSIA  11/23/2015                9,200    18,400    36,800                1,245,496   PSIA 11/20/2017           6,700  13,400  26,800           1,654,230 
 RS  11/23/2015                            9,200            652,372   RS 11/20/2017                    6,700        855,389 
 Options  11/23/2015                                72,800   $70.91    1,416,040   Options 11/20/2017                       55,800  $127.67  1,942,599 

Thaxton

 ACIA  11/23/2015    152,250    304,500    609,000                               ACIA 11/20/2017  164,500  329,000  658,000                      
 PSIA  11/23/2015                2,400    4,800    9,600                324,912   PSIA 11/20/2017           1,550  3,100  6,200           382,695 
 RS  11/23/2015                            2,400            170,184   RS 11/20/2017                    1,600        204,272 
 Options  11/23/2015                                17,200   $70.91    334,559   Options 11/20/2017                       12,500  $127.67  435,170 

Keane

 ACIA  11/23/2015    147,000    294,000    588,000                               ACIA 11/20/2017  159,250  318,500  637,000                      
 PSIA  11/23/2015                2,400    4,800    9,600                324,912   PSIA 11/20/2017           1,550  3,100  6,200           382,695 
 RS  11/23/2015                            2,400            170,184   RS 11/20/2017                    1,600        204,272 
 Options  11/23/2015                                17,200   $70.91    334,559   Options 11/20/2017                       12,500  $127.67  435,170 

Merk

 ACIA  11/23/2015    114,000    228,000    456,000                               ACIA 11/20/2017  136,500  273,000  546,000                      
 PSIA  11/23/2015                1,700    3,400    6,800                230,146   PSIA 11/20/2017           1,125  2,250  4,500           277,763 
 RS  11/23/2015                            1,700            120,547   RS 11/20/2017                    1,200        153,204 
 Options  11/23/2015                                13,400   $70.91    260,645   Options 11/20/2017                       9,000  $127.67  313,322 

Veillette

 ACIA  11/23/2015    98,175    196,350    392,700                              

Pembroke

 ACIA 11/20/2017  134,875  269,750  539,500                      
 PSIA  11/23/2015                1,400    2,800    5,600                189,532   PSIA 11/20/2017           1,025  2,050  4,100           253,073 
 RS  11/23/2015                            1,400            99,274   RS 11/20/2017                    1,000        127,670 
 Options  11/23/2015                                11,000   $70.91    213,962   Options

 

  

 

11/20/2017

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

8,400

 

 

 

 $

 

127.67

 

 

 

  

 

292,434

 

 

 

 

(1)

These columns show the estimated dollar value of the potential payout under the ACIA at threshold, target, or maximum payout levels. The Compensation Committee’s process to determine payouts under the ACIA is described in Part III of the Compensation Discussion and Analysis section of this Proxy Statement under the caption “Key Components of Our Executive Compensation Program.”

 

(2)

These columns show the potential number of shares to be paid out for our named executive officers under the PSIA at threshold, target, or maximum performance. The measures and potential payouts are described in more detail in Part III of the Compensation Discussion and Analysis section of this Proxy Statement under the caption “Key Components of Our Executive Compensation Program.” The grant date fair value, based on target performance for these performance awards, is included in the “Stock Awards” column of the Summary Compensation Table.

 

(3)

Values in this column reflect the grant date fair value for stock option awards, restricted shares, and PSIAs determined in accordance with FASB ASC Topic 718. The grant date fair value of the PSIAs are at target. The actual amounts that will be received by the named executive officer will be determined at the end of the performance period based upon our actual performance, which may differ from the performance that was probable on the grant date.

 

    

For establishing grant date fair value of stock options, we use the Black-Scholes option pricing model to calculate the fair value of stock options. The key assumptions for the Black-Scholes valuation method include the expected life of the option, stock price volatility, the risk-free interest rate, dividend yield and exercise price. The exercise price of stock options is the fair market value of our common shares on the grant date. The following table sets forth the assumptions used in the calculation of the amounts for stock option awards presented in the table:

 

 a.

Expected Volatility: 0.3037.0.2670.

 

 b.

Risk-Free Interest Rate: The rate available at the time the award was made onzero-coupon U.S. Government issues with a remaining term equal to the expected life: 1.90%2.20%.

 

 c.

Dividend Yield: 1.54%0.97% based on the historical dividend yield.

 

 d.

Expected Life: 6.2 years.

 

    

The calculations for the fair value of restricted shares are based upon the grant date fair value of restricted share awards determined using the market price of our common stock at the award date.

 

64  | Nordson Corporation – 20172019 Proxy Statement


OUTSTANDING EQUITY AWARDS AT OCTOBER 31, 20162018

The following narrative, table and footnotes describe equity awards to our named executive officers under our Amended and Restated 2012 Stock Incentive and Award Plan that were outstanding as of the end of 2016:2018:

 

2015-20172017-2019 Performance Share Incentive Awards (disclosed as “2015“2017 PSIA” awards in the “Stock Awards” columns).    The 2015-20172017-2019 performance period began November 1, 20142016 and concludes October 31, 2017.2019. Settlement of these awards will be in the form of unrestricted Nordson common shares on aone-for-one basis. The ultimate value of the awards will depend on the number of share units earned and the price of our common shares at the time of settlement.

 

2016-20182018-2020 Performance Share Incentive Awards (disclosed as “2016“2018 PSIA” awards in the “Stock Awards” columns).    The 2016-20182018-2020 performance period began November 1, 20152017 and concludes October 31, 2018.2020. Settlement of these awards will be in the form of unrestricted Nordson common shares on aone-for-one basis. The ultimate value of the awards will depend on the number of share units earned and the price of our common shares at the time of settlement.

 

Restricted Share Awards (disclosed in the “Stock Awards” columns).    Consist of the unvested restricted shares as of October 31, 2016.2018.

 

Stock Option Awards (disclosed in the “Option Awards” columns).    Consist of outstanding stock options awarded to our named executive officersofficers.

 

Nordson Corporation – 20172019 Proxy Statement

 |  65


Outstanding Equity Awards

The following table sets forth information with respect to performance share awards, restricted share awards and stock options held by our named executive officers as of October 31, 2016.2018. Dates noted below the names of the named executive officers represent award dates for stock options and restricted shares.

 

  

 Option Awards  Stock Awards 
Name Number of
Securities
Underlying
Unexer-
cised
Options -
Exercis-
able (1)
(#)
  Number of
Securities
Underlying
Unexer-
cised
Options-
Unexercis-
able (1)
(#)
  Option
Exercise
Price
$/sh
  Option
Expiration Date
  Number of
Shares or
Units of
Stock That
Have Not
Vested (2)
(#)
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested (2)
($)
  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights Not
Vested (3)
(#)
  Equity Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
Not Vested (4)
($)
 

Michael F. Hilton

         

2015 PSIA

                          30,200    3,023,926  

2016 PSIA

                          36,800    3,684,784  

Restricted Shares

         

25-Nov-2013

                  2,434    243,716          

24-Nov-2014

                  5,000    500,650          

23-Nov-2015

                  9,200    921,196          

Stock Options:

         

16-Jan-2010 (5)

  69,218        30.70    16-Jan-2020                  

7-Dec-2010

  50,000        43.32    7-Dec-2020                  

28-Nov-2011

  55,000        43.73    28-Nov-2021                  

28-Nov-2012

  32,250    10,750    61.59    28-Nov-2022                  

25-Nov-2013

  21,350    21,350    71.75    25-Nov-2023                  

24-Nov-2014

  12,275    36,825    79.66    24-Nov-2024                  

23-Nov-2015

      72,800    70.91    23-Nov-2025                  

Gregory A. Thaxton

         

2015 PSIA

                          7,600    760,988  

2016 PSIA

                          9,600    961,248  

Restricted Shares

         

25-Nov-2013

                  600    60,078          

24-Nov-2014

                  1,200    120,156          

23-Nov-2015

                  2,400    240,312          

Stock Options:

         

5-Dec-2007

  3,200        26.46    5-Dec-2017                  

4-Dec-2008

  7,475        14.37    4-Dec-2018                  

3-Dec-2009

  11,250        27.26    3-Dec-2019                  

7-Dec-2010

  11,400        43.32    7-Dec-2020                  

28-Nov-2011

  13,000        43.73    28-Nov-2021                  

28-Nov-2012

  8,250    2,750    61.59    28-Nov-2022                  

25-Nov-2013

  5,500    5,500    71.75    25-Nov-2023                  

24-Nov-2014

  3,050    9,150    79.66    24-Nov-2024                  

23-Nov-2015

      17,200    70.91    23-Nov-2025                  

John J. Keane

         

2015 PSIA

                          8,000    801,040  

2016 PSIA

                          9,600    961,248  

Restricted Shares

         

25-Nov-2013

                  634    63,482          

27-Aug-2014 (6)

                  2,000    200,260          

24-Nov-2014

                  1,200    120,156          

23-Nov-2015

                  2,400    240,312          

Stock Options:

         

3-Dec-2009

  23,600        27.26    3-Dec-2019                  

7-Dec-2010

  16,000        43.32    7-Dec-2020                  

28-Nov-2011

  16,000        43.73    28-Nov-2021                  

28-Nov-2012

  8,925    2,975    61.59    28-Nov-2022                  

25-Nov-2013

  5,750    5,750    71.75    25-Nov-2023                  

24-Nov-2014

  3,125    9,375    79.66    24-Nov-2024                  

23-Nov-2015

      17,200    70.91    23-Nov-2025                  

 

 Option Awards  Stock Awards 

  Name

 

 

Number of
Securities
Underlying
Unexercised
Options-
Exercisable (1)
(#)

 

  

Number of
Securities
Underlying
Unexercised
Options-
Unexercisable (1)
(#)

 

  

Option
Exercise
Price
$/sh

 

  

Option
Expiration

Date

 

  

Number of
Shares or
Units of
Stock

That
Have

Not
Vested (2)
(#)

 

  

Market
Value of
Shares or
Units of
Stock That
Have

Not
Vested (2)
($)

 

  

Equity
Incentive
Plan

Awards:
Number of
Unearned
Shares,

Units
or Other
Rights Not
Vested (3)
(#)

 

  

Equity

Incentive
Plan

Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
Not Vested (4)
($)

 

 

  Michael F. Hilton

         

  2017 PSIA

                    29,800   3,655,566 

  2018 PSIA

                    26,800   3,287,556 

  Restricted Shares:

         

  23-Nov-2015

              3,068   376,352       

  21-Nov-2016

              4,967   609,302       

  20-Nov-2017

              6,700   821,889       

  Stock Options:

         

