UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A

(Rule 14a-101)

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NORDSON CORPORATION
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NORDSON CORPORATION

Notice of

2019 Annual Meeting

and Proxy Statement

LOGOLOGO


LOGO

LOGO

Nordson Corporation

28601 Clemens Road

Westlake, Ohio 44145

January 18, 201922, 2021

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 virtually, via audio-only, at the law offices of BakerHostetler LLP, 2000 Key Tower, 127 Public Square, Cleveland, Ohio 44114, at 8:00 a.m., Eastern Time,www.virtualshareholdermeeting.com/NDSN2021 on Tuesday, February 26, 2019.March 2, 2021, at 10:00 a.m. Eastern Time. We are holding the Annual Meeting virtually this year to support the health and well-being of our shareholders, employees, and their families due to the COVID-19 pandemic. You will be able to attend the Annual Meeting online, vote your shares electronically, and submit your questions electronically during the Annual Meeting. You will not be able to attend the Annual Meeting in person.

The accompanying noticeNotice of Annual Meeting and Proxy 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, youYou may also vote in person atelectronically during 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 2019.

Sincerely,

MICHAEL J. MERRIMAN, JR.

Chair of the Board of Directors


NORDSON CORPORATION

TABLE OF CONTENTS2021.

 

LOGO

Sincerely,

LOGO

MICHAEL 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 

Governance Highlights

6

Compensation Highlights

   5

Governance Highlights

7 

Directors Serving on Boards of Other Public Companies

   89 

Proxy Statement

   910 

Proposal 1: Election of Directors Whose Terms Expire in 20222024

   1011 

Corporate Governance

   1720 

Shareholder Engagement, Environment and Sustainability, Human Capital, and Community

20

Committees of the Board of Directors

   2127 

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

   2531 

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

��  2733 

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

   2936 

Proposal 4: Approve Nordson Corporation 2021 Stock Incentive and Award Plan

38

Executive Compensation: Compensation Discussion and Analysis

   3247 

Part I: Executive Summary

   3349 

Part II: Setting Executive Compensation

37

Part III: Key ComponentsDiscussion of Our Executive Compensation Program

41

Part IV: Other Components of Our Executive Compensation Program

52

Part V: Policies Related to Executive Compensation

   56 

Compensation Committee Report

   5877 

Risks Related to Executive Compensation Policies and Practices

  

59

78

Summary Compensation for Fiscal Year 20182020

  

60

79

Grants of Plan-Based Awards

  

63

83

Outstanding Equity Awards at October 31, 20182020

  

65

86

Stock Option Exercises and Stock Vested Tables

  

68

89

Pension Benefits

  

69

90

Non-Qualified Deferred Compensation

  

71

92

Potential Benefits Upon Termination or Change of Control

  

73

94

CEO Pay Ratio

  

77

98

Audit Committee Report

  

78

99

Questions and Answers About the Annual Meeting and These Proxy Materials

  

79

100

Appendix A: Nordson Corporation 2021 Stock Incentive and Award Plan

  

A-1


NORDSON CORPORATIONNordson Corporation

NOTICE OF ANNUAL MEETING

OF SHAREHOLDERS

To Be Held Tuesday, February 26, 2019March 2, 2021

 

Date and Time:

  

Tuesday, February 26, 2019, at 8:March 2, 2021

10:00 a.m., Eastern Time.Time

Place:

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

Virtually, Via Audio-Only

www.virtualshareholdermeeting.com/NDSN2021

Items of Business:

  

1.   To elect as directors threefive nominees named in this Proxy Statement and recommended by the Board of Directors to serve until the 20222024 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, 2019;2021;

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

4.   To approve the Nordson Corporation 2021 Stock Incentive and Award Plan; and

4.

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

Record Date:

  Close of business on January 2, 2019.4, 2021.

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, 2018,2020, accompany this Notice and are also available at:www.nordson.com/en/our-company/investors/annual-reports-and-presentationshttps://investors.nordson.com/financials/default.aspx#annual-reports. The Board of Directors has determined that shareholders of record at the close of business on January 2, 20194, 2021 are entitled to notice of, and to vote during, the Annual Meeting.

By Order of the Board of Directors,

LOGO

GINA A. BEREDO

Executive Vice President, General Counsel

and Secretary

January 18, 201922, 2021

Westlake, Ohio

 

Important Notice Regarding the Availability of Proxy Materials for the Annual

Meeting of Shareholders to be held on February 26, 2019:March 2, 2021:

The Proxy Statement, Proxy/Voting Instruction Card, and the Annual Report to Shareholders, which

includes our Annual Report on FormForm 10-K for the fiscal year ended October 31, 2018,2020, are available at:www.nordson.com/en/our-company/investors/annual-reports-and-presentations.https://investors.nordson.com/financials/default.aspx#annual-reports.

 

Nordson Corporation – 2019

Nordson Corporation – 2021 Proxy Statement|   1

|  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, 20182020 filed with the United States Securities and Exchange Commission on December 14, 201818, 2020 (the “2018“2020 Annual Report”).Unless otherwise noted, all references to 2020 in this Proxy Statement refer to our fiscal year that ended October 31, 2020.

 

GENERAL INFORMATION

2021 ANNUAL MEETING

2019 Annual Meeting Date and Time

DATE AND TIME

  

Tuesday, March 2, 2021

Tuesday, February 26, 2019

8:10:00 a.m., Eastern Time

PlacePLACE

  

Virtually, Via Audio-Only

Law Offices of BakerHostetler LLPwww.virtualshareholdermeeting.com/NDSN2021

2000 Key Tower

127 Public Square

Cleveland, Ohio 44114

USA

Record Date

ACCESS

  

Visit www.virtualshareholdermeeting.com/NDSN2021

To attend the Annual Meeting, you must have your 16-digit control number appearing on your proxy/voting instruction card.

RECORD DATE

Close of business on January 2, 2019

4, 2021

VotingVOTING

  

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

   
PROPOSALREQUIRED VOTEProposalBOARD’S VOTING
  RECOMMENDATION  
 Voting Options  PAGE  
 Required 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.

Each nominee must receive a plurality of the votes cast.

No 

FOR

the election of each of the
director nomineesnominee

11

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

2021

  

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

Thisnon-binding proposal will be considered approved if more votes are cast in favor than against.

Yes(1) FOR31

3.  Advisory vote to approve compensation of named executive officers

  

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

Thisnon-binding proposal will be considered approved if more votes are cast in favor than against.

FOR36

4.  Approve the Nordson Corporation 2021 Stock Incentive and Award Plan

This proposal will be considered approved if more votes are cast in favor than against.FOR38

HOW TO VOTE
VIA THE INTERNETBY TELEPHONEBY MAILVOTE AT MEETING

LOGO

 

 No

LOGO

  FOR

LOGO

 

(1)

This is considered to be a routine matterLOGO

www.proxyvote.com

Call 1-800-690-6903

in the U.S. or Canada

Follow the instructions on the proxy/voting instruction cardAttend our Annual Meeting and therefore, if you hold your shares in street name and do not provide voting instructions to the broker, trustee, 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.

electronically

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. However, abstentions will affect the outcome of the votevotes on Proposals 2, 3, and 3,4, being equivalent to a vote “against” the Proposals.

 

2  |Nordson Corporation – 2019 Proxy Statement

2   |   Nordson Corporation – 2021 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:

 

NOMINEEPRIMARY
OCCUPATION
INDEPENDENT

NomineeBOARD
COMMITTEE

MEMBERSHIPS

 KEY ATTRIBUTES/
QUALIFICATIONS

Primary
Occupation

John A. DeFord

 Vice President and Chief Technology Officer at Becton, Dickinson and CompanyYesAuditBroad expertise in the medical device sector and management of multi-billion dollar companies, understanding of corporate governance and technology matters, and public company board experience.

Independent    

Arthur L. George, Jr.  

 RetiredYesAudit; Governance & NominatingSignificant experience in operational leadership, global industrial businesses, strategic vision, new product development, technology, with a keen focus on the semiconductor industry, and public company board experience.

Board
Committee

Memberships

Frank M. Jaehnert  

 RetiredYes

Key Attributes/
Qualifications
Audit;

  Lee C. BanksExecutive

 

PresidentExtensive experience in operational leadership, global industrial businesses, strategic vision, understanding of financial accounting and Chief Operating Officer, Parker Hannifin Corporationfinancial matters, acquisitions and divestitures, and public company board experience.

Ginger M. Jones

 RetiredYesAuditSubstantial executive financial management experience, understanding of financial accounting and financial matters, international business experience, and public company board experience.

YesJennifer A. Parmentier  

 

Compensation

Vice President and President, Motion Systems at Parker-Hannifin Corporation
 

Significant executive general management and operational experiences and a unique perspective in identifying strategic and tactical risks attendant to a multi-national sales, distribution, manufacturing, and operational footprint.

  Randolph W. Carson  

Yes
 

Retired

Audit
 

Yes  

Audit and Governance & Nominating

Deep operational experience in global industrial businesses, strategic vision, acquisition and understanding of financial accountingdivestitures, integration, and financial matters; public company board experience.

  Victor L. Richey, Jr.

Chair of the Board, President, and Chief Executive Officer, ESCO Technologies Inc.

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 and board experience at public and private companies.

unique perspective on tactical risks attendant to a multinational operation.

 

Nordson Corporation – 2019

Nordson Corporation – 2021 Proxy Statement|   3

|  3


BUSINESS HIGHLIGHTS

Fiscal year 20182020 was aan unprecedented year of outstandingwhere we achieved solid financial results in an uncertaina challenging macroenvironment affected by the COVID-19 pandemic. Despite these challenges, we remained committed to our customers andlow-growth global macroeconomic environment. advanced our long-term profitable growth strategy. The following highlights our performance for fiscal year 2018:2020:

 

SalesAdjusted Operating Profit(1)Free Cash Flow(2)

Record Sales$2.1 Billion

 

Fourth consecutive year over $2B

 

   

Record Operating Profit$454 Million

 

21% of sales

   

Record Net Income

$2.3 Billion

9% increase over 2017

$495452 Million

 

8% increase over 2017141% of adjusted net income

Dividends Paid   

Leverage RatioTotal Shareholder Return (3)

$37788 Million

 

28% increase over 2017

Record Free Cash Flow(1)

Record GAAP Diluted

Earnings Per Share

Record Full Year EBITDA(2)

$415 Million

110% of net income

$6.40

26% increase over 2017

$605 Million

11% increase over 2017

Operating Margin

Dividends Paid

Total Shareholder Return(3)

22%

$72 Million

55th57th consecutive year

dividend has increased

 

   

1.6x

Based on trailing

12-month EBITDA

3 Year: 25.9%57.22%

5 Year: 66.8%185.95%

10 Year: 392.7%449.71%

 

(1)

Free cash flow,Adjusted Operating Profit,” anon-GAAP measure, is determineddefined as Operating Profit from our consolidatedConsolidated statement of cash flowsincome plus certain adjustments such as an assets held-for-sale impairment charge and for 2018 represents $504.6 million of net cash provided by operating activities minus $89.8 million of additions to property, plant, and equipment plus $0.5 million of proceeds from the sale of property, plant, and equipment.other non-recurring items.

 

(2)

EBITDA,Free cash flow,” anon-GAAP measure, is defined as earnings before interest, taxes, depreciation,Net cash provided by operating activities, less Additions to property, plant and amortization.equipment, both from our Consolidated statement of cash flows.

 

(3)

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

Our COVID-19 Response

As the COVID-19 pandemic spread throughout the world, Nordson remained committed to our core values – Integrity, Excellence, Passion for Our Customers, Energy, and Respect for People. We relied on these foundational principles to guide us as we focused on two critical priorities – protecting the health and safety of our employees and responding to the needs of our customers.

Our employees’ health and safety remain our highest priority, especially during the pandemic, and reflects our core values of Respect for People and Integrity. We manufacture products deemed essential to the critical infrastructure, including health and safety, food and agriculture, and energy, and as a result, all our production sites continued operating during the pandemic. As such, we have invested in creating physically safe work environments for our employees. When the pandemic first impacted our employees in our international locations, we began hosting cross-functional global team meetings to proactively manage employee safety. Teams from around the world came together to ensure our employees had access to masks, thermometers, protective gloves and sanitizing supplies in order to protect not only themselves, but their families as well.

This Nordson spirit continued as the virus spread around the world. Closely following the recommendations of the World Health Organization, the U.S. Centers for Disease Control and Prevention, and local governments, we took action to ensure our employees were safe:

Adjusted work schedules to allow the proper amount of social distance between employees;

Increased hygiene, cleaning and sanitizing procedures at all locations;

Implemented temperature-taking protocols upon entering facilities;

Provided additional personal protective equipment to employees;

Enabled employees to work from home where possible;

4   |   Nordson Corporation – 2021 Proxy Statement


Restricted travel and encouraged quarantine upon return;

Developed a special COVID-leave policy that encouraged employees to take time off for illness or caretaking while maintaining steady wages;

Established strict protocols and screening for outside guests; and

Launched a coronavirus intranet site to increase communications and ensure our employees had access to up-to-date and accurate information.

Guided by our values of Excellence and Passion for Our Customers, we responded quickly to the needs of our customers that resulted from the pandemic. We supplied gear pumps and screen changers to producers of melt blown polypropylene microfiber sheets used in the manufacture of masks, gowns, and other personal protective equipment for healthcare workers. We helped innovate the mask manufacturing process. With Nordson adhesive dispensing technology for nonwoven materials, surgical facemask manufacturers were able to optimize the standard design to output as many as ten times more masks per minute. We supplied electronic dispense applications and fluid management robots that were used to enable the mass-production of ventilators used to support the fight against COVID-19. Nordson teams partnered with key medical customers to develop applications that dispense reagents for diagnostic test strips and to produce proprietary single-use plastic fluid management components to manufacture vaccines. Across countless critical applications, Nordson teams supported our customers and produced applications and systems that supported the front-line efforts to combat the spread of COVID-19 and support its treatment around the world.

While we anticipate continued challenges, our actions in 2020 have demonstrated our agility to support the continued and evolving needs of our customers, while remaining committed to our core purpose: to be a vital, self-renewing, worldwide organization that, within the framework of ethical behavioral and enlightened citizenship, grows and produces wealth for our customers, employees, shareholders, and communities.

Nordson Corporation – 2021 Proxy Statement   |   5


GOVERNANCE HIGHLIGHTS

The following summarizes the structure of our board of directors as of our record date, January 4, 2021(1), and key elements of our corporate governance framework:

 

4  |

Share Ownership

Guidelines

  Nordson CorporationBoard IndependenceOversight of Risk

Share ownership guidelines for directors and executive officers:

•   Directors – 2019 Proxy Statement5x cash retainer

•   CEO – 5x base salary

•   CFO – 3x base salary

•   Other executive officers – 2x base salary

100% Independent

Committee Members

100% Independent

Committee Chairs

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

Meeting of

Independent Directors

Board Meeting

Attendance

Hedging/Pledging

Transactions

Executive sessions of independent

directors are conducted during each

Board meeting

Each of our directors attended at least
75% of board and

committee meetings

Strict policy of no pledging or

hedging of company shares

by directors or executive officers

Voting Standard for

Election of Directors

Compensation

Board

Self-Assessments

Plurality vote with director resignation

policy for failure to receive a majority

vote in uncontested director elections

Our non-employee director compensation

is not excessive when compared to

non-employee director compensation of

proxy peers

Board, Committee, and peer

self-assessments conducted

on a regular basis

Chief Executive Officer

Performance

Board LeadershipClawback Policy

Annual review by independent directors

Independent Chair

Robust policy

Advisory Vote on Named

Executive Officer Compensation

Shareholder Rights Plan

(“Poison Pill”)

Average Tenure of

Independent Directors

Annual Vote

No shareholder rights plan in place

7 years

LOGO

LOGO

LOGO

(1)

As of January 4, 2021, the board of directors consisted of nine directors. Lee C. Banks, Randolph W. Carson, and Joseph P. Keithley resigned or retired as directors prior to January 4, 2021 and their information is not included in the Governance Highlights summary data. Effective November 23, 2020, the board appointed John A. DeFord and, effective November 30, 2020, appointed Jennifer A. Parmentier to serve on the board of directors. Dr. DeFord’s and Ms. Parmentier’s information is included in the Governance Highlights summary data.

6   |   Nordson Corporation – 2021 Proxy Statement


COMPENSATION HIGHLIGHTS

The information below reflects highlights of our named executive officer compensation program for fiscal year 2018.2020. The tablescharts 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 20182020 Annual Meeting, approximately 97.70%98.74% 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 “Executive Compensation: Compensation Discussion and Analysis” section of this Proxy Statement.

Principal Components of Named Executive Officer Compensation

 

LOGO

LOGO

Base Salary

 

  

•  15% of CEO’s and 22% of average named executive officer’s target direct compensation (other than CEO)

•  Target levels of incentive compensation based on percentage of base salary

  

 

Annual Cash Incentive Award

 

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

Base salary increases for 2018 for the named executive officers other than our CEO ranged from 3.0% to 4.6%; 5.7% for our CEO.

  

 

Target bonus opportunity range for our•  15% of CEO’s (at target) and 15% of average named executive officers otherofficer’s target compensation (other than our CEO:

65% – 75% of base salary.CEO)

 

Target bonus opportunity for CEO:•  Designed to drive high performance results year-over-year

100% of base salary

 

Long-term Compensation•  Places significant portion of annual compensation at risk

 

 

Performance ShareLong-term Incentive AwardAwards

At

•  70% of CEO’s and 63% of average named executive officer’s target represents approximately 40% of the long-term compensation opportunity.(other than CEO)

 

Other Equity Awards•  Aligns interests of executive officers with shareholders’ long-term interests

Stock Options represent approximately

•  Performance share awards (at target, 40% of the long-term compensation opportunity.opportunity) are payable in unrestricted Nordson common stock to the extent pre-established quantitative performance goals are met

•  Stock options (approximately 40% of long-term compensation opportunity) vest in 25% increments over four years and only have value if the price of the Company’s stock increases after the award

•  Restricted Shares represent approximatelyshare awards (approximately 20% of the long-term compensation opportunity.opportunity) vest over a three-year period and are an important management succession planning, retention, and recognition tool

 

The tables below present FY2016

Nordson CorporationFY2018 reported results for the three primary drivers of incentive compensation for the named executive officers2021 Proxy Statement   |   7


CEO Compensation – Diluted Earnings per Share, Return on Total Capital,2020 Opportunity and Revenue:Earned/Realized

 

LOGO

Pay Component

  LOGO

2020 Compensation Opportunity(1)

  LOGO

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

2020 Compensation Realized(2)

 

*

Base Salary

$850,000$882,692(3)

Annual Cash

Incentive Award

$850,000 (at target)$353,077

Long-Term Compensation

This data includes the benefits inured to the Company from the Tax Cuts and Jobs Act that was passed

Performance Shares

Target number of

2018-2020 performance share units

granted 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%.FY 2020, upon hire:

3,956

Grant date fair value at target:

$560,407

Performance Shares

Number of

2018-2020 performance share units earned in FY 2020:

1,286

Award settlement date value:

$256,287

Stock Options

41,800 shares granted in FY 2020

$1,628,218 grant date fair value

Stock Options

0 options exercised in FY 2020

Value Realized: $0

Restricted Shares

4,700 shares granted in FY 2020

$776,487 grant date fair value

Restricted Shares

Number of shares vested in FY 2020: 1,566

Value Realized: $319,166

 

Nordson Corporation – 2019 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

(1)

TenureThe compensation opportunity amount shown for Mr. Nagarajan includes his base salary, target annual cash incentive award, the target performance share units representing the grant date fair value of Independent Directors

Oversight of Risk

Eight of nine directors

are independent

Audit, Compensation, and

Governance and Nominating

Committees all composed of

independent directors

6 years: George and Jaehnert

8 years: Banks and Richey

9 years: Carson

10 years: Merriman

17 years: Keithley and Puma

Average tenure: 10 years

The Board as a whole exercises its

oversight responsibilities with

respect to material risks

The Board has delegated

responsibilitythe performance share awards that could have vested if the performance metrics at target were met for the oversight2018-2020 performance period, the grant date fair value of

specific risks to Board committees

Meeting stock option awards calculated using the Black-Scholes options pricing method, and the fair value at grant of Independent Directors

Board Meeting Attendance

Board Leadership and Structure

Executive sessions of independent

directors are conducted during each

Board meeting

Eachrestricted shares calculated at the closing price of our directors attended at least 75% of board and

committee meetings

Classified with three

classes of directors

Independent Chair –

Michael J. Merriman, Jr.

Voting Standard for Election of Directors

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, Committee, and Peer self- assessmentscommon stock on a regular basis

Chief Executive Officer

Performance

Hedging/Pledging Transactions

Clawback Policy

Annual review by independent directors

Strict policy of no pledging or

hedging of company shares

Robust policy

Advisory Vote on Named

Executive Officer Compensation

Shareholder Rights Plan

(“Poison Pill”)

Average Age of Independent

Directors

Annual Vote

No shareholder rights plan in place

Age: 62 years

the grant date.

 

(2)

Nordson Corporation – 2019 Proxy StatementThe amount shown as the compensation realized by Mr. Nagarajan for 2020 includes his base salary, the actual annual cash incentive award paid for 2020 performance, the value of the performance share units (as of the vesting date) that were realized for the 2018-2020 performance period and the value of the restricted shares (as of the vesting date), that vested. In each case, the value of the performance share units and restricted share includes dividends. Mr. Nagarajan did not exercise any stock options during 2020.

|  7

(3)

The salary earned in fiscal year 2020 is higher than the base amount because an extra pay period occurred (27 pay periods versus 26) during fiscal year 2020.

8   |   Nordson Corporation – 2021 Proxy Statement


DIRECTORS SERVING ON BOARDS OF OTHER PUBLIC COMPANIES

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

“It is the Company’s policyGuidelines, which provides that a Directordirectors who isare not an executive officerofficers of a public company may serve as a director on up to fivethree other public company boards, of public companies. For Directorsand directors who are also servingserve as an executive officer of a public company themay serve on a maximum number of two other public company boards. The following table shows our directors as of our record date, January 4, 2021, and the public company boards onupon which the Director maythey serve is two in addition to serving as a director on the board of his or her company.”other than ours:

 

Lee C. Banks

John A. DeFord

  

Parker-Hannifin Corporation (NYSE: PH)

NuVasive, Inc. (Nasdaq: NUVA)

 

Arthur L. George, Jr.

  

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

 

Michael F. Hilton (CEO)

Ryder System, Inc. (NYSE: R)

Lincoln Electric Holdings, Inc. (Nasdaq: LECO)

Frank M. Jaehnert

  

Briggs & Stratton Corporation (NYSE: BGG)

Itron, Inc. (Nasdaq: ITRI)

Ginger M. Jones

Tronox Limited (NYSE: TROX)

 

Joseph P. Keithley

Axcelis Technologies, Inc. (Nasdaq GS: ACLS)

Michael J. Merriman, Jr. (Chair)

  

Regis Corporation (NYSE: RGS)

OMNOVA Solutions Inc.Sundaram Nagarajan (CEO)

Sonoco Products Company (NYSE: OMN)

SON)

 

Mary G. Puma

  

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

 

Victor L. Richey, Jr.

  

ESCO Technologies Inc. (NYSE: ESE)

 

8  |Nordson Corporation – 2019 Proxy Statement

Nordson Corporation – 2021 Proxy Statement   |   9


NORDSON CORPORATION

NORDSON CORPORATION

PROXY STATEMENT

FOR THE ANNUAL MEETING OF SHAREHOLDERS

FEBRUARY 26, 2019MARCH 2, 2021

The accompanying proxy is solicited on behalf of the Board of Directors (the “Board”) of Nordson Corporation for use at the 20192021 Annual Meeting. The Annual Meeting will be held virtually, via audio-only, at the law offices of BakerHostetler LLP, 2000 Key Tower, 127 Public Square, Cleveland, Ohio 44114 at 8:00 a.m., Eastern Time,www.virtualshareholdermeeting.com/NDSN2021 on Tuesday, February 26, 2019March 2, 2021, at 10:00 a.m. Eastern Time, for the following purposes:

 

 1.

To elect as directors threefive nominees, named in this Proxy Statement and recommended by the Board, to serve until the 20222024 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, 2019;2021;

 

 3.

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

4.

To approve the Nordson Corporation 2021 Stock Incentive and Award Plan; and

 

 4.5.

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 18, 2019.22, 2021. Our 20182020 Annual Report to Shareholders is enclosed with this Proxy Statement.

We are holding the Annual Meeting virtually this year to support the health and well-being of our shareholders, employees, and their families due to the COVID-19 pandemic. You will be able to attend the Annual Meeting online, vote your shares electronically, and submit your questions during the Annual Meeting by visiting www.virtualshareholdermeeting.com/NDSN2021. You will not be able to attend the Annual Meeting in person. This Proxy Statement includes more information about the procedures for the virtual Annual Meeting.

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”“Nordson,” or the “Company” refers to Nordson Corporation.

 

Nordson Corporation – 2019

10   |   Nordson Corporation – 2021 Proxy Statement

|  9


PROPOSAL 1: ELECTION OF DIRECTORS WHOSE TERMS EXPIRE IN 20222024

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. Our Board is divided into three classes, with each class serving for three-year terms. The Board underwent a significant refreshment in the last year. Randolph W. Carson and Lee C. Banks resigned from the Board effective November 24, 2020 and November 30, 2020, respectively. Joseph P. Keithley retired effective December 1, 2020 based on the retirement age requirements set forth in our Governance Guidelines. Messrs. Banks and Carson’s resignations created two vacancies in the class of directors whose term expires in 2022 and Mr. Keithley’s retirement created a vacancy in the class of 2023. To maintain equally balanced classes, with a minimum of three directors per class, the Board appointed John A. DeFord, effective November 23, 2020, and Jennifer A. Parmentier, effective November 30, 2020, to the Board of Directors and each to the class of directors whose term expires in 2022. In addition, Dr. DeFord and Ms. Parmentier were each immediately appointed to the Audit Committee. As a result of these changes, our Board now consists of nine directors. Although Dr. DeFord and Ms. Parmentier were each appointed to the class of directors whose term expires in 2022, we believe that the shareholders should have an opportunity to express their view on the newly appointed directors. Thus, Dr. DeFord and Ms. Parmentier are standing for election at the 2021 Annual Meeting. If elected at the 2021 Annual Meeting, the Board expects to confirm the director classes to be a minimum of three directors per class. As members of the class of directors whose term expires in 2022, Dr. DeFord and Ms. Parmentier will stand for election again next year.

The Governance and& Nominating Committee has recommended, and the Board has approved, the persons named as nominees for terms expiring in 2022 and, unless otherwise marked, a duly executed and properly submitted proxy will be voted for such nominees. Nominees Lee C. Banks, Randolph W. Carson,John A. DeFord, Arthur L. George Jr., Frank M. Jaehnert, Ginger M. Jones, and Victor L. Richey, Jr.Jennifer A. Parmentier currently serve as directors. All nominees have agreed to stand for election for a three-year term.term; however, because Dr. DeFord and Ms. Parmentier were each appointed in November 2020 to the class of directors whose term expires in 2022 and are standing for election as a matter of good corporate governance, they will each stand for election again next year.

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 that the Governance and& Nominating Committee believes enables a director nominee to make significant contributions to the Board, Nordson, and our shareholders. The Board is committed to an inclusive director search process, which includes actively seeking diverse candidates, including women and minority candidates, for each search the Board undertakes.

Consistent with the Board’s commitment to actively seek diverse candidates, and to enhance the collective experience and expertise of the Board, in 2020 the Board engaged an executive search firm to assist in identifying and recruiting potential candidates for membership on the Board. The search included reviewing candidates of diverse backgrounds, including women and minority candidates. The firm identified, evaluated, and performed background searches of potential nominees, and facilitated interviews. Following the firm’s identification of Dr. DeFord and Ms. Parmentier as potential candidates, the Governance & Nominating Committee reviewed their qualifications, interviewed each of them, and recommended them for appointment to the Board. As noted above, the Board appointed Dr. DeFord effective November 23, 2020 and Ms. Parmentier effective November 30, 2020. We believe that Dr. DeFord’s diverse set of experiences with multi-billion dollar companies and his expertise in the medical device sector make him well-suited to provide advice on a variety of topics, including our strategic growth plans. Ms. Parmentier’s strong international operating experience and service to diverse and complex organizations provides an international perspective to the Board as we develop our business in global markets. We paid customary compensation to the executive search firm for its services.

Nordson Corporation – 2021 Proxy Statement   |   11


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

 

Experience workingWorking outside the United States and/or with global

enterprises to help oversee the management of our global

operations.

 

  

 

 

Experience workingWorking on M&A transactions, which provides insight

into developing and implementing strategies for growing our businesses.

 

Financial Experience   Public Company CEO Experience

 

Financial Experience

Public Company CEO Experience

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

help drive our operating and financial performance.

 

   

 

ExperienceServing 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

Capital Allocation Experience

Experience workingWorking with publicly-traded companies and corporate governance

issues to help us oversee an ever-changing mix of strategic, operational, and compliance-related matters.