  28-Nov-2012

  43,000      61.59   28-Nov-2022             

  25-Nov-2013

  42,700      71.75   25-Nov-2023             

  24-Nov-2014

  36,825   12,275   79.66   24-Nov-2024             

  23-Nov-2015

  36,400   36,400   70.91   23-Nov-2025             

  21-Nov-2016

  15,100   45,300   107.65   21-Nov-2026             

  20-Nov-2017

     55,800   127.67   20-Nov-2027             

  Gregory A. Thaxton

         

  2017 PSIA

                    7,200   883,224 

  2018 PSIA

                    6,200   760,554 

  Restricted Shares:

         

  23-Nov-2015

              800   98,136       

  21-Nov-2016

              1,200   147,204       

  20-Nov-2017

              1,600   196,272       

  Stock Options:

         

  3-Dec-2009

  11,250      27.26   3-Dec-2019             

  7-Dec-2010

  11,400      43.32   7-Dec-2020             

  28-Nov-2011

  13,000      43.73   28-Nov-2021             

  28-Nov-2012

  11,000      61.59   28-Nov-2022             

  25-Nov-2013

  11,000      71.75   25-Nov-2023             

  24-Nov-2014

  9,150   3,050   79.66   24-Nov-2024             

  23-Nov-2015

  8,600   8,600   70.91   23-Nov-2025             

  21-Nov-2016

  3,500   10,500   107.65   21-Nov-2026             

  20-Nov-2017

     12,500   127.67   20-Nov-2027             

  John J. Keane

         

  2017 PSIA

                    7,200   883,224 

  2018 PSIA

                    6,200   760,554 

  Restricted Shares:

         

  23-Nov-2015

              800   98,136       

  21-Nov-2016

              1,200   147,204       

  20-Nov-2017

              1,600   196,272       

  Stock Options:

         

  7-Dec-2010

  16,000      43.32   7-Dec-2020             

  28-Nov-2011

  16,000      43.73   28-Nov-2021             

  28-Nov-2012

  11,900      61.59   28-Nov-2022             

  25-Nov-2013

  11,500      71.75   25-Nov-2023             

  24-Nov-2014

  9,375   3,125   79.66   24-Nov-2024             

  23-Nov-2015

  8,600   8,600   70.91   23-Nov-2025             

  21-Nov-2016

  3,500   10,500   107.65   21-Nov-2026             

  20-Nov-2017

     12,500   127.67   20-Nov-2027             

 

66  | Nordson Corporation – 20172019 Proxy Statement


  

 Option Awards  Stock Awards 
Name Number of
Securities
Underlying
Unexer-
cised
Options -
Exercis-
able (1)
(#)
  Number of
Securities
Underlying
Unexer-
cised
Options-
Unexercis-
able (1)
(#)
  Option
Exercise
Price
$/sh
  Option
Expiration Date
  Number of
Shares or
Units of
Stock That
Have Not
Vested (2)
(#)
  Market
Value of
Shares or
Units of
Stock That
Have Not
Vested (2)
($)
  Equity
Incentive
Plan Awards:
Number of
Unearned
Shares, Units
or Other
Rights Not
Vested (3)
(#)
  Equity Incentive
Plan Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
Not Vested (4)
($)
 

Gregory P. Merk

         

2015 PSIA

                          5,400    540,702  

2016 PSIA

                          6,800    680,884  

Restricted Shares

         

25-Nov-2013

                  434    43,456          

24-Nov-2014

                  934    93,521          

23-Nov-2015

                  1,700    170,221          

Stock Options:

         

3-Dec-2009

  12,200        27.26    3-Dec-2019                  

7-Dec-2010

  9,000        43.32    7-Dec-2020                  

28-Nov-2011

  10,000        43.73    28-Nov-2021                  

28-Nov-2012

  5,700    1,900    61.59    28-Nov-2022                  

25-Nov-2013

  3,800    3,800    71.75    25-Nov-2023                  

24-Nov-2014

  2,075    6,225    79.66    24-Nov-2024                  

23-Nov-2015

      13,400    70.91    23-Nov-2025                  

Robert E. Veillette

         

2015 PSIA

                          4,800    480,624  

2016 PSIA

                          5,600    560,728  

Restricted Shares

         

25-Nov-2013

                  400    40,052          

24-Nov-2014

                  800    80,104          

23-Nov-2015

                  1,400    140,182          

Stock Options:

         

5-Dec-2007

  3,200        26.46    5-Dec-2017                  

4-Dec-2008

  17,000        14.37    4-Dec-2018                  

3-Dec-2009

  8,000        27.26    3-Dec-2019                  

7-Dec-2010

  6,400        43.32    7-Dec-2020                  

28-Nov-2011

  8,800        43.73    28-Nov-2021                  

28-Nov-2012

  5,325    1,775    61.59    28-Nov-2022                  

25-Nov-2013

  3,450    3,450    71.75    25-Nov-2023                  

24-Nov-2014

  1,900    5,700    79.66    24-Nov-2024                  

23-Nov-2015

      11,000    70.91    23-Nov-2025                  

 

 Option Awards  Stock Awards 

  Name

 

 

Number of
Securities
Underlying
Unexercised
Options-
Exercisable (1)
(#)

 

  

Number of
Securities
Underlying
Unexercised
Options-
Unexercisable (1)
(#)

 

  

Option
Exercise
Price
$/sh

 

  

Option
Expiration

Date

 

  

Number of
Shares or
Units of
Stock

That
Have

Not
Vested (2)
(#)

 

  

Market
Value of
Shares or
Units of
Stock That
Have

Not
Vested (2)
($)

 

  

Equity
Incentive
Plan

Awards:
Number of
Unearned
Shares,

Units
or Other
Rights Not
Vested (3)
(#)

 

  

Equity

Incentive
Plan

Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other Rights
Not Vested (4)
($)

 

 

  Gregory P. Merk

         

  2017 PSIA

                    5,400   662,418 

  2018 PSIA

                    4,500   552,015 

  Restricted Shares:

         

  23-Nov-2015

              568   69,677       

  21-Nov-2016

              900   110,403       

  20-Nov-2017

              1,200   147,204       

  Stock Options:

         

  7-Dec-2010

  9,000      43.32   7-Dec-2020             

  28-Nov-2011

  10,000      43.73   28-Nov-2021             

  28-Nov-2012

  7,600      61.59   28-Nov-2022             

  25-Nov-2013

  7,600      71.75   25-Nov-2023             

  24-Nov-2014

  6,225   2,075   79.66   24-Nov-2024             

  23-Nov-2015

  6,700   6,700   70.91   23-Nov-2025             

  21-Nov-2016

  2,500   7,500   107.65   21-Nov-2026             

  20-Nov-2017

     9,000   127.67   20-Nov-2027             

  Jeffrey A. Pembroke

         

  2017 PSIA

                    3,360   412,171 

  2018 PSIA

                    4,100   502,947 

  Restricted Shares:

         

  23-Nov-2015

              300   36,801       

  21-Nov-2016

              560   68,695       

  20-Nov-2017

              1,000   122,670       

  Stock Options:

         

  25-Nov-2013

  3,200      71.75   25-Nov-2023             

  24-Nov-2014

  2,850   950   79.66   24-Nov-2024             

  23-Nov-2015

  3,600   3,600   70.91   23-Nov-2025             

  21-Nov-2016

  1,625   4,875   107.65   21-Nov-2026             

  20-Nov-2017

     8,400   127.67   20-Nov-2027             

 

(1)

Amounts in these columns represent outstanding vested and unvested stock options awarded from November 22, 2006December 3, 2009 to October 31, 2016.2018. The options are exercisable in four equal annual installments (25% of award per year), commencing one year after the grant date. As of October 31, 2016,2018, none of the options awarded during 20162018 had vested.

 

(2)

Amounts in these columns represent restricted share awards that have not vested as of October 31, 2016.2018. Restricted shares vest in three equal annual installments, commencing one year after date of grant. Market Value was calculated by multiplying the closing price of our common shares on October 31, 20162018$100.13$122.67 per share – by the number of unvested shares.

 

(3)

This column reflects performance share units awarded in 20152017 and 2016.2018. Payouts in unrestricted shares are conditioned upon performance during three-year cycles ending on October 31, 20172019 and October 31, 2018,2020, respectively, and will be determined following the Compensation Committee’s certification of performance at the close of the respective performance period.

 

(4)

The 2015-20172017-2019 and 2016-20182018-2020 performance period awards are shown at maximum payout since the target performance level would be exceeded based on performance to date. Market value was calculated by multiplying the closing price of our common shares on October 31, 20162018$100.13$122.67 per share – by the maximum number of performance shares.share units.

(5)Upon his employment as President and Chief Executive Officer, Mr. Hilton was awarded 69,218 stock options pursuant to the employment agreement we entered into with Mr. Hilton. These options are fully vested.

(6)Mr. Keane was awarded 2,000 restricted shares on August 27, 2014 in recognition of his assuming management of multiple product lines effective June 6, 2014 and for retention purposes. These restricted shares will vest on August 27, 2017.

 

Nordson Corporation – 20172019 Proxy Statement

 |  67


STOCK OPTION EXERCISES AND STOCK VESTED TABLES

The following tables set forth information with respect to the stock options exercised, restricted shares vested and the Performance Share Incentive Award earned, before payment of any applicable withholding tax and broker commissions.

 

  Stock Option   2014-2016
PSIA Payout
 Stock Option2016-2018
          PSIA  Payout          
Named Executive Officer  Number of
Shares
Acquired
(#)
   Value
Realized
($)
   Number of
Shares
Acquired
(#)
   Value
Realized
($) (1)
 Number of
Shares
Acquired on
Exercise
(#)
Value
Realized
on Exercise
($)
Number of
Shares
Earned
(#)

Value
Realized

($) (1)

Michael F. Hilton

             23,491    $2,664,349   105,000$9,883,940 34,095 3,844,552  

Gregory A. Thaxton

   1,600    $97,648     5,953    $675,189   7,475$1,002,472 8,894 1,002,887  

John J. Keane

   6,900    $422,496     6,275    $711,711     8,894 1,002,887  

Gregory P. Merk

   43,400    $3,293,576     4,183    $474,436   12,200$1,497,794 6,300 710,388  

Robert E. Veillette

   12,200    $734,586     3,701    $419,767  

Jeffrey A. Pembroke

   3,335 376,055  

 

(1)

Settlement of performance sharesshare units occurred on January 3, 2017.2019. The closing price of our common shares was $113.42$112.76 on January 3, 2017.2019. Mr. HiltonMerk deferred 21,1411,260 shares having a settlement date value of $2,397,812; and Mr. Merk deferred 836 shares having a settlement date value of $94,819.of$142,078.

 

  Restricted
Shares
(Vested 11/28/15) (1)
   Restricted
Shares
(Vested 11/25/15) (2)
   Restricted
Shares
(Vested 11/24/15) (3)
 Restricted
Shares
(Vested 11/24/17) (1)
Restricted
Shares
(Vested 11/23/17) (2)
Restricted
Shares
(Vested 11/30/17) (3)
Named Executive Officer  Number of
Shares
Acquired
on
Vesting
(#)
   Value
Realized
on
Vesting
($) (4)
   Number of
Shares
Acquired
on
Vesting
(#)
   Value
Realized
on
Vesting
($) (4)
   Number of
Shares
Acquired
on
Vesting
(#)
   Value
Realized
on
Vesting
($) (4)
 Number of
Shares
Acquired
on
Vesting
(#)
Value
Realized
on
Vesting
($) (4) (a)
Number of
Shares
Acquired
on
Vesting
(#)

Value

Realized

on

Vesting

($) (4) (b)

Number of
Shares
Acquired
on
Vesting
(#)

Value

Realized

on

Vesting

($) (5)

Michael F. Hilton

   2,668    $193,590     2,433    $175,663     2,500    $179,375   2,500$315,663 3,066$393,352 2,483$318,718

Gregory A. Thaxton

   668    $48,470     600    $43,320     600    $43,050   600$75,759 800$102,636 600$77,016

John J. Keane

   734    $53,259     633    $45,703     600    $43,050   600$75,759 800$102,636 600$77,016

Gregory P. Merk

   484    $35,119     433    $31,263     466    $33,436   468$59,092 566$72,615 450$57,762

Robert E. Veillette

   434    $31,491     400    $28,880     400    $28,700  

Jeffrey A. Pembroke

   300$38,489 280$35,941

 

(1)These restricted shares were awarded November 28, 2012.

(2)These restricted shares were awarded November 25, 2013.

(3)These restricted shares were awarded November 24, 2014.

(2)

These restricted shares were awarded November 23, 2015.

(3)

These restricted shares were awarded November 21, 2016.

 

(4)

Value realized was calculated by multiplying the closingaverage of our high and low share price of our common shares on the date restrictions expired by the number of shares that vested:

 

 (a)

November 27, 201524, 2017 ($72.56126.27 per share); and

 

 (b)

November 25, 201522, 2017 ($72.20128.30 per share); and.

 

(5)(c)

Value realized was calculated by multiplying closing price of our common shares on November 24, 201530, 2017 ($71.75128.36 per share). by the number of shares that vested.

 

68  | Nordson Corporation – 20172019 Proxy Statement


PENSION BENEFITS TABLE

The following narrative, table narrative and footnotes set forth the actuarial present value of, and other information about, the pension benefits accumulated by each of our named executive officers for 2016.2018.

 

Named Executive Officer  Plan Name  

Number of

Years
Credited
Service
(#)

   Present Value of
Accumulated
Benefit (1)(2)
($)
   

Payments

During Last
Fiscal Year
($)

 Plan Name

Number of

Years
Credited
Service
(#)

Present Value of
Accumulated
Benefit (1)(2)
($)

Payments  

During Last  

Fiscal Year  

($)

Michael F. Hilton

  Salaried Employees Pension Plan   6.75     314,216       Salaried Employees Pension Plan 8.75 418,465 
  Excess Defined Benefit Pension Plan   6.75     3,020,147       Excess Defined Benefit Pension Plan 8.75 3,876,129 

Gregory A. Thaxton

  Salaried Employees Pension Plan   27.0     1,017,488       Salaried Employees Pension Plan 29.00 1,057,152 
  Excess Defined Benefit Pension Plan   27.0     2,682,911       Excess Defined Benefit Pension Plan 29.00 3,098,010 

John J. Keane

  Salaried Employees Pension Plan   24.0     906,607       Salaried Employees Pension Plan 26.00 954,562 
  Excess Defined Benefit Pension Plan   24.0     2,389,514       Excess Defined Benefit Pension Plan 26.00 2,502,717 

Gregory P. Merk (3)

  Salaried Employees Pension Plan   3.75     106,478       Salaried Employees Pension Plan 5.75 136,045 
  Excess Defined Benefit Pension Plan   22.33     1,675,161       Excess Defined Benefit Pension Plan 24.33 1,877,719 

Robert E. Veillette

  Salaried Employees Pension Plan   31.42     1,499,511       

Jeffrey A. Pembroke

Salaried Employees Pension Plan 13.08 370,767 
  Excess Defined Benefit Pension Plan   31.42     2,012,462       Excess Defined Benefit Pension Plan 13.08 671,756 

 

(1)

For the Salaried Employees Pension Plan, the actuarial assumptions used to determine the present value of the accumulated benefit at October 31, 20162018 are:

 

measurement date of October 31;

 

each participant’s benefit commences at age 65, the age at which retirement may occur without anyage-based reduction in benefits, discounted to October 31, 20162018 using a discount rate of 4.05%3.57%;

 

the benefits are payable as a single life annuity; and

 

post-retirement mortality based on the RP2006 Fully Generational Mortality Table for Healthy Employees projected with mortality improvements by Scale MP2016.

 

(2)

For the Excess Defined Benefit Pension Plan, the calculation of the present value of the accumulated benefit for Messrs. Hilton, Thaxton, Keane, and Merk assumes that each participant’s benefit is payable as a lump sum commencing at age 65, the age at which retirement may occur without anyage-based reduction in benefits, discounted to October 31, 20162018 using a discount rate of 4.05%3.57%, a lump sum interest rate of 2.89%2.88% and post-retirement mortality based on the life expectancy under IRC regulation1.401(a)(9)-9. The calculation for Mr. Veillette assumes an annuity payment commencing at age 65, the age at which retirement may occur without anyage-based reduction in benefits, discounted to October 31, 2016 using a discount rate of 3.75% and post-retirement mortality based on the RP2014 Fully Generational Mortality Table with Scale MP 2014 for Healthy Employees.

 

(3)

Mr. Merk became a participant in the Salaried Employees Pension Plan and the Excess Defined Benefit Pension Plan effective February 1, 2013. He receives benefit service credit for his service prior to February 1, 2013 with Nordson under the Excess Defined Benefit Pension Plan.

Salaried Employees Pension Plan

We sponsor the Nordson Corporation Salaried Employees Pension Plan (the “Salaried Employees Pension Plan”), a defined benefit pension plan for our U.S.-based salaried employees, including our U.S.-based named executive officers. Benefits under the pension plan are based on a “final average pay,” which means the monthly average of the highest aggregate compensation (base salary and cash incentive payment) for 60 months of the 120 most recent consecutive months prior to retirement. Compensation used to determine benefits under the Salaried Employees Pension Plan may not exceed the limit under the Internal Revenue Code.

Normal retirement age under the Salaried Employees Pension Plan is age 65. Employees who retire on or after age 55 may begin receiving their benefit immediately but experience a reduction in the benefit for every month prior to age 65 that the benefit begins. Employees become 100% vested in their benefit at the earlier of age 65, or after five years of service. The benefits are further reduced by benefits received under the Social Security program.

 

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If the employee dies prior to receiving the vested benefit, the surviving spouse, if any, will receive a 50% survivor annuity for the rest of the surviving spouse’s life. Benefits under the Salaried Employees Pension Plan become payable on the first of the month following retirement, absent any election by a participant to commence the payment of benefits at a different time. Benefits are payable in one of the following ways:

 

Life Only Annuity.    If a participant is not married or has been married less than 12 months when payments begin and does not elect an optional payment method, he or she will receive the full amount of his or her benefit in equal monthly installments for the rest of his or her life. Payments begin on the first of the month following the retirement date. After death, no additional payments are made.

 

50% Joint & Survivor Annuity.    If a participant is married for at least 12 months when payments begin, he or she will receive his or her benefit as a 50% Joint & Survivor Annuity, absent election of (and spousal consent for) an optional payment form. Under this option, a participant will receive a reduced monthly benefit during his or her lifetime. After the participant’s death, his or her spouse receives a benefit equal to 50% of the monthly benefit the participant was receiving. If the spouse dies before the participant, but after the participant begins receiving payments, the participant will continue to receive the same benefit amount during his or her lifetime and no additional payments are made after death.

 

100% (or 75%) Joint & Survivor Annuity.    A participant will receive a reduced lifetime benefit under this option. The participant names a beneficiary and chooses the percentage of his or her benefit to continue to that individual after the participant’s death. After death, the beneficiary receives the percentage of benefit elected (100% or 75%) for the remainder of his or her life. The participant’s age at the date the benefit commences, the beneficiary’s age, and the percentage elected to continue after death affect the amount of the benefit received during the participant’s lifetime.

 

10 Year Certain Annuity.    A participant will receive a reduced lifetime benefit in equal monthly installments with payments guaranteed for at least ten years under this option. Payments continue for the rest of the participant’s life even if he or she lives longer than the period of time elected. However, if the participant receives less than 120 payments before death, the same monthly benefit continues to the beneficiary until the combined total number of installment payments are made.

 

Level Income Option.    This option allows a participant to receive an increased monthly payment from the pension plan initially if a participant retires early and begins receiving payments from the pension plan before he or she is eligible for Social Security benefits. After Social Security benefits begin, the monthly payment from the pension plan is reduced. This option does not provide any survivor benefit and, therefore, no benefit is payable after death.

Excess Defined Benefit Pension Plan

We also sponsor an Excess Defined Benefit Pension Plan for our U.S.-based executive officers. This plan is anon-tax qualified supplemental defined benefit plan designed to work in conjunction with the Salaried Employees Pension Plan. The pension benefit outlined above for the Salaried Employees Pension Plan is calculated as if there were no compensation limits under the Internal Revenue Code. Then, the maximum benefit allowable is paid out under the Salaried Employees Pension Plan and the balance is paid out under the Excess Defined Benefit Pension Plan. In addition to the benefit payout alternatives under the Salaried Employees Pension Plan, our executive officers may under the Excess Defined Benefit Pension Plan elect a lump sum payout of the benefit following termination of employment.

70  |Nordson Corporation – 2019 Proxy Statement


Benefits under the Excess Defined Benefit Pension Plan are unsecured and are payable from our general assets. Payments will be delayed if and to the extent payment within six months of the

70  |Nordson Corporation – 2017 Proxy Statement


termination of employment will result in the imposition of additional taxes on the executive officer pursuant to Section 409A of the Internal Revenue Code. Payments delayed due to Section 409A rules will accrue interest during the deferral period at the10-year Treasury bill rate in effect on the first business day of the Excess Defined Benefit Pension Plan year in which the delayed payment period commences.

NON-QUALIFIED DEFERRED COMPENSATION

The following narrative, table setsand footnotes set forth the contributions, earnings, withdrawals or distributions, and aggregate balances for the named executive officers in 20162018 under the Amended and Restated 2005 Deferred Compensation Plan.