 

   

 

Experience with capitalCapital allocation decision-making experience to help us

allocate capital efficiently.

 

Strategy Development Experience   Manufacturing Experience

 

Strategy DevelopmentExperience in the development and oversight of long-term

strategic planning.

 

   

 

Manufacturing Experience

Experience with the development and oversight of long-term

planning.

Experience with manufacturing operations experience to help us drive

operating performance.

 

See director biographies beginning on page 1213 for further detail.

10  |Nordson Corporation – 2019 Proxy Statement


TheOur Board recognizes the importance of Board refreshment to ensure that the directors possess a composite set of skills, experience, and qualifications necessary to successfully oversee the Company’s strategic priorities. We do not believe in a specific limit for the overall length of time an independent director may serve; however, we believe that the tenure spectrum of our directors should provide an effective mix of deep knowledge and new perspectives. Our recent refreshment reflects this healthy tenure spectrum, with Ms. Puma serving as a seasoned strategic advisor with historical knowledge and context on the vitality and continued and growth of Nordson, and with Mses. Jones and Parmentier and Dr. DeFord providing fresh perspectives and additional diversity of thought. 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. In the last two years, we rotated the chairs of each of our committees to ensure continued diverse perspectives. As a result of our refreshment, as of our record date for the Annual Meeting, the average tenure of our independent directors is 107 years, and the average age of our independent directors is 62 years. Twenty-five60 years, and fifty-six percent of our independent directors represent gender and racial or ethnic 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. The Board does not believe in a specific limit for the overall length of time an independent director may serve. Directors who have served on the Board for an extended period can provide valuable insight into the operations and future of the Company based on their experience with, and understanding of, the Company’s history, policies, and 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. 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.

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 knowsis not aware of noany reason whythat would prevent any nominee might not befrom being a candidate at the 2019 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 26, 2019)March 2, 2021) of each of the threefive nominees for election as directors, for terms expiring in 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.

 

Nordson Corporation – 2019

12   |   Nordson Corporation – 2021 Proxy Statement

|  11


Nominees for Terms Expiring in 2022

2024

 

JOHN A. DEFORDDirector Since: 2020*Age: 59

LOGO

Director Qualifications:

Medical Device Expertise, Global Business Management, Corporate Governance Experience

Independent Director

Other Public Boards:

NuVasive, Inc.

(Nasdaq: NUVA)

 

        LEE C. BANKSExecutive Vice President and Chief Technology Officer, Becton, Dickinson and Company

Business Experience.    Dr. DeFord serves as executive vice president and chief technology officer of Becton, Dickinson and Company (NYSE: BDX), a leading global medical technology company which manufactures and sells medical devices, instrument systems, and reagents. He has served in this position since the acquisition of C.R. Bard, Inc. in 2017. Previously, Dr. DeFord was the senior vice president of Science, Technology and Clinical Affairs for C.R. Bard, Inc., which was acquired by BDX in 2017. At the time of acquisition, C.R. Bard, Inc. was a leading multinational developer, manufacturer, and marketer of innovative, life-enhancing medical technologies in the fields of vascular, urology, oncology and surgical specialty products. His prior work experience includes serving as a managing director of Early Stage Partners, a venture capital fund and as president and chief executive officer of Cook Group Incorporated, a privately held medical device manufacturer.

Current Directorships.    Dr. DeFord is a director of NuVasive, Inc. (Nasdaq: NUVA), a medical device company focusing on medical devices and procedures for minimally invasive surgery and world class surgeon education, where he is a member of the nominating, corporate governance, and compliance committee.

Key Attributes, Experiences, and Skills.    Dr. DeFord has a diverse set of experiences resulting from serving in various leadership positions over the past 35 years, holds 13 U.S. patents, is the author of numerous peer-reviewed scientific papers, and has a Ph.D in Electrical Engineering. His expertise in the medical device sector and multi-billion dollar companies enables him to make significant contributions to discussions regarding the Company’s strategy and growth.

Nordson Committees.    Audit

*  Dr. DeFord was appointed to the Board on November 23, 2020 to the class of directors whose term expires in 2022 and will therefore stand for election again in 2022.

 

  

ARTHUR L. GEORGE, JR.Director Since: 2012Age: 59

 

                              Age: 56LOGO

Director Qualifications:

Business Strategy and Operations Expertise, Global Business Management, Technology Expertise

Independent Director

Other Public Boards:

Axcelis Technologies, Inc. (Nasdaq: ACLS)

Retired Senior Vice President, Texas Instruments Inc.

Business Experience.    Mr. George retired from Texas Instruments (Nasdaq: TXN) in 2014, one of the world’s largest semiconductor companies and a highly innovative, high performing global leader in analog, embedded processing, and wireless technologies, after a 30-year career. Immediately prior to retirement, Mr. George served as senior vice president and manager of Texas Instruments’ Analog Engineering Operations from 2011 until 2014. Previously, 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: ACLS), a provider of equipment and service solutions for the semiconductor manufacturing industry, where he serves as chair of the technology and new product development committee and as a member of the compensation committee.

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.

Nordson Committees.    Audit, Governance and Nominating

 

  

Nordson Corporation – 2021 Proxy Statement   |   13


FRANK M. JAEHNERTDirector Since: 2012Age: 63

 

LOGO

Director Since 2010Qualifications:

CEO Experience, Financial Management Expertise, Business Strategy & Operations

Independent Director

Other Public Boards:

Itron, Inc.

(Nasdaq: ITRI)

Briggs & Stratton Corporation

(formerly NYSE: BGG) (served from 2014-2021)

Retired President and Chief Executive Officer, Brady Corporation

Business Experience.    Mr. Jaehnert served as chief executive officer and president of Brady Corporation (NYSE: BRC), a leading provider of high-performance labels and signs, safety devices, printing systems, and software, from 2003 through 2013. Previously, Mr. Jaehnert was the chief financial officer and president of Brady Corporation. 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.

Current Directorships.    Mr. Jaehnert 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, and serves as chair of the nominating and corporate governance committee and as a member of the compensation committee. Mr. Jaehnert served as a director of Briggs & Stratton Corporation (formerly NYSE: BGG) from January 2014 through January 2021 and as a member of the audit and nominating and governance committees. BGG was a world leader in gasoline engines for outdoor power equipment, portable generators, and lawn and garden-powered equipment and related accessories. BGG filed a voluntary petition for bankruptcy under Chapter 11 in the U.S. Bankruptcy Court of the Eastern District of Missouri on July 20, 2020 and was subsequently delisted from the NYSE.

Key Attributes, Experiences, and Skills.    Mr. Jaehnert served as a director of Brady from April 2003 through October 2013. Mr. Jaehnert received the equivalent of a master of business administration degree from the University of Stuttgart, Germany, and has been designated as an “audit committee financial expert”, 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.

Nordson Committees.    Audit (Chair), Executive

 

Business Experience.    Mr. Banks has been president and chief operating officer of Parker-Hannifin

14   |   Nordson Corporation (NYSE: PH) since February 2015. Parker-Hannifin 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 2015 and senior vice president and operating officer of Parker-Hannifin from 2006 to 2008.– 2021 Proxy Statement

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.


GINGER M. JONESDirector Since: 2019Age: 56

LOGO

Director Qualifications:

Financial Expertise, Public Company Board Experience, Global Business Management

 

Independent Director

Other Public Boards:

Tronox Limited

(NYSE: TROX)

Libbey, Inc.

(formerly NYSE: LBY)

(served 2013-2020)

Retired Senior Vice President and Chief Financial Officer, Cooper Tire & Rubber Company

Business Experience.    Ms. Jones served as the senior vice president and chief financial officer of Cooper Tire & Rubber Company (NYSE: CTB), a provider of car, light truck, medium truck, motorcycle, and racing tires, from December 2014 until 2018 when she retired. Prior to joining Cooper, Ms. Jones served as chief financial officer of Plexus Corporation (Nasdaq: PLXS), a global electronics, engineering and manufacturing service company from 2004-2014.

Current Directorships.    Ms. Jones is a director of Tronox Limited (NYSE: TROX), a chemical company, where she chairs the audit committee and is a member of the compensation and human resource committees. She previously served as a director of Libbey, Inc. (formerly NYSE: LBY), a glass and tableware manufacture, from August 2013 to November 2020, where she chaired the audit committee and was a member of the compensation committee. LBY filed a voluntary petition for bankruptcy under Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware on June 1, 2020 and emerged from bankruptcy on November 13, 2020. As a result of the bankruptcy, LBY was delisted from the NYSE and is now a privately held company.

Key Attributes, Experiences, and Skills.    Ms. Jones brings thirty years of accounting and finance skills, in industries ranging from consumer goods, industrial manufacturing, supply chain management and software. She served as a public company CFO for ten years at two different global companies. Ms. Jones has significant finance, financial reporting, and accounting expertise and was formerly a certified public accountant, which provides the Board with valuable financial expertise. She has been designated as an “audit committee financial expert”, as described under the “Committees of the Board of Directors” section of this Proxy Statement.

Nordson Committees.    Audit

JENNIFER A. PARMENTIERDirector Since: 2020*Age: 53

LOGO

Director Qualifications:

Manufacturing, Global, Business Management, Business Strategy & Operations

Independent Director

Other Public Boards:

None

Vice President and President, Motion Systems, Parker-Hannifin Corporation

Business Experience.    Ms. Parmentier serves as vice president and president of Motion Systems at Parker-Hannifin Corporation (NYSE: PH), a global leader in motion and control technologies, which positions she has held since 2019. Ms. Parmentier has served in various roles of increasing responsibility since joining Parker in 2008, having served as the vice president and president of the Engineered Materials Group, and general manager for the Hose Products Division in the Fluid Connectors Group, Parker’s largest industrial division. Prior to joining Parker, Ms. Parmentier served as a business leader of Trane Technologies (NYSE: TT), an industrial manufacturing company, which was acquired by Ingersoll Rand Inc. in 2008.

Current Directorships.    Ms. Parmentier does not serve on any other public boards.

Key Attributes, Experiences, and Skills.    Ms. Parmentier brings strong international operating experience in the industrial sector to the Board. Her experiences, specifically her career with Parker, which serves a diverse market base spanning mobile, industrial, and aerospace clients, enables her to make significant contributions to discussions regarding the Company’s diverse and complex organization.

Nordson Committees.    Audit

*  Ms. Parmentier was appointed to the Board on November 30, 2020 to the class of directors whose term expires in 2022 and will therefore stand for election again in 2022.

Nordson Corporation – 2021 Proxy Statement   |   15


Present Directors with Terms Expiring in 2022

 

        RANDOLPH W. CARSON

VICTOR L. RICHEY, JR.
Director Since: 2010Age: 63  

 

                              Age: 68LOGO

Director Qualifications:

CEO Experience, Business Strategy & Operations Expertise, Public Company Board

 

Independent Director

 

      Director Since 2009Other Public Boards:

ESCO Technologies Inc. (NYSE: ESE)

 

Business Experience.    From 2000 to February 2009, Mr. Carson served as chief executive officer of Eaton Corporation’s 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.

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. (formerly, Nasdaq: FCS), a leading global manufacturer of semiconductor devices, until September 2016, when ON Semiconductor Corporation (Nasdaq: ON) closed its acquisition of Fairchild. Mr. Carson served as chair of the board of GrafTech International, Ltd. (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).

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.

 

Chair, President, and Chief Executive Officer, ESCO Technologies Inc.

 

        VICTOR L. RICHEY, JR.

                              Age: 61

      Director Since 2010

Business Experience.    Mr. Richey has been chair 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;Business Experience.    Mr. Richey has been chair 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-based packaging, and specialty products for medical and commercial markets.

 

Current Directorships.    Mr. Richey is chair of the board of ESCO Technologies.

Key Attributes, Experiences, and Skills.     Mr. Richey has extensive experience as 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, which provides our Board with a breadth of skills critical to its oversight responsibility.

Nordson Committees.    Compensation (Chair), Governance & Nominating

12  |Nordson Corporation – 2019 Proxy Statement

16   |   Nordson Corporation – 2021 Proxy Statement


Current Directorships.    Mr. Richey is chair of the board of ESCO Technologies.

Key Attributes, Experiences, and Skills.    Our 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 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

2023

 

        JOSEPH P. KEITHLEY

MICHAEL J. MERRIMAN, JR.
Director Since: 2008Age: 64  

 

                             Age: 70LOGO

Director Qualifications:

CEO Experience, Financial Management Expertise, Global Business Management, Investor Relations

 

Independent Director

Other Public Boards:

Regis Corporation

(NYSE: RGS)

 

            Director Since 2001

Strategic Advisor, Resilience Capital Partners

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.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, a private equity firm focused on principal investing in lower, middle-market underperforming and turnaround opportunities, from 2008 until 2017, and currently serves on the board of one of Resilience’s portfolio companies. 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 2006 to 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 2005 until 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, where he is chair of the audit committee and a member of the compensation committee.

 

                              Age: 62Key Attributes, Experiences, and Skills.    Mr. Merriman was a director of OMNOVA Solutions Inc. (formerly, 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, from 2008 until its acquisition by Synthomer plc (LSE: SYNT) in 2020; 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, from 2014 until 2018, and a director of American Greetings from 2006 through 2013, when American Greetings became a private company. Mr. Merriman also served as a director of RC2 Corporation (formerly, Nasdaq: RCRC), a manufacturer of pre-school toys and infant products, from 2004 until its sale in 2011.

 

            Director Since 2008

Business Experience.    Mr. Merriman has servedMr. Merriman’s prior experience 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 public company chief executive officer and chief financial officer and his current service on the board of directors of a publicly traded 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.

 

Nordson Committees.    Compensation, Executive (Chair)

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SUNDARAM NAGARAJANDirector Since: 2019Age: 58

LOGO

Director Qualifications:

CEO Experience, Public Company, Board Experience

Non-independent Director

Other Public Boards:

Sonoco Products Co. (NYSE: SON)

President and Chief Executive Officer, Nordson Corporation

 

        MARY G. PUMABusiness Experience.    Mr. Nagarajan joined Nordson as President and Chief Executive Officer effective August 1, 2019 following a 23-year career with Illinois Tool Works Inc. (NYSE: ITW), a FORTUNE® 200 manufacturer of industrial products and equipment, where he had roles of increasing responsibility. Most recently, he was the executive vice president, ITW Automotive OEM Segment, a position he held since 2015.

Current Directorships.    Mr. Nagarajan is a director of Sonoco Products Company (NYSE: SON), a global provider of consumer packaging industrial products, where he serves as a member of the executive compensation and the employee and public responsibility committees.

Key Attributes, Experiences, and Skills.    Mr. Nagarajan is the only member of Nordson’s management serving on our Board. He brings to the Board significant global manufacturing company experience, with a focus on creating value for customers through innovation and industry leading excellence in quality and delivery. Mr. Nagarajan has an intimate understanding of management, leadership, strategy development and day-to-day operations of a global company.

Nordson Committees.    Executive

 

  

                              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.

MARY G. PUMA
Director Since: 2001Age: 63  

 

                              Age: 57LOGO

Director Qualifications:

CEO Experience, Business Strategy and Operations Expertise, Corporate Governance

 

Independent Director

Other Public Boards:

Axcelis Technologies, Inc. (Nasdaq: ACLS)

 

      Director Since 2012

President and Chief Executive Officer, Axcelis Technologies, Inc.

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. HILTONBusiness Experience.    Ms. Puma is president and chief executive officer of Axcelis Technologies, Inc. (Nasdaq: ACLS), a provider of equipment and service solutions for the semiconductor manufacturing industry. Ms. Puma has served as chief executive officer of Axcelis since 2002. She also served as Axcelis’ president and chief operating officer from 2000 until 2002, where she played an instrumental role in Axcelis’ spin off from Eaton Corporation (NYSE: ETN), a global diversified industrial manufacturer. Ms. Puma was general manager and vice president of the Implant Systems Division of Eaton from 1998 to 2000.

Current Directorships.    Ms. Puma is a director of Axcelis. From 2005 to 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.

Nordson Committees.    Compensation, Governance & Nominating (Chair), Executive

 

  

                              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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18   |   Nordson Corporation – 2021 Proxy Statement


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 20192021 Annual Meeting.

Cumulative Voting

Voting for directors will be cumulative if any shareholder provides notice in writing to the President, an 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 Chair 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 achievement 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 achievement of a plurality, but will be counted for quorum purposes.

RECOMMENDATION REGARDING PROPOSAL 1:

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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LOGO

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

Committee Charters

Director Recruitment and Performance Guidelines

Director Resignation Policy
Conflict Minerals Policy

Related Persons Transaction Policy

Share Ownership Guidelines

Code of Ethics and Business Conduct

Suppliers Code of Conduct

•  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 20182020 Annual Report and this Proxy Statement, are available at:www.nordson.com/en/our-company/investors/annual-reports-and-presentationsinvestors. 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.

Code of Ethics and Business Conduct

We have a Code of Ethics and Business Conduct (the “Code”) that applies to all Nordson directors, officers, 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, directly to their managers, human resources, or the Chief Compliance Officer. We also provide confidential, anonymous reporting through our third-party helpline, which is available 24 hours per day, 7 days per week via a toll-free telephone line or the internet. We provide interpreters who may speak the reporter’s preferred language. 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.

Shareholder Engagement, Environment and Sustainability, Human Capital, and Community

We recognize that managing our economic, environmental, social, and governance impacts enhances our ability to continue creating and delivering results over the long term for all shareholders. Our Board oversees our corporate responsibility efforts, while cross functional teams of senior management drive this and our sustainability efforts throughout the Company. Further information about our Corporate Responsibility and Sustainability initiatives can be found on our website at www.nordson.com/en/our-company/corporate-responsibility.com

Shareholder Engagement

Sharing the Nordson story and being accessible to our shareholders is a priority for Nordson. In 2020, we reached approximately 300 institutional investors and analysts through phone calls, virtual and in-person conferences, and virtual road trips hosted by sell-side research analysts. Key themes from these conversations included the diversity of our end markets and geographies, growth drivers of our business, the NBS Next growth framework, our new leadership team, and our pandemic response. Though in-person visits and site tours were curtailed due to the pandemic, we have an investor-focused website (www.investors.nordson.com) that includes access to videos that help showcase Nordson’s technology and competitive advantage.

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Environment and Sustainability

The environmental and sustainability issues that we focus on include, among others, workplace health and safety, energy efficiency, and supply chain management.

Our commitment to safe and healthy working conditions is evident throughout our global operations, as demonstrated by our expansive control systems, constant monitoring and, most recently, our Journey to Zero initiative. Launched in 2020, this initiative centers on our respect for people and communities through our employee health and safety activities. Our Journey to Zero goal is to have zero adverse impact on our employees and zero adverse environmental impact on our community. In executing this goal, we employ a roadmap of key strategies, processes, and tools, to drive the importance of workplace safety, environmental compliance, product compliance, and sustainability at all our facilities. This vision extends to our contractors and vendors, who are required to read, provide documentation on, and sign our Contractor Vendor Safety Program.

A variety of internal and external audits are leveraged to focus on process improvement and hold us accountable to our commitment to zero. Two measures of focus on our Journey to Zero for impacts to employees are the Total Recordable Incident Rate (“TRIR”) and the Total Incidents.

LOGOLOGO

We have reduced our Total Recordable Incident (TRIR) and Total Incident rates over the last three years and are committed to continuing this path toward a safer workplace. We define TRIR as the average number of recordable work-related injuries incurred by 100 full-time workers (40 hours per week, 50 weeks per year) over a one-year period.

We recognize that best practices in environmental and social reporting frameworks continue to evolve. Accordingly, we are establishing a cross-functional team to evaluate data and reporting best practices and to identify opportunities for continuous improvement.

Human Capital

As of October 31, 2020, we had 7,555 full-time and part-time employees, including 137 at our Amherst, Ohio, facility who are represented by a collective bargaining agreement that expires on November 12, 2022.

As part of our compensation philosophy, we believe that we must offer and maintain market competitive total rewards programs for our employees to attract and retain superior talent. These programs not only include base wages and incentives in support of our pay for performance culture, but also health, welfare, and retirement benefits. We focus many programs on employee wellness and have implemented solutions including mental health support access, telemedicine, and healthy weight loss programs. We believe that these solutions have helped us successfully manage healthcare and prescription drug costs for our employee population.

Nordson provides service awards which show appreciation and gratitude to longstanding employees with 5 or more years of service. Service milestones are recognized at each five-year increment by presentation of a digital and/or printed certificate with an invitation to select a recognition award via an online catalog.

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Our key talent philosophy is to develop talent from within and supplement with external hires. This approach has yielded a deep understanding among our employee base of our business, products, and customers, while adding new employees and ideas in support of our continuous improvement mindset. We believe that our average tenure across the globe – 10.18 years as of the end of the fiscal year 2020 – reflects the strong engagement of our employees and is reflective of our positive workplace culture. Our talent acquisition team uses internal and external resources to recruit highly skilled and talented workers, and we encourage employee referrals for open positions.

Talent development and succession planning for critical roles is a cornerstone of our talent program. Development plans are created and monitored for critical roles to ensure progress is made along the established timelines. Development plans also intersect with our mission, particularly as we strive to be responsible to our communities.

One of our core values – Respect for People – reflects the behavior we strive to include in every aspect of the way we conduct business. Our diversity and inclusion initiatives support our goal that everyone throughout the Company is engaged in creating an inclusive workplace, and we have begun work on building diverse talent pools as part of our recruitment efforts. We strive to promote inclusion through “Inclusive Leadership” training across the Company. With the support of our Board, we continue to explore additional diversity and inclusion initiatives.

Community

Investing in our communities has been integral to Nordson since our founding. We are dedicated to making a positive difference in the communities in which we work through philanthropy, scholarships, and employee volunteerism. Nordson contributes approximately 5% of U.S. pre-tax profits to support charitable endeavors. Through the Nordson Corporation Foundation (the “Foundation”), we give back by providing grants to nonprofits in communities where we have facilities employing more than 100 people. In recent years, we have extended our reach internationally, with giving programs in nine international locations. Through our Dollars for Doers program, Nordson supports employees who volunteer 40 hours within a year by making a $500 grant to the organization they volunteer with, while our Time ‘n Talent Employee Volunteer Program encourages employees to be engaged corporate citizens through acts of service. Our Matching Gifts program matches dollar for dollar any employee gifts of $25 or more, up to $10,000 per calendar year, to verified non-profit organizations.

LOGO

Director Independence

In accordance with the listing standards of The Nasdaq Stock Market LLC (“Nasdaq”), and our Governance Guidelines, the Board must consist of a majority of independent directors. The Board has determined that Ms.Mses. Puma, Jones, and Parmentier, and Messrs. Banks, Carson, George, Jaehnert, Keithley, Merriman, Richey, and RicheyDr. DeFord each satisfy the definition of “independent director” under these listing standards. In addition, Messrs. Banks, Carson, and Keithley, who served as directors during 2020, were determined to be independent prior to their retirement or resignation from the Board. Mr. HiltonNagarajan is not an independent director because he serves as our President and Chief Executive Officer. Our Governance Guidelines also require that our Audit, Compensation, and Governance & Nominating Committees each be comprised of independent directors who meet all the independence and experience requirements of Nasdaq.

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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. With respect to Compensation Committee members, the Board must consider, in addition to the general independence requirements described above, the source of compensation of such directors, including any consulting, advisory or other compensatory fee paid by Nordson to the directors, and whether such directors are affiliated with Nordson, a subsidiary of Nordson or an affiliate of a subsidiary of 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 or which may have a director serving on its board to ensure the avoidance of any conflicts of interest resulting from our relationship. Mr. Banks, a director, servesAll transactions and relationships evaluated by the Board involved only the ordinary course of business purchase and sale of goods and services at companies where directors serve as presidentan officer or director. The table below describes the transactions and chief operating officerrelationships the Board considered in the 2020 fiscal year and, in each case, the amounts involved were less than the greater of Parker-Hannifin Corporation. Mr. Richey, a director, serves as a director of ESCO Technologies Inc. These two companies purchase components manufactured by a number$1 million or 2% of our and the recipient’s respective annual revenues in each of the last three years. Transactions and relationships at the companies where Dr. DeFord and Ms. Parmentier serve are included because the Board evaluated these transactions and relationships as part of their appointments and onboarding process.

 Director /  NomineeEntity and RelationshipTransactions

% of Entity’s Annual    

Revenues in each of    

the last 3 years    

Lee C. Banks

(resigned as a

director effective

November 30, 2020)  

Parker-Hannifin Corporation

President and Chief Operating Officer

We sell products to and purchase products from Parker-Hannifin Corporation.Less than 1%

Arthur L. George, Jr.

Axcelis Technologies, Inc.

Director

We sell products to Axcelis Technologies, Inc.Less than 1%

Frank M. Jaehnert

Briggs & Stratton CorporationWe sell products to Briggs & Stratton CorporationLess than 1%

Itron, Inc.

Director

We sell products to Itron, Inc.

Less than 1%

Joseph P. Keithley

(retired as a director effective

December 1, 2020)

Axcelis Technologies, Inc.

Director

We sell products to Axcelis Technologies, Inc.Less than 1%

Jenny Parmentier

Parker-Hannifin Corporation

President and Vice President, Motion Systems

We sell products to and purchase products from Parker-Hannifin Corporation.Less than 1%

Mary G. Puma

Axcelis Technologies, Inc.

President and Chief Executive Officer

We sell products to Axcelis Technologies, Inc.Less than 1%

Victor L. Richey

ESCO Technologies Inc.

Director

We sell products to and purchase products from ESCO Technologies Inc.Less than 1%

Nordson Corporation – 2021 Proxy Statement   |   23


Based on this review and the information provided in response to annual questionnaires completed by each independent director (including initial questionnaires completed by Dr. DeFord and Ms. Parmentier in connection with their appointments in November 2020) regarding employment, business, units in volumesfamilial, compensation, and other relationships with the Company and management, the Board has determined that are insignificant when compared toevery director and director nominee (i) has no material relationship with Nordson, (ii) satisfies all of the respective companies’Nasdaq independence standards and Nordson’s annual revenue for fiscal year 2018.our independence standards, and (iii) is independent, with the exception of Sundaram Nagarajan, who is an employee director. The Board does not believehas also determined that these relationships impair the independenceeach member and chair of Messrs. Banks or Richey or that they have any material interest in any transaction between Nordsonits Audit, Compensation, and Parker and ESCO, respectively.Governance & Nominating Committees are independent directors. 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

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, considering 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 of 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, 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 Chair of the Board or a presiding independent director if the Chair is not an independent director. The Governance Guidelines set forth the responsibilities of the Chair of the Board and the Presiding Director when the Chair of the Board is not an independent director. At present, the Chair 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.

We 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 Chair of the Board, Michael J. Merriman, Jr., leads the Board in the performance of its duties by establishing

18  |Nordson Corporation – 2019 Proxy Statement


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.

Meetings of the Board of Directors

The Board held twelve meetings during fiscal year 2018. In addition, there were a total of eighteen 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 2018. Directors are encouraged to attend the Annual Meeting. All of Nordson’s directors attended the 2018 Annual Meeting of Shareholders held on February 27, 2018.

Executive Sessions of Independent Directors

Pursuant to our Governance Guidelines, independent directors meet in regularly scheduled executive sessions without management. The Chair of the Board (or, when our Chair 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 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 updated on each committee’s risk oversight and other activities via meeting reports from 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 between the Company and its subsidiaries and certain persons that are required to be disclosed in proxy statements, which are commonly referred to 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, 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 or which may have a director serving on its board, 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.company based on our written policy and the guidelines set forth in Item 404(a) of Regulation S-K under the Securities Exchange Act of 1934, as amended. All such transactions were conducted at arms-length. Information on the related persons transaction review is set forth under the caption “Director Independence” above.

Compensation Committee Interlocks and Insider Participation

No member of the Compensation committee is a current, or during 2020, was, a former officer or employee of Nordson or any of its subsidiaries or affiliates. During 2020, no member of the Compensation committee had a relationship that must be described under the SEC rules relating to disclosure of related party transactions. In 2020, none of our executive officers served on the board of directors or compensation committee of any entity that had one or more of its executive officers serving on our Board or Compensation Committee.

Director Qualifications

Through its selection and vetting process, the Governance & Nominating Committee seeks not only to identify directors that meet basic criteria, but also to enhance the diversity of the Board in such areas 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, ethnic, and gender diversity. As of our record date, fifty percent of our independent directors are women or racially or ethnically diverse individuals.

The Governance & 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, considering 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.

24   |   Nordson Corporation – 2021 Proxy Statement


Consideration of Director Candidates Recommended by Shareholders

Under its charter, the Governance & Nominating Committee is responsible for reviewing shareholder nominations of 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.

Board Leadership Structure

Our Governance Guidelines require us to have either an independent Chair of the Board or a presiding independent director if the Chair is not an independent director. The Governance Guidelines set forth the responsibilities of the Chair of the Board and the Presiding Director when the Chair of the Board is not an independent director. At present, the Chair 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.

We believe that separating the Chair of the Board and Chief Executive Officer positions provides independent oversight of management while permitting our Chief Executive Officer 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 Chair of the Board leads the Board in the performance of its duties by establishing agendas and ensuring appropriate meeting content (in collaboration with our Chief Executive Officer), presiding during regularly held executive sessions with our independent directors, actively engaging with all independent directors and our Chief Executive Officer between Board meetings, and providing overall guidance to our Chief Executive Officer as to the Board’s views and perspectives, particularly on the strategic direction of the Company.