 

  Deferred Compensation Plan Deferred Compensation Plan
Named Executive Officer  Executive
Contributions
in Last
Fiscal Year (1)
($)
   Registrant
Contributions
in Last
Fiscal Year
($)
   Aggregate
Earnings in
Last Fiscal
Year (2)
($)
   Aggregate
Withdrawals /
Distributions
($)
   Aggregate
Balance at
Last Fiscal
Year End (3)
($)
 Executive
Contributions
in Last
Fiscal Year (1)
($)
Registrant
Contributions
in Last
Fiscal Year
($)
Aggregate
Earnings in
Last Fiscal
Year (2)
($)
Aggregate
Withdrawals /
Distributions
($)
Aggregate
Balance at
Last Fiscal
Year End (3)
($)

Michael F. Hilton

   1,149,821     56,552     3,727,293          13,035,499   121,622 59,810 (373,063)  19,084,883

Gregory A. Thaxton

   356,211     17,364     894,629          3,507,912   245,554 20,334 (6,429)   5,029,027

John J. Keane

   30,000     15,199     379,174          2,344,916   30,000 15,900 3,052   2,793,820

Gregory P. Merk

   110,024     11,448     75,609          526,431   177,777 16,434 19,698   1,102,501

Robert E. Veillette

   117,205     11,518     609,709          2,652,819  

Jeffrey A. Pembroke

 19,936 10,637 3,420   84,427

 

(1)

This column includes:

 

 (a)

Amounts of base salary each named executive officer deferred in 2016:2018: Mr. Hilton – $50,971;$55,419; Mr. Thaxton – $43,472;$46,946; Mr. Keane – $30,000; Mr. Merk – $25,476;$20,169; and Mr. VeillettePembroke$35,676.$19,936. These amounts deferred are included in the “Salary” column of the Summary Compensation Table.

 

 (b)

Amounts of Annual Cash Incentive Award payout deferred in 2016:2018: Mr. Hilton – $48,000;$66,203; Mr. Thaxton – $163,170;$198,608; and Mr. Merk – $43,687; and Mr. Veillette – $42,125.$35,180.

 

 (c)

Of the 2013-20152015-2017 Performance Share Incentive Award payout, Mr. HiltonMerk deferred 16,588821 shares having a settlement date value of $1,050,850; Mr. Thaxton deferred 2,361 shares having a settlement date value of $149,569; Mr. Merk deferred 645 shares having a settlement date value of $40,861; and Mr. Veillette deferred 622 shares having a settlement date value of $39,404.$122,428.

 

(2)

The increase in aggregate earnings is attributable primarily to appreciation in the share price of Nordson common stock in 2016.2018.

 

(3)

The fiscalyear-end aggregate balances reported in this column include the amounts of base salary, Annual Cash Incentive Award payouts and Performance Share Incentive Award payouts that were deferred and reported as compensation in the Summary Compensation Table in previous two years:

 

 (a)

Base salary: Mr. Hilton – $97,390;$103,437; Mr. Thaxton – $80,919;$88,437; Mr. Keane – $60,000;$59,031; Mr. Merk – $97,186;$44,824; and Mr. VeillettePembroke$69,963.$19,336.

 

 (b)

Annual Cash Incentive Award payout: Mr. Hilton – $124,140;$130,824; Mr. Thaxton – $410,424; and Mr. Merk – $55,215; and Mr. Veillette – $92,815.$84,887.

 

 (c)

Settlement date dollar value of Performance Share Incentive Award payout: Mr. Hilton – $4,218,381;$3,448,662; Mr. Thaxton – $149,569; and Mr. Merk – $118,264; and Mr. Veillette – $312,815.$135,680.

Deferred Compensation Plan

Under the Amended and Restated 2005 Deferred Compensation Plan, our executive officers may elect to defer up to 100% of their base pay and Annual Cash Incentive Award payout, and 90% of their Performance Share Incentive Award payout each year. An executive officer may elect to invest in a number of investment accounts designated by the Compensation Committee, including an account comprised of units of our common shares. The cash investment accounts mirror the investment funds and investment returns provided under our qualified defined contribution 401(k) Plan, although the plans are not linked. The number of units credited to the share unit account is based on the closing price of our common shares on the day the share units are credited to the account and includes additional share units credited for quarterly dividends paid on our common shares.

 

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 |  71


Distributions are made in either a lump sum or installments based upon the executive officer’s annual election. An executive officer may elect to receive payment in the form of a single lump sum or periodic payments over a period of 5, 10, or 15 years. No later than 12 months prior to a distribution, an executive officer may make an election to change the payment date or form of payment, provided that the distribution occurs at least 5 years after the original date of distribution previously elected by the executive officer.

The Internal Revenue Code places limits on amounts that “highly compensated employees,” such as our executive officers, may contribute to 401(k) plans. Correspondingly, because of these limits, matching contributions to the 401(k) Plan accounts of our executive officers in 20162018 were limited. In order to restore any matching contribution amount that may have been forgone by our executive officers because of this limitation, we provide executive officers the opportunity to capture this potentially lost match in the deferred compensation plan. This restoration match is made to the executive officers who defer at least a minimum portion of their base salary.

For all distributions, cash will be paid with respect to the cash accounts and our common shares will be issued equal to the number of share units in the executive officer’s share equivalent unit account. Upon an executive officer’s death, payment of any balance in a deferral account will be made to a designated beneficiary.

In order to permit deferrals and payouts that comply with Section 409A of the Internal Revenue Code, we adopted the 2005 Deferred Compensation Plan effective for deferrals by the executive officers after January 1, 2005. On December 10, 2008, the Compensation Committee adopted the Amended and Restated 2005 Deferred Compensation Plan to bring the plan into compliance with final rules issued under Section 409A.

The investment options and respective returns under the Amended and Restated 2005 Deferred Compensation Plan for 2014, 20152016, 2017 and 20162018 were as follows:

 

Investment Funds  2016 Return % 2015 Return % 2014 Return % 

 

2018 Return

 

 

2017 Return

 

 

2016 Return

 

 

Investment Contract

   3.05  3.00  2.58 

 

3.00

 

%

 

 

 

3.00

 

%

 

 

 

3.05

 

%

 

 

Money Market Trust

   (0.24)%*   (0.63)%   (0.64%)  

 

0.80

 

%

 

 

 

0.01

 

%

 

 

 

(0.24

 

)%*

 

 

Large Cap Value (500 Index B)

   3.58  4.33  16.26 

 

6.41

 

%

 

 

 

16.10

 

%

 

 

 

3.58

 

%

 

 

Large Cap Blend (Equity-Income)

   6.90  (3.09)%   9.23 

 

0.78

 

%

 

 

 

11.12

 

%

 

 

 

6.90

 

%

 

 

Large Cap Growth (Blue Chip Growth)

   (0.55)%   11.56  14.74 

 

9.77

 

%

 

 

 

32.71

 

%

 

 

 

(0.55

 

)%

 

 

International Equity Index (B)

   (0.05)%   (6.28)%   0.07 

 

(9.15

 

)%

 

 

 

23.65

 

%

 

 

 

(0.05

 

)%

 

 

Nordson Stock (includes dividends)

   41.94  (5.76)%   4.34 

 

13.82

 

%

 

 

 

13.82

 

%

 

 

 

41.94

 

%

 

 

*

Average of the 2016 Return % of two funds. The Money Market fund in the plan was merged into a new fund in April 2016.

 

72  | Nordson Corporation – 20172019 Proxy Statement


POTENTIAL BENEFITS UPON TERMINATION

The following table and narrative address the impact a loss of employment in each of the following scenarios as of October 31, 2016 has2018 would have on executive compensation and benefits: termination for cause or voluntary termination, death, long-term disability, retirement, involuntary termination and termination without cause or for good reason, and payments in connection with a termination following achange-in-control.

Payout of account balances of our executive officers’ deferred compensation plan accounts, qualified and excess defined benefit pension plans, and qualified defined contribution (401(k))401(k) plan would be made under the distribution provisions of those plans.

 

Benefit or Payment 

Termination

for Cause
or

Voluntary
Termination

 

Termination
Due to

Death, Disability
(1) or Retirement
At Normal
Age

(age 65) (2)

 

Termination
Due to Early

Retirement
(age 55) (2)

 

Involuntary

Termination (3) /

Termination
Without
Cause or for Good
Reason (4)

 

Termination

following a
Change-in-Control (5)

Severance

(Cash)

 None None None 

Chief Executive Officer Only:

 

Described in the “Severance Agreements” section above under Part IV of Compensation Discussion and Analysis

 Lump sum cash payment equal to two times the sum of the executive officer’s annual base salary and cash incentive award (at target payout)
      
Stock Options
(Unvested)
 Forfeited 

Death or Disability: full vesting (6)

 

Retirement at 65: vesting continues except for awards made less than 12 months prior to termination, which are forfeited (6)

 

Vesting

Continues except for awards made less than 12 months prior to termination, which are forfeited (7)

 Forfeited Vest upon achange-in-control
      

Service-Based
Restricted

Shares

(Unvested)

 Forfeited 

Death or Disability: full vesting (6)

 

Retirement at 65: full vesting, except for awards made less than 12 months prior to termination, which are forfeited

 Pro-rated vesting based on number of months of service since award date except for awards made less than 12 months prior to termination, which are forfeited 

Chief Executive Officer Only:

 

Full vesting

 

All Others: Forfeited

 Vest upon achange-in-control
      
Performance Share Incentive Award Forfeited 

Pro-rated payout determined at the conclusion of the respective

performance period

 Pro-rated payout determined at the conclusion of the respective performance period Forfeited Vesting with payout based on performance at target as of the date ofchange-in-control
      
Excess Defined
Pension Benefit
 

No

enhancement

 

No

enhancement

 

No

enhancement

 

No

enhancement

 Two (2) additional years of age and benefit service

 

Nordson Corporation – 20172019 Proxy Statement

 |  73


Benefit or Payment 

Termination

for Cause
or

Voluntary
Termination

 

Termination
Due to

Death, Disability
(1) or Retirement
At Normal
Age

(age 65) (2)

 

Termination
Due to Early

Retirement
(age 55) (2)

 

Involuntary

Termination (3) /

Termination
Without
Cause or for Good
Reason (4)

 

Termination

following a
Change-in-Control (5)

      
Paid Health
Care Benefits
 None None None 

Chief Executive Officer:Yes

 

For Others:

None

 Yes
      
Professional
Outplacement
Services
 None None None None Yes (up to $50,000)
      
Excise and
Related Income
Tax Gross Up
 None None None None Yes (8)

 

(1)

A disability benefit is payable under the long-term disability plan under a group life insurance policy. Any amounts due to an executive officer above the maximum disability payment provided by the policy ($25,000 per month) would be paid from our general assets. In the event of the Chief Executive Officer’s death, the surviving spouse will be entitled to: (a) a life insurance benefit equal to two times the sum of her or his annual base salary and target Annual Cash Incentive Award for the fiscal year in which the death occurs; (b) continued health benefits for 2 years; and (c) apro-rated amount of the Chief Executive Officer’s Annual Cash Incentive Award for the fiscal year of death based upon actual performance in such fiscal year, as determined at the end of the applicable performance period. In the event of the Chief Executive Officer’s termination of employment due to disability when she or he is age 65 or older or a termination due to retirement, the Chief Executive Officer shall receive a $12,000 Company-paid retiree life insurance benefit.

 

(2)

Predicated upon retirement under the Company-sponsored pension plan. Stock option and restricted share awards made less than 12 months prior to date of termination of employment are forfeited.

 

(3)

Presumes involuntary termination was not due to a violation of the Company’s Code of Ethics and Business Conduct.

 

(4)

We have no contractual obligation to provide severance payments or benefits to an executive officer whose employment is terminated without cause, other than with respect to Mr. Hilton under his employment agreement. Severance benefits due to Mr. Hilton in the event of a termination without cause or a resignation for good reason are discussed under the caption “Severance Agreements” in the Compensation Discussion and Analysis of this Proxy Statement.

If any negotiated severance arrangement were entered into between us and an executive officer for severance payments, we would require the executive officer to sign a general release and waiver of claims against us and would typically require compliance with confidentiality andnon-compete restrictions. Any agreed-upon severance payment will be subject to delay in the commencement of payments required by Section 409A of the Internal Revenue Code.

“Cause” and “Good Reason” are discussed in the “Severance Agreement” section of the Compensation Discussion and Analysis section of this Proxy Statement.

 

(5)

Achange-in-control occurs if and when:

 

a report is filed with the SEC on Schedule 13D or Schedule14D-1 (or any successor schedule, form, or report), each as promulgated pursuant to the Exchange Act, disclosing that any “person” (as the term “person” is used in Section 13(d) or Section 14(d)(2) of the Exchange Act) is or becomes a beneficial owner, directly or indirectly, of securities representing 35% or more of the combined voting power of our then outstanding securities eligible to vote for the election of the Board of Directors;

 

during any period of 24 consecutive months, individuals who, at the beginning of such24-month period were our directors, which we refer to as the incumbent board, cease to constitute at least a majority of the Board of Directors, unless the election, or nomination for election, of any person becoming a director subsequent to the beginning of such24-month period was approved by a vote of at leasttwo-thirds of the incumbent board;

 

all or substantially all of our assets are sold in a single transaction or a series of related transactions to a single purchaser or a group of affiliated purchasers; or

 

we are merged or consolidated with another corporation and, as a result, securities representing less than 50% of the combined voting power of the surviving or resulting corporation’s securities (or of the securities of a parent corporation in case of a merger in which the surviving or resulting corporation becomes a wholly-owned subsidiary of the parent corporation) are owned in the aggregate by holders of our securities immediately prior to such merger or consolidation.

Upon achange-in-control, all outstanding equity compensation awards vest immediately. Unlike the “double trigger” discussed above, no termination of employment is required for the accelerated vesting of the awards. This “single-trigger” vesting provides our named executive officers with the same opportunity as our shareholders to realize the value created by the transaction.

(6)Vested options may be exercised for the life of the option.

 

74  | Nordson Corporation – 20172019 Proxy Statement


(6)

Vested options may be exercised for the life of the option.

(7)

Vested options may be exercised for the earlier of (i)(a) five (5) years following retirement date or (ii)(b) the life of the option.

 

(8)

Effective November 1, 2015, we have eliminated gross up payments on any severance benefits for tax purposes.

Enhanced Payments and Benefits Assuming Termination as of October 31, 20162018

The following table reflects the estimated value of enhanced payments and benefits that the named executive officers would receive under various termination scenarios assuming that all listed events occurred as of the last business day of fiscal year 20162018 – October 31, 2016.2018.

In estimating the amounts reflected in the following table, we also applied the following general assumptions and principles:

 

No amounts for 20162018 base salary or payouts under the 20162018 Annual Cash Incentive Award and 2014-20162016-2018 Performance Share Incentive Award are included in the following tables because the amounts are already earned as of October 31, 20162018 and are not enhanced by any of the triggering events;

 

Amounts were calculated based on each named executive officer’s age, compensation, and years of service as of October 31, 2016;2018;

 

The value of our common shares on October 31, 20162018 was $100.13$122.67 per share;

 

Unvested stock options that vest were valued at an amount per share equal to the difference between $100.13$122.67 and the grant date share price for each of the stock options on the grant date;

 

No amounts were included for account balances in our qualified defined contribution 401(k) plan because this plan is available to all U.S.-based salaried employees who have worked the minimum amount of hours required to receive this benefit;

 

No amounts were included for balances in a named executive officers’ deferred compensation account. Fiscalyear-end deferred account balances are reported in theNon-Qualified Deferred Compensation table;

 

The value of benefits and payments that are generally available to all employees on anon-discriminatory basis are not included;

 

The value of performance share units for termination other than voluntary termination or termination due to cause was determined using payout at target performance;

 

The value of restricted shares subject to accelerated vesting is based on shares outstanding as of October 31, 20162018 as shown in the Outstanding Equity Awards table. Value is determined by multiplying the number of shares by the closing price of our common shares on October 31, 20162018 – $100.13$122.67 per share;

 

None of the named executive officers is qualified to receive an age 65 retirement pension benefit as of October 31, 2016.2018. The actuarial present value of the deferred vested benefit under our Salaried Employees Pension Plan for each named executive officer may be found in the Pension Benefits table; and

 

Calculation of post-termination payout of the Excess Defined Benefit Pension Plan assumes a lump sum payout. Other assumptions used in the calculation are noted in footnote 1 to the Pension Benefits table. The payout amount in the event of a qualifying termination following achange-in-control reflects an additional two years of age and two years of service, up to a maximum age 65 and 30 years of service.

 

Nordson Corporation – 20172019 Proxy Statement

 |  75


Although the calculations are intended to provide reasonable estimates of the potential benefits, they are based on numerous assumptions and may not represent the actual amount a named executive officer would have received if termination had occurred on October 31, 2016.2018.

 

  Death and Disability
($)
   Early Retirement
(Age 55) (1)
($)
   Involuntary Termination/
Termination Without
Cause or for Good
Reason (2)
($)
   Qualifying
Termination
Following Change-
in-Control
($)
   Death and Disability
($)
  Early Retirement
(Age 55) (1)
($)
  Involuntary Termination/
Termination Without
Cause or for Good
Reason (2)
($)
  

Qualifying 
Termination 
Following Change- 

in-Control 

($)

Michael F. Hilton

   

 

7,188,910

 

  

 

   

 

3,952,938

 

  

 

   

 

5,065,562

 

  

 

   

 

50,954,327

 

  

 

   

 

 

 

 

6,734,973

 

 

 

   

 

 

 

 

5,961,604

 

 

 

   

 

 

 

 

5,507,542

 

 

 

   

 

 

 

 

27,790,593

 

 

 

Gregory A. Thaxton

   

 

1,786,376

 

  

 

   

 

998,442

 

  

 

   

 

 

  

 

   

 

18,417,624

 

  

 

   

 

 

 

 

1,652,887

 

 

 

   

 

 

 

 

1,463,232

 

 

 

   

 

 

 

 

             —

 

 

 

   

 

 

 

 

12,010,172

 

 

 

John J. Keane

   

 

2,023,764

 

  

 

   

 

1,180,087

 

  

 

   

 

 

  

 

   

 

15,163,528

 

  

 

   

 

 

 

 

1,656,112

 

 

 

   

 

 

 

 

1,466,457

 

 

 

   

 

 

 

 

             —

 

 

 

   

 

 

 

 

9,521,271

 

 

 

Gregory P. Merk

   

 

1,300,957

 

  

 

   

 

704,210

 

  

 

   

 

 

  

 

   

 

8,689,094

 

  

 

   

 

 

 

 

1,219,426

 

 

 

   

 

 

 

 

1,075,419

 

 

 

   

 

 

 

 

             —

 

 

 

   

 

 

 

 

6,197,050

 

 

 

Robert E. Veillette

   

 

1,118,419

 

  

 

   

 

626,778

 

  

 

   

 

 

  

 

   

 

12,121,871

 

  

 

Jeffrey A. Pembroke

   

 

 

 

 

702,483

 

 

 

   

 

 

 

 

552,096

 

 

 

   

 

 

 

 

             —

 

 

 

   

 

 

 

 

3,879,931

 

 

 

 

(1)

As of October 31, 2016,2018, no named executive officer was eligible for retirement at the normal retirement age.

 

(2)

Mr. Hilton is the only named executive officer eligible to receive severance and full vesting of restricted shares in the event his employment is terminated involuntarily by the Company or by Mr. Hilton for Good Reason, as that term is defined in the employment agreement with Mr. Hilton, absent achange-in-control. No enhancements are provided to the other named executive officers in this termination scenario.

 

76  | Nordson Corporation – 20172019 Proxy Statement


CEO PAY RATIO

As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and Item 402(u) of RegulationS-K, we are providing the following information with respect to our last completed fiscal year. The pay ratio information provided below is a reasonable estimate calculated in a manner consistent with Item 402(u) of RegulationS-K.

In determining the pay ratio information provided above, we first identified our median employee for the 2018 fiscal year by using the following methodology, assumptions, adjustments, and estimates, as permitted by Item 402(u) of RegulationS-K. We selected September 1, 2018 as the date upon which we would identify our median employee, and, from our tax and payroll records, we compiled a list of all full-time and part-time employees, excluding the CEO, who were employed on that date. We did not exclude any employees located outside the United States. We used total target cash compensation (base salary and annual cash incentive) as the consistently applied compensation measure for all employees. Sorting the list based on this measure, we selected our median employee.

Once our median employee was identified in the manner described above, we calculated the annual total compensation of the median employee using the same methodology that we used to determine the annual total compensation of the CEO, as reported in the Summary Compensation Table. The annual total compensation our median employee, excluding the CEO, was $61,750. The annual total compensation of our CEO, as reported in the Summary Compensation Table on page 61 of this Proxy Statement, was $6,997,090; and the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 113.3 to 1.

The pay ratio disclosure rules of Item 402(u) of RegulationS-K provide reporting companies with flexibility in determining the methodology used to identify the median employee, in calculating the median employee’s annual total compensation and in estimating the ratio of the annual total compensation of the CEO to the median of the annual total compensation of all other employees. As such, our methodology may differ materially from the methodology used by other companies to prepare their pay ratio disclosures, which, along with differences in employee populations, geographic locations, business strategies and compensation practices, may contribute to a lack of comparability between our pay ratio and the pay ratio reported by other companies, including those within our industry.