Meetings of the Board of Directors

The Board held twelve meetings and there were twenty-three meetings of our committees during 2020, of which the majority were held virtually due to the pandemic and to protect the health and safety of our directors. Nordson’s policy requires attendance and active participation by directors at Board and committee meetings. In 2020, each director attended at least 75% of the aggregate of (i) the total number of meetings of the Board held during the period for which he or she served as a director and (ii) the total number of meetings held by all committees on which he or she served (during the period that he or she served). Directors are encouraged to attend the Annual Meeting. All of Nordson’s directors then serving at the time attended the 2020 Annual Meeting of Shareholders held on February 25, 2020.

Executive Sessions of Independent Directors

Pursuant to our Governance Guidelines, independent directors meet in regularly scheduled executive sessions without management. The Chair of the Board (or, when our Chair 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.

Risk Oversight

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’s day-to-day risk management activities and oversees areas of material risk, which may include operational, financial, legal and regulatory, human capital, information technology and security, and strategic and reputational risks. 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.

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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 CommitteeCompensation CommitteeGovernance & Nominating
Committee

Risks associated with financial matters, particularly financial reporting, accounting, disclosure, cybersecurity, 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 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 updated on each committee’s risk oversight and other activities via meeting reports from each committee chair to the full Board at each Board meeting.

Like all businesses, we also face threats to our cybersecurity, as we are reliant upon information systems and the Internet to conduct our business activities. In light of the pervasive and increasing threat from cyberattacks, the Audit Committee, with input from management, identifies, assesses and monitors the Company’s cybersecurity and other information technology risks and threats and the measures implemented by the Company to mitigate and prevent cyberattacks, and the Board receives periodic reports from the Audit Committee on the Company’s cybersecurity program.

In response to the pandemic, the Board held several special meetings with management during 2020 to discuss the pandemic’s impact on our business and management’s response, including its impact on the health and safety of our employees, the short and long-term financial impacts on the business, liquidity, supply chain, and pricing, and related mitigation strategies. Additionally, the Audit Committee oversaw financial risks posed by the pandemic while the Compensation Committee oversaw compensation actions considered in response to the pandemic.

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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26   |   Nordson Corporation – 2021 Proxy Statement


COMMITTEES OF THE BOARD OF DIRECTORS

The Board 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 20182020 are listed below. All members of the Audit Committee, Compensation Committee, and Governance and& Nominating Committee are independent under the independence standards of Nasdaq 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.

 

CommitteeFunction

Members for

2018(1)

Meetings in

2018

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;

•   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.

Jaehnert*

Carson

George

Keithley

9

Compensation

•   Reviewing 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

Merriman

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.

 

AUDIT

   

 

COMPENSATION

   

 

GOVERNANCE & NOMINATING

 

Function

  

 

Function

  

 

Function

 

•  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 controls;

 

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

 

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

 

•  Reviewing and approving all related-persons transactions; and

 

•  Providing oversight of cyber security risks.

  

 

•  Reviewing and approving compensation for our executive officers;

 

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

 

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

 

•  Overseeing the strong links between executive compensation and performance of our business by (i) holding executive sessions (without management present) at every regularly scheduled committee meeting; (ii) engaging an independent compensation consultant to advise on executive compensation issues, including peer benchmarking data; (iii) examining peer group compensation structures, goals, and financial performance; and (iv) basing incentive/variable pay on the achievement of financial and operating performance goals to foster alignment with shareholder interests.

 

  

 

•  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 chair for such committee;

 

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

 

•  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; and

 

•  Reviewing Director’s compensation.

 

Members

  

 

Members

  

 

Members

 

Frank M. Jaehnert*

John A. DeFord

Arthur L. George Jr.

Ginger M. Jones

Jennifer A. Parmentier

 

  

 

Victor L. Richey, Jr.*

Michael J. Merriman Jr.

Mary G. Puma

  

 

Mary J. Puma*

Arthur L. George Jr.

Victor L. Richey, Jr.

 

Meetings

  

 

Meetings

  Meetings

 

9

  

 

6

  

 

8

 

Nordson Corporation – 2019 Proxy Statement

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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 chair 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

4

*

Committee chair

(1)

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 Mr. Jaehnert and Ms. Jones, who is anare independent directordirectors under the Nasdaq listing standings and the SEC’s audit committee requirements, each as an “audit committee financial expert” pursuant to the SEC’s final rules implementing Section 407 of the Sarbanes-Oxley Act. Shareholders should understand that the designation of Mr. Jaehnert and Ms. Jones each as an “audit committee financial expert” is an SEC disclosure requirement and that it does not impose upon himthem any duties, obligations, or liabilities that are greater than those imposed on himthem 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 page 7899 of this Proxy Statement.

Director Compensation

Nordson Corporation – 2021 Proxy Statement   |   27


DIRECTORS 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 componentsfeatures of our director compensation program support the objectives above:

 

We provide cash compensation through retainers for boardBoard and committee service, as well as additional cash retainers to the Chair of the Board and chairs of our standing Board committees.

 

22  |Nordson Corporation – 2019 Proxy Statement

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.


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.

As a practice, we do not grant securities to address any decrease in the market value of equity securities granted as compensation or held, directly or indirectly, by any officer, director, or other employee.

 

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.

Our share ownership guidelines require non-employee directors to own at least five times their annual retainer in Nordson common shares.

Directors are prohibited from pledging or hedging Nordson common shares.

Determining Director Compensation.    The Governance and& Nominating Committee of the Board 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 LLP (“Exequity”), the Compensation Committee’s independent compensation consultant.

Exequity’s review for fiscal year 20182020 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 year 2018.2020.

28   |   Nordson Corporation – 2021 Proxy Statement


The components and respective amounts ofnon-employee director compensation for fiscal year 20182020 were:

 

                     TypeAnnual Amount ($)  

•  Annual Cash Retainer

  75,000

•  Annual Chair Cash Retainer:

ANNUAL DIRECTOR COMPENSATION(1)
   ANNUAL CHAIR COMPENSATION

¡

LOGO

Chair of the Board

   60,000

$75,000

¡

Audit Committee Chair

 

$15,000

¡

Compensation Committee Chair

   10,000

$12,500

¡

Governance & Nominating Committee Chair

    8,000

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

 

 125,000

$10,000

 

 

(1)

The number of restricted share units granted is determined by the average of the fourth quarter closing share price on the date of grant.Nordson common shares.

Annual Cash Retainer.    The cash retainers are paid in equal quarterly installments. ForGenerally, for directors who join the Board after the commencement of a fiscal year, the annual retainer is prorated based on the number of monthsdays 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 monthsdays served prior to retirement. If a director is electedappointed by the Board or elected by the shareholders after the commencement of a fiscal year, generally, the restricted share unit award is prorated based on the number of monthsdays 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 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 accrued dividend equivalents. We do not pay above market or preferential interest rates under this deferred compensation plan.

Nordson Corporation – 2019 Proxy Statement

|  23


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 or resignation 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-year period.period or in a lump sum, as elected by the director. 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-year period.period or in a lump sum, as elected by the director.

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.guidelines, except for Ms. Jones who was appointed November 26, 2019, Dr. DeFord who was appointed November 23, 2020, and Ms. Parmentier who was appointed November 30, 2020. Each has five years from the date of their respective appointment to achieve their ownership requirement, per the Governance Guidelines.

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Charitable Gifts Matching Program.    Current and retirednon-employee directors may participate in our charitable matching gift program that is available to all current and retired employees. DirectorsMessrs. Banks, George, Jaehnert, Keithley, Puma, and Richey, Jr.Mses. Jones and Puma participated in this program in fiscal year 2018. During fiscal year 2018, we2020. We made matching contributions totaling $49,500$61,250 in 2020 under this program.

Indemnity Agreements.    We have indemnification agreements for directors in order to    To attract and retain highly qualified candidates to serve as our directors. Thedirectors, we provide indemnification agreements that 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 20182020

The following table sets forth the total compensation of eachnon-employee director for services provided as a director forin 2020. Dr. DeFord and Ms. Parmentier did not receive any compensation during 2020 because they were appointed to our Board after our fiscal year 2018. Due to Committee membership changes the director fees for Messrs. Jaehnert, Keithley, and Merriman were prorated.ended.

 

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

Total  

($)  

  Fees Earned or Paid
in Cash
($)
 (1)
  

Stock Awards (2)

($)

  All Other
Compensation
  (3)
($)
  

Total

($)

Lee C. Banks

  

 

  75,000

 

  

 

125,000

 

  

 

11,293

 

  

 

211,293  

 

Randolph W. Carson

  

 

  75,000

 

  

 

125,000

 

  

 

21,077

 

  

 

221,077  

 

Lee C. Banks(4)

  89,375  130,000  11,304  230,679

Randolph W. Carson(4)

  80,000  130,000  25,677  235,677

Arthur L. George, Jr.

  

 

  75,000

 

  

 

125,000

 

  

 

18,110

 

  

 

218,110  

 

  80,000  130,000  26,707  236,707

Frank M. Jaehnert

  

 

  85,112

 

  

 

125,000

 

  

 

11,238

 

  

 

221,350  

 

  95,000  130,000  15,943  240,943

Joseph P. Keithley

  

 

  94,551

 

  

 

125,000

 

  

 

69,724

 

  

 

289,275  

 

Michael J. Merriman, Jr. (3)

  

 

120,337

 

  

 

125,000

 

  

 

42,669

 

  

 

288,006  

 

Ginger M. Jones

  80,000  130,000  11,258  221,258

Joseph P. Keithley(4)

  80,000  130,000  86,665  296,665

Michael J. Merriman, Jr. (5)

  155,000  130,000  51,882  336,882

Mary G. Puma

  

 

  85,000

 

  

 

125,000

 

  

 

  9,363

 

  

 

219,363  

 

  90,625  130,000  15,138  235,763

Victor L. Richey, Jr.

  

 

  83,000

 

  

 

125,000

 

  

 

24,333

 

  

 

232,333  

 

  82,500  130,000  23,852  236,352

 

(1)

Effective February 25, 2020, the Board appointed new chairs to the Compensation and the Governance & Nominating Committees. Mr. Banks received $9,375 as chair of the Compensation Committee, which was prorated from February 25, 2020 until the end of the fiscal year; Ms. Puma received $3,125 as chair of the Compensation Committee, which was prorated from the start of the fiscal year until the appointment of Mr. Banks, and $7,500 as chair of the Governance & Nominating Committee, which was prorated from February 25, 2020 until the end of the fiscal year; and Mr. Richey received $2,500 as chair of the Governance & Nominating Committee, which was prorated from the start of the fiscal year until the appointment of Ms. Puma.

(2)

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 20182020 are discussed in Note 14 Stock-based Compensation in the “Notes to Consolidated Financial Statements” section of our Form10-K for 2018.2020.

 

(2)(3)

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 charitable gifts made during fiscal year 2018.2020.

 

(3)(4)

Messrs. Carson and Banks resigned from the Board effective November 24, 2020 and November 30, 2020, respectively. Mr. Keithley retired from the Board effective December 1, 2020.

(5)

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 $17,940$18,169 in income to Mr. Merriman for insurance premiums for coverage based on the full COBRA premium value for 2018.2020. No othernon-employee directors participate in this legacy, and now discontinued, program.

 

24  |Nordson Corporation – 2019 Proxy Statement

30   |   Nordson Corporation – 2021 Proxy Statement


PROPOSAL 2: RATIFY THE APPOINTMENT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

Appointment of Independent Registered Public Accounting Firm for Fiscal Year Ending October 31, 20192021

Ernst & Young LLP served as our independent registered public accounting firm for the fiscal year ended October 31, 2018.2020. The Audit Committee has appointed Ernst & Young LLP to serve as our auditors for the fiscal year ending October 31, 2019.2021. 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 20172019 and 20182020 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 chair of the Audit Committee to approve such engagement. Any such approval by the chair 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 chair 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.

 

Nordson Corporation – 2019

Nordson Corporation – 2021 Proxy Statement|   31

|  25


Fees Paid to Ernst & Young LLP

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, 20182020 and October 31, 2017:2019:

 

Services

  

 

Fiscal Year 2018

 

  

 

Fiscal Year 2017  

 

  Fiscal Year 2020  Fiscal Year 2019

Audit Fees (1)

  

 

$2,204,684

 

  $1,919,363    $2,054,450  $2,037,900

Audit-Related Fees (2)

  

 

$     18,000

 

  

 

$   240,000  

 

  $            —  $            —

Tax Fees

  $            —  $            —

Other Fees

  

 

$             —

 

  

 

$            —  

 

  $            —  $            —

Total Fees

  $2,054,450  $2,037,900

 

(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.

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, 2019.

 

26  |Nordson Corporation – 2019 Proxy Statement

LOGO

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, 2021.

32   |   Nordson Corporation – 2021 Proxy Statement


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 2, 20194, 2021 by directors, director nominees, each named executive officer (except Mr. Thaxton because he retired on August 28, 2020), and all directors and executive officers as a group. There were 57,609,58858,109,370 shares of common stock outstanding as of January 2, 2019.4, 2021. 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)  

 

 

   Lee C. Banks

 

 

 

 

 

 

14,735

 

 

 

 

 

 

*

 

 

 

 

 

 

14,735

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

   Randolph W. Carson

 

 

 

 

 

 

26,786

 

 

 

 

 

 

*

 

 

 

 

 

 

12,093

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

14,693

 

 

 

 

 

   Arthur L. George, Jr.

 

 

 

 

 

 

11,823

 

 

 

 

 

 

*

 

 

 

 

 

 

4,536

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

7,287

 

 

 

 

 

   Frank M. Jaehnert

 

 

 

 

 

 

13,773

 

 

 

 

 

 

*

 

 

 

 

 

 

12,209

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,564

 

 

 

 

 

   Joseph P. Keithley

 

 

 

 

 

 

48,010

 

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

48,010

 

 

 

 

 

   Michael J. Merriman, Jr.

 

 

 

 

 

 

22,555

 

 

 

 

 

 

*

 

 

 

 

 

 

2,701

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

19,854

 

 

 

 

 

   Mary G. Puma

 

 

 

 

 

 

18,829

 

 

 

 

 

 

*

 

 

 

 

 

 

16,359

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,470

 

 

 

 

 

   Victor L. Richey, Jr.

 

 

 

 

 

 

13,501

 

 

 

 

 

 

*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

13,501

 

 

 

 

 

   Michael F. Hilton

 

 

 

 

 

 

401,350

 

 

 

 

 

 

*

 

 

 

 

 

 

24,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

233,550

 

 

 

 

 

 

 

 

 

143,669

 

 

 

 

 

   Gregory A. Thaxton

 

 

 

 

 

 

130,171

 

 

 

 

 

 

*

 

 

 

 

 

 

10,899

 

 

 

 

 

 

 

 

 

8,646

 

 

 

 

 

 

 

 

 

81,625

 

 

 

 

 

 

 

 

 

29,001

 

 

 

 

 

   John J. Keane

 

 

 

 

 

 

127,150

 

 

 

 

 

 

*

 

 

 

 

 

 

23,469

 

 

 

 

 

 

 

 

 

897

 

 

 

 

 

 

 

 

 

90,925

 

 

 

 

 

 

 

 

 

11,859

 

 

 

 

 

   Gregory P. Merk

 

 

 

 

 

 

105,495

 

 

 

 

 

 

*

 

 

 

 

 

 

41,370

 

 

 

 

 

 

 

 

 

367

 

 

 

 

 

 

 

 

 

59,800

 

 

 

 

 

 

 

 

 

3,958

 

 

 

 

 

   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

 

 

 

 

 

 

  Name of Beneficial
  Owner

 

  

Total Number

of Shares
Beneficially
Owned
(1)

 

   

Percent of
Outstanding
Shares

 

 

Direct
Ownership

 

   

Employee

Plan(2)

 

   

Right to

Acquire(3)

 

   

Share 

Equivalent 

Units(4) 

 

 

 

John A. DeFord, Director

 

  

 

 

 

 

 

 

 

 

  

 

*

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

Arthur L. George, Jr., Director

 

  

 

 

 

 

9,298

 

 

 

 

  

 

*

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

9,298

 

 

 

 

 

Frank M. Jaehnert, Director

 

  

 

 

 

 

15,669

 

 

 

 

  

 

*

 

 

 

 

 

 

12,209

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

3,460

 

 

 

 

 

Ginger M. Jones, Director

 

  

 

 

 

 

1,789

 

 

 

 

  

 

*

 

 

 

 

 

 

1,000

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

789

 

 

 

 

 

Michael J. Merriman, Jr.,

Chair of the Board

 

  

 

 

 

 

23,818

 

 

 

 

  

 

*

 

 

 

 

 

 

1,701

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

22,117

 

 

 

 

 

Jennifer A. Parmentier, Director

 

  

 

 

 

 

 

 

 

 

  

 

*

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

Mary G. Puma, Director

 

  

 

 

 

 

16,852

 

 

 

 

  

 

*

 

 

 

 

 

 

14,332

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

2,519

 

 

 

 

 

Victor L. Richey, Jr., Director

 

  

 

 

 

 

15,637

 

 

 

 

  

 

*

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

15,637

 

 

 

 

 

Sundaram Nagarajan,
President and Chief Executive Officer, and Director

 

  

 

 

 

 

14,023

 

 

 

 

  

 

*

 

 

 

 

 

 

1,161

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

10,450

 

 

 

 

  

 

 

 

 

2,412

 

 

 

 

 

Joseph P. Kelley,

Executive Vice President and Chief Financial Officer

 

  

 

 

 

 

 

 

 

 

  

 

*

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

John J. Keane,

Executive Vice President

 

  

 

 

 

 

78,343

 

 

 

 

  

 

*

 

 

 

 

 

 

33,133

 

 

 

 

  

 

 

 

 

914

 

 

 

 

  

 

 

 

 

32,200

 

 

 

 

  

 

 

 

 

12,096

 

 

 

 

 

Gregory P. Merk,

Executive Vice President

 

  

 

 

 

 

108,650

 

 

 

 

  

 

*

 

 

 

 

 

 

3,364

 

 

 

 

  

 

 

 

 

373

 

 

 

 

  

 

 

 

 

60,250

 

 

 

 

  

 

 

 

 

5,976

 

 

 

 

 

Jeffrey A. Pembroke,
Executive Vice President

 

  

 

 

 

 

36,255

 

 

 

 

  

 

*

 

 

 

 

 

 

8,120

 

 

 

 

  

 

 

 

 

142

 

 

 

 

  

 

 

 

 

26,150

 

 

 

 

  

 

 

 

 

1,843

 

 

 

 

 

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

 

  

 

 

 

 

504,903

 

 

 

 

  

 

0.87%

 

 

 

 

 

 

171,531

 

 

 

 

  

 

 

 

 

4,387

 

 

 

 

  

 

 

 

 

230,847

 

 

 

 

  

 

 

 

 

98,137

 

 

 

 

*

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 1, 2019.4, 2021 and restricted stock units that are subject to vesting by March 4, 2021.

 

(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.

 

Nordson Corporation – 2019

Nordson Corporation – 2021 Proxy Statement|   33

|  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 2, 2019.4, 2021.

 

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

 

 

%

 

Beneficial Owner

  

Total Number

of Shares
Beneficially Owned

  

Percent of 

Outstanding 

Shares 

 

The Vanguard Group, Inc.(1)

 

   

 

 

 

 

5,198,715

 

 

 

   

 

 

 

 

8.9

 

 

%

 

 

BlackRock, Inc.(2)

 

   

 

 

 

 

4,767,365

 

 

 

   

 

 

 

 

8.2

 

 

%

 

 

Massachusetts Financial Services Company(3)

 

   

 

 

 

 

3,610,667

 

 

 

   

 

 

 

 

6.2

 

 

%

 

 

Jennifer A. Savage(4)

 

   

 

 

 

 

3,308,424

 

 

 

   

 

 

 

 

5.7

 

 

%

 

 

Jane B. Nord(5)

 

   

 

 

 

 

2,991,749

 

 

 

   

 

 

 

 

5.1

 

 

%

 

 

(1)

The information set forth is based solely on the Schedule 13G/A filed February 9, 201812, 2020 with the SEC by The Vanguard Group, Inc., 100 Vanguard Blvd., Malvern, PA 19355, wherein it reported beneficial ownership of 4,560,6185,198,715 shares and stated that it has sole voting power over 30,14030,862 of the reported shares, sole investment power over 4,528,1235,165,233 of the reported shares, shared voting power over 6,5199,393 of the reported shares, and shared investment power over 32,49533,482 of the reported shares. According to the Schedule 13G/A,The Vanguard Fiduciary Trust Company, a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 25,97624,089 shares as a result of its serving as an investment manager of collective trust accounts, and Vanguard Investments Australia, Ltd., a wholly owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 10,68316,166 shares as a result of its serving as investment manager of Australian investment offerings.

 

(2)

The information set forth is based solely on the Schedule 13G/A filed January 29, 2018February 5, 2020 with the SEC by BlackRock, Inc., 55 East 52nd Street, New York, NY 10055, wherein it reported beneficial ownership of 4,311,0224,767,365 shares and stated that it has sole voting power over 4,108,7704,549,908 of the reported shares and sole investment power over all of the reported shares.

 

(3)

The information set forth is based solely on the Schedule 13G13G/A filed October 17, 2018February 14, 2020 with the SEC by Massachusetts Financial Services Company, 111 Huntington Avenue, Boston MA 02199, wherein it reported beneficial ownership of 3,610,667 shares and stated that it has sole voting power over 3,557,170 of the reported shares and sole investment power over all of the reported shares.

(4)

The information set forth is based solely on the Schedule 13G/A filed January 15, 2020 with the SEC by Jennifer A. Savage, an individual, c/o Schneider Smeltz Spieth Bell LLP, 1375 East 9th Street, Suite 900, Cleveland, OH 44114, wherein she reported beneficial ownership of 4,038,7083,308,424 shares and stated that she has sole voting and investment power over 2,792,6972,003,833 of the reported shares and shared voting and investment power over 1,246,0111,304,591 of the reported shares. According to the Schedule 13G,13G/A, the amount of shares beneficially owned by Ms. Savage includes (a) 1,147,1551,140,304 shares owned by Nord Irrevocable Trusts held for the benefit of Nord family descendants, of which Ms. Savage is the sole trustee, (b) 1,645,142863,529 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) 353,475412,055 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)(5)

The information set forth is based solely on the Schedule 13G/A13G filed February 8, 2018October 21, 2020 with the SEC by Jane B. Nord, an individual, P.O. Box 457, Oberlin, OHOhio 44074, wherein she reported beneficial ownership of 3,272,2132,991,749 shares and stated that she has sole voting and investment power over 2,379,6772,237,213 of the reported shares and shared voting and investment power over 892,536754,536 of the reported shares. According to the Schedule 13G/A,13G, the amount of shares beneficially owned by Ms. Nord includes (a) 2,379,6772,237,213 shares owned by the Jane B. Nord Grantor Trust, overof which Ms.Jane B. Nord is the sole trustee, and (b) 892,536754,536 shares owned by Eric T. Nord Trusts, of which Ms.Jane B. Nord is 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.

34   |   Nordson Corporation – 2021 Proxy Statement


Delinquent Section 16(a) Beneficial Ownership Reporting ComplianceReports

Section 16(a) of the Exchange Act requires our directors, executive officers, and beneficial owners of more than ten percent of our outstanding common shares to file reports of beneficial ownership and changes in beneficial ownership with the SEC, and to furnish copies of those reports to us. To our knowledge and based solely on a review of the Forms 3, 4, and 5 and amendments thereto with respectfiled during 2020, a Form 5 filed on December 16, 2019 for Gregory P. Merk to fiscal year ended October 31, 2018, we believe thatreport 50 shares received as part of his dividend reinvestment plan on September 10, 2019, and the Form 4s filed on December 4, 2019 for each of Gina A. Beredo, James E. DeVries, Michael F. Hilton, John J. Keane, Joseph Stockunas, Stephen Lovass, Gregory P. Merk, Shelly Peet, Jeffrey A. Pembroke, and Gregory A. Thaxton (reporting, in each case, the year 2018 all filing requirementsvesting of restricted shares held by each individual) were met on a timely basis.delinquent by one day, due to administrative error.

 

28  |Nordson Corporation – 2019 Proxy Statement

Nordson Corporation – 2021 Proxy Statement   |   35


PROPOSAL 3: ADVISORY VOTE TO APPROVE

THE COMPENSATION OF OUR NAMED

EXECUTIVE OFFICERS

During our 20182020 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 97.7%98.74% of shareholder votes cast were in favor of our executive officer compensation program. We value the 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 2018, an average of 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 (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 Nasdaq listing standards.

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

 Share Ownership Guidelines. There are restrictions on sales of vested awards until an executive officer has attained meaningful stock ownership of the Company.

 

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.

 Market Competitive Compensation. Our compensation program is competitive within our peer group and recognizes evolving governance practices, which allows us to attract and retain key talent.

 

Total Target Direct Compensation Generally Approximating the Median. In 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, 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.

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 generally made on a consistent schedule (with exceptions for newly hired executives and promotions) 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.

Nordson Corporation – 2019 Proxy Statement

|  29


WHAT WE DO

Include Recoupment and Other Forfeiture Clawback 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. Cash severance payments for our executive officers require a “double-trigger” — achange-in-control and involuntary termination without cause within two years following achange-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.

 

36   |   Nordson Corporation – 2021 Proxy Statement


WHAT WE DO NOT DO

  ☒    

×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 arecollateral, 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.

  ☒    

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

×   No Single-Trigger for Change-in-Control Severance Payments. Cash severance payments to our executive officers require a “double-trigger” — a change-in-control and involuntary termination without cause within two years following a change-in-control — and equity awards granted after December 27, 2017 under our Stock Incentive and Award Plan also provide for “double-trigger” vesting.

×   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 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.

×   No Excessive Dilution. 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).

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

×   No Automatic Vesting.We require a minimum vesting period of at least one year for all types of equity awards, with an exception for awards covering up to 5% of the share reserve of our Stock Incentive and Award Plan.

We urgeencourage you to read the “Executive Compensation: Compensation Discussion and Analysis” section 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.

30  |Nordson Corporation – 2019 Proxy Statement


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 20192021 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 20192021 Annual Meeting of Shareholders pursuant to the compensation disclosure rules of the Securities and Exchange Commission, including the Executive 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.

 

Nordson Corporation – 2019

LOGO

The Board of Directors recommends that,

on an advisory basis,

you vote “FOR” the approval of

the compensation of our named executive officers.

Nordson Corporation – 2021 Proxy Statement|   37

|  31


PROPOSAL 4: APPROVE NORDSON CORPORATION 2021 STOCK INCENTIVE AND AWARD PLAN

The Company is requesting that shareholders approve the Nordson Corporation 2021 Stock Incentive and Award Plan as approved by our Board of Directors and effective upon shareholder approval on March 2, 2021 (the “2021 Plan”). The purpose of the 2021 Plan is to attract and retain non-employee directors, officers and other key employees of the Company, and to provide those persons with incentives and rewards for superior performance.

The Company currently grants equity awards under the Amended and Restated Nordson Corporation 2012 Stock Incentive and Award Plan (amended and restated as of December 28, 2017) (the “Prior Plan”). If the 2021 Plan is approved by the Company’s shareholders, no further awards will be made under the Prior Plan. However, outstanding awards granted under the Prior Plan before shareholder approval of the 2021 Plan will remain outstanding in accordance with their terms.

Key Highlights

The Board of Directors unanimously recommends that shareholders vote “FOR” the approval of the 2021 Plan for the following reasons:

Key Component of Compensation.    Stock awards are a critical element of our compensation program. Equity compensation fosters an employee ownership culture and motivates employees to create shareholder value, because the value employees realize from equity compensation is based on the Company’s stock performance.

Alignment.    We believe that our long-term incentive compensation program aligns the interests of the 2021 Plan participants and our long-term shareholders to create long-term shareholder value. Equity compensation also promotes a focus on long-term value creation, because equity compensation awards are subject to vesting and/or performance conditions and generally provide the greatest value to the 2021 Plan participants when held for longer terms.

Reasonable Share Reserve.    The maximum number of common shares that may be issued under the 2021 Plan is 2,213,523 shares, including the number of shares that are available to be granted under the Prior Plan on the date shareholders approve the 2021 Plan. This share reserve represents an increase of 900,000 over the remaining share reserve of the Prior Plan.

Low Burn Rate.    We define our raw burn rate as the number of equity awards granted in the year, divided by the weighted average number of common shares outstanding (basic share base) during the year. It measures the potential dilutive effect of annual equity grants. Our raw burn rates for fiscal years 2018 through 2020 are depicted in the table below. We believe that our burn rate is reasonable in relation to companies in our peer group and reflects a judicious use of equity for compensation purposes. As of October 31, 2020, approximately 1,493,523 common shares remained available for issuance pursuant to the Prior Plan. Under the 2021 Plan, the maximum number of common shares that may be issued is 2,213,523 shares (representing an increase of 900,000 over the remaining share reserve of the Prior Plan). If our shareholders approve the 2021 Plan, we believe that the 2021 Plan’s share reserve is likely to be sufficient for approximately five years.