Nordson Corporation – 2019 Proxy Statement

|  77


AUDIT COMMITTEE REPORT

January 18, 2019

To: The Board of Directors of Nordson Corporation

The Audit Committee consists solely of independent Directors within the meaning of the Nasdaq listing standards. The Audit Committee oversees Nordson’s financial reporting process on behalf of the Board. Nordson’s independent registered public accounting firm, Ernst & Young LLP, is responsible for performing an integrated audit of Nordson’s annual consolidated financial statements and internal control over financial reporting as of the end of the year in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB). The Committee operates under a written charter that specifies the Committee’s responsibilities. The full text of the Committee’s Charter is available at:www.nordson.com/en/our-company/investors/annual-reports-and-presentations. The Audit Committee members are not auditors and their functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm.

Management has the responsibility for the financial statements and the reporting process, including the systems of internal control over financial reporting. In fulfilling its oversight responsibilities, the Committee reviewed and discussed with management the audited financial statements in the Annual Report on Form10-K for the fiscal year ended October 31, 2018, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments, and the clarity of disclosures in the financial statements.

The Committee discussed with Ernst & Young LLP, which is responsible for expressing an opinion on the conformity of those audited financial statements with U.S. generally accepted accounting principles, its judgment as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Committee under PCAOB Auditing Standard 1301,Communications with Audit Committees. In addition, the Committee has received and discussed with Ernst & Young LLP written disclosures regarding Ernst & Young LLP’s independence as required by PCAOB Ethics and Independence Rule 3526,Communication with Audit Committees Concerning Independence.

The Committee discussed with our internal auditor and Ernst & Young LLP the overall scope and plan for their respective audits. The Committee met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls, and the overall quality of our financial reporting.

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended October 31, 2018 filed with the Securities and Exchange Commission. The Committee also evaluated and reappointed Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal year 2019.

This Audit Committee report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 (the “Exchange Act”), except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Exchange Act.

This report has been furnished by the members of the Audit Committee:

Frank M. Jaehnert, Chair

Randolph W. Carson

Arthur L. George, Jr.

Joseph P. Keithley

78  |Nordson Corporation – 2019 Proxy Statement


QUESTIONS AND ANSWERS ABOUT THE ANNUAL MEETING AND THESE PROXY MATERIALS

Why am I receiving this Proxy Statement?    You have been sent this Proxy Statement and proxy/voting instruction card(s) because you were a shareholder, or held Nordson common stock through a broker, banktrustee, or other third party, at the close of business on January 3, 2017,2, 2019, the record date for shareholders entitled to vote at the Annual Meeting. As of January 3, 2017,2, 2019, there were outstanding, excluding treasury shares which cannot be voted, 57,440,35257,609,588 common shares entitled to one vote per share upon all matters presented to the shareholders.

What is a proxy?    A proxy is your legal appointment of another person to vote the shares that you own in accordance with your instructions. The person you appoint to vote your shares is also called a proxy.

On the proxy/voting instruction card, you will find the names of the persons designated by the Company to act as proxies to vote your shares at the Annual Meeting. The proxies are required to vote your shares in the manner you instruct.

Who can attend the Annual Meeting?    All shareholders of record as of the close of business on January 3, 20172, 2019 may attend the meeting.

Must I inform anyone of my intent to attend the Annual Meeting?Yes. To permit your name to be registered with the Key Tower security service to gain access to the BakerHostetler LLP offices, you must inform the company’sCompany’s Secretary, Robert E. Veillette,Gina A. Beredo, in writing (letter ore-mail) before the Annual Meeting of your intent to attend the Annual Meeting. Mr. Veillette’Ms. Beredo’ s contact information is as follows:

 

  

E-mail address:Robert.veillette@nordson.comgina.beredo@nordson.com

 

Mailing Address: 28601 Clemens Road, Westlake, Ohio 44145.

Must I present credentials to permit access to the BakerHostetler LLP offices?Yes. You must present a form of picture identification to the security officer at the desk located on the main floor of the Key Tower. You will be provided a pass to permit access to the Key Tower elevators. You will proceed to the 20th floor offices of Baker Hostetler.BakerHostetler LLP.

What if I have a disability?    If you are disabled and would like to participate in the Annual Meeting, we can provide reasonable assistance. Please send any request for assistance to c/o Secretary, Nordson Corporation, 28601 Clemens Road, Westlake, Ohio 44145.

What proposals may I vote on at the Annual Meeting and how does the Board recommend I vote?    The following chart explains your voting options with regard to each proposal to be voted upon at the Annual Meeting, how the Board of Directors recommends that you vote, and the vote required for that proposal to be approved.

 

VOTING MATTERS AND BOARD RECOMMENDATIONS

     

 

Proposal

 

 

 

Voting Options

 

 

 

Vote Required for
Approval
Vote

 

 

 

Broker Discretionary
Vote Permitted

 

 

 

Board’s Voting
Recommendation

 

1. Election of directors

 “FOR” all nominees or “WITHHOLD” your vote for one or more of the nominees. PluralityEach nominee must receive a plurality of the votes cast by holders of common stock present in person or represented by proxy and entitled to vote in the election of directors.cast. No 

FOR

the election of each of the director nominees

 

Nordson Corporation – 20172019 Proxy Statement

 |  7779


VOTING MATTERS AND BOARD RECOMMENDATIONS

     

 

Proposal

 

 

 

Voting Options

 

 

 

Vote Required for
Approval
Vote

 

 

 

Broker Discretionary
Vote Permitted

 

 

 

Board’s Voting
Recommendation

 

     

2. Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 20172019

 “FOR” or “AGAINST” or “ABSTAIN” from voting. Affirmative vote of the holders of a majority of the shares of common stock presentThisnon-binding proposal will be considered approved if more votes are cast in person or represented by proxy and entitled to vote on the proposal.favor than against. Yes(1) FOR
     

3. Advisory vote to approve compensation of named executive officers

 “FOR” or “AGAINST” or “ABSTAIN” from voting. Affirmative vote of the holders of a majority of the shares of common stock presentThisnon-binding proposal will be considered approved if more votes are cast in person or represented by proxy and entitled to vote on the proposal.favor than against. No FOR
4. Advisory vote on the frequency for holding the advisory vote to approve compensation of named executive officersFor aone-year,two-year, or three-year frequency or “ABSTAIN” from voting.The frequency that receives the highest number of votes cast will be the recommended frequency.No

FOR

one year frequency

 

(1)

This is considered to be a routine matter and, therefore, if you hold your shares in street name and do not provide voting instructions to the broker, banktrustee, or other nominee that holds your shares, the nominee has discretionary authority to vote on this Proposal but not any other Proposals since they are considered to be“non-routine” matters.

Abstentions as to any matter are counted in determining the presence of a quorum at the Annual Meeting. They are not included in the vote count for election of directors and do not have an impact on the outcome of the vote on Proposal 4.directors. However, abstentions will affect the outcome of the vote on Proposals 2 and 3, being equivalent to a vote “against” the Proposals.

Will any other matters be voted on?    We are not aware of any other matters on which you will be asked to vote at the Annual Meeting. If other matters are properly brought before the Annual Meeting, the proxy holders will use their discretion to vote on these matters as they may arise. Furthermore, if a nominee cannot or will not serve as director, then the proxy holders will vote for a replacement nominated by the Board. We do not expect any nominee to be unwilling to serve.

May I ask questions at the Annual Meeting?    Yes. Our management will respond to shareholder questions at the end of the meeting. In order to give a greater number of shareholders the opportunity to ask questions, we may impose certain procedural requirements.

78  |Nordson Corporation – 2017 Proxy Statement


What is the difference between holding shares as a shareholder of record, a beneficial owner, or a Nordson-sponsored retirement plan participant?

 

  

Shareholder of record.    If Nordson shares are registered in your name with our transfer agent, Computershare, Inc., you are considered the shareholder of record and these proxy materials have been sent directly to you. You may vote in person at the Annual Meeting. You may also award us your proxy to vote your shares by telephone, via the Internet, or by mailing your signed proxy/voting instruction card in the postage-paid envelope provided. The card provides voting instructions.

 

  

Beneficial owner (“in street name”).    If your shares are not held in your name but instead are held in a brokerage account, by a trustee, or by another nominee, then that other entity/holder is considered the shareholder of record and you are considered a beneficial owner of those shares. We sent these proxy materials to that other entity/holder, and they have been forwarded to you with a voting instruction card. As the beneficial owner, you have the right to direct your broker, trustee, or other nominee how to vote. Please refer to the information your broker, trustee, or other nominee provided to determine what voting options are available to you.

 

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Shares held as a participant in the Nordson Corporation Employees’ Savings Trust (“401(k)”) Plan and/or Nordson Corporation Employee Stock Ownership Plan (collectively, the “Plans”).    If you participate in one or both of these Plans you may have certain voting rights regarding shares of our common stock credited to your account in the Plans. You do not own these shares. They are owned by the Plan trustee, which is the same trustee for both Plans.

The Plans provide you with voting rights based on the number of shares that were constructively invested in your Plan account as of the close of business on the record date. You may vote these shares in much the same way as shareholders of record vote their shares, but you have an earlier deadline to vote.

You may vote the amount of shares credited to your account as of the record date for the Annual Meeting by telephone, via the Internet, or by mailing your signed proxy/voting instruction card in the postage-paid envelope provided. Your vote must be received by11:59 p.m., Eastern Standard Time on February 23, 2017.21, 2019. You may vote these shares by following the instructions provided on the proxy/voting instruction card included with these materials.

By submitting your voting instructions, you will direct the Plan trustee:

 

How to vote the shares allocated to your account in the Plan(s), and

 

How to vote a portion of the shares allocated to the accounts of other participants in the Plan(s) who have not submitted voting instructions by the deadline.

The trustee will submit one proxy to vote all shares in each of the Plans. The trustee will vote the shares of participants submitting voting instructions in accordance with their instructions and will vote the remaining shares in each of the Plans in the same proportion as the final votes of all participants who actually voted. Please note that, if you do not submit voting instructions for the shares in your account by the voting deadline, those shares will be included with the other undirected shares and voted by the trustee as described above. Because the trustee submits one proxy to vote all shares in each of the Plans, you may not vote Plan shares in person at the Annual Meeting.

Where is Nordson Corporation common stock traded?    Our common stock is traded and quoted on the NASDAQNasdaq Global Select Stock Market LLC under the symbol “NDSN.”

How many votes do I have, and can I cumulate my votes?    You have one vote for everyeach share of our common stock that you own. Unless cumulative voting is invoked by a shareholder through proper notice to Nordson as described under “Proposal 1: Election of Directors Whose Terms Expire in2022-Cumulative Voting,” cumulative voting is not allowed.

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How do I vote and what are the voting deadlines?

Shareholders of record and Plan participants.    If you are a shareholder of record or a Plan participant, you may vote by proxy in any of the following three ways:

1.By telephone.    If you reside in the United States or Canada, you may call1-800-690-6903, 24 hours a day, 7 days a week. Have your proxy/voting instruction card in hand when you call and follow the voice prompts to cast your vote.