Fiscal Year

 Stock Options
and SARs
Granted (A)
 Full Value
Awards
Granted (B)
 Weighted
Average
Common
Shares
Outstanding (C)
 Run Rate (%) Burn Rate (%)   

2020

   391,980   106,517   57,757,013   0.86   1.14  

2019

   347,970   56,000   57,461,740   0.70   0.85  

2018

   367,890    36,000    57,970,211   0.70    0.79  

3-Year Average:

            0.75   0.93  

Run Rate = (A + B)/C

Burn Rate = (A + (2.5 x B))/C

38   |   Nordson Corporation – 2021 Proxy Statement


Overhang.    Another measure of the dilutive impact of our equity program is the so-called “overhang,” which we determine by using this formula:

the number of shares subject to outstanding equity awards +

the number of shares available to be granted (1,665,139 + 1,493,523)

the total shares outstanding plus the shares included in the numerator (57,757,013 + 1,665,139 + 1,493,523)

As of October 31, 2020, our fully diluted overhang was approximately 5.79%.

If our shareholders approve the 2021 Plan, the 900,000 additional shares being requested thereunder would bring our fully diluted overhang to approximately 7.43%, which we believe is a reasonable amount of potential equity dilution.

Conforms to Best Practices.    The 2021 Plan contains a number of features that are designed to further our pay-for-performance philosophy, protect the interests of the Company and its shareholders, and implement best practices. For example, the 2021 Plan:

Minimum Vesting Period Requirement:Requires a minimum vesting period of at least one year for all types of awards granted under the 2021 Plan, with an exception for awards covering up to 5% of the 2021 Plan’s share reserve.

Non-Employee Director Compensation Limit:Limits the grant date fair value of equity awards that may be granted to any one non-employee director under the 2021 Plan during a year, plus the amount of cash fees payable to the non-employee director during that year (whether paid currently or deferred), to no more than $700,000.

Limits on Awards to Employees:    Establishes limits on the awards that may be granted to any one employee under the 2021 Plan during a year, except in extraordinary cases as determined in the discretion of the Compensation Committee.

No Repricings:Prohibits the repricing of stock options or stock appreciation rights (or “SARs”) without shareholder approval, except for adjustments made in connection with certain corporate transactions.

No Dividends or Dividend Equivalents on Unearned Awards or on Stock Options or SARs:    Provides that dividends and dividend equivalents will be paid only on a deferred and contingent basis (either accumulated or deemed reinvested in additional common shares or units), subject to the vesting of the underlying award (including the achievement of performance objectives, where applicable), and prohibits paying any dividend equivalents with respect to stock options or SARs.

Limitations Imposed on Share Counting:Provides that the share reserve will not be increased by any common shares used to pay the exercise price of a stock option or that are withheld to cover taxes with respect to any award, and provides that the full number of common shares subject to a SAR award will be counted against the 2021 Plan’s share reserve, regardless of the number of shares used to settle the SAR award upon exercise.

Double Trigger Vesting in the Event of a Change in Control:Provides for “double-trigger” vesting in connection with a change in control. In general, awards that are assumed in a change in control transaction will continue to vest based on continued service (with performance goal achievement for performance-based awards based on the level of actual achievement at the time of the change in control, or if actual achievement is not determinable, at the “target” level), but vesting will accelerate (on a pro-rata basis, for performance-based awards, or in full, for purely service-based awards), upon a termination of the participant’s employment without cause or, where applicable, a resignation for good reason, within 2 years after the change in control. Any awards that are not assumed in a change in control transaction generally would vest immediately upon the occurrence of the change in control (on a pro-rata basis, for performance-based awards, or in full, for purely service-based awards). The Compensation Committee retains the discretion to cancel awards in exchange for a payment in cash or other property (including shares of the resulting entity in connection with a change in control) equal to the “in-the-money” value of the shares.

No In-the-Money Stock Option or Stock Appreciation Right Grants:    Requires that stock options and SARs granted under the 2021 Plan have an exercise price at least equal to the fair market value of the underlying shares on the date of grant.

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Provides for Clawback of Awards:    Provides for the forfeiture of outstanding awards upon a participant’s termination for cause, including violations of Nordson’s Code of Ethics and Business Conduct, or willful misconduct or fraud that causes harm to the Company and authorizes the forfeiture and recovery of equity awards pursuant to our clawback policy that applies to executive officers, or any other compensation recovery policy that may be adopted or amended by the Company, including any policy adopted or amended to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, or rules and regulations issued by the Securities and Exchange Commission or applicable securities exchange.

The provisions of the 2021 Plan are summarized below. The complete text of the 2021 Plan is attached to this Proxy Statement as Appendix A. The summary below does not purport to be a complete description of the 2021 Plan and is qualified in its entirety by reference to Appendix A.

Description of the 2021 Plan

The 2021 Plan authorizes the Company to grant equity-based and cash-based incentive compensation in the form of stock options, SARs, restricted shares, restricted share units, other share-based awards, and cash-based awards. The principal features of the 2021 Plan are summarized below.

General Provisions of the 2021 Plan

2021 Plan Limits.    We are asking our shareholders to authorize 2,213,523 shares for issuance as awards under the 2021 Plan, inclusive of shares that were available to be granted under the Prior Plan (representing an increase of 900,000 over the remaining share reserve of the Prior Plan). All of the common shares reserved for issuance under the 2021 Plan may be granted with respect to awards of “incentive stock options” (within the meaning of Section 422 of the Internal Revenue Code).

The following shares will not count against the number of shares available for awards under the 2021 Plan: (i) shares covered by awards under the 2021 Plan and the Prior Plan that expire or are forfeited, canceled, surrendered or otherwise terminated without the issuance of shares; (ii) shares covered by awards settled only in cash; and (iii) shares granted in assumption of, or substitution for, awards granted to individuals who become employees or directors as a result of a merger or similar transaction. With respect to SARs that are settled in shares, the full number of common shares subject to a SAR award will be counted against the 2021 Plan’s share reserve, regardless of the number of shares used to settle the SAR award upon exercise. Shares that are repurchased by the Company with stock option proceeds will not be added back to the number of shares available for awards under the 2021 Plan.

The 2021 Plan imposes a limit on awards to non-employee directors, such that the grant date fair value of equity awards that may be granted to any one non-employee director under the Plan during a year, plus the amount of cash fees payable to the non-employee director during that year (whether paid currently or deferred), will not exceed $700,000.

The 2021 Plan also imposes various sub-limits on the number of common shares that may be issued to any employee during any calendar year. Accordingly, except as otherwise may be determined by the Compensation Committee, in its discretion, the following limits apply to awards granted to employees under the 2021 Plan:

The maximum number of shares underlying stock options or SARs granted in any calendar year to any one employee shall be 750,000 shares.

The maximum number of restricted shares granted in any calendar year to any one employee shall be 250,000 shares.

The maximum number of shares underlying restricted share units or other share-based awards granted in any calendar year to any one employee shall be 250,000 shares (or, if the applicable performance period is more than one year, 250,000 times the full number of years in the performance period).

The maximum amount of compensation that may be paid under a cash-based award granted in any calendar year to any one employee shall be $5,000,000, or a number of shares having a fair market value not exceeding that amount (or, if the applicable performance period is more than one year, $5,000,000 times the full number of years in the performance period).

40   |   Nordson Corporation – 2021 Proxy Statement


Administration of the Plan.    The 2021 Plan will be administered by the Compensation Committee of the Board of Directors of the Company (or such other committee as may be appointed by the Board in accordance with applicable laws). The Board may reserve to itself any or all of the authority of the Compensation Committee, and the Board or the Compensation Committee may delegate any or all of its authority to one or more directors or employees to the extent permitted by applicable laws.

Eligibility for Awards.    The 2021 Plan authorizes the Compensation Committee to make awards to any of our employees or non-employee directors. The selection of participants and the nature and size of awards are within the discretion of the Compensation Committee. For the fiscal year 2020 grant cycle, there are approximately 434 employees (approximately 5.7% of global employee population) and nine non-employee directors who were granted awards under the Prior Plan. Over the past four fiscal years, we have averaged approximately 388 employee-grantees.

Term and Amendment.    If approved by shareholders, the 2021 Plan will remain in effect until March 2, 2031, unless terminated earlier by the Board.

The Board may amend or terminate the 2021 Plan at any time, provided that the 2021 Plan may not be amended without shareholder approval where required by applicable laws. Generally, the amendment or termination of the 2021 Plan or of any award agreement may not adversely affect in a material way any outstanding award without the consent of the participant holding the award.

Awards Under the 2021 Plan

General.    When an award is granted under the 2021 Plan, the Compensation Committee will establish the terms and conditions of that award. These terms and conditions will be contained in an award agreement and may, for example, require that the participant continue to provide services to the Company or a related entity for a certain period of time or that the participant meet certain performance objectives during a specified period of time, subject to the minimum vesting provisions of the 2021 Plan. By accepting an award, a participant will agree to be bound by the terms of the 2021 Plan and the associated award agreement. If there is a conflict between the terms of the 2021 Plan and the terms of an award agreement, the terms of the 2021 Plan will control. The types of awards that may be granted under the 2021 Plan are described below.

Stock Options.    A stock option gives a participant the right to purchase a specified number of common shares and may be an incentive stock option or nonqualified stock option. The price at which a common share may be purchased upon exercise of a stock option, called the “exercise price,” will be determined by the Compensation Committee, but may not be less than the fair market value of a common share on the date the stock option is granted. Generally, “fair market value” will be the closing price of the Company’s common shares on the date in question. As of January 4, 2021, the closing price per share of the Company’s common stock was $196.56. An option’s exercise price may be paid in any way determined by the Compensation Committee, including payment in cash (or a cash equivalent), a cashless exercise, tendering common shares the participant already owns or a combination thereof. In no event may an option be exercised more than 10 years after the date of grant. A participant who has been granted a stock option will not have any dividend or voting rights in connection with the shares underlying the stock option.

Special provisions apply to any incentive stock options granted under the 2021 Plan. Incentive stock options may be granted only to employees. Incentive stock options that become exercisable for the first time in any year cannot relate to common shares having a fair market value (determined on the date of grant) of more than $100,000 per employee. The exercise price of an incentive stock option granted to an employee who owns shares possessing more than 10 percent of the Company’s voting power (a “10% shareholder”) may not be less than 110% of the fair market value of a common share on the date of grant, and an incentive stock option granted to a 10% shareholder will expire no later than 5 years after the date of grant.

Stock Appreciation Rights.    A SAR gives a participant the right to receive the difference between the SAR’s exercise price and the fair market value of a common share on the date the SAR is exercised. SARs will be settled in (i) cash, (ii) common shares with a value on the settlement date equal to the difference between the fair market value of the common shares and the exercise price, or (iii) a combination of cash and common shares, as determined by the Compensation Committee at the time of grant. The exercise price of a SAR will be determined by the Compensation Committee but may not be less than the fair market value of a common share on the date

Nordson Corporation – 2021 Proxy Statement   |   41


the SAR is granted. A SAR will be forfeited if the applicable terms and conditions are not met or if it is not exercised before it expires (which will be no later than 10 years after the date of grant). A participant who has been granted a SAR will not have any dividend or voting rights in connection with the shares underlying the SAR.

Restricted Shares.    Restricted shares consist of common shares that are granted to a participant, but which are subject to certain restrictions on transferability and a risk of forfeiture if certain terms and conditions specified by the Compensation Committee are not met by the end of the restriction period. The restrictions may include time-based and/or performance-based restrictions. Unless otherwise determined by the Compensation Committee, a participant who has been granted restricted shares will have the right to receive dividends on the restricted shares and may vote those shares during the restriction period. However, any such dividends with respect to unvested restricted shares will be accumulated or deemed reinvested until the restricted shares are earned and will not be paid until vesting of the underlying restricted shares.

Restricted Share Units.    Restricted share units constitute an agreement to deliver common shares to a participant if certain conditions specified by the Compensation Committee are met by the end of the restriction period. The conditions may include time-based and/or performance-based restrictions. Restricted share units may be settled by (i) issuing one common share for each restricted share unit, (ii) paying the participant cash equal to the fair market value of a common share for each restricted share unit, or (iii) a combination of common shares and cash, as determined by the Compensation Committee at the time of grant. A participant who has been granted restricted share units will not have any dividend or voting rights in connection with the notional shares underlying the restricted share units, but the Compensation Committee may authorize the payment of dividend equivalents, as described below.

Other Share-Based Awards.    The Compensation Committee may grant other awards that are valued in whole or in part by reference to, or otherwise based on the fair market value of, common shares. Such other share-based awards shall be subject to terms and conditions specified by the Compensation Committee, which may include time-based and/or performance-based restrictions.

Cash-Based Awards.    A cash-based award gives a participant the right to receive a specified amount of cash, subject to terms and conditions as determined by the Compensation Committee, which may include time-based and/or performance-based restrictions.

Minimum Vesting Requirements.    In general, each award granted under the Plan will have a minimum vesting or performance period of at least one year. However, (i) awards covering up to 5% of the Plan’s share reserve may be granted as unrestricted awards or otherwise with a vesting or performance period of less than one year. Other exceptions to the minimum vesting requirement may apply in connection with a change in control, including for awards that may be issued in substitution for acquired company awards, or for awards to participants outside the U.S.

Dividend Equivalents.    As determined by the Compensation Committee in its discretion, restricted share units or other share-based awards may provide the participant with a deferred and contingent right to receive dividend equivalents, either in cash or in additional shares. Any such dividend equivalents will be accumulated or deemed reinvested until such time as the underlying award becomes earned and vested (including, where applicable, the achievement of performance objectives). No dividend equivalents shall be granted with respect to shares underlying any stock option or SAR.

Performance Objectives.    The 2021 Plan provides that performance objectives may be established by the Compensation Committee in connection with any award. Performance objectives may relate to performance of the Company or one or more of its subsidiaries, divisions, departments, units, functions, partnerships, joint ventures or minority investments, product lines or products, or the performance of an individual participant, and performance objectives may be made relative to the performance of a group of companies or an index of companies.

Any applicable performance objectives shall be based on the attainment of one or more criteria selected by the Compensation Committee, in its discretion, which may include, but are not limited to, the following measures: return on net assets, return on capital employed, economic value added, sales, revenue, earnings per share, operating income, net income, earnings before interest and taxes, return on equity, total shareholder return, market valuation, cash flow, completion of acquisitions, product and market development, inventory management, working capital management and customer satisfaction. Those measures may be clarified by reasonable

42   |   Nordson Corporation – 2021 Proxy Statement


definitions adopted from time to time by the Compensation Committee, which may include or exclude any items as the Compensation Committee may specify, including but not limited to: extraordinary, unusual or non-recurring items; effects of accounting changes; effects of currency fluctuations; effects of financing activities, changes in pension plans; effects relating to the impairment of goodwill or other intangible assets; expenses for restructuring or productivity initiatives; non-operating items; acquisition expenses; and effects of acquisitions, divestitures or reorganizations. The Compensation Committee will establish in writing the performance objectives, the performance period, and any formula for computing the payout of a performance award. Such terms and conditions will be established in writing during the first ninety days of the applicable performance period, or during such other period as may be determined in the Compensation Committee’s discretion.

Forfeiture of Awards.    If the Company terminates a participant’s employment or service for cause, then the participant shall forfeit all outstanding awards granted under the 2021 Plan. For this purpose, “cause” will have the meaning provided in any applicable employment agreement or Change-in-Control Retention Agreement with the participant, or if there is no such applicable definition, “cause” shall mean (i) the commission of an act of fraud, embezzlement, theft, or other similar criminal act constituting a felony and involving the business of the Company or its subsidiaries; (ii) the participant’s continued failure to perform substantially the participant’s duties (other than a failure resulting from a medically determined physical or mental impairment or disability) that is not cured by the participant within 30 days after a written demand from the Company which specifically identifies the manner in which the Company believes that the participant has not substantially performed the participant’s duties; (iii) violation of the Company’s Code of Ethics and Business Conduct; or (iv) willful misconduct that causes harm to the financial condition or business reputation of the Company. Awards granted under the 2021 Plan may also be subject to forfeiture or repayment to the Company pursuant to any compensation recovery (or “clawback”) policy maintained by the Company from time to time, including a policy that may be adopted or amended to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 or any rules or regulations issued by the SEC or Nasdaq.

Adjustments to Authorized Shares and Outstanding Awards.    In the event of any equity restructuring, such as a stock dividend, stock split, reverse stock split, spinoff, rights offering or recapitalization through a large, nonrecurring cash dividend, the Compensation Committee will equitably adjust the number and kind of shares that may be delivered under the 2021 Plan, the individual award limits, and, with respect to outstanding awards, the number and kind of shares subject to outstanding awards, the exercise price, and the grant price or other price of shares subject to outstanding awards, to prevent dilution or enlargement of rights. In the event of any other change in corporate capitalization, such as a merger, consolidation or liquidation, the Compensation Committee may, in its discretion, cause there to be such equitable adjustment as described in the foregoing sentence, to prevent dilution or enlargement of rights. However, unless otherwise determined by the Compensation Committee, the Company will always round down to a whole number of shares subject to any award. Any such adjustment will be made by the Compensation Committee, whose determination will be conclusive.

Prohibition on Repricing.    Except in connection with certain corporate transactions or events or with the approval of shareholders, the 2021 Plan prohibits the amendment of outstanding stock options or SARs to reduce the exercise price of the award, and no stock option or SAR will be cancelled and replaced with another award (including an award having a lower exercise price) or for cash. These provisions of the 2021 Plan are intended to prohibit the repricing of “underwater” stock options or SARs without approval of the Company’s shareholders.

Effect of a Change in Control

In the event of a change in control of the Company, the treatment of any award will depend upon whether and to what extent the award is assumed, converted or replaced by the resulting entity.

To the extent that such awards are assumed in connection with the change in control, then, except as otherwise provided in the applicable award agreement or in an applicable severance plan or written agreement with the participant, those awards will continue to vest and become exercisable (as applicable) based on continued service during the remaining vesting period, with performance-based awards being converted to service-based awards based on the level of actual achievement at the time of the change in control (or if actual achievement is not determinable, at the “target” level). If the participant experiences a “qualifying termination” of employment within two years after the change in control, the vesting and exercisability of any such assumed awards would be accelerated, on a pro-rata basis, for awards that were subject to performance objectives at the time of the change

Nordson Corporation – 2021 Proxy Statement   |   43


in control, or in full, for other awards. Any such vested stock option or SAR also would remain exercisable for the full duration of its term. For purposes of the 2021 Plan, a “qualifying termination” means that the participant’s employment is involuntarily terminated without cause or, if the participant is a party to a Change-in-Control Retention Agreement, the participant terminates his or her employment for “good reason” as defined in the applicable Change-in-Control Retention Agreement.

To the extent that awards are not assumed in connection with the change in control transaction, then, except as otherwise provided in the applicable award agreement or in an applicable severance plan or written agreement with the participant, those awards would become immediately vested and exercisable (as applicable), with awards subject solely to service-based vesting conditions becoming vested in full, and awards subject to performance-based vesting conditions becoming vested on a pro-rata basis, with performance determined based on the level of actual achievement of the applicable performance objectives at the time of the change in control (or if actual achievement is not determinable, at the “target” level).

In any case, the Compensation Committee has the discretion to cancel any award in exchange for a payment in cash or other property upon the occurrence of a change in control, or cancel a stock option or SAR without payment if the fair market value of a share on the date of the change in control does not exceed the exercise price per share of the stock option or SAR.

U.S. Federal Income Tax Consequences

The following is a brief summary of the general U.S. federal income tax consequences relating to the 2021 Plan. This summary is based on U.S. federal tax laws and regulations in effect on the date of this proxy statement and does not purport to be a complete description of the U.S. federal income tax laws.

Incentive Stock Options.    Incentive stock options are intended to qualify for special treatment available under Section 422 of the Internal Revenue Code. A participant who is granted an incentive stock option will not recognize ordinary income at the time of grant, and the Company will not be entitled to a deduction at that time. A participant will not recognize ordinary income upon the exercise of an incentive stock option provided that the participant was, without a break in service, an employee of the Company or a subsidiary during the period beginning on the date of grant of the option and ending on the date three months prior to the date of exercise (one year prior to the date of exercise if the participant’s employment is terminated due to permanent and total disability).

If the participant does not sell or otherwise dispose of the common shares acquired upon the exercise of an incentive stock option within two years from the date of grant of the incentive stock option or within one year after he or she receives the common shares, then, upon disposition of such common shares, any amount recognized in excess of the exercise price will be taxed to the participant as a capital gain, and the Company will not be entitled to a corresponding deduction. The participant will generally recognize a capital loss to the extent that the amount recognized is less than the exercise price.

If the foregoing holding period requirements are not met, the participant will generally recognize ordinary income at the time of the disposition of the common shares in an amount equal to the lesser of (i) the excess of the fair market value of the common shares on the date of exercise over the exercise price, or (ii) the excess, if any, of the amount recognized upon disposition of the common shares over the exercise price, and the Company will be entitled to a corresponding deduction. Any amount recognized in excess of the value of the common shares on the date of exercise will be capital gain. If the amount recognized is less than the exercise price, the participant generally will recognize a capital loss equal to the excess of the exercise price over the amount recognized upon the disposition of the common shares.

The rules described above that generally apply to incentive stock options do not apply when calculating any alternative minimum tax liability. The rules affecting the application of the alternative minimum tax are complex, and their effect depends on individual circumstances, including whether a participant has items of adjustment other than those derived from incentive stock options.

Nonqualified Stock Options.    A participant will not recognize ordinary income when a nonqualified stock option is granted, and the Company will not receive a deduction at that time. When a nonqualified stock option is exercised, a participant will recognize ordinary income in an amount equal to the excess, if any, of the fair market

44   |   Nordson Corporation – 2021 Proxy Statement


value of the common shares that the participant purchased over the exercise price he or she paid, and the Company generally will be entitled to a corresponding deduction.

Stock Appreciation Rights.    A participant will not recognize ordinary income when a stock appreciation right is granted, and the Company will not receive a deduction at that time. When a stock appreciation right is exercised, the participant will recognize ordinary income equal to the cash and/or the fair market value of common shares the participant receives, and the Company generally will be entitled to a corresponding deduction.

Restricted Shares.    A participant who has been granted restricted shares will not recognize ordinary income at the time of grant, and the Company will not be entitled to a deduction at that time, assuming that the underlying common shares are not transferable and that the restrictions create a “substantial risk of forfeiture” for federal income tax purposes and that the participant does not make an election under Section 83(b) of the Internal Revenue Code. Generally, upon the vesting of restricted shares, the participant will recognize ordinary income in an amount equal to the then fair market value of the common shares, less any consideration paid for such common shares, and the Company will be entitled to a corresponding deduction. Any gains or losses recognized by the participant upon disposition of the common shares will be treated as capital gains or losses. However, a participant may elect pursuant to Section 83(b) of the Internal Revenue Code to have income recognized at the date of grant of a restricted share award equal to the fair market value of the common shares on the date of grant (less any amount paid for the restricted shares) and to have the applicable capital gain holding period commence as of that date. If a participant makes this election, the Company generally will be entitled to a corresponding deduction in the year of grant.

Restricted Share Units.    A participant generally will not recognize ordinary income when restricted share units are granted, and the Company generally will not receive a deduction at that time. Instead, a participant will recognize ordinary income when the restricted share units are settled in an amount equal to the fair market value of the common shares and the cash he or she receives, less any consideration paid, and the Company generally will be entitled to a corresponding deduction.

Other Share-Based Awards.    Generally, participants will recognize ordinary income equal to the fair market value of the common shares subject to other share-based awards when they receive the common shares, and the Company generally will be entitled to a corresponding deduction at that time.

Cash-Based Awards.    Generally, a participant will recognize ordinary income when a cash-based award is settled in an amount equal to the cash he or she receives, and the Company generally will be entitled to a corresponding deduction at that time.

Miscellaneous.    When a participant sells common shares that he or she has received under an award, the participant will generally recognize long-term capital gain or loss if, at the time of the sale, the participant has held the common shares for more than one year (or, in the case of a restricted share award, more than one year from the date the restricted shares vested unless the participant made an election pursuant to Section 83(b) of the Internal Revenue Code, described above). If the participant has held the common shares for one year or less, the gain or loss will be a short-term capital gain or loss.

Tax Withholding.    Each participant will be required to satisfy any withholding tax obligations that may arise with respect to an award under the 2021 Plan. The Committee may permit or require tax withholding obligations to be satisfied by withholding a portion of the shares that otherwise would be issued with respect to an award, but in no event will the fair market value of any shares so withheld exceed the amount of taxes that are required to be withheld based on the maximum statutory tax rates in the applicable taxing jurisdictions.

Section 409A of the Tax Code.    Section 409A of the Internal Revenue Code provides rules for amounts deferred under nonqualified deferred compensation plans. Section 409A includes a broad definition of nonqualified deferred compensation plans which may extend to various types of awards granted under the 2021 Plan. If an award is subject to, but fails to comply with, Section 409A, the participant would generally be subject to accelerated income taxation, plus a 20% penalty tax and an interest charge. The Company intends that awards granted under the 2021 Plan will either be exempt from, or will comply with, Section 409A, but the Company does not warrant that any award under the 2021 Plan will qualify for favorable tax treatment under Section 409A or any other provision of tax law.

Limitations on the Company’s Tax Deductions.    To the extent that a participant recognizes ordinary income in the circumstances described above, the Company (or a subsidiary that employs the participant) generally will be

Nordson Corporation – 2021 Proxy Statement   |   45


entitled to a corresponding compensation deduction provided that, among other things, the income meets the test of reasonableness, is an ordinary and necessary business expense, and is not an “excess parachute payment” within the meaning of Section 280G of the Internal Revenue Code. However, the Company’s compensation deductions also may be limited by Section 162(m) of the Internal Revenue Code, which provides that the Company generally may not deduct compensation paid to a “covered employee” (as defined under Section 162(m)) to the extent that the compensation paid to the covered employee in that year exceeds $1,000,000.

Benefits Proposed to be Awarded Under the Plan

The issuance of any awards under the 2021 Plan is at the discretion of the Compensation Committee. Therefore, it is not possible to determine the amount or form of any award that will be granted to any individual in the future as there are many variables the Compensation Committee considers in granting equity awards, including compensation of our executive officers compared to peer group compensation, share price at the time the Compensation Committee sets executive compensation, and, for payouts under the Long-Term Incentive Plan, performance against predetermined metrics at the time of settlement.

Registration with the Securities and Exchange Commission

As soon as practicable after approval of the 2021 Plan by its shareholders, the Company intends to file with the Securities and Exchange Commission a Registration Statement on Form S-8 under the Securities Act of 1933, as amended, relating to the shares reserved for issuance under the 2021 Plan.

Current Equity Compensation Plan Information

The following table provides information concerning the Company’s equity compensation plans or individual arrangements that were approved by shareholders and those that were not approved by shareholders as of October 31, 2020:

Plan category

  

Number of securities to

be issued upon exercise

of outstanding options,

warrants and rights

  

Weighted-average

exercise price of

outstanding options,

warrants and rights

  

Number of securities

remaining available for

future issuance under

equity compensation

plans (excluding

securities reflected in

first reporting column)

 

    

Equity compensation plans approved by security holders

    1,787   $97.74    1,888  

Equity compensation plans not approved by security holders

              

Total

    1,787   $97.74    1,888   

RECOMMENDATION REGARDING PROPOSAL 4:

LOGO

The Board of Directors recommends that

you vote “FOR” the approval of

the Nordson Corporation 2021

Stock Incentive and Award Plan.

46   |   Nordson Corporation – 2021 Proxy Statement


EXECUTIVE COMPENSATION:

COMPENSATION DISCUSSION AND ANALYSIS

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

This Executive Compensation Discussion and Analysis (“CD&A”) describes our executive compensation philosophy, and program, theour compensation decisions made under this program,decision process, and the specific factors we considered in making those decisions. This CD&A focuses on theelements of our executive compensation ofprogram for our named executive officers for 2018:2020. They are:

 

  Name

Sundaram Nagarajan

  

Title

  Michael F. Hilton

President and Chief Executive Officer

Joseph P. Kelley

Executive Vice President and Chief Financial Officer

John J. Keane

Executive Vice President

Gregory P. Merk

Executive Vice President, Industrial Precision Solutions

Jeffrey A. Pembroke

Executive Vice President, Advanced Technology Solutions

Gregory A. Thaxton

  

Former Executive Vice President and Chief Financial Officer

  John J. Keane

Executive Vice President

  Gregory P. Merk

Executive Vice President

  Jeffrey A. Pembroke

Executive Vice President

This CD&A is presented in five parts:

Part I:    Executive Summary.    In this section we discuss: (a) highlightsAs part of our financialnormal succession planning process and operating performance that supported, in part, compensation awarded toas a result of a robust search, the Board of Directors appointed Joseph P. Kelley as our named executive officers for 2018; (b) our compensation objectives, including ourpay-for-performance philosophy; (c) Mr. Hilton’s compensation for 2018;Executive Vice President and (d) how compensation was tied to performance.