2.Via the Internet.    You may access the website atwww.proxyvote.com to cast your vote 24 hours a day, 7 days a week. With your proxy/voting instruction card in hand, follow the instructions provided to cast your vote.

3.By mail.    You may mark, sign and date your proxy/voting instruction card and return it in the enclosed prepaid and addressed envelope. You do not need to mail the proxy/voting instruction card if you have voted by telephone or over the Internet.

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The Internet and telephone voting procedures are designed to authenticate votes cast and allow shareholders to appoint a proxy and to confirm that their actions have been properly recorded. Specific voting instructions are set forth on the accompanying proxy/voting instruction card.

If you are a shareholder of record, your deadline to cast your vote by proxy is11:59 p.m., Eastern Standard Time, on February 27, 2017.25, 2019. You may also vote in person at the Annual Meeting.

If you are a Plan participant, your deadline to cast your vote by proxy is11:59 p.m., Eastern Standard Time, on February 23, 2017.21, 2019.

Beneficial owners.    If you are a beneficial owner, you should have receivedreceive voting instructions from the broker, trustee, or other nominee holding your shares. You should follow the instructions in the notice or voting instructions provided by your broker, trustee, or nominee in order to instruct your broker, trustee, or other nominee on how to vote your shares. The availability of telephone and Internet voting will depend on the voting process of the broker, trustee, or nominee. Shares held beneficially may be voted in person at the Annual Meeting only if you obtain a legal proxy from the broker, trustee or nominee giving you the right to vote the shares.

All owners.    If you receive more than one proxy/voting instruction card, it is important that you vote all shares represented by the multiple cards. Each card represents different shares.

May I change my vote?    Yes. You may change your vote or revoke your proxy any time before the voting deadline.

Shareholders of record.    If you are a shareholder of record, you may revoke your vote at any time before the final vote at the Annual Meeting by:

 

submitting a later-dated voteproxy by telephone or via the Internet since only your latest Internet or telephone proxy received by11:59 p.m., Eastern Standard Time, on February 27, 201725, 2019 will be counted;

 

returning a later-dated, duly executed proxy card;

 

delivering a written revocation to our Corporate Secretary at 28601 Clemens Road, Westlake, Ohio 44145 before the Annual Meeting; or

 

attending the Annual Meeting in person and voting again.

Plan participants.    If you are a Plan participant, you may revoke previously given voting instructions on or before11:59 p.m., Eastern Standard Time, on February 23, 201721, 2019 by filing either a written notice of revocation or a properly completed and signed voting instruction card bearing a later date with John Hancock Trust Company, LLC, the trustee for each of the Plans.

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Beneficial Owners.    If you are a beneficial owner of your shares, you must contact the broker, trustee, or other nominee holding your shares and follow their instructions for changing your vote.

All owners.    You will not revoke a proxy merely by attending the Annual Meeting. To revoke a proxy, you must take one of the actions described above.

What will happen if I do not vote my shares?

Shareholders of record.    If you are the shareholder of record and you do not vote by proxy card, by telephone, via the Internet, or in person at the Annual Meeting, your shares will not be voted at the Annual Meeting.

Beneficial owners.    If you are the beneficial owner of your shares, your broker, trustee, or nominee may vote your shares only on those proposals on which it has discretion to vote. Under the rules of the Securities and Exchange Commission (the “SEC”), your broker, trustee, or nominee does not have discretion to vote your shares onnon-routine matters such as Proposals 1 3 and 4.3. Therefore, if you do not provide voting instructions to your broker, trustee, or other nominee, your broker, trustee, or other nominee may only vote your shares on Proposal 2 and any other routine matters properly presented for a vote at the Annual Meeting.

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What if I do not specify how my shares are to be voted?    If you are a shareholder of record and you submit a duly executed proxy, but you do not provide voting instructions, your shares will be voted as indicated in the following table:

 

 

Proposal

  

 

Vote to be Cast

Proposal 1 — Election of three nominees as directors to serve for athree-year term: Joseph P. Keithley, Michael J. Merriman,Lee C. Banks, Randolph W. Carson, and Victor L. Richey, Jr. and Mary G. Puma

  

FOR ALL NOMINEES

Proposal 2 — Ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 20172019

  

FOR

Proposal 3 — Advisory vote to approve the compensation of our

named executive officers

FOR

Proposal 4 — Advisory vote on the frequency for holding the advisory vote on the compensation of our named executive officers

 

  

FOR A ONE YEAR
FREQUENCY

What constitutes a quorum, and why is a quorum required?    Our Regulations require a quorum of shareholders to hold our Annual Meeting. A quorum will be present when at least a majority of the outstanding shares entitled to vote are represented at the Annual Meeting either in person or by proxy. Your shares will be counted towards the quorum if you submit a proxy or vote at the Annual Meeting. Abstentions and brokernon-votes (described below) will also count towards the quorum requirement. If a quorum is not achieved, a majority of the shares present at the Annual Meeting may adjourn the meeting to a later date.

What are brokernon-votes?    A brokernon-vote occurs when a broker, trustee, or other nominee holding your shares does not receive voting instructions from you as the beneficial owner of the shares by a specified date before the Annual Meeting and does not have discretionary authority to vote those undirected shares on specified matters under SEC rules. The election of directors (Proposal 1), and the approval, on an advisory basis, of the compensation of our named executive officers (Proposal 3) and the advisory vote on the frequency of the advisory vote on the compensation of our named executive officers (Proposal 4) are considerednon-routine matters and discretionary voting on these matters is prohibited.

As a result, if you are a beneficial owner and hold your shares in street name, and do not give your broker, trustee, or other nominee instructions on how to vote your shares with respect to the election of

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directors or the advisory vote on named executive compensation, or the advisory vote on the frequency of the advisory vote on the compensation of our named executive officers, no votes will be cast on your behalf with respect to those proposals. The ratification of auditors (Proposal 2) is a discretionary matter, so your broker, trustee, or other nominee will be permitted to exercise discretionary authority to vote your shares with respect to the ratification of our selection of Ernst & Young LLP as our independent registered public accounting firm even if you do not give your broker, trustee, or other nominee instructions on how to vote your shares with respect to that proposal.

Brokernon-votes will be counted for purposes of calculating whether a quorum is present at the Annual Meeting, but will not be counted for purposes of determining the number of votes with respect to a particular proposal. Thus, a brokernon-vote will not impact our ability to obtain a quorum and will not otherwise affect the outcome of the vote on a proposal that requires a plurality of votes cast (Proposal 1) or the approval of Proposal 2 since brokers have discretion to vote uninstructed shares on that proposal. Brokernon-votes will affecthave no effect on the outcome of the vote on Proposal 3 but will have no effect on Proposal 4.Proposals 2 or 3. It is important that you provide voting instructions for all shares you own beneficially.

Who will tabulate the votes?    Broadridge Financial Solutions, Inc. (“Broadridge”) has been engaged as our independent agent to receive and tabulate shareholder votes. Broadridge will separately tabulate FOR, AGAINST and WITHHOLD votes, abstentions, and brokernon-votes. The Inspector of Election will certify the election results and perform any other acts required by Ohio Corporation Law.

What happens if the Annual Meeting is adjourned or postponed?    Your proxy will still be effective and will be voted at the rescheduled Annual Meeting. You will still be able to change or revoke your proxy until it is voted.

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Who is paying for the costs of this proxy solicitation?    We will bear the expense of soliciting proxies. Proxies may also be solicited by Nordson personnel who will not receive additional compensation for such solicitation. Copies of proxy materials and the Annual Report to Shareholders will be supplied to brokers, trustees, and other nominees for the purpose of soliciting proxies from beneficial owners.

How will I know the results of the Annual Meeting?    The final voting results will be tallied by our Inspector of Election and published in a Current Report on Form8-K filed with the SEC that we expect to file within four business days after the Annual Meeting.

If there is more than one shareholder living at the same address, will each shareholder receive proxy materials?    To reduce the expense of delivering duplicate materials to shareholders sharing the same address, we have adopted a procedure approved by the SEC called “householding.” Under this procedure, certain shareholders of record who have the same address and last name will receive only one copy of the Annual Report to Shareholders and proxy materials until such time as one or more of these shareholders notifies us that they wish to receive individual copies.copies by contacting us at the address and phone number below. Shareholders of record in the same household continue to receive separate proxy/voting instruction cards. In addition, if your household currently receives multiple copies of our Annual Report to Shareholders and proxy materials, you may “opt in” to householding for future mailings to receive a single copy of these documents.

We will mail materials that you request at no cost. You may contact us with your request by writing to or calling Corporate Communications, Nordson Corporation, 28601 Clemens Road, Westlake, Ohio, 44145 or440-414-5606. You may also access the Proxy Statement and Annual Report at:www.nordson.com/en/our-company/investors/annual-reports-and-presentations.

How do I submit director nominations or shareholder proposals for the 20172020 Annual Meeting?

Shareholder Proposals Submitted Under Rule14a-8

Assuming that our 20182020 Annual Meeting is held within thirty days of the anniversary of the 20172019 Annual Meeting, any shareholder who wishes to submit a proposal for consideration at the 20182020 Annual Meeting and for inclusion in next year’s Proxy Statement under Rule14a-8 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”), should send the proposal to c/o Secretary, Nordson Corporation, 28601 Clemens Road, Westlake, Ohio 44145 for receipt on or before September 29, 2017.

20, 2019.

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Proposals and Director Nominations Submitted Pursuant to our Regulations

Additionally, under our Regulations, a shareholder may submit a proposal for consideration at the 20182020 Annual Meeting, but not for inclusion in next year’s Proxy Statement, if the shareholder provides written notice no earlier than 90 days and no later than 60 days prior to the 20182020 Annual Meeting. Assuming that the 20182020 Annual Meeting will be held on February 27, 2018,25, 2020, that means notice of such proposals must be received no earlier than November 30, 201727, 2019 and no later than December 30, 2017.27, 2019. Our Regulations are available at:www.nordson.com/en/our-company/corporate-governance.

Similar to the timeliness requirements under our Regulations described above, the notice of the nomination of a director must be received no earlier than 90 days and no later than 60 days prior to our annual meeting. Assuming the 20182020 Annual Meeting is held on February 27, 2018,25, 2020, the deadlines would be no earlier than November 30, 201727, 2019 and no later than December 30, 2017.27, 2019. The Governance and Nominating Committee will assess the qualifications of the candidate according to criteria set out in Nordson Corporation’s Governance Guidelines, which are available at:www.nordson.com/en/our-company/corporate-governance. For a candidate to be considered for election as a director or for business to be properly requested by a shareholder to be brought before an annual meeting of shareholders, the shareholder must comply with all of the requirements of our Regulations, not just the timeliness requirements described above. Any proposal for inclusion in the proxy materials, notice of

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proposal, or suggestion for nominee(s) for election to our Board of Directors should be sent to c/o Secretary, Nordson Corporation, 28601 Clemens Road, Westlake, Ohio 44145.