Part II:    SettingChief Financial Officer, effective July 6, 2020. On the same day, Gregory A. Thaxton concluded his tenure as Chief Financial Officer after thirty successful years with the Company and remained as an Executive Compensation.    In this section we explain our processes and procedures and the roles the Compensation Committee, management, and the Compensation Committee’s independent compensation consultant have in setting our executive compensation program.

Part III:    Key Components of Our Executive Compensation Program.    In this section we provide detailsVice President of the key components ofCompany until his retirement on August 28, 2020. On January 8, 2021, John J. Keane announced his retirement after 28 successful years with 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 2018.Company.

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:    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. “Risk Factors” and Part II, Item 7. “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our 20182020 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 – 2019 Proxy Statement

Nordson Corporation – 2021 Proxy Statement   |   47


PART I: EXECUTIVE SUMMARY

2018 Financial Performance

Fiscal year 2018 was a year of strong financial performance. The tables below present FY2016 – FY2018 reported results forCD&A and the three primary drivers of incentive compensation for the named executive officers – Diluted Earnings per Share, Return on Total Capital, and Revenue. TheExecutive Compensation Committee elected to exclude any financial benefits the Company receivedTables are organized as a result of the Tax Cuts and Jobs Act that was passed in 2017. 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 and Jobs Act.follows:

 

LOGO LOGO

Section

 LOGO

Subject

Page

Executive Summary

•   Fiscal Year 2020 Performance

49

•   Business Realignment

50

•   Actions Taken After the End of the Fiscal Year 2020

50

•   Executive Compensation Philosophy

51

•   Pay for Performance

51

•   CEO Compensation

53

•   Shareholder Returns and 2020 Financial and Operating Highlights

54

Discussion of our

Compensation Program

•   Executive Compensation Decision Process

56

•   Elements of Compensation

59

¡Base Salary

60

¡  Performance-Based Compensation

61

•   2020 Actions and Analysis

63

•   Other Components of Compensation

71

•   Additional Compensation Policies

74

¡Executive Share Ownership

74

¡Anti-Pledging/Anti-Hedging Policy

75

¡Tax and Accounting Treatment

75

¡Equity Grant Policy

76

¡Clawback Policy

76

Compensation Committee Report

77

Compensation Tables

and Explanatory Notes

•   2020 Summary Compensation Table

80

•   2020 Grants of Plan-Based Awards

83

•   2020 Outstanding Equity Awards

86

•   2020 Options Exercised and Stock Vested

89

•   Nonqualified Deferred Compensation

92

•   Potential Payments Upon Termination or Change of Control

94

Diluted Earnings per Share* Return

48   |   Nordson Corporation – 2021 Proxy Statement


EXECUTIVE SUMMARY

Fiscal Year 2020 Financial Performance

During 2020, the challenges created by the COVID-19 pandemic were unprecedented and unlike any in Nordson’s history. The pandemic impacted our operations beginning in our second quarter and continued through the end of our fiscal year.

Despite the challenges created by the pandemic, we demonstrated the strength of our business continuity plans and our agility by enabling over 40% of our worldwide workforce to work remotely, staying closely connected with our customers, and resolving supply chain challenges quickly. As a business that supports several critical infrastructure sectors, we continued to deliver essential products and services to our customers who continued their operations during the pandemic. During the first months of the shutdowns that resulted from the pandemic, which was during our second and third quarters, our order rates declined and at times were greater than 20% below prior year levels. Despite this, our leadership team leveraged our close-to-the-customer model to identify new market opportunities, which included supporting our customers who began producing personal protective equipment and other medical products in response to urgent business and community needs, and ensured the strength of our supply chains to support our customers’ requirements. This resulted in our fourth quarter order rates returning to pre-pandemic levels and the negative impact on Total Capital* Revenue (Billions)our full year sales was less than most of our proxy peers during 2020.

Achievements realized during the pandemic due to our strong management focus included:

Active cost management to ensure ongoing profitability despite declining revenues

Effective management of distribution channels to ensure sustainable and ongoing operations

Continued focus on growth through acquisitions and a strategic divestiture despite travel challenges:

 

*¡

This data includes the benefits inured to the Company from the Tax Cuts and Jobs ActAcquisition of Fluortek, LLC, a high-quality medical company 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%.expands our medical platform

¡

Acquisition of vivaMos, Ltd., an X-ray image sensor company that builds on our strategic objective to enhance our test and inspection capabilities for diverse end markets

¡

Announced the divestiture of our screw and barrel product line and allowed our team to focus its resources and time on growing its more differentiated product lines

Successful implementation of the next generation of the Nordson Business System—the NBS Next growth framework—despite travel restrictions and teams working remotely

Realignment of the business to better position the Company for the next chapter of profitable growth

Management’s unwavering focus on leading their teams through these challenging times, identifying growth opportunities, and managing costs resulted in Nordson delivering solid results, especially when compared to our proxy peers and their respective performances during 2020. Nordson’s total shareholder return performed in the top quartile and our revenue growth and operating profit growth performed in the second quartile when compared to our proxy peers during 2020. Our ability to maintain financial stability and minimize the negative impact of the pandemic resulted instrong adjusted free cash flow of $452 million (defined as operating cash flow less capital expenditures) and allowed us to maintain payment of our quarterly dividends, including a 3% increase in the fourth quarter. This marked our 57th consecutive year of an annual dividend increase.

Summary of Compensation ObjectivesOutcomes for Fiscal 2020

We provideThe Compensation Committee believes that our long-term success depends in large measure on our ability to attract and retain highly qualified officers who are motivated to serve with purpose on behalf of our Company, our employees, and our shareholders. Although the pandemic changed many things about our business during 2020, this belief endures.

Throughout the year, the Board held several special meetings with management to discuss the extensive impact of the pandemic on our business and management’s response. Because management reacted quickly to the new

Nordson Corporation – 2021 Proxy Statement   |   49


challenges caused by the pandemic by ensuring effective business continuation, reducing costs, and continuing to find new sales opportunities to replace those resulting from the market downturn from the pandemic, Nordson shareholders benefited from a straightforward, uncomplicated compensation structurestable and growing share price and dividend increase during this time.

Despite the impact that the pandemic had on payouts of the 2020 Annual Cash Incentive Awards and 2018-2020 Performance Share Incentive Awards, the Compensation Committee did not make any adjustments to those incentive awards. Relying upon our pay-for-performance approach, the Compensation Committee believed that because portions of the 2020 Annual Cash Incentive Award and 2018-2020 Performance Share Incentive Award payouts were achieved, management should be compensated for the performance it attained, even in a pandemic environment.

Business Realignment

On March 30, 2020, the Company announced a strategic business realignment to position it for profitable growth. The Company reorganized into two businesses: (1) Industrial Precision Solutions (IPS) and (2) Advanced Technologies Solutions (ATS). The new IPS business combined the Company’s Adhesive Dispensing Systems (ADS) and Industrial Coatings Systems (ICS) businesses. In fiscal year 2019, ADS and ICS had combined revenues of approximately $1.2 billion. The ATS business predominantly serves customers in the electronics, medical and general industrial end markets and in fiscal year 2019 had revenues of approximately $986 million.

Mr. Gregory P. Merk, Executive Vice President, was promoted to lead the IPS business and Mr. Jeffrey A. Pembroke was promoted to lead the ATS business. Each assumed new responsibilities in overseeing their new respective segment. As a result, Messrs. Merk and Pembroke’s base salaries, annual cash incentives, and long-term incentives were each adjusted to reflect their additional responsibilities and to incentivize them to achieve performance with the new business segment.

Actions Taken After the End of Fiscal Year 2020

At its November 23, 2020 meeting, the Compensation Committee took certain actions to realign management incentives in recognition of the impact of the pandemic on the 2020 performance year and its expected impact on the future performance periods and to address other key business objectives.

In particular and as discussed in more detail below under the heading “2020-2022 Performance Share Incentive Award”, the Compensation Committee made adjustments to the performance goals for our named2020-2022 Performance Share Incentive Awards to reflect the challenges posed by the pandemic. No such adjustments were made to the performance goals for either the 2018-2020 or 2019-2021 Performance Share Incentive Awards.

The Compensation Committee recognized several factors that will likely affect future performance and retention of our top talent. Specifically, in 2020 the Company experienced a significant amount of change related to recent CEO and CFO transitions, the business realignment described above, and focused implementation of an enhanced business system. In addition, the Compensation Committee recognized that the impacts of the pandemic not only impacted 2020 incentives, but are expected to have a continuing effect on fiscal years 2021 and 2022, including a potential for no incentive award payouts under the 2019-2021 Performance Share Incentive Awards due to the long-term incentive reliance on cumulative growth (see discussion beginning on page 68 for additional details). Considering these factors, the Compensation Committee granted special, one-time continuation equity awards to certain members of management that consisted of restricted share units with two-year cliff vesting and a gateway performance measure that must be achieved for the grant to vest. The gateway performance measure requires the Company to maintain an average ROIC of 8% over the two-year period following the grant date for the units to vest. If the gateway performance measure is not achieved, the restricted share units will not vest.

The Compensation Committee granted these continuation awards to retain certain top talent and incentivize them to continue their efforts, which resulted in strong performance in 2020 when compared with our peers and despite the pandemic-related challenges. In calculating the number of restricted share units to grant, the Compensation Committee considered the Company’s 2020 total shareholder return relative to our peers and corresponding potential performance over the three-year period. The Compensation Committee also considered the employee’s role, compensation level, and desire to retain. Because retention of our talent was the primary reason for the

50   |   Nordson Corporation – 2021 Proxy Statement


award, the Compensation Committee believed a time-based award with a threshold performance requirement was most appropriate. Additionally, because the awards are subject to forfeiture, they emphasize the need for ongoing focused performance in the coming years.

The Compensation Committee made additional changes to the fiscal year 2021 executive officers, onecompensation to more closely align with our updated growth strategy and to reflect incentive compensation market trends. For our fiscal year 2021, the Compensation Committee determined the metrics for the annual cash incentive award as organic revenue growth (weighted 40%) and base business operating profit (weighted 60%). For the 2021-2023 performance share incentive award, the metrics for each year of the performance plan are earnings per share growth (weighted 40%), return on invested capital (weighted 30%), and EBITDA margin (weighted 30%). It includes a relative total shareholder return multiplier of up to 20 percentage points (plus or minus), which iswill determine the final payout of the 3-year award. The total shareholder return performance will be determined relative to the same indices as calculated for the 2020-2022 performance share incentive 2020 attainment: S&P 900 Machinery, Industrial Conglomerates, and Electrical Equipment (S&P 900 Selected). We will provide additional details on this fiscal year 2021 executive compensation change in our proxy statement for the 2022 annual meeting of shareholders.

Executive Compensation Philosophy

Our compensation plans and programs are designed to supportdrive sustainable results and deliver long-term, superior shareholder returns. We design our executive compensation plans and programs based on three primary objectives:fundamental objectives that help us achieve those goals: (1) alignment with shareholder interests, (2) pay for performance, and (3) talent retention.

 

   Objective

  

How Objective is Achieved

Alignment with Shareholder Interests

  

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

 

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

  Pay-for-Performance

Pay for Performance  

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

Talent Retention

  

Total direct compensation opportunities generally are targeted to approximate the median of the peer group thatwith which we compete with for talent. In addition, other factors affect total direct compensation, such as experience, internal equity, future potential, and tenure.

 

The vesting periods for equity-based compensation (performance share units, stock options, restricted shares and restricted shares) support this objective.share units) encourage our executives to remain employed with and invested in the Company over the long-term.

Our compensation philosophy emphasizes a long-term view aligned with shareholder interests. Our long track record of sustained success is exemplified by the following:

 

Annual average shareholder return is above market.    Our annual shareholder return, measured over the 12 months of fiscal year 2020 and including dividends, is 24.45%, compared to the average annual return for the S&P 500 of 7.65%.

 

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. Considering Mr. Hilton’s tenure, experience, and performance, his total target direct compensation approximates the 75th percentile of other chief executive officers in our peer group. 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 20, 2017 meeting, the Compensation Committee, with input from its independent executive compensation consultant, Exequity LLP, established Mr. Hilton’s 2018 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:

2018 Compensation Element

 

Value

  Base Salary

$925,000 (5.7% increase over 2017)

  Annual Cash Incentive Award Target Opportunity

$925,000 (100% of base salary, same target percentage as 2017)

  2018-2020 Performance Share Incentive Award

  Target Opportunity

13,400 share units

$1,654,230 grant date fair value

  Stock Options

55,800 shares

$1,942,599 grant date fair value

  Restricted Shares

6,700 shares

$855,389 grant date fair valueContinued dividend payment record.    In 2020, we increased our dividend, marking the 57th consecutive year we have increased our annual dividend.

The combination of target payout opportunityPay 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 85% of Mr. Hilton’s target total direct compensation for 2018, which further reinforces ourpay-for-performance culture.

During its November 26, 2018 meeting, shortly after our 2018 fiscal year ended, the Board reviewed Mr. Hilton’s performance for 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 strong financial and operating performance, including achieving multiple record financial metrics, and 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 2018 incentive compensation:

 

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, 2019. Based on the closing price of our common shares on January 3, 2019 ($112.76 per share), value of the payout in dollars was $3,844,552.

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.Company’s performance. The program is not overly

Nordson Corporation – 2021 Proxy Statement   |   51


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 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 asplan. These include revenue and earnings growth, and return on total capital.capital, which we believe are key value drivers of the business.

TheSpecifically, the Annual Cash Incentive Award payout isfor 2020 was tied to diluted earnings per share growth and return on total capital. The Performance Share Incentive Award payout ishas historically been 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. We believe that using diluted earnings per share as a metric for both annual and long-term incentive awards was appropriate because it measures the rate at which management has succeeded in increasing the profits per unit of ownership by shareholders and is a measure commonly used by the investment community to evaluate performance.

A Significant Portion of CEO Compensation Opportunity is Performance-Based and/or At-Risk

We design our Chief Executive Officer’s compensation opportunity to be largely performance-based and at-risk. Consistent with our pay for performance philosophy and to incentivize Mr. Nagarajan to focus on performance, approximately 85% of the target total compensation opportunity for Mr. Nagarajan in 2020 was at-risk and was designed to be based on attainment of performance metrics. This includes approximately 70% in the form of long-term, and multi-year opportunities granted in restricted stock, stock options, and performance shares. The performance shares depend on attainment of pre-established performance metrics. Approximately 15% of Mr. Nagarajan’s 2020 compensation was in the form of an at-risk annual cash incentive opportunity.

Principal Components of Chief Executive Officer Compensation

LOGO

Base Salary

•  Approximately 15% of CEO’s total direct compensation

Annual Cash Incentive Award

•  Approximately 15% of CEO’s total direct compensation (at target)

•  Target levels of incentive compensation are based on a percentage of base salary

•  Designed to drive high performance results year-over-year

•  Places significant portion of annual compensation at risk

Long-term Incentive Awards

•  Approximately 70% of CEO’s total direct compensation

•  Aligns interests of executive officers with shareholders’ long-term interests

•  Performance Share Awards are payable in unrestricted Nordson common stock to the extent applicable quantitative performance goals are met

52   |   Nordson Corporation – 2021 Proxy Statement


CEO Compensation

During its November 25, 2019 meeting, the Compensation Committee, with input from its independent compensation consultant, Exequity LLP (“Exequity”), established Mr. Nagarajan’s 2020 total target direct compensation as Chief Executive Officer, 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. Nagarajan’s performance, and the Company’s overall financial and operating performance. Considering these factors, the Committee established his 2020 compensation as:

 

Nordson Corporation – 2019 Proxy Statement   2020 Compensation Element

  |  35Value

Base Salary

$850,000 (on an annualized basis)

Annual Cash Incentive Award Target Opportunity

$850,000

(100% of base salary)

2020-2022 Performance Share Incentive Award

Target Opportunity

9,500 share units

$1,316,035 grant date fair value

Stock Options

41,800 shares

$1,628,218 grant date fair value(1)

Restricted Shares

4,700 shares

$776,487 grant date fair value

(1)

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

Nordson Corporation – 2021 Proxy Statement   |   53


Shareholder Returns and 2020 Financial and Operating Highlights

The graph and corresponding table below comparescompare Nordson’s total shareholder return*return(1) for the ten yearten-year period ended October 31, 20182020 with that of the following indexes: the S&P MidCap 400500 Index, the S&P MidCap 400, the S&P 500 Industrial Machinery, Index,the S&P MidCap 400 Industrial Machinery, and the median return of our peer group companies (assuming the reinvestment of all dividends).

COMPARISON OF CUMULATIVE RETURN

LOGO Both the chart and table show our strong long-term performance compared to our benchmarks and peers over a ten-year period of time. We continue to achieve our long-term objective of creating and maximizing shareholder value, which is evidenced by our above-market return and outperformance of our peers and benchmarks.

 

*
Comparison of 10 Year Cumulative Total Shareholder Return

LOGO

(1)

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

ASSUMES $100 INVESTED ON NOVEMBER 1, 20082010

ASSUMES DIVIDENDS REINVESTED

FISCAL YEAR ENDED OCTOBER 31, 20182020

 

   

Company/Market/Peer Group

 

2008

  

2009

  

2010

  

2011

  

2012

  

2013

  

2014

  

2015

  

2016

  

2017

  

2018

  2010  2011  2012  2013  2014  2015  2016  2017  2018  2019  2020 
 

Nordson Corporation

 $100.00  $149.23  $226.27  $274.10  $356.22  $439.17  $471.10  $443.80  $632.04  $807.21  $788.83  $100.00  $121.14  $157.44  $194.09  $208.21  $196.14  $279.33  $356.75  $348.63  $450.67  $560.87 
 

S&P 500 Index

 $100.00  $108.09  $124.52  $158.36  $185.71  $195.37  $204.17  $252.43  $270.97  $309.79  $339.87 
 

S&P MidCap 400

 $100.00  $118.18  $150.84  $163.74  $183.57  $245.03  $273.58  $282.95  $300.65  $371.23  $375.02  $100.00  $108.55  $121.69  $162.44  $181.37  $187.58  $199.31  $246.11  $248.62  $271.03  $267.92 
 

S&P 500 Ind. Machinery

 $100.00  $103.46  $123.82  $176.80  $199.37  $199.07  $227.30  $313.37  $289.14  $352.62  $386.78 
 

S&P MidCap 400 Ind. Machinery

 $100.00  $123.61  $160.67  $182.73  $199.57  $277.07  $293.61  $245.77  $288.44  $413.70  $404.98  $100.00  $113.73  $124.21  $172.45  $182.74  $152.97  $179.53  $257.49  $252.07  $299.53  $320.07 

Peer Group

 $100.00  $108.45  $133.57  $150.02  $171.39  $238.19  $262.44  $252.27  $259.27  $388.10  $399.03  $100.00  $113.30  $128.23  $177.35  $193.38  $188.81  $193.62  $292.26  $299.10  $383.02  $414.51 

Source: Zack’s Investment Research

We placeDespite the pandemic, the Company continued to deliver significant emphasis on long-term growthshareholder value. Our 2020 performance is the direct result of our ability to pivot in a challenging pandemic environment and to win new market opportunities. When faced with declining orders, the Company successfully continued to support our share price, and believe the information providedexisting customers’ needs by securing our supply chains that enabled us to continue to supply our customers who operate in critical infrastructure sectors. Management additionally identified new opportunities, specifically in the graph and tables abovemedical industry, to be important in understanding our compensation philosophy and its rolecreate new revenue sources. As a result, the Company’s total shareholder return performed in the achievement oftop quartile compared to our long-term objectives.proxy peers during our 2020 fiscal year.

 

36  |Nordson Corporation – 2019 Proxy Statement

54   |   Nordson Corporation – 2021 Proxy Statement


The tables below represent fiscal years 2018 – 2020 as 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.

LOGO  LOGO  LOGO

*

The performance metrics for the Performance Share Incentive Awards for the 2018-2020 performance period were determined by the Compensation Committee in November 2017, which was prior to the enactment of the Tax Cuts and Jobs Act (the “Act”). As a result of the passing of the Act, the Company experienced unexpected benefits to its Diluted Earnings Per Share (“EPS”). Because part of the effect on EPS was the result of legislation and not solely due to Company performance, the Compensation Committee excluded the benefits that inured to the Company as a result of the Act, and utilized a more normalized effective tax rate for these performance years. As a result, the Compensation Committee used the following Diluted Earnings Per Share results to calculate the 2018-2020 Performance Share Incentive Award payouts for our named executive officers: $5.70 (2018), $5.37 (2019), and $3.74 (2020).

Nordson Corporation – 2021 Proxy Statement   |   55


PART II: SETTING EXECUTIVEDISCUSSION OF OUR COMPENSATION PROGRAM

Executive Compensation Decision Process

Role of the ShareholderSay-on-Pay Vote

TheIn setting executive compensation, the Compensation Committee believes thatconsiders the results of the advisory“say-on-pay”say-on-pay shareholder vote. The Compensation Committee believes the historical 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 2018.philosophies. The Compensation 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 (%)  

 

2014

    97.90

2015

    98.50

2016

    98.97

2017

    98.11

2018

    97.70

    

 

Annual Meeting Year

  FOR Vote (%)     
 

2020

  98.74 
 

2019

  97.95 
 

2018

  97.70 
 

2017

  98.11 
  

2016

  98.97  

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

Role of the Compensation Committee

The Compensation Committee is made upconsists entirely of independent directors as defined by our Governance Guidelines and Nasdaq listing standards and is supported by our human resources department. It has responsibility for establishing our executive compensation program and for making compensation decisions under the program. In fulfilling its duties and responsibilities for 2018,2020, the Compensation Committee sought input, advice, and recommendations from anits independent executive compensation consultant as well as recommendations from our Chief Executive Officer, Mr. Hilton.Officer. At all times, however, the Compensation Committee exercised independent judgment in making executive compensation decisions.

Role of theThird-Party Executive Compensation Consultant

The Compensation Committee retained Exequity LLP (“Exequity”) as theits independent executive compensation consultant reportingto support the Compensation Committee’s oversight and management of our executive compensation programs. Exequity reports directly to the Committee. Exequity provides research, data analyses, survey information,Compensation Committee, and design expertise in developing compensation programs forits responsibilities include assisting the Compensation Committee with validating our executive officers.compensation plans and programs through periodic studies and analysis. In addition, Exequity informs the Compensation Committee of regulatory developments and market trends related to executive compensation practices. The Committee has assessedCompensation Committee’s written policies require that it annually assess the independence of Exequity in light of SEC rules and Nasdaq listing standardsstandards. In 2020, the Compensation Committee performed this assessment and concluded that no conflict of interest would preventprevented Exequity from independently and objectively advising the Compensation Committee.

Role of Executive Management

Mr. Hilton and Ms. Shelly Peet,Our Chief Executive Officer, along with our Executive Vice President of Human Resources, & Information Systems, provide additional information and analysis as requested by the Compensation Committee. More specifically, Mr. HiltonNagarajan, Chief Executive Officer, and Ms. Peet, Executive Vice President of Human Resources, provided support for Compensation 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. HiltonNagarajan also: (a)(i) provided to the Board of Directors a self-assessmentself- assessment of his performance for the fiscal year; (b)respective performance; (ii) provided an assessment of each executive officer’s performance; and (c)(iii) recommended annual base salary adjustments, payouts of Annual Cash Incentive Awards and Performance Share Incentive Awards, and equity awards for executive officers other than himself.

 

Nordson Corporation – 2019

56   |   Nordson Corporation – 2021 Proxy Statement

|  37


Benchmarking-Peer Group and Compensation Surveys

Our compensation peer group for 2020, which was developed in consultation with Exequity, consisted of the 20 publicly-traded companies listed below. The Compensation Committee believes the listed companies serve as the appropriate peer group because they have: (i) revenues generally within the range of 0.5x - 2.0x Nordson’s revenue; (ii) a global scope and business complexity; (iii) a focus on precision industrial manufacturing, innovation and technology; (iv) global growth strategies; and (v) profiles or business models similar to Nordson’s, based on industries or diverse markets served. The Compensation Committee reviews the peer group annually and makes appropriate modifications from time to time so that the group closely resembles our competitive market for executive talent.

Company

  Revenue(1)
($MMs)

Market Cap

As of Dec. 2018(2)
($MMs)

Actuant Corporation

$1,183$  1,282

Albany International Corp.

$   982$  2,014

AMETEK Inc.

$4,846$15,714

Barnes Group Inc.

$1,496$  2,751

Chart Industries Inc.

$1,084$  2,029

Donaldson Company, Inc.

$2,734$  5,549

Entegris, Inc.

    

$1,550$  3,942

Esterline

$1,176$  6,024

FLIR Systems, Inc.

$1,776$  6,024

Gardner Denver Holdings, Inc.

$2,690$  4,065

Graco, Inc.

$1,653$  6,965

IDEX Corporation

$2,484$  9,685

ITT, Inc.

$2,745$  4,227

Keysight Technologies, Inc.

$3,878$11,649

Lincoln Electric Holdings, Inc.

$3,029$  5,082

National Instruments Corporation

$1,359$  6,010

Roper Technologies, Inc.

$5,191$27,566

Teradyne, Inc.

$2,101$  5,625

Watts Water Technologies, Inc.

$1,565$  2,200

Woodward, Inc.

$2,326$  4,594

75th Percentile

$2,737$  6,259

Average

$2,336$  6,529

Median

$2,070$  4,838

25th Percentile

$1,537$  3,388

Nordson Corporation

$2,255$  6,914

(1)

Revenue values are as of the most recent fiscal year end prior to or before December 2018.

(2)

The Compensation Committee identified our compensation peer group for 2020 during its May 2019 meeting. Due to the date of this meeting, the latest full-year data available to and considered by the Compensation Committee was December 2018.

In March 2019, Esterline Technologies Corp. was acquired by Transdigm Group Inc. (NYSE: TDG) and ceased to be an independent public company. However, the Committee incorporated Esterline in its comparisons in benchmarking 2020 compensation and establishing the 2020 executive compensation levels because its 2019 data was available and determined relevant. Where peer group proxy data was not available, and as a reference and a

Nordson Corporation – 2021 Proxy Statement   |   57


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.

Setting Goals and Compensation

In order toTo focus on delivering growth and value for shareholders over time and to communicate consistently with investors and other stakeholders,shareholders, we take a longer termlong-term approach to incentive compensation wherein ourcompensation. Our incentive plan targets remainremained consistent for a multi-year period of time, which iswas more aligned with our five yearfive-year strategic plan cycle. We annually assessassessed measures and performance goals (threshold, target, and maximum) to validate that they arewere appropriately 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 further evaluate the appropriateness of our goals.

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

 

Nordson 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 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.

Nordson expected future performance based on our five-year strategic plan.    This allowed us to assess whether our future expected performance continues to align with existing incentive targets and therefore would indicate that our goals should remain, 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.

 

Nordson historic performance: Our historic performance is reviewed along with projected future performance to help us assess whether we believe targets should be changed.

Nordson 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.

Other external factors.    Consideration of economic conditions, investor and shareholder expectations, pay for performance alignment, and other factors also contributed to our final recommendation on whether our targets should be adjusted.

Based on a qualitative analysis of all factors, and considering input from the independent executive compensation consultant, the Compensation Committee may change goals or to retain the targets currently in place.

38  |Nordson Corporation – 2019 Proxy Statement


Peer Group and Compensation Surveys

Our compensation peer group for 2018, which was developed in consultation with Exequity, consisted of the 18 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 0.5x — 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. 2017
($MMs)

 

 

 

  Actuant Corporation

 

  $

 

1,096

 

 

 

 $

 

1,517

 

 

 

  Albany International Corp.

 

  $

 

864

 

 

 

 $

 

1,976

 

 

 

  AMETEK Inc.

 

  $

 

4,300

 

 

 

 $

 

16,749

 

 

 

  Barnes Group Inc.

 

  $

 

1,436

 

 

 

 $

 

3,392

 

 

 

  Chart Industries Inc.

 

  $

 

989

 

 

 

 $

 

1,442

 

 

 

  Donaldson Company, Inc.

 

  $

 

2,372

 

 

 

 $

 

6,359

 

 

 

  Entegris, Inc.

 

  $

 

1,343

 

 

 

 $

 

4,306

 

 

 

  Esterline Technologies Corp.

 

  $

 

2,002

 

 

 

 $

 

2,220

 

 

 

  FLIR Systems, Inc.

 

  $

 

1,800

 

 

 

 $

 

6,460

 

 

 

  Graco, Inc.

 

  $

 

1,475

 

 

 

 $

 

7,615

 

 

 

  IDEX Corporation

 

  $

 

2,287

 

 

 

 $

 

10,083

 

 

 

  ITT Corporation

 

  $

 

2,585

 

 

 

 $

 

4,697

 

 

 

  Keysight Technologies, Inc.

 

  $

 

3,189

 

 

 

 $

 

7,791

 

 

 

  Lincoln Electric Holdings, Inc.

 

  $

 

2,624

 

 

 

 $

 

6,022

 

 

 

  Roper Technologies, Inc.

 

  $

 

4,607

 

 

 

 $

 

26,512

 

 

 

  Teradyne, Inc.

 

  $

 

2,137

 

 

 

 $

 

8,213

 

 

 

  Watts Water Technologies, Inc.

 

  $

 

1,457

 

 

 

 $

 

2,594

 

 

 

  Woodward, Inc.

 

  $

 

2,099

 

 

 

 $

 

4,688

 

 

 

75th Percentile

 

  $

 

2,532

 

 

 

 $

 

7,747

 

 

 

Average

 

  $

 

2,148

 

 

 

 $

 

6,813

 

 

 

Median

 

  $

 

2,050

 

 

 

 $

 

5,359

 

 

 

25th Percentile

 

  $

 

1,442

 

 

 

 $

 

2,793

 

 

 

  Nordson Corporation

 

  $

 

2,067

 

 

 

 $

 

8,454

 

 

 

*

Revenue values are as of the most recent fiscal year end prior to or before December 2017.

Prior to the date that 2018 compensation was set, CLARCOR, Inc. was acquired by Parker-Hannifin (NYSE: PH) and it ceased to be an independent public entity and was removed from our peer group. 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

|  39


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 2018:

LOGO

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 69% - 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 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 – 2019 Proxy Statement


PART III: KEY COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

The table below summarizes the components and objectives of our 2018 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

2017 Committee Actions –
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 3.0% to 4.6%. The CEO’s increase was 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 106.5% to 144.5% of target. The CEO’s payout was 117.0% of target.

Long-Term Incentive Awards

Includes performance 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 2016-2018 Performance Share Incentive Award to our named executive officers, including the CEO, were 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;

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

Nordson Corporation – 2019 Proxy Statement

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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.

2018 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 2018 at a level consistent with the general objective of paying total target direct compensation to approximate the median of our peer 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 2018 and 2017(year-end):

    

 

  Name

 

  

 

Base Salary
2018 ($)

 

  

 

Base Salary
2017 ($)

 

  

 

 Increase in Base 

Salary (%)

 

  Michael F. Hilton

 

    

 

925,000

 

 

    

 

875,000

 

 

    

 

5.7

 

 

  Gregory A. Thaxton

 

    

 

470,000

 

 

    

 

450,000

 

 

    

 

4.4

 

 

  John J. Keane

 

    

 

455,000

 

 

    

 

435,000

 

 

    

 

4.6

 

 

  Gregory P. Merk

 

    

 

420,000

 

 

    

 

403,000

 

 

    

 

4.2

 

 

  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

42  |Nordson Corporation – 2019 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 Policy

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 and Performance Share Incentive Award payouts, the Committee adopted a policy in 2016 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 U.S. Dollardollar 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.

58   |   Nordson Corporation – 2021 Proxy Statement


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.

In certifying the results for the financial performance measures employed in calculating the Performance Share Incentive Award, the Committee applies the same methodology as described in the 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 versus one-year performance period.

Foreign Currency Translation Methodology

For purposes of applying the currency adjustment policy, current year financial statements and supplemental schedules are retranslated at the prior yearyear’s exchange rates using the same methodology as disclosed in Note 1 in the “Notes to Consolidated Financial Statements” section of our Form10-K for 20182020 to determine the currency neutral result, with the exception that we do not attempt tore-measure gains and losses, based on a retranslation at the prior yearyear’s 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.

Elements of Compensation

The table below summarizes the components and objectives of our 2020 total direct compensation program for executive officers, including our named executive officers.

 

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2018 Actions and Analysis

During our November 20, 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

 

   Name

 

  

 

Threshold

 

  

 

Target

 

  

 

Maximum  

 

 

  Michael F. Hilton

 

  

 

50.0

 

  

 

100

 

  

 

200

 

 

  Gregory A. Thaxton

 

  

 

35.0

 

  

 

  70

 

  

 

140

 

 

  John J. Keane

 

  

 

35.0

 

  

 

  70

 

  

 

140

 

 

  Gregory P. Merk

 

  

 

32.5

 

  

 

  65

 

  

 

130

 

 

  Jeffrey A. Pembroke

 

  

 

32.5

 

  

 

  65

 

  

 

130

 

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   

 

 

  Diluted Earnings Per Share Growth

 

  

 

0%

 

  

 

8%

 

  

 

20%

 

  

 

50%

 

 

  Return on Total Capital

 

  

 

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)

Element of Pay

 

 

Form   

 

20                 Links to Performance

 

Link to Compensation
Objectives

Operating Profit Growth (year-over-year)

Base Salary

 Cash  Fixed annual compensation

•  Attract and retain exceptional executive talent by providing market competitive salaries.

 

40                 

•  Compensate executives for their responsibilities, experience, and individual performance.

Operating Margin (as % of revenue)

20                 

Asset Turns (% achieved)

10                 

Days of Inventory

  10                 

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 2018 is material to an understanding of our 2018 executive compensation program as covered by this Proxy Statement.

44  |

Annual Cash

Incentive Award

 Nordson Corporation – 2019 Proxy StatementCash  

Corporate payout is tied to year-over-year growth in earnings per share and return on total capital.

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.

•  Drives key business, operating, and individual results on an annual basis.

•  Strictly performance-based against pre-established corporate and financial business unit metrics, no payout guaranteed.

Long-Term

Incentive Awards

Performance   Share Units  

Stock Options  

Restricted Stock  

Tied to achievement of long-term financial goals.

Aligned with shareholder returns because all awards are denominated in shares of stock or share units.

•  Value tied to share price and with respect to performance share units, to achievement of pre-established long-term financial goals.

•  Links executive officer and long-term shareholder interests.

•  Serves as a key attraction and retention tool and a strong long-term performance driver.

•  Multiyear long-term retention.

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Determining Payout AmountsBelow is a depiction of the elements of the total direct compensation components and the limited perquisites provided to the named executive officers(1).

Determination

LOGO

Our executive compensation program does not prescribe a specific formula for the mix of base salary and annual and long-term incentive components. This allows us to develop an appropriate compensation mix, depending on business performance.

(1)

Performance metrics for the 2020-2022 Performance Share Awards have been modified as described in the “2020-2022 Performance Share Incentive Award” section below.

 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;

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

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.

 Annual Cash Incentive Award

The Annual Cash Incentive Award drives high-performance results year-over-year based on the achievement of pre-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.

Performance and payouts under the Annual Cash Incentive Award were determined based on quantitative corporate financial measures — diluted earnings per share growth and return on total capital — and quantitative operating measures.

two-step60   |   Nordson Corporation – 2021 Proxy Statement


We considered diluted earnings per share growth and return on total capital to be measures critical to our success. We believed these measures offered the proper balance between growth and profitability. We also believed that achieving greater return on total capital and earnings per share growth over time would 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 shareholder ownership. 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.

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 Annual Report on Form 10-K: process:

Step 1: Calculationthe sum of the Payout Rate (as a % of Target)net income (loss) plus after-tax interest expense on an Actual Currency and Currency Neutral Basis

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

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

Currency Neutral — Performance Adjusted for Effectaverage 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)  

 

 

  Diluted Earnings Per Share Growth

 

  

 

$5.49

 

  

 

$5.70*

 

 

 

134.4

 

  

 

$5.41*

 

 

 

 

 

 

90.2       

 

 

 

 

 

  Return on Total Capital

 

  

 

11.5%

 

  

 

13.7%*

 

 

 

148.9

 

  

 

13.1%*

 

 

 

 

 

 

135.6       

 

 

 

 

 

  Combined Corporate Factor

 

       

 

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 rangequarterly debt (net of results, as a percent of target, were:cash) plus average quarterly shareholders’ equity over five accounting periods.

Operating Unit Results

   Currency Calculation Method

% of Target (Range)

  Actual Currency

50.7 – 185.5

  Currency Neutral

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 accountaccounted for 50% of any payout with a weighted average of the business unitoperating units’ quantitative operating measures accounting for the other 50% of the payout. For the operating unit named executive officers, the corporate financial measures accountaccounted for 50% of any payout with the respective operating unit’s quantitative operating measures accounting for the other 50% of the payout.

 

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|  45 Long Term Incentive Awards


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)  

 

 

  Michael F. Hilton

 

  

 

925,000

 

  

 

141.6

 

  

 

127.6 (Weighted)

 

  

 

 

 

 

134.6       

 

 

 

 

  Gregory A. Thaxton

 

  

 

329,000

 

  

 

141.6

 

  

 

127.6 (Weighted)

 

  

 

 

 

 

134.6       

 

 

 

 

  John J. Keane

 

  

 

318,500

 

  

 

141.6

 

  

 

95.1

 

  

 

 

 

 

118.4       

 

 

 

 

  Gregory P. Merk

 

  

 

273,000

 

  

 

141.6

 

  

 

185.5

 

  

 

 

 

 

163.6       

 

 

 

 

  Jeffrey A. Pembroke

 

  

 

269,750

 

  

 

141.6

 

  

 

157.3

 

  

 

 

 

 

149.5       

 

 

 

Currency Neutral:

  Named Executive Officer  

Target

Payout
Opportunity ($)

  

Corporate
Factor

(% of Target)

  

Operating Unit
Factor

(% of Target)

  

Combined  

Factor  

Payout  

(% of Target)  

 

 

  Michael F. Hilton

 

  

 

925,000

 

  

 

112.9

 

  

 

101.0 (Weighted)

 

  

 

 

 

 

107.0       

 

 

 

 

  Gregory A. Thaxton

 

  

 

329,000

 

  

 

112.9

 

  

 

101.0 (Weighted)

 

  

 

 

 

 

107.0       

 

 

 

 

  John J. Keane

 

  

 

318,500

 

  

 

112.9

 

  

 

80.0

 

  

 

 

 

 

96.5       

 

 

 

 

  Gregory P. Merk

 

  

 

273,000

 

  

 

112.9

 

  

 

114.3

 

  

 

 

 

 

113.6       

 

 

 

 

  Jeffrey A. Pembroke

 

  

 

269,750

 

  

 

112.9

 

  

 

156.0

 

  

 

 

 

 

134.5       

 

 

 

 

Under the currency adjustment policy, because the payout calculation at actual currency was higher than payout at currency neutral by more than ten percentage points, final payouts were adjusted upward by ten percentage points from the currency neutral calculation, reflecting the Committee’s position that payouts should be affected by only the first ten percentage points of the impact of currency fluctuation:

  Named Executive Officer

  

Target Payout
Opportunity ($)

  

Actual  

Payout ($)  

 

 

  Michael F. Hilton

 

  

 

925,000

 

  

 

 

 

 

1,082,250  

 

 

 

 

  Gregory A. Thaxton

 

  

 

329,000

 

  

 

 

 

 

384,930  

 

 

 

 

  John J. Keane

 

  

 

318,500

 

  

 

 

 

 

339,203  

 

 

 

 

 

  Gregory P. Merk

 

  

 

273,000

 

  

 

 

 

 

337,428  

 

 

 

 

  Jeffrey A. Pembroke

 

  

 

269,750

 

  

 

 

 

 

389,789  

 

 

 

 

Except 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.

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 share units; (ii) stock options; and (iii) service-based restricted shares. This 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 takestook numerous factors into consideration. As referenced above, market alignment and competitiveness arewere key factors the Committee considersconsidered in setting equity compensation levels. Other factors considered arewere current industry trends, practices among our peer group, and the behaviors the awards arewere intended to drive. In addition to these factors, the Committee placesplaced significant weight on the dilutive impact equity issuances have on our shareholders. In assessing dilution, the Committee considersconsidered the annualized effect of equity compensation by analyzing the equity “burn rate” overone- and three-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 considersconsidered the aggregate impact of all past equity compensation grants by looking at the company’sCompany’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 providesprovided the Committee with insight into the long-term cost of the Company’s equity compensation programs.

ApproximateThe approximate allocation of the three equity components (as a percent of the long-term incentive compensation opportunity) iswas as follows:

 

Equity Form

  % of Opportunity

Performance Share Units

 

 

40

Stock Options

 

 

40

Restricted Shares

 

 

20

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Performance Share Incentive Award

A portion of each named executive officer’s total direct compensation opportunity iswas in the form of performance share units which are settled in unrestricted Nordson Common Stockcommon 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) 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 considersconsidered whether the measures arewere appropriately aligned with those in the Annual Cash Incentive Award so that the overall compensation design doesdid 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 AwardareAwardwere determined based on quantitative corporate financial measures — cumulative diluted earnings per share growth and cumulative revenue growth. We believebelieved these measures offeroffered 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 believedefine it isas 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 iswas 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 believedefine it isas 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 iswas 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 arewere of primary importance, management iswas also expected to grow the size and scale of the enterprise and cumulative revenue growth iswas 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 calculating 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.

48  |Nordson Corporation – 2019 Proxy Statement


2018 Actions and Analysis

During its November 23, 2015 meeting, the Committee established quantitative performance measures and goals for the 2016-2018 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%  

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)

 

 

 Cumulative Diluted Earnings
 per Share Growth

 

  

 

$12.10

 

  

 

$15.51^

 

  

 

100%

 

  

 

$15.85^

 

  

100%

 

 

 Cumulative Revenue

 

  

 

$5,809*

 

  

 

$6,130.7*

 

  

 

85.3%

 

  

 

$6,174.9*

 

  

 

90.2%

 

 

 Combined Factor

 

        

 

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, because 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 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

 

  

 

 

 

 

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 – 2019 Proxy Statement

|  49


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 the named executive officers.

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 2017-2019 and 2018-2020 Performance Share Incentive Awards.

2017-2019 Performance Share Incentive Award

 

   Performance Measure

 

  

Threshold

 

   

Target

 

   

Maximum

 

 

 

  Cumulative Diluted Earnings Per Share Growth

 

  

 

 

 

 

4%    

 

 

 

  

 

 

 

 

8%  

 

 

 

  

 

 

 

 

14%    

 

 

 

 

  Cumulative Revenue Growth

 

  

 

 

 

 

5%    

 

 

 

  

 

 

 

 

7%  

 

 

 

  

 

 

 

 

11%    

 

 

 

   Grant Date  

 

Grant Date

Share
Price

  

Threshold
Payout

(# Shares)

  

Target
Payout

(# Shares)

  

Maximum
Payout

(# Shares)

  

Target Earned

Date

  Actual Payout

 

  11/21/2016

 

  

 

$107.65  

 

  

 

13,240  

 

  

 

26,480  

 

  

 

52,960  

 

  

 

October 31, 2019

 

  

 

Not determined

 

2018-2020 Performance Share Incentive Award

 

   Performance Measure

  

 

Threshold

  

 

Target

  

 

Maximum 

 

  Cumulative Diluted Earnings Per Share Growth

 

  

 

2%

 

  

 

8%  

 

  

 

14%

 

 

  Cumulative Revenue Growth

 

  

 

2%

 

  

 

5%  

 

  

 

8%

 

   Grant Date  

 

Grant Date

Share
Price

  

Threshold
Payout

(# Shares)

  

Target
Payout

(# Shares)

  

Maximum
Payout

(# Shares)

  

Target Earned

Date

   Actual Payout 

 

  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 20, 2017,25, 2019, 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 – 2019 Proxy Statement


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

   Named Executive Officer  Options Granted (#)   

 

Grant Date
Fair Value ($) (1)

 

 

  Michael F. Hilton

 

  

 

 

 

 

55,800    

 

 

 

  

 

 

 

 

1,942,599    

 

 

 

 

  Gregory A. Thaxton

 

  

 

 

 

 

12,500    

 

 

 

  

 

 

 

 

435,170    

 

 

 

 

  John J. Keane

 

  

 

 

 

 

12,500    

 

 

 

  

 

 

 

 

435,170    

 

 

 

 

  Gregory P. Merk

 

  

 

 

 

 

9,000    

 

 

 

  

 

 

 

 

313,322    

 

 

 

 

  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’ interestinterests 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, tying our executive officers’ compensation to the goal of increasing the value of our shareholders’ investment.shareholder interests. 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.date, but with any cash dividend payable with respect to unvested restricted shares being accumulated, without interest, and paid in cash if and when the restricted shares become vested.

62   |   Nordson Corporation – 2021 Proxy Statement


2020 Actions and Analysis

 Base Salary

Except for Joseph P. Kelley, during its November 25, 2019 meeting, the Committee set individual base salaries of our named executive officers for 2020 at a level consistent with the general objective of paying total target direct compensation to approximate the median of our peer group; however, each named 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. In setting the salaries, we considered Exequity’s input and analysis, and the recommendations of Mr. Nagarajan, President and Chief Executive Officer (except with respect to his own salary). Mr. Nagarajan’s base salary was established using Exequity’s analysis of peer group data and reflects that he is relatively new to the position and his prior executive experience and performance. Mr. Kelley’s base salary was established at the time of hire using Exequity’s analysis of peer group data. In addition to the November 2019 salary adjustments, Messrs. Merk and Pembroke received increases in their annual base salaries effective March 30, 2020 due to a concurrent increase in their responsibilities in connection with their promotions and the realignment of the Company’s businesses discussed above.

The following table reflects the annualized base salaries of our named executive officers for 2020 and 2019 (fiscal year end):

 

Named Executive Officer

  Base Salary
2020 ($)
(1)
   Base Salary
2019 ($)
  

Increase in Base

Salary (%)

Sundaram Nagarajan

   850,000   850,000  0.0

Joseph P. Kelley

   500,000            —   —

John J. Keane

   484,000   470,000  3.0

Gregory P. Merk

   470,000(2)   435,000  8.1

Jeffrey A. Pembroke

   470,000(3)   432,000  8.8

Gregory A. Thaxton

   500,000   485,000  3.1

(1)

Reflects base salaries set at the beginning of the fiscal year except for Mr. Kelley, whose base salary was established at the time of hire, and Messrs. Merk and Pembroke, who received additional mid-year salary adjustments.

(2)

Effective March 30, 2020, the Committee increased Mr. Merk’s base salary by $20,000 to $470,000 to reflect his promotion in connection with his expanded role and assumption of significant additional responsibilities.

(3)

Effective March 30, 2020, the Committee increased Mr. Pembroke’s base salary by $20,000 to $470,000 to reflect his promotion in connection with his expanded role and assumption of significant additional responsibilities.

 Annual Cash Incentive Program

Except for Joseph P. Kelley, the Committee established target payout opportunities, including threshold and maximum payout opportunities, for our named executive officers during the Committee’s November 25, 2019 meeting. These metrics considered Exequity’s analysis of our peer group’s annual incentive opportunities. Mr. Kelley’s target opportunity was established at the time of hire and used Exequity’s analysis of peer group data. Mr. Kelley’s Annual Cash Incentive Award target was prorated.

The Annual Cash Incentive targets (as a percentage of base salary) for Messrs. Merk and Pembroke each were increased by the Committee from 65% to 70% to encourage high-performance results in the realigned business structure and to deliver results in alignment with our shareholder interests. The increased bonus targets for Messrs. Merk and Pembroke were prorated. The previous target bonus began November 1, 2019 and was effective through April 30, 2020. The new target bonus became effective on May 1, 2020 and continued through the end of the fiscal year.

Nordson Corporation – 2021 Proxy Statement   |   63


The following table reflects the payout opportunities as a percentage of base salary:

    Incentive Amount as a
Percentage (%) of Base Salary

Named Executive Officer

  Threshold  Target  Maximum 

Sundaram Nagarajan

    50.0    100    200

Joseph P. Kelley

    37.5    75    150

John J. Keane

    35.0    70    140

Gregory P. Merk(1)

    32.5    70    130

Jeffrey A. Pembroke(1)

    32.5    70    130

Gregory A. Thaxton

    37.5    75    150

(1)

Effective May 1, 2020, each of Messrs. Merk’s and Pembroke’s Annual Cash Incentive target (as a percentage of base salary) increased from 65% to 70% each to reflect their promotions due to the realignment of the Company’s business structure.

The Committee established the following quantitative corporate financial performance measures and goals(1), which measures account for 50% of the Annual Cash Incentive Award payout:

Measure

  Threshold Target Maximum Weighting     

Diluted Earnings Per Share Growth

    0%   8%   20%   50%  

Return on Total Capital

    8.0%   11.5%   16%   50%  

(1)

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 the Chief Executive Officer:

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

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 2020 is material to an understanding of our 2020 executive compensation program as covered by this Proxy Statement.

Determination of Payout Amounts

Determination of the Annual Cash Incentive Award payout is a two-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 as described above, the Committee first certified performance and calculated payouts as a percentage of target for the corporate financial measure:

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

Currency Neutral — performance adjusted for the effect of currency fluctuation

64   |   Nordson Corporation – 2021 Proxy Statement


The results are reflected in the following table:

Measure

 

Target

Performance

 Performance at
Actual Currency
 

Payout at Actual
Currency

(% of Target)

 Performance at
Currency
Neutral
 Payout
Currency
Neutral (% of
Target)
   

Diluted Earnings Per Share Growth

  $6.25  $4.41   0.0(1)   $4.43   0.0(1)   

Return on Total Capital

   11.5%   10.4%   84.8   10.3%   82.4  

Combined Corporate Factor

         42.4      41.3   

(1)

The payout calculation for the diluted earnings per share growth measure at actual currency and currency neutral was 0.0% because performance did not meet the threshold of $5.79.

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

Operating Units’ Results

Currency Calculation Method

% of Target (Range)

Actual Currency

20 – 80

Currency Neutral

20 – 80

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

Next, 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)

 

    

Sundaram Nagarajan

    850,000    42.4    37.6   40.0  

Joseph P. Kelley

    375,000    42.4    37.6   40.0  

John J. Keane

    338,800    42.4    80.0   61.2  

Gregory P. Merk

    329,000    42.4    55.3(1)    49.7  

Jeffrey A. Pembroke

    329,000    42.4    34.8(2)    36.3  

Gregory A. Thaxton

    375,000    42.4    37.6   40.0  

(1)

In accordance with Mr. Merk’s promotion due to the realignment of the Company’s business structure, the operating unit factors utilized in the calculation of payout was 55.3% for November 1, 2019 to April 29, 2020, and 51.1% for May 1, 2020 to October 31, 2020.

(2)

In accordance with Mr. Pembroke’s promotion due to the realignment of the Company’s business structure, the operating unit factors utilized in the calculation of payout was 20.0% for November 1, 2019 to April 29, 2020, and 34.8% for May 1, 2020 to October 31, 2020.

Currency Neutral

Named Executive Officer

  

Target

Payout
Opportunity ($)

  

Corporate
Factor

(% of Target)

  

Operating Unit
Factor

(% of Target)

  

Combined

Factor

Payout

(% of Target)

 

    

Sundaram Nagarajan

    850,000    41.3    33.5    37.4  

Joseph P. Kelley

    375,000    41.3    33.5    37.4  

John J. Keane

    338,800    41.3    80.0    60.6  

Gregory P. Merk

    329,000    41.3    53.1    47.2  

Jeffrey A. Pembroke

    329,000    41.3    23.0    32.2  

Gregory A. Thaxton

    375,000    41.3    33.5    37.4  

Nordson Corporation – 2021 Proxy Statement   |   65


Under our currency adjustment policy, because the payout calculations at actual currency were less than ten percentage points lower than the payout calculations at currency neutral rates, the Committee determined that the currency adjustment policy did not apply.

Named Executive Officer

  Target Payout
Opportunity ($)
  

Combined Factor Payout
After Currency Adjustment
Policy

(% of Target)

 

Actual

Payout ($)(1)

  

    

Sundaram Nagarajan

  850,000  40.0  353,077  

Joseph P. Kelley

  375,000  40.0  49,038(2)  

John J. Keane

  338,800  61.2  215,113  

Gregory P. Merk

  329,000  49.7  154,291  

Jeffrey A. Pembroke

  329,000  36.3  112,901  

Gregory A. Thaxton

  375,000  40.0  129,652(3)  

(1)

Except for Mr. Kelley and Mr. Thaxton, the actual payout is slightly higher than the calculated formula (target payout opportunity x combined factor payout after currency adjustment policy) because an extra pay period occurred during fiscal year 2020 (27 pay periods versus 26). Thus, the actual payout was based on the actual salary paid rather than the target.

(2)

Amount reflects Mr. Kelley’s actual payout, which was based on his target payout opportunity, prorated from his hire date to the end of the fiscal year.

(3)

Amount reflects Mr. Thaxton’s actual payout, which was based on his target payout opportunity, prorated from the beginning of the fiscal year until his retirement on August 28, 2020.

No discretion was exercised to increase or decrease the formulaic incentive award payouts to the named executive officers.

 Long Term Incentive Awards

Performance Share Incentive Awards

Payout of 2018-2020 Performance Share Incentive Awards

During its November 20, 2017 meeting, the Committee established quantitative performance measures and goals for the 2018-2020 Performance Share Incentive Award. These measures are equally-weighted.

Measure

  Threshold  Target  Maximum     

Cumulative Diluted Earnings Per Share Growth

    2%    8%    14%  

Cumulative Revenue Growth

    2%    5%    8%  

Determination of Payout Amounts

Determination of the Performance Share Incentive Award payout is a two-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

66   |   Nordson Corporation – 2021 Proxy Statement


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)
     

Cumulative Diluted Earnings per Share Growth

   $17.81  $14.92   0%  $14.96   0%(1)  

Cumulative Revenue

   $6,842*  $6,558*   63.9%  $6,580*   66.4%  

Combined Factor

        32.5%     33.2%   

(1)

The payout calculation for cumulative diluted earnings per share growth measure at actual currency and currency neutral was 0.0% because performance did not meet the threshold of $15.86.

*

millions

In calculating the performance share results for 2018-2020, the Committee did not utilize the “as reported” diluted earnings per share for each respective year; rather, it utilized a more normalized effective tax rate in determining the diluted earnings per share for 2018-2020, which excluded the benefits to the Company as a result of the Act. The Committee determined this adjustment reflected more accurately the intent of the Committee when it set the three-year, cumulative performance standards during its November 2017 meeting, which was before the Act was enacted.

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

Under the currency adjustment policy, because the difference between the two payout percentage rates is equal to or less than +/- 10 percentage points, the final payouts for the 2018-2020 performance period are based on the calculation at actual currency rates, with no adjustments:

Named Executive Officer

  

Target Payout
Opportunity

(# of Shares)

  

Post-Currency
Adjustment Policy
Combined Factor
Payout

(% of Target)

   

Payout

(# of Shares)

       

Sundaram Nagarajan

   3,956   32.5    1,286  

Joseph P. Kelley(1)

            

John J. Keane

   3,100   32.5    1,008  

Gregory P. Merk

   2,250   32.5    731  

Jeffrey A. Pembroke

   2,050   32.5    666  

Gregory A. Thaxton

   3,100(2)   32.5    949  

(1)

Based on his hire date and the negotiated terms of his compensation, Mr. Kelley did not receive any performance share grants for the 2018-2020 performance period.

(2)

This reflects Mr. Thaxton’s annualized performance share grant opportunity. Actual payout was prorated from the beginning of the fiscal year until his retirement on August 28, 2020.

Other than utilizing a more normalized tax rate and excluding the financial benefits inured to the Company by the Act in calculating the diluted earnings per share for 2018-2020, no discretion was exercised by the Committee to increase or decrease the formulaic incentive award payouts to the named executive officers.

In-Progress Performance Share Incentive Awards

The following tables summarize the key elements and share payout opportunities for the named executive officers on a cumulative basis at threshold, target, and maximum performance for the 2019-2021 and 2020-2022 Performance Share Incentive Awards.

Nordson Corporation – 2021 Proxy Statement   |   67


2019-2021 Performance Share Incentive Award

During its November 19, 2018 meeting, the Compensation Committee established the following quantitative performance measures and goals for the 2019-2021 Performance Share Incentive Award. These measures were equally weighted:

Performance Measure

  Threshold   Target   Maximum       

Cumulative Diluted Earnings Per Share Growth

   2   8   14 

Cumulative Revenue Growth

   2   5   8 

Grant Date

  

Grant Date

Share
Price

  

Threshold
Payout

(# Shares)

  

Target
Payout

(# Shares)

  

Maximum
Payout

(# Shares)

  

Target Earned

Date

  Actual Payout

11/26/2018

  $124.90  3,600  7,200  14,400  October 31, 2021  Not determined

08/01/2019

(Nagarajan)(1)

  $138.53  2,784  5,567  11,134  October 31, 2021  Not determined

(1)

Mr. Nagarajan received a performance share grant upon his hire. Based on his hire date and the negotiated terms of his compensation, Mr. Kelley did not receive a performance share grant for the 2019-2021 performance period upon his hire on July 6, 2020.

2020-2022 Performance Share Incentive Award

During its November 25, 2019 meeting, the Compensation Committee established the following quantitative performance measures and goals for the 2020-2022 Performance Share Incentive Award. These measures were equally weighted:

Performance Measure

  Threshold   Target   Maximum 

Cumulative Diluted Earnings Per Share Growth

   2   8   14

Cumulative Revenue Growth

   2   5   8

However, during its November 23, 2020 meeting, the Committee modified the goals for the 2020-2022 performance period to realign management incentives in a post-pandemic environment and to create an incentive for management to perform in the coming years. As noted above, no such adjustments have been made to the goals for the 2018-2020 and 2019-2021 Performance Share Incentive Awards.