If the notices delivered pursuant to the Regulations are not timely received, then we will not be required to present such proposals or nominations, as applicable, at the 20182020 Annual Meeting. If the Board chooses to present any information submitted after the deadlines set forth in the Regulations (other than pursuant to Rule14a-8 of the Exchange Act) at the 20182020 Annual Meeting, then the persons named in proxies solicited by the Board for the 20182020 Annual Meeting may exercise discretionary voting power with respect to such information.

What is our policy governing communication with our Board of Directors?

Members of our management team regularly meet with shareholders to discuss a broad range of topics, including our governance and compensation practices. In addition, our Board provides to every shareholder the ability to communicate with the Board as a whole and with individual directors through an established process for shareholder communication.

Shareholders may communicate with the Board, the ChairmanChair of the Board, a Board committee, thenon-employee directors as a group, or individual directors by sending written communications addressed to the Board of Directors, a Board committee or such individual director or directors, c/o Secretary, Nordson Corporation, 28601 Clemens Road, Westlake, Ohio 44145.

Each communication should specify the applicable addressee or addressees to be contacted as well as the general topic of the communication. Our Secretary will initially review communications before forwarding them to members of the Board to whom the communication is directed, or if the communication is not directed to any specific member(s) of the Board, to the ChairpersonChair of the Governance and Nominating Committee. We generally will not forward a shareholder communication that is primarily commercial in nature, relates to an improper or irrelevant topic, or requests general information about the Company. Concerns about accounting or auditing matters or possible violations of our Code of Ethics and Business Conduct should be reported pursuant to the procedures outlined in the Code.

 

YOUR VOTE IS VERY IMPORTANT, SO PLEASE VOTE.

 

Promptly return your proxy/voting instruction card or vote via telephone or the Internet,

which will help to reduce the cost of this solicitation.

This Proxy Statement and the enclosed proxy/voting instruction card are being mailed to shareholders of record on or about January 27, 2017.18, 2019. Nordson’s executive offices are located at 28601 Clemens Road, Westlake, Ohio 44145, telephone number(440) 892-1580.

 

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APPENDIX A

AUDIT COMMITTEE REPORT

January 27, 2017

To: The Board of Directors of Nordson Corporation

The Audit Committee consists solely of independent Directors within the meaning of the NASDAQ listing standards. The Audit Committee oversees Nordson’s financial reporting process on behalf of the Board. Nordson’s independent registered public accounting firm, Ernst & Young, LLP, is responsible for performing an integrated audit of Nordson’s annual consolidated financial statements and internal control over financial reporting as of the end of the year in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB). The Committee operates under a written charter that specifies the Committee’s responsibilities. The full text of the Committee’s Charter is available at:www.nordson.com/en/our-company/investors/annual-reports-and-presentations.The Audit Committee members are not auditors and their functions are not intended to duplicate or to certify the activities of management and the independent registered public accounting firm.

Management has the responsibility for the financial statements and the reporting process, including the systems of internal control over financial reporting. In fulfilling its oversight responsibilities, the Committee reviewed and discussed with management the audited financial statements in the Annual Report on Form10-K for the fiscal year ended October 31, 2016, including a discussion of the quality, not just the acceptability, of the accounting principles, the reasonableness of significant judgments and the clarity of disclosures in the financial statements.

The Committee discussed with Ernst & Young LLP, which is responsible for expressing an opinion on the conformity of those audited financial statements with U.S. generally accepted accounting principles, its judgment as to the quality, not just the acceptability, of our accounting principles and such other matters as are required to be discussed with the Committee under PCAOB Auditing Standard No. 16,Communications with Audit Committees. In addition, the Committee has received and discussed with Ernst & Young LLP written disclosures regarding Ernst & Young LLP’s independence as required by PCAOB Ethics and Independence Rule 3526,Communication with Audit Committees Concerning Independence.

The Committee discussed with our internal auditor and Ernst & Young LLP the overall scope and plan for their respective audits. The Committee met with the internal and independent auditors, with and without management present, to discuss the results of their examinations, their evaluations of our internal controls, and the overall quality of our financial reporting.

In reliance on the reviews and discussions referred to above, the Committee recommended to the Board of Directors that the audited financial statements be included in the Company’s Annual Report on Form10-K for the fiscal year ended October 31, 2016 filed with the Securities and Exchange Commission. The Committee also evaluated and reappointed Ernst & Young LLP as the Company’s independent registered public accounting firm for fiscal 2017

This Audit Committee report shall not be deemed incorporated by reference by any general statement incorporating by reference this Proxy Statement into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934 (the “Exchange Act”), except to the extent that we specifically incorporate this information by reference, and shall not otherwise be deemed filed under the Exchange Act.

This report has been furnished by the members of the Audit Committee:

Michael J. Merriman, Jr., Chair

Randolph W. Carson

Arthur L. George, Jr.

Frank M. Jaehnert

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YOUR VOTE IS IMPORTANT.

PLEASE VOTE YOUR PROXY

ACCORDING TO THE INSTRUCTIONS

ON THE PROXY/VOTING INSTRUCTION
CARD.


 

NORDSON CORPORATION

28601 CLEMENS ROAD

WESTLAKE, OH 44145-1119

  

VOTE BY INTERNET -www.proxyvote.com

 

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. eastern standard timeEastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you access the website and follow the instructions to obtain your records and to create an electronic voting instruction form.

 

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS

 

If you would like to reduce the costs incurred by our company in mailing proxy materials, you may consent to receiving all future proxy statements, proxy cards and annual reports electronically viae-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years.

 

VOTE BY PHONE -1-800-690-6903

 

Use any touch-tone telephone to transmit your voting instructions up until11:59 P.M. eastern standard timeEastern Time the day before thecut-off date or meeting date. Have your proxy card in hand when you call and then follow the instructions.

 

VOTE BY MAIL

 

Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. If you vote by mail, your proxy card must be received no later than 11:59 P.M. eastern standard time,Eastern Time the day before thecut-off date.

 

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

  

E16447-P84959-Z69096E54397-P16269-Z73728

 

  KEEP THIS PORTION FOR YOUR RECORDS

DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

NORDSON CORPORATION

  1.  The election of three nominees as directors to serve for a three year term.

Board recommendation: FOR all 3 Nordson nominees

  

For

All

  

Withhold

All

  

For All

Except

    

INSTRUCTIONS: To withhold authority to vote for any individual nominee(s), mark the box “FOR ALL EXCEPT” and write the nominee‘s number on the line provided below.

     

LOGO

     
 1.

The election of three nominees as directors to serve for a three year term.

Board recommendation: FOR all 3 Nordson nominees

 
    

01) Joseph P. KeithleyLee C. Banks

02) Michael J. Merriman, Jr.Randolph W. Carson

03) Mary G. PumaVictor L. Richey, Jr.

                    
    For  Against  Abstain   
  
  2.  To ratify the appointment of Ernst & Young LLP as our independent registered public accounting firm for the fiscal year ending October 31, 2017.2019.Board recommendation: FOR         
  
  3.  Advisory vote to approve the compensation of our named executive officers.Board recommendation: FOR  
1 Year2 Years3 YearsAbstain
4.Advisory vote on the frequency for holding the advisory vote on the compensation of our named executive officers.Board recommendation: for 1 year       
  
  NOTE: Such other business as may properly come before the Annual Meeting or any adjournment or postponement thereof.   
  
  

Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer.

 

             
      
                                                                 
   Signature [PLEASE SIGN WITHIN BOX]  

Date

 

                  

Signature (Joint Owners)

 

  

Date

 

   

V.1.1


 

Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report and Shareholder Letter are available at www.proxyvote.com.

 

 

E16448-P84959-Z69096E54398-P16269-Z73728

NORDSON CORPORATION

Annual Meeting of Shareholders

February 28, 201726, 2019

This proxy is solicited on behalf of the Board of Directors

The herein signed shareholder hereby appoints Arthur L. George,Joseph P. Keithley, Michael J. Merriman, Jr., Michael F. Hilton, and Frank M. Jaehnert,Mary G. Puma, or any of them, as proxies, each with the full power to appoint a substitute, to attend the 20172019 Annual Meeting of Shareholders of the Company (the “Annual Meeting”) to be held at Baker & Hostetler LLP, 2000 Key Tower, 127 Public Square, Suite 2000, Cleveland, Ohio 44114, at 8:00 A.M., eastern standard time,Eastern Time, on February 28, 2017,26, 2019, and any adjournment or postponement, thereof, to cast all votes that the shareholder or Plan Participant is entitled to vote at such Annual Meeting, as designated on the reverse side of this ballot, and otherwise to represent the shareholder with all of the powers possessed by the shareholder if personally present at the Annual Meeting. The shareholder hereby acknowledges receipt of the Notice of the Annual Meeting and the accompanying Proxy Statement, the terms of each of which are incorporated by reference, and revokes any proxy heretofore given with respect to the Annual Meeting.

This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors’ recommendations. If cumulative voting is invoked, by a shareholder through proper notice to Nordson Corporation, this proxy will give the proxy holders authority, in their discretion, to cumulate all votes to which the shareholder is entitled with respect to the shares represented by this proxy and allocate them in favor of one or more of the nominees for director if any situation arises, which in the opinion of the proxy holders, makes such action necessary or desirable.

In order to ensure that your securities are voted as you wish, if you are a shareholder of record, the proxy must be voted by 11:59 P.M., eastern standard time,Eastern Time, on February 27, 2017.25, 2019.

 

 

IMPORTANT NOTICE TO PARTICIPANTS IN THE EMPLOYEES’ SAVINGS TRUST PLAN AND EMPLOYEE STOCK OWNERSHIP PLAN (COLLECTIVELY, THE “PLANS”).

 

John Hancock Trust Company, LLC, as Trustee of the Plans, has been requested to forward to you the enclosed proxy material relative to the securities held by us in your account but not registered in your name. Such securities can be voted only by us as holder of record. We shall be pleased to vote your securities in accordance with your wishes if you will execute this form and return it to us promptly in the enclosed business reply envelope. It is understood that, if you sign without otherwise marking the form, the securities will be voted as recommended by the Board of Directors on all matters to be considered at the meeting.

 

For this meeting, the extent of our authority to vote your securities in the absence of your instructions, as directed by the Plans, is that securities for which no voting instructions have been given shall be voted in the same ratio as the ratio in which the total shares with respect to which timely directions were received were voted in such matters.In order to ensure that your securities are voted as you wish, the proxy must bevoted by 11:59 P.M., eastern standard time,Eastern Time, on February 23, 2017.21, 2019.

 

Continued and to be signed on reverse side

V.1.1