The revised performance metrics set by the Committee for the 2020-2022 performance period are described below:

Attainment for 2020 is based on relative total shareholder return, which was in the top quartile of our peers, and is capped at target. The Committee used a relative performance measure for 2020 to align our executives’ interest with those of our shareholders and to reward our executives for strong performance during a year of unprecedented challenges. The total shareholder performance is determined relative to the following indices: S&P 900 Machinery, Industrial Conglomerates, and Electrical Equipment (S&P 900 Selected) for 2020. In determining the 2020 goal, the Committee relied on actual 2020 performance rather than establishing a goal retroactively.

Performance metrics and attainment for 2021 and 2022 will be determined by the Committee, which will set financial goals for 2021 and 2022 at the beginning of each such fiscal year. The Committee believes that setting goals annually on a go-forward basis for this cycle will allow it to more accurately forecast longer term goals and assess the ongoing impact of the pandemic. Management continues to believe that establishing goals based on absolute financial metrics is important and creates a clear and linked incentive for management to focus their efforts during the ongoing recovery.

At the end of the three-year performance period, each year’s attainment will be averaged to determine the payout for the cycle.

68   |   Nordson Corporation – 2021 Proxy Statement


The following table summarizes the attainment of the relative total shareholder return metric for 2020 for the named executive officers at threshold and target for the 2020-2022 Performance Share Incentive Awards. As discussed above, attainment was capped at target.

Relative Performance

Payout

Nordson TSR performance at or above 50th percentile of the S&P 900 Selected peer group

100%

(capped)

Nordson TSR performance between the 25th and 50th percentile of the S&P 900 Selected peer group

25%

Nordson TSR performance at or below the 25th percentile of the S&P 900 Selected peer group

0%

Below are the share payout opportunities for the named executive officers on a cumulative basis at threshold, target, and maximum performance for the 2019-2021 and 2020-2022(1):

Grant Date

  

Grant Date

Share
Price

  

Threshold
Payout

(# Shares)

  

Target
Payout

(# Shares)

  

Maximum
Payout

(# Shares)

  

Target Earned

Date

  Actual Payout

11/25/2019

  $165.21  9,450  18,900  37,800  October 31, 2022  Not determined

03/30/2020

(Merk & Pembroke)

  $138.59  193  386  772  March 30, 2022  Not Determined

07/06/2020

(Kelley)

  $189.72  1,699  3,399  6,798  July 6, 2020  Not Determined

(1)

The table reflects the amount of performance shares granted on November 25, 2019 to the named executive officers other than Mr. Kelley, the amount of additional performance shares granted to Messrs. Merk and Pembroke on March 30, 2020 as result of their promotions and the business realignment, and the performance shares granted to Mr. Kelley on his hire date of July 6, 2020.

As a result of their promotions and the business realignment, the Committee awarded Messrs. Merk and Pembroke each additional performance shares to encourage high-performance results in the realigned business structure and to deliver results in alignment with our shareholder interests.

Nordson Corporation – 2021 Proxy Statement   |   69


Stock Options

Except for Joseph P. Kelley, we granted stock options to our executive officers on November 25, 2019, 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 Committee’s November meeting, which is scheduled at the same time this 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. We granted stock options to Mr. Kelley on his hire date, July 6, 2020. In connection with their promotions and the realignment of the Company’s businesses discussed above, the Committee awarded Messrs. Merk and Pembroke special promotional stock options on March 30, 2020 to encourage high-performance results in the realigned business structure and to deliver results in alignment with our shareholder interests.

The following table provides information regarding the stock options granted to our named executive officers for 2020:

Named Executive Officer

  Options Granted (#)   Grant Date
Fair Value ($)
  (1)
       

Sundaram Nagarajan

   41,800    1,628,219  

Joseph P. Kelley

   21,317    1,101,518  

John J. Keane

   11,900    463,536  

Gregory P. Merk(2)

   9,660    373,822  

Jeffrey A. Pembroke(2)

   9,660    373,822  

Gregory A. Thaxton

   11,900    463,536  

(1)

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

(2)

As discussed above, Messrs. Merk and Pembroke were each granted additional stock options upon their promotions and the realignment of the Company’s business structure. The table above reflects the amount of options granted on November 25, 2019 and the amount of promotional options granted on March 30, 2020 as result of the business realignment.

Restricted Shares

Except for Joseph P. Kelley, we granted restricted shares to executive officers on November 20, 2017.25, 2019. The share price on the grant date was the closing price on November 20, 201725, 2019$127.67. $165.21 for named executive officers. We granted restricted shares to Mr. Kelley on his hire date, July 6, 2020. The share price on Mr. Kelley’s grant date was the closing price on July 6, 2020 – $189.72. In connection with their promotions and the realignment of the Company’s businesses discussed above, the Committee awarded Messrs. Merk and Pembroke special promotional restricted stock grants on March 30, 2020 to encourage high performance results in the realigned business structure and to deliver results in alignment with our shareholder interests. The share price on Messrs. Merk and Pembroke’s grant date was the closing price on March 30, 2020 – $138.59.

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The following table provides information regarding the 2018 restricted share awards:awards granted to our named executive officers for 2020:

 

Named Executive Officer  

 

Restricted
Shares
Granted (#)

   Grant     
Date     
Value ($)     
   Restricted
Shares
Granted (#)
  Grant
Date
Value ($)

Michael F. Hilton

  

 

 

 

 

6,700    

 

 

 

  

 

 

 

 

855,389     

 

 

 

Sundaram Nagarajan

    4,700    776,487    

Joseph P. Kelley

    6,117(1)     1,160,517

John J. Keane

    1,340    221,381

Gregory P. Merk(2)

    1,096    178,515

Jeffrey A. Pembroke(2)

    1,096    178,515

Gregory A. Thaxton

  

 

 

 

 

1,600    

 

 

 

  

 

 

 

 

204,272     

 

 

 

    1,340    221,381

John J. Keane

  

 

 

 

 

1,600    

 

 

 

 

  

 

 

 

 

204,272     

 

 

 

Gregory P. Merk

  

 

 

 

 

1,200    

 

 

 

  

 

 

 

 

153,204     

 

 

 

Jeffrey A. Pembroke

  

 

 

 

 

1,000    

 

 

 

 

  

 

 

 

 

127,670     

 

 

 

 

(1)

Nordson Corporation – 2019 Proxy StatementThe restricted shares granted to Mr. Kelley reflect his negotiated compensation and were made, in part, to replace equity forfeited related to his prior position.

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(2)

As discussed above, Messrs. Merk and Pembroke were each granted additional restricted shares upon the realignment of the Company’s business structure. The table above reflects the amount of restricted shares granted on November 25, 2019 and the amount of restricted shares granted on March 30, 2020 as a result of the business realignment.


PART IV: OTHER COMPONENTS OF OUR EXECUTIVE COMPENSATION PROGRAMOther 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 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 reimbursereimbursed Mr. HiltonNagarajan for one private business club membership 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 certain key 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.

 

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Welfare and Retirement Benefits

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

 

Qualified Defined Contribution 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 tomay 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 Code 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.

 

•  Additionally, pursuant to the employment agreement that was negotiated at the time he was hired as CEO, Mr. Nagarajan is entitled to an individual nonqualified pension benefit (the “Supplemental Individual Pension Benefit”), which will make up for benefits that he may forfeit under our tax-qualified defined benefit pension plan if his employment terminates prior to vesting under the pension plan in certain circumstances. In particular, the Supplemental Individual Pension Benefit will treat Mr. Nagarajan as if he were fully vested in our tax-qualified defined benefit pension plan, solely in the event of his death, disability, involuntary termination without cause or termination for good reason (whether or not in connection with an change in control of Nordson), prior to becoming 100% vested under the pension plan. Mr. Kelley is not entitled to the Supplemental Individual Pension Benefit.

 

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2020 Retirement Actions Taken

Gregory A. Thaxton, who most recently served as our Chief Financial Officer until July 6, 2020, retired from the Company on August 28, 2020 after 30 years at Nordson. In recognition of his long and outstanding service to the Company, and in considering his employment for 10 months of fiscal year 2020, the Compensation Committee decided to waive the forfeiture of Mr. Thaxton’s restricted share and stock option grants made in November 2019.

Severance Agreements

Mr. HiltonNagarajan is the only executive officer for whichwhom 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, weWe have agreed to provide Mr. HiltonNagarajan with a cash severance and other benefits in the event his employment is terminated by us without “Cause” or Mr. Hiltonhe terminates his employment with us for “Good Reason” (each such term as defined in Mr. Hilton’sthe his employment agreement).

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

 

an amounta lump sum cash payment 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;

 

Nordson Corporation – 2019 Proxy Statement

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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. HiltonNagarajan 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;

 

continuation of vesting for stock options in accordance with the normal vesting schedule;

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.termination; and

immediate vesting of Mr. Nagarajan’s benefits under the Supplemental Individual Pension Benefit, if the triggering event occurs within the first five years of his employment.

We will notgross-up any tax imposed upon any payment received by Mr. HiltonNagarajan 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, including the agreement executed with Joseph P. Kelley, 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.

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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, sincebecause 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 cash 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, life insurance, accidental death and dismemberment, pension, disability and tax and financial planning plans for the lesser of 24 months following termination of employment or until the date he or she becomes covered under similar benefit plans;

 

professional outplacement services; and

 

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.

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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 historically has provided for full vesting of all outstanding share-based Awardsawards upon achange-in-control. However, effective for awards granted under that plan after December 27, 2017, equity awards generally will vest on a “double-trigger” basis, in the event of achange-in-control and a qualifying termination of the participant’s employment.

Additional Compensation Policies

Executive Share Ownership

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:

 

Nordson Corporation – 2019 Proxy Statement

  Chief Executive Officer
  |  555 times base salary
  President (other than the Chief Executive Officer)3 times base salary
  Chief Financial Officer3 times base salary
  Other Executive Officers2 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.

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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 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, 2020, except for Sundaram Nagarajan and Joseph P. Kelley, all named executive officers met or exceeded their respective ownership guidelines. Messrs. Nagarajan and Kelley each have five years from their appointments in which to achieve their share ownership requirements. Actual share ownership of our named executive officers is shown in the table below:

Named Executive Officer

  Ownership
Requirement as a
Multiple of Salary
  

Ownership
Requirement

($)

   

Current Share
Ownership

Market Value  ($)(1)

  

    

 

Sundaram Nagarajan

  5   4,250,000    1,386,313  

Joseph P. Kelley

  3   1,500,000    1,183,211  

John J. Keane

  2   968,000    9,321,843  

Gregory P. Merk

  2   940,000    10,904,170  

Jeffrey A. Pembroke

  2   940,000    3,465,298  

Gregory A. Thaxton(2)

  3   1,500,000    7,790,659  

(1)

Market Value was calculated by multiplying the closing price of our common shares on October 30, 2020 – $193.43 per share – by the total number of shares owned (owned outright, owned indirectly, owned jointly, vested deferred share equivalent units, and unvested restricted share units).

(2)

Calculated as of the date of his retirement, August 28, 2020.

PART V: POLICIES RELATED TO EXECUTIVE COMPENSATIONAnti-Pledging/Anti-Hedging Policy

We prohibit directors and executive officers from pledging Nordson common shares as collateral. Also prohibited are 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. At this time, we do not prohibit other employees from hedging Nordson common shares or pledging Nordson common shares as collateral.

Tax and Accounting Treatment

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 million on the amount we can deduct for compensation paid to our “covered employees”. Historically, compensation meeting the requirements of “qualified performance-based compensation” under Section 162(m) did not count toward the $1 million limit. However, the Tax Cuts and Jobs Act, which was enacted on December 22, 2017 (the “Act”), made a number of changes 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 the expansion of the definition of “covered employees” (for example, by including both the chief financial officer and certain former named executive officers as covered employees).

As a result of these changes, except as otherwise provided in the transition relief provisions of the Act, compensation paid to any of our covered employees generally will not be deductible to the extent it exceeds $1,000,000 in the applicable taxable year. Moreover, due to uncertainties regarding the scope of transition relief

Nordson Corporation – 2021 Proxy Statement   |   75


under the 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, as has historically been the case, the Committee retains full discretion to construct compensation packages that will best attract, retain, and reward successful executive officers, even if that compensation is not deductible under Section 162(m). 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.

Equity AwardGrant Policy

We grant equity on a consistent schedule, generally at the first Committee meeting following the end 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. Hiltonthe Chief Executive Officer to grant equity awards, excluding awards made to executive officers. Equity awards granted by Mr. Hiltonthe Chief Executive Officer 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:76   |   Nordson Corporation – 2021 Proxy Statement

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

56  |Nordson Corporation – 2019 Proxy Statement


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, 2018, all named executive officers, except 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 are 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.

Tax 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 million on the amount we can deduct for compensation paid to our “covered employees”. Historically, compensation meeting the requirements of “qualified performance-based compensation” under Section 162(m) did not count toward the $1 million limit. However, the Tax Cuts and Jobs Act, which was enacted on December 22, 2017, made a number of changes 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 the expansion of the definition of “covered employees” (for example, by including both the chief financial officer and certain former named executive officers as covered employees).

Our general philosophy has 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. Historically, 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. However, 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 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. Moreover, given the nature of the changes to Section 162(m) under 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 program will decrease.

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COMPENSATION COMMITTEE REPORT

We have reviewed and discussed with management the Executive 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 Executive Compensation Discussion and Analysis be included in the Company’s definitive Proxy Statement on Schedule 14A and incorporated by reference into the Company’s 20182020 Annual Report, each as filed with the SEC.

Compensation Committee,

Mary G. Puma,Victor L. Richey, Jr., Chair

Lee C. Banks

Michael J. Merriman, Jr.

Victor L. Richey, Jr.Mary G. Puma

January 18, 201922, 2021

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“Executive 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 pay 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.

 

Nordson Corporation – 2019

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SUMMARY COMPENSATION FOR FISCAL YEAR 20182020

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, 2018.2020. The individual components of the compensation reflected in the Summary Compensation Table (“SCT”) for 20182020 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.

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 2018-2020, 2017-2019,2020-2022, 2019-2021, and 2016-20182018-2020 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 2018, 2017,2020, 2019, and 2016.2018. Details about the performance share incentive awards made during 20182020 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 grant date fair value at 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 2018 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 each 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.

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 2020 are included in the narrative accompanying the “Grants of Plan-Based Awards” table.

 

60  | Nordson Corporation – 2019

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 the Executive Compensation Discussion and Analysis section of this Proxy Statement under the caption “Elements of Compensation.”

Change in Pension Value and Non-Qualified Deferred Compensation Earnings.    The amounts disclosed in the “Change in Pension Value and Non-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 and non-qualified excess defined benefit pension plan. We do not pay above-market or preferential rates on the non-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 each named executive officer’s perquisites, our matching contributions to the qualified deferred compensation 401(k) plan and non-qualified deferred compensation plan and other noted payments.

Nordson Corporation – 2021 Proxy Statement   |   79


Summary Compensation Table For Fiscal Year 2020

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 compensatednamed executive officers for 2018.2020.

 

  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 $

 

 

  Michael F. Hilton

  2018   925,000      2,509,619   1,942,599   1,082,250   454,746   82,876   6,997,090 

  President and Chief

  2017 �� 875,000      2,347,868   1,829,045   1,103,375   505,485   87,542   6,748,315 

  Executive Officer

 

  

 

2016

 

 

 

  

 

850,000

 

 

 

  

 

 

 

 

  

 

1,897,868

 

 

 

  

 

1,416,040

 

 

 

  

 

1,380,400

 

 

 

  

 

775,637

 

 

 

  

 

108,904

 

 

 

  

 

6,428,849

 

 

 

  Gregory A. Thaxton

  2018   470,000      586,967   435,170   384,930   47,260   37,854   1,962,181 

  Executive Vice President,

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

  Chief Financial Officer

 

  

 

2016

 

 

 

  

 

435,000

 

 

 

  

 

 

 

 

  

 

495,096

 

 

 

  

 

334,559

 

 

 

  

 

494,508

 

 

 

  

 

618,576

 

 

 

  

 

41,600

 

 

 

  

 

2,419,339

 

 

 

  John J. Keane

  2018   455,000      586,967   435,170   339,203      32,662   1,848,855 

  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

          
                                     

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

$

Sundaram Nagarajan

President and Chief

Executive Officer

   2020   882,692      2,092,522   1,628,219   353,077   290,917   103,048   5,350,475
   2019   212,500      788,621      212,500   69,136   241,066   1,523,823
   2018                        

Joseph P. Kelley

Executive Vice

President and Chief

Financial Officer

 

  

 

 

 

2020

 

  

 

163,462

  

 

  

 

1,786,069

(7)

 
  

 

1,101,518

  

 

49,038

  

 

  

 

  

 

3,100,087

  

 

2019

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

  

 

 

2018

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

  

 

 

 

 

John J. Keane

Executive Vice

President

   2020   502,131      595,412   463,536   215,113   784,136   26,024   2,586,352
   2019   470,000      547,710   389,017   285,572   1,452,191   47,895   3,192,385
   2018   455,000      586,967   435,170   339,203      32,662   1,849,002

Gregory P. Merk

Executive Vice

President

   2020   478,712      481,246   373,822   154,291   969,383   23,420   2,480,874
   2019   435,000      401,654   292,594   230,724   1,134,926   27,522   2,522,420
   2018   420,000      430,967   313,322   337,428      24,764   1,526,481

Jeffrey A. Pembroke

Executive Vice

President

   2020   478,608      481,246   373,822   112,901   465,128   30,606   1,942,311
   2019   432,000      365,140   275,969   211,162   728,979   36,554   2,049,804
   2018   415,000      380,743   292,434   389,789   37,374   38,794   1,554,134

Gregory A. Thaxton

Former Executive Vice

President and Chief

Financial Officer

 

  

 

 

 

2020

 

   432,173      595,412   463,536   129,652      86,041   1,706,814
   2019   485,000      547,710   392,342   260,081   1,679,874   50,994   3,416,001
   2018   470,000      586,967   435,170   384,930   47,260   37,854   1,962,181

 

(1)

The respective salary earned for each officer in fiscal year 2020 is higher than the base amount because an extra pay period occurred (27 pay periods versus 26) during fiscal year 2020. This column also 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 20182020 are discussed in Note 14 Stock-based Compensation in the “Notes to Consolidated Financial Statements” section of our Form10-K for 2018.2020.

 

Named Executive Officer

  

Fiscal
Year

 

  

Maximum
Payout (# of Units)

 

  

 Maximum     

 Grant Date Fair     

 Value Payout     

 

  Fiscal
Year
  Maximum
Payout
(# Units)
  Maximum
Grant Date Fair
Value Payout
($)

Michael F. Hilton

  2018  26,800  $3,308,460    

Sundaram Nagarajan

   2020   19,000   2,632,070
   2019   11,134   1,577,242
    2018        

Joseph P. Kelley

   2020   6,798   1,251,104
   2019        
    2018        

John J. Keane

   2020   5,400   748,062
   2019   6,000   720,720
    2018    6,200    765,390

Gregory P. Merk

   2020   4,386   605,462
   2019   4,400   528,528
    2018    4,500    555,525

Jeff Pembroke

   2020   4,386   605,462
   2019   4,000   480,480
  2017  29,800  $3,091,750        2018    4,100    506,145
  2016

 

  36,800

 

  $2,490,992    

 

Gregory A. Thaxton

  2018    6,200  $   765,390       2020   5,400   748,062
  2017    7,200  $   747,000       2019   6,000   720,720
  2016

 

    9,600

 

  $   649,824    

 

    2018    6,200    765,390

John J. Keane

  2018    6,200  $   765,390    
  2017    7,200  $   747,000    
  2016

 

    9,600

 

  $   649,824    

 

Gregory P. Merk

  2018    4,500  $   555,525    
  2017    5,400  $   560,250    
  2016

 

    6,800

 

  $   460,292    

 

Jeffrey A. Pembroke

  2018    4,100  $   506,145    
         

 

80   |   Nordson Corporation – 2021 Proxy Statement


(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.

 

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, 2020:

Fiscal Year

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

2020

   83,200  $169.70   6.3   1.16%   0.2453   1.68%

2020(i)

   1,720  $138.59   6.3   0.92%   0.2921   0.50%

2020(ii)

   21,317  $189.72   6.3   0.87%   0.3050   0.44%

2019

   92,000  $124.90   6.2   1.04%   0.2414   2.95%

2018

   98,200  $127.67   6.2   0.97%   0.2670   2.20%

(i)

On March 30, 2020, the Company awarded 860 stock options each to Messrs. Merk and Pembroke as part of the business realignment discussed above.

(ii)

Nordson Corporation – 2019 Proxy StatementThe Company awarded Mr. Kelley 21,317 stock options on his hire date, July 6, 2020, as part of his negotiated compensation.

  |  61

The assumptions listed above differ slightly from those presented in Note 14 Stock-based Compensation in the “Notes to Consolidated Financial Statements” section of our Form 10-K for 2020. The assumptions in Note 14 represent awards to all executive officers and key employees and grant dates during each year.


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, 2018:

 

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

 

  2014

 

   76,000

 

 $  71.75

 

 6.1

 

 1.03%

 

 0.4419

 

 1.78%

 

 

  2015

 

   85,900

 

 $  79.66

 

 6.1

 

 1.10%

 

 0.3919

 

 1.84%

 

 

  2016

 

 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 14 Stock-based Compensation in the “Notes to Consolidated Financial Statements” section of our Form10-K for 2018. The assumptions in Note 14 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 2018 and the “Outstanding Equity Awards” table for information with respect to the stock options awarded prior to 2018.

See the “Grants of Plan-Based Awards” table for information with respect to the stock options awarded in 2020 and the “Outstanding Equity Awards” table for information with respect to the stock options awarded prior to 2020.

 

(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 6 Retirement, Pension and other Post-retirement Plans in the “Notes to Consolidated Financial Statements” section of our Form10-K for 2018.2020.

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

The following table provides further details to the increases by plan for 2020:

 

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

    

 

37,095

 

 

  

 

417,651

 

 

Sundaram Nagarajan

    63,847  227,070

Joseph P. Kelley(i)

      

John J. Keane

    195,942  588,194

Gregory P. Merk

    82,916  886,467

Jeffrey A. Pembroke

    126,177  338,951

Gregory A. Thaxton

    

 

(45,626

 

)

 

  

 

  92,886

 

 

    151,966  508,045

John J. Keane

    

 

(35,831

 

)

 

  

 

  35,684

 

 

Gregory P. Merk

    

 

(2,794

 

)

 

  

 

(129,449

 

)

 

Jeffrey A. Pembroke

    

 

(18,955

 

)

 

  

 

  56,329

 

 

 

(i)

No pension benefits are listed for Mr. Kelley because he has not met the 5-year service requirement for vesting and is therefore not vested in the pension.

Nordson Corporation – 2021 Proxy Statement   |   81


(6)

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

 

Named Executive OfficerTotal
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)
 

Relocation

Expenses

($)

 

Tax
Gross-Up

Related to

Relocation
Expenses

($)

 

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

 

 

9,800

 

 

 

 

49,927

 

 

 

 

18,419

 

 

 

 

4,730

 

 

 

 

82,876

 

 

Sundaram Nagarajan

  9,403  332  64,269  19,044    10,000  103,048

Joseph P. Kelley

              

John J. Keane

        24,492  1,532    26,024

Gregory P. Merk

        22,285  1,135    23,420

Jeffrey A. Pembroke

  2,500      17,118  987  10,000  30,606

Gregory A. Thaxton

 

 

6,637

 

 

 

 

21,628

 

 

 

 

  4,500

 

 

 

 

5,089

 

 

 

 

37,854

 

 

  7,396      26,148  6,542  10,000  86,041

John J. Keane

 

 

6,681

 

 

 

 

21,481

 

 

 

 

  4,500

 

 

 

 

      —

 

 

 

 

32,662

 

 

Gregory P. Merk

 

 

  875

 

 

 

 

20,554

 

 

 

 

  3,335

 

 

 

 

      —

 

 

 

 

24,764

 

 

Jeffrey A. Pembroke

 

 

4,518

 

 

 

 

16,951

 

 

 

 

  2,325

 

 

 

 

15,000

 

 

 

 

38,794

 

 

 

 (a)

Total perquisites for 2018:2020:

 

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

Total
 Perquisites 

($)

  Financial
Planning
($)
  Business
and Airline
Club Dues
($)
  Executive
Physicals
($)
 

Total
    Perquisites    

($)

Michael F. Hilton

 

 

5,000

 

 

 

 

4,800

 

 

 

 

 

 

 

 

9,800

 

 

Sundaram Nagarajan

    5,000        4,403  9,403

Joseph P. Kelley

              

John J. Keane

              

Gregory P. Merk

              

Jeffrey A. Pembroke

    2,500          2,500

Gregory A. Thaxton

 

 

4,000

 

 

 

 

1,250

 

 

 

 

1,387

 

 

 

 

6,637

 

 

    4,900    550    1,946  7,396

John J. Keane

 

 

4,300

 

 

 

 

 

 

 

 

2,381

 

 

 

 

6,681

 

 

Gregory P. Merk

 

 

875

 

 

 

 

 

 

 

 

 

 

 

 

875

 

 

Jeffrey A. Pembroke

 

 

2,400

 

 

 

 

 

 

 

 

2,118

 

 

 

 

4,518

 

 

 

(7)
62  |Nordson Corporation – 2019 Proxy Statement

The restricted shares granted to Mr. Kelley reflect his negotiated compensation and were made, in part, to replace equity that was forfeited related to his prior position.

82   |   Nordson Corporation – 2021 Proxy Statement


GRANTS OF PLAN-BASED AWARDS

We granted the following awards to our executive officers in 2018:2020:

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 – 2019 Proxy Statement

 |  63

Annual Cash Incentive Awards The 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 the pre-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 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 a one-for-one basis or share equivalent units on a one-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 generally on a pro-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 and tax-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 an award-by-award basis is set forth in the table below. These awards are referred to in the following table as “Options.”

Nordson Corporation – 2021 Proxy Statement   |   83


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 2018.2020.

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)

($)

    

 

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

 

 

Threshold

($)

 

 

Target

($)

 

 

Maximum

($)

 

 

Threshold

(#)

 

 

Target

(#)

 

 

Maximum

(#)

 

  Plan Grant
Date
 

Threshold

($)

 

Target

($)

 

Maximum

($)

 

Threshold

(#)

 

Target

(#)

 

Maximum

(#)

 

Hilton

 ACIA 11/20/2017  462,500  925,000  1,850,000                      

Nagarajan

 ACIA 11/25/2019  425,000  850,000  1,700,000                      
 PSIA 11/25/2019           4,750  9,500  19,000           1,316,035 
 RS 11/25/2019                    4,700        776,487 
 Options  11/25/2019                        41,800  $165.21   1,628,219 

Kelley

 ACIA 07/06/2020  187,500  375,000  750,000                      
 PSIA 07/06/2020           1,700  3,399  6,798           625,552 
 RS 07/06/2020                    6,117        1,160,517 
 Options  07/06/2020                        21,317  $189.72   1,101,518 

Keane

 ACIA 11/25/2019  169,400  338,800  677,600                      
 PSIA 11/25/2019           1,350  2,700  5,400           374,031 
 RS 11/25/2019                    1,340        221,381 
 Options  11/25/2019                        11,900  $165.21   463,536 

Merk

 ACIA 11/25/2019  164,500  329,000  658,000                      
 PSIA 11/25/2019           1,000  2,000  4,000           277,060 
  03/30/2020           97  193  386           25,671 
 RS 11/25/2019                    1,000        165,210 
  03/30/2020                    96        13,305 
 Options 11/25/2019                       8,800  $165.21  342,783 
   03/30/2020                        860  $138.59   31,039 

Pembroke

 ACIA 11/25/2019  164,500  329,000  658,000                      
 PSIA 11/25/2019           1,000  2,000  4,000           277,060 
  03/30/2020           97  193  386           25,671 
 RS 11/25/2019                    1,000        165,210 
  03/30/2020                    96        13,305 
 PSIA 11/20/2017           6,700  13,400  26,800           1,654,230  Options 11/25/2019                       8,800  $165.21  342,783 
 RS 11/20/2017                    6,700        855,389    03/30/2020                        860  $138.59   31,039 
 Options 11/20/2017                       55,800  $127.67  1,942,599 

Thaxton

 ACIA 11/20/2017  164,500  329,000  658,000                       ACIA 11/25/2019  187,500  375,000  750,000                      
 PSIA 11/20/2017           1,550  3,100  6,200           382,695  PSIA 11/25/2019           1,350  2,700  5,400           374,031 
 RS 11/20/2017                    1,600        204,272  RS 11/25/2019                    1,340        221,381 
 Options 11/20/2017                       12,500  $127.67  435,170  Options  11/25/2019                        11,900  $165.21   463,536 

Keane

 ACIA 11/20/2017  159,250  318,500  637,000                      
 PSIA 11/20/2017           1,550  3,100  6,200           382,695 
 RS 11/20/2017                    1,600        204,272 
 Options 11/20/2017                       12,500  $127.67  435,170 

Merk

 ACIA 11/20/2017  136,500  273,000  546,000                      
 PSIA 11/20/2017           1,125  2,250  4,500           277,763 
 RS 11/20/2017                    1,200        153,204 
 Options 11/20/2017                       9,000  $127.67  313,322 

Pembroke

 ACIA 11/20/2017  134,875  269,750  539,500                      
 PSIA 11/20/2017           1,025  2,050  4,100           253,073 
 RS 11/20/2017                    1,000        127,670 

 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 Executive Compensation Discussion and Analysis section of this Proxy Statement under the caption “Key Components“Elements of Our Executive Compensation Program.Compensation.

 

(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 Executive Compensation Discussion and Analysis section of this Proxy Statement under the caption “Key Components“Elements of Our Executive Compensation Program.Compensation.” 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.

 

84   |   Nordson Corporation – 2021 Proxy Statement


  

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

 

 a.

Expected Volatility: 0.2670.0.2580.

 

 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: 2.20%1,41%.

 

 c.

Dividend Yield: 0.97%1.10% based on the historical dividend yield.

 

 d.

Expected Life: 6.26.3 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 – 2019 Proxy Statement

Nordson Corporation – 2021 Proxy Statement   |   85


OUTSTANDING EQUITY AWARDS AT OCTOBER 31, 20182020

The following narrative, table, and footnotes describe equity awards to our named executive officers under our Amended and Restated 2012 Nordson Corporation Stock Incentive and Award Plan that were outstanding as of the end of 2018:2020:

2017-2019 Performance Share Incentive Awards (disclosed as “2017 PSIA” awards in the “Stock Awards” columns).The 2017-2019 performance period began November 1, 2016 and concludes October 31, 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.

2018-2020 Performance Share Incentive Awards (disclosed as “2018 PSIA” awards in the “Stock Awards” columns).The 2018-2020 performance period began November 1, 2017 and concludes October 31, 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, 2018.

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

 

Nordson Corporation – 2019 Proxy Statement

 |  65

2019-2021 Performance Share Incentive Awards (disclosed as “2019 PSIA” awards in the “Stock Awards” columns).The 2019-2021 performance period began November 1, 2018 and concludes October 31, 2021. Settlement of these awards will be in the form of unrestricted Nordson common shares on a one-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.

2020-2022 Performance Share Incentive Awards (disclosed as “2020 PSIA” awards in the “Stock Awards” columns).The 2020-2022 performance period began November 1, 2019 and concludes October 31, 2022. Settlement of these awards will be in the form of unrestricted Nordson common shares on a one-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, 2020.

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

86   |   Nordson Corporation – 2021 Proxy Statement


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, 2018.2020. Dates noted below the names of the named executive officers represent award dates for stock options and restricted shares.

 

 Option Awards Stock Awards  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 
Named Executive Officer 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)(4)
(#)

 

Equity

Incentive
Plan

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

 

Sundaram Nagarajan

        

2019 PSIA

                   2,784  538,412 

2020 PSIA

                   2,375  459,396 

Restricted Shares:

                 

23-Nov-2015

              3,068   376,352       

25-Nov-2019

             4,700  909,121       

Stock Options:

        

25-Nov-2019

     41,800   138.59   25-Nov-2029             

Joseph P. Kelley

        

2019 PSIA

                        

2020 PSIA

                   850  164,367 

Restricted Shares:

                        

06-Jul-2020

             6,117  1,183,211       

Stock Options:

                        

06-Jul-2020

     21,317   189.72   06-Jul-2030             

John J. Keane

        

2019 PSIA

                   1,500  290,145 

2020 PSIA

                   675  130,565 

Restricted Shares:

        

20-Nov-2017

             534  103,292       

26-Nov-2018

             1,000  193,430       

25-Nov-2019

             1,340  259,196       

Stock Options:

        

21-Nov-2016

              4,967   609,302        10,500  3,500  107.65  21-Nov-2026             

20-Nov-2017

              6,700   821,889        6,250  6,250  127.67  20-Nov-2027             

26-Nov-2018

 2,925  8,775  124.90  26-Nov-2028             

25-Nov-2019

     11,900   138.59   25-Nov-2029             

Gregory P. Merk

        

2019 PSIA

                   1,100  212,773 

2020 PSIA

                   548  106,048 

Restricted Shares:

        

20-Nov-2017

             400  77,372       

26-Nov-2018

             734  141,978       

28-Feb-2019

             6,408  1,239,499       

25-Nov-2019

             1,000  193,430       

30-Mar-2020

             96  18,569       

Stock Options:

                 

28-Nov-2012

  43,000      61.59   28-Nov-2022              7,600     61.59  28-Nov-2022             

25-Nov-2013

  42,700      71.75   25-Nov-2023              7,600     71.75  25-Nov-2023             

24-Nov-2014

  36,825   12,275   79.66   24-Nov-2024              8,300     79.66  24-Nov-2024             

23-Nov-2015

  36,400   36,400   70.91   23-Nov-2025              13,400     70.91  23-Nov-2025             

21-Nov-2016

  15,100   45,300   107.65   21-Nov-2026              7,500  2,500  107.65  21-Nov-2026             

20-Nov-2017

     55,800   127.67   20-Nov-2027              4,500  4,500  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             

26-Nov-2018

 2,200  6,600  124.90  26-Nov-2028             

25-Nov-2019

    8,800  138.59  25-Nov-2029             

30-Mar-2020

     860   165.21   30-Mar-2030             

 

66  |Nordson Corporation – 2019 Proxy Statement

Nordson Corporation – 2021 Proxy Statement   |   87


 Option Awards Stock Awards  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 
Named Executive Officer 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)(4)
(#)

 

Equity

Incentive
Plan

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

 

Jeffrey A. Pembroke

        

2019 PSIA

                   1,000  193,430 

2020 PSIA

                   548  106,048 

Restricted Shares:

                 

23-Nov-2015

              568   69,677       

21-Nov-2016

              900   110,403       

20-Nov-2017

              1,200   147,204                    334  64,606       

26-Nov-2018

             600  116,058       

28-Feb-2019

             6,408  1,239,499       

25-Nov-2019

             1,000  193,430       

30-Mar-2020

             96  18,569       

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              3,800     79.66  24-Nov-2024             

23-Nov-2015

  6,700   6,700   70.91   23-Nov-2025              3,200     70.91  23-Nov-2025             

21-Nov-2016

  2,500   7,500   107.65   21-Nov-2026              4,875  1,625  107.65  21-Nov-2026             

20-Nov-2017

     9,000   127.67   20-Nov-2027              4,200  4,200  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       

26-Nov-2018

 2,075  6,225  124.90  26-Nov-2028             

25-Nov-2019

    8,800  138.59  25-Nov-2029             

30-Mar-2020

     860   165.21   30-Mar-2030             

Gregory A. Thaxton

        

2019 PSIA

                   1,500  290,145 

2020 PSIA

                   186(5)  35,978 

Stock Options:

        

21-Nov-2016

              560   68,695        10,500  3,500  107.65  21-Nov-2026             

20-Nov-2017

              1,000   122,670        6,250  6,250  127.67  20-Nov-2027             

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             

26-Nov-2018

 2,950  8,850  124.90  26-Nov-2028             

25-Nov-2019

     11,900   138.59   25-Nov-2029             

 

(1)

Amounts in these columns represent outstanding vested and unvested stock options awarded from December 3, 2009November 28, 2012 to October 31, 2018.2020. 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, 2018,2020, none of the options awarded during 20182020 had vested.

 

(2)

Amounts in these columns represent restricted share awards that have not vested as of October 31, 2018.2020. Restricted shares vest in three equal annual installments, commencing one year after date of grant.grant, except for the restricted shares awarded on February 28, 2019 to Messrs. Merk and Pembroke, which will fully vest after two years on February 28, 2021. Market Value was calculated by multiplying the closing price of our common shares on October 31, 201830, 2020$122.67$193.43 per share – by the number of unvested shares.

 

(3)

This column reflects performance share units awarded in 20172019 and 2018.2020. Payouts in unrestricted shares are conditioned upon performance during three-year cycles ending on October 31, 20192021 and October 31, 2020,2022, respectively, and will be determined following the Compensation Committee’s certification of performance at the close of the respective performance period.

 

(4)

The 2017-20192019-2021 and 2018-20202020-2022 performance period awards are shown at maximumthreshold payout since the targetbecause 2020 actual performance level would be exceeded based on performance to date.was at threshold. Market value was calculated by multiplying the closing price of our common shares on October 31, 201830, 2020$122.67$193.43 per share – by the maximumtarget number of performance share units.

 

(5)

Nordson Corporation – 2019 Proxy StatementThis reflects Mr. Thaxton’s annualized performance share grant opportunity at threshold based on the prorated target opportunity from the beginning of the fiscal year until his retirement on August 28, 2020.

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88   |   Nordson Corporation – 2021 Proxy Statement


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              2018-2020
        PSIA Payout        
    
Stock Option2016-2018
          PSIA  Payout          
Named Executive OfficerNumber of
Shares
Acquired on
Exercise
(#)
Value
Realized
on Exercise
($)
Number of
Shares
Earned
(#)

Value
Realized

($) (1)

  Number of
Shares
Acquired on
Exercise
(#)
   Value
Realized
on
Exercise
($)
     Number of
Shares
Earned
(#)
   

Value
    Realized    

($)(1)

 

Michael F. Hilton

 105,000$9,883,940 34,095 3,844,552  

Sundaram Nagarajan

            1,286    256,287  

Joseph P. Kelley

                  

John J. Keane

   41,200    4,493,717     1,008    200,884  

Gregory P. Merk

   5,000    679,875     731    145,681  

Jeffrey A. Pembroke

   4,000    511,160     666    132,727  

Gregory A. Thaxton

 7,475$1,002,472 8,894 1,002,887     64,400    7,689,693     949    189,126  

John J. Keane

   8,894 1,002,887  

Gregory P. Merk

 12,200$1,497,794 6,300 710,388  

Jeffrey A. Pembroke

   3,335 376,055  

 

(1)

Settlement of performance share units occurred on January 3, 2019.5, 2021. The closing price of our common shares was $112.76$199.29 on January 3, 2019.5, 2021. Mr. MerkNagarajan deferred 1,2601,157 shares having a settlement date value of$142,078.of $230,579. Mr. Merk deferred 146 shares having a settlement date value of$29,096. Mr. Pembroke deferred 599 shares having a settlement date value of $119,375.

 

  Restricted Shares
(Vested on 11/30/17)
(1)
      Restricted Shares
(Vested on 11/30/18)
(2)
      Restricted Shares
(Vested on 11/30/19)
(3)
 
Restricted
Shares
(Vested 11/24/17) (1)
Restricted
Shares
(Vested 11/23/17) (2)
Restricted
Shares
(Vested 11/30/17) (3)
Named Executive OfficerNumber 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)

  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

($)(4)(c)

 

Michael F. Hilton

 2,500$315,663 3,066$393,352 2,483$318,718

Sundaram Nagarajan

                          

Joseph P. Kelley

                          

John J. Keane

   600    76,980     534    64,299     500    82,915 

Gregory P. Merk

   450    57,735     400    48,164     366    60,694 

Jeffrey A. Pembroke

   280    35,924     334    40,217     334    55,387 

Gregory A. Thaxton

 600$75,759 800$102,636 600$77,016   600    76,980     489    58,880     583    96,679 

John J. Keane

 600$75,759 800$102,636 600$77,016

Gregory P. Merk

 468$59,092 566$72,615 450$57,762

Jeffrey A. Pembroke

   300$38,489 280$35,941

 

(1)

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.

 

(2)

These restricted shares were awarded November 20, 2017.

(3)

These restricted shares were awarded on November 26, 2018.

(4)

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

 

 (a)

November 24,29, 2017 ($126.27128.36 per share); and.

 

 (b)

November 22, 201729, 2018 ($128.30120.41 per share).

 

(5)(c)

Value realized was calculated by multiplying closing price of our common shares on November 30, 201729, 2019 ($128.36165.83 per share) by the number of shares that vested..

 

68  |Nordson Corporation – 2019 Proxy Statement

Nordson Corporation – 2021 Proxy Statement   |   89


PENSION BENEFITS

The following narrative, table 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 2018.2020.

 

Named Executive OfficerPlan 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 8.75 418,465 

Sundaram Nagarajan

  Salaried Employees Pension Plan   1.25        66,709       
  Excess Defined Benefit Pension Plan   1.25        293,344       

Joseph P. Kelley

  Salaried Employees Pension Plan   0.33        —       
  Excess Defined Benefit Pension Plan   0.33        —       

John J. Keane

  Salaried Employees Pension Plan   28.00        1,498,018       
  Excess Defined Benefit Pension Plan   28.00        4,195,586       

Gregory P. Merk(3)

  Salaried Employees Pension Plan   26.33        325,583       
  Excess Defined Benefit Pension Plan   26.33        3,792,490       

Jeffrey A. Pembroke

  Salaried Employees Pension Plan   15.08        697,285       
  Excess Defined Benefit Pension Plan   15.08        1,540,345       
Excess Defined Benefit Pension Plan 8.75 3,876,129 

Gregory A. Thaxton

Salaried Employees Pension Plan 29.00 1,057,152   Salaried Employees Pension Plan   30.83        1,591,676       
Excess Defined Benefit Pension Plan 29.00 3,098,010   Excess Defined Benefit Pension Plan   30.83        4,903,371       

John J. Keane

Salaried Employees Pension Plan 26.00 954,562 
Excess Defined Benefit Pension Plan 26.00 2,502,717 

Gregory P. Merk (3)

Salaried Employees Pension Plan 5.75 136,045 
Excess Defined Benefit Pension Plan 24.33 1,877,719 

Jeffrey A. Pembroke

Salaried Employees Pension Plan 13.08 370,767 
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, 20182020 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, 20182020 using a discount rate of 3.57%2.32%;

 

the benefits are payable as a single life annuity; and

 

post-retirement mortality based on the RP2006Pri-2012 Fully Generational Mortality Table for Healthy EmployeesAnnuitant projected with mortality improvements by Scale MP2016.MP2020.

 

(2)

For the Excess Defined Benefit Pension Plan, the calculation of the present value of the accumulated benefit for Messrs. Hilton,Nagarajan, Keane, Pembroke, Merk and 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, 20182020 using a discount rate of 3.57%2.32%, a lump sum interest rate of 2.88%1.57% and post-retirement mortality based on the life expectancy under IRC regulation1.401(a)(9)-9.

 

(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.

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.

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.

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.

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.

As described above in the Executive Compensation Discussion and Analysis on page 47, if Mr. Nagarajan were to die, become disabled, be terminated without cause or terminate his employment for good reason (whether or not in connection with a change in control of Nordson), the Salaried Pension Plan Benefit amounts reported above would be payable, as 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 continueswere 100% vested in those benefits, pursuant to the beneficiary until the combined total number of installment payments are made.his Supplemental Individual Pension Benefit.

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-taxnon-tax-qualified 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

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.

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NON-QUALIFIED DEFERRED COMPENSATION

The following narrative, table and footnotes set forth the contributions, earnings, withdrawals or distributions, and aggregate balances for the named executive officers in 20182020 under the Amended and Restated 2005 Deferred Compensation Plan.

 

 Deferred Compensation Plan   
Deferred Compensation Plan
Named Executive OfficerExecutive
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

 121,622 59,810 (373,063)  19,084,883

Sundaram Nagarajan

  458,963    10,494    78,121        559,151 

Joseph P. Kelley

  46,154        179        46,333 

John J. Keane

  31,154    15,942    500,863        3,853,607 

Gregory P. Merk

  153,811    14,844    460,944        2,236,498 

Jeffrey A. Pembroke

  437,017    16,339    56,046        356,604 

Gregory A. Thaxton

 245,554 20,334 (6,429)   5,029,027  43,217    17,769    1,171,853        7,414,747 

John J. Keane

 30,000 15,900 3,052   2,793,820

Gregory P. Merk

 177,777 16,434 19,698   1,102,501

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 2018:2020: Mr. Hilton – $55,419;Nagarajan, $52,962; Mr. Kelley, $46,154; Mr. Keane, $31,154, Mr. Merk, $23,070; Mr. Pembroke, $83,668; and Mr. Thaxton, – $46,946; Mr. Keane – $30,000; Mr. Merk – $20,169; and Mr. Pembroke – $19,936.$43,217. These amounts deferred are included in the “Salary” column of the Summary Compensation Table.

 

 (b)

Amounts of Annual Cash Incentive Award payout deferred in 2018:2020: Mr. Hilton – $66,203;Nagarajan, $12,750; Mr. Thaxton – $198,608;Merk, $23,072; and Mr. Merk – $35,180.Pembroke, $52,791.

 

 (c)

Of the 2015-20172017-2019 Performance Share Incentive Award payout, Mr. MerkNagarajan deferred 8212,397 shares having a settlement date value of $122,428.$393,525; Mr. Merk deferred 654 shares having a settlement date value of $107,668; and Mr. Pembroke deferred 1,832 shares having a settlement date value of $300,558.

 

(2)

The increase in aggregate earnings is attributable primarily to appreciation in the share price of Nordson common stock in 2018.2020.

 

(3)

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

 

 (a)

Base salary: Mr. Hilton – $103,437;Nagarajan, $11,818; Mr. Keane, $60,000; Mr. Merk, $41,060; Mr. Pembroke, $57,294; and Mr. Thaxton, – $88,437; Mr. Keane – $59,031; Mr. Merk – $44,824; and Mr. Pembroke – $19,336.$95,400.

 

 (b)

Annual Cash Incentive Award payout: Mr. Hilton – $130,824;Merk, $68,923; and Mr. Thaxton, – $410,424; and Mr. Merk – $84,887.$198,608.

 

 (c)

Settlement date dollar value of Performance Share Incentive Award payout: Mr. Hilton – $3,448,662; Mr. Thaxton – $149,569; and Mr. Merk, – $135,680.$277,080.

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 20182020 were limited. In order to restore any

92   |   Nordson Corporation – 2021 Proxy Statement


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 toTo 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 2016, 20172018, 2019 and 20182020 were as follows:

 

Investment Funds

 

2018 Return

 

 

2017 Return

 

 

2016 Return

 

          2020 Return         2019 Return         2018 Return   
 

Investment Contract

 

 

3.00

 

%

 

 

 

3.00

 

%

 

 

 

3.05

 

%

 

    3.00%  3.00%  3.00% 
 

Money Market Trust

 

 

0.80

 

%

 

 

 

0.01

 

%

 

 

 

(0.24

 

)%*

 

    0.71%  2.07%  0.80% 
 

Large Cap Value (500 Index B)

 

 

6.41

 

%

 

 

 

16.10

 

%

 

 

 

3.58

 

%

 

    (10.70)%  10.56%  6.14% 
 

Large Cap Blend (Equity-Income)

 

 

0.78

 

%

 

 

 

11.12

 

%

 

 

 

6.90

 

%

 

    14.88%  14.06%  0.78% 
 

Large Cap Growth (Blue Chip Growth)

 

 

9.77

 

%

 

 

 

32.71

 

%

 

 

 

(0.55

 

)%

 

    35.88%  14.33%  9.77% 
 

International Equity Index (B)

 

 

(9.15

 

)%

 

 

 

23.65

 

%

 

 

 

(0.05

 

)%

 

    3.24%  11.28%  (9.15)% 
 

Nordson Stock (includes dividends)

 

 

13.82

 

%

 

 

 

13.82

 

%

 

 

 

41.94

 

%

 

    32.20%  29.00%  13.82%  

 

*

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

Nordson Corporation – 2021 Proxy Statement   |   93

72  |Nordson Corporation – 2019 Proxy Statement


POTENTIAL BENEFITS UPON TERMINATION OR CHANGE OF CONTROL

The following table and narrative address the impact a loss of employment in each of the following scenarios as of October 31, 20182020 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) plan would be made under the distribution provisions of those plans.

 

Benefit or Payment

Termination

for Cause
or

Voluntary
Termination

 

Termination

for Cause
or

Voluntary
Termination

Termination
Due to

Death, Disability(1)
(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 the Executive 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 or involuntary termination without cause or for good reason within 2 years after a change-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 or involuntary termination without cause or for good reason within 2 years after a change-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 payoutVest upon a change-in-control or involuntary termination without cause or for good reason within 2 years after a change-in-control. Payout based on performance to date, or if not determinable, 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 – 2019

94   |   Nordson Corporation – 2021 Proxy Statement

|  73


Benefit or Payment

Termination

for Cause
or

Voluntary
Termination

 

Termination

for Cause
or

Voluntary
Termination

Termination
Due to

Death, Disability(1)
(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)

Excess Defined Pension Benefit

 

No

enhancement

 

No

Enhancement, except Supplemental Individual Pension Benefit for Mr. Nagarajan due to death or disability prior to full vesting under Salaried Employees Pension Plan

 

No

enhancement

No

Enhancement, except Supplemental Individual Pension Benefit for Mr. Nagarajan upon termination prior to full vesting under Salaried Employees Pension Plan

Two (2) additional years of age and benefit service

Supplemental Individual Pension Benefit for Mr. Nagarajan upon termination prior to full vesting under Salaried Employees Pension Plan

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. HiltonNagarajan under his employment agreement. Severance benefits due to Mr. HiltonNagarajan in the event of a termination without cause or a resignation for good reason are discussed under the caption “Severance Agreements” in the Executive 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 Executive 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;

 

Nordson Corporation – 2021 Proxy Statement   |   95


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 that are not assumed or continued by the acquirer vest immediately. Unlike the “double trigger” discussed above, no termination of employment is required for the accelerated vesting of the awards. Equity awards that are assumed or continued by the acquirer vest on termination without cause or for good reason within 2 years after the change-in-control.

(6) Vested options may be exercised for the accelerated vestinglife of the awards. This “single-trigger” vesting provides our named executive officers withoption.

(7) Vested options may be exercised for the same opportunity as our shareholders to realizeearlier of (a) five (5) years following retirement date or (b) the value created bylife of the transaction.option.

74  |Nordson Corporation – 2019 Proxy Statement
(8) Effective November 1, 2015, we have eliminated gross up payments on any severance benefits for tax purposes.


(6)

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

(7)

Vested options may be exercised for the earlier of (a) five (5) years following retirement date or (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, 20182020

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 2018 –2020 — October 31, 2018.2020, except for Mr. Thaxton, whose payments and benefits reported below reflect only the amounts received in connection with his retirement on August 28, 2020.

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

 

No amounts for 20182020 base salary or payouts under the 20182020 Annual Cash Incentive Award and 2016-20182018-2020 Performance Share Incentive Award are included in the following tables because the amounts are already earned as of October 31, 20182020 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, 2018;2020;

 

The value of our common shares on October 31, 201830, 2020 was $122.67$193.43 per share;

 

Unvested stock options that vest were valued at an amount per share equal to the difference between $122.67$193.43 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, 20182020 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, 2018 – $122.6730, 2020 — $193.43 per share;

 

None of the named executive officers is qualified to receive an age 65 retirement pension benefit as of October 31, 2018.2020. 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;table. In the event of Mr. Nagarajan’s death, disability, termination without cause or termination for good reason (whether or not in connection with a change in control of Nordson) on October 31, 2020, that benefit would have been provided pursuant to his Supplemental Individual Pension Benefit; and

 

96   |   Nordson Corporation – 2021 Proxy Statement


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 – 2019 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, 2018.2020.

 

  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

($)

  

Retirement

($)

  

Michael F. Hilton

   

 

 

 

 

6,734,973

 

 

 

   

 

 

 

 

5,961,604

 

 

 

   

 

 

 

 

5,507,542

 

 

 

   

 

 

 

 

27,790,593

 

 

 

Gregory A. Thaxton

   

 

 

 

 

1,652,887

 

 

 

   

 

 

 

 

1,463,232

 

 

 

   

 

 

 

 

             —

 

 

 

   

 

 

 

 

12,010,172

 

 

 

Sundaram Nagarajan

    4,070,514    869,081    4,439,889    9,351,236     

Joseph P. Kelley

    1,262,297            1,935,703     

John J. Keane

   

 

 

 

 

1,656,112

 

 

 

   

 

 

 

 

1,466,457

 

 

 

   

 

 

 

 

             —

 

 

 

   

 

 

 

 

9,521,271

 

 

 

    3,114,280    2,135,142        6,878,387     

Gregory P. Merk

   

 

 

 

 

1,219,426

 

 

 

   

 

 

 

 

1,075,419

 

 

 

   

 

 

 

 

             —

 

 

 

   

 

 

 

 

6,197,050

 

 

 

    3,572,371    2,593,509        5,871,732     

Jeffrey A. Pembroke

   

 

 

 

 

702,483

 

 

 

   

 

 

 

 

552,096

 

 

 

   

 

 

 

 

             —

 

 

 

   

 

 

 

 

3,879,931

 

 

 

    3,374,515    2,405,367        5,740,406     

Gregory A. Thaxton(3)

                   $656,155(3)  

 

(1)

As of October 31, 2018,2020, no named executive officer was eligible for retirement at the normal retirement age.

 

(2)

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

 

(3)
76  |Nordson Corporation –

Reflects the prorated payout of the fiscal year 2020 annual cash incentive of $129,652 and the value of his 2019 Proxy Statementrestricted stock and stock option grants, which were not forfeited and calculated using a closing stock price on August 28, 2020 of $187.96, that Mr. Thaxton received in connection with his retirement.

Nordson Corporation – 2021 Proxy Statement   |   97


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 firstWe identified our median employee for the 2018 fiscal year 2020 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 compiledcompiling a list of all full-time and part-time employees, excluding the CEO, who were employed by us on September 1, 2020 and sorting that date.list based on the consistently applied compensation measure of total target cash compensation (base salary and annual cash incentive). We included all full-time and part-time employees and 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, weWe calculated the annual total compensation of the median employee by using the same methodology that we used to determine the annual total compensation of theour CEO, as reported in the 2020 Summary Compensation Table. TheUsing this calculation method, the annual total compensation of our median employee, excluding the CEO, was $61,750. The$62,544, and the annual total compensation of Mr. Nagarajan, our CEO, as reported in the Summary Compensation Table on page 61 ofwas $5,350,475. Using this Proxy Statement, was $6,997,090; andmethodology, the ratio of the annual total compensation of our CEO to the median of the annual total compensation of all other employees was 113.386 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

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AUDIT COMMITTEE REPORT

January 18, 201922, 2021

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:https://www.nordson.com/en/our-company/investors/annual-reports-and-presentationscorporate-governance/audit-committee-charter.. 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, 2018,2020, 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 underby applicable requirements of the PCAOB Auditing Standard 1301,and the Securities and Exchange CommissionCommunications 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.applicable requirements of the PCAOB.

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, 20182020 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 2019.2021.

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. CarsonJohn A. DeFord

Arthur L. George, Jr.

Joseph P. KeithleyGinger M. Jones

Jennifer A. Parmentier

 

78  |Nordson Corporation – 2019 Proxy Statement

Nordson Corporation – 2021 Proxy Statement   |   99


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, trustee, or other third party, at the close of business on January 2, 2019,4, 2021, the record date for shareholders entitled to vote at the Annual Meeting. As of January 2, 2019,4, 2021, there were outstanding, excluding treasury shares which cannot be voted, 57,609,58858,109,370 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 2, 20194, 2021 may attend the meeting.

Must I inform anyone of my intent to attend the Annual Meeting?Yes. To permit your name to    No. The Annual Meeting will be registered withheld virtually and no advanced notice of attendance is required.

How do I attend the Key Tower security service to gain accessAnnual Meeting?    Due to the BakerHostetler LLP offices, you must informCOVID-19 pandemic and for the Company’s Secretary, Gina A. Beredo, in writing (letter ore-mail) beforehealth and safety of our shareholders, employees, and families, we will be hosting the Annual Meeting of your intentlive via the Internet. You will not be able to attend the Annual Meeting in person. The Annual Meeting will only be held virtually via audio-only at: www.virtualshareholdermeeting.com/NDSN2021. Shareholders of record as of the close of business on January 4, 2021, the record date, or their legal proxy holders, are entitled to attend the Meeting. Ms. Beredo’ s contact information is as follows:

E-mail address:gina.beredo@nordson.com

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

Must I present credentials to permit accessTo be admitted to the BakerHostetler LLP offices?Yes. YouMeeting, you must present a form of picture identificationlog-in using the 16-digit control number found on your proxy card or Voter Instruction Form. The Annual Meeting will begin promptly at 10:00 a.m. Eastern Daylight Time on Tuesday, March 2, 2021. We encourage you to access the Annual Meeting prior to the security officerstart time. Online access will begin at the desk located9:45 a.m. Eastern Daylight Time. Instructions on the main floor of the Key Tower. You will be provided a passhow to permit access to the Key Tower elevators. You will proceed to the 20th floor offices of BakerHostetler LLP.

What if I have a disability?    If you are disabledconnect and would like to participate in the Annual Meeting weare posted at www.virtualshareholdermeeting.com/NDSN2021.

How do I ask questions during the Annual Meeting?    Shareholders will have substantially the same opportunities to participate as they would have at an in-person meeting. Shareholders may submit questions while connected to the Annual Meeting on the Internet. If you wish to submit a question, you may do so by logging into the virtual meeting platform at www.virtualshareholdermeeting.com/NDSN2021, typing the question into the “Ask a Question” field and clicking “Submit”. Additional information regarding the ability of shareholders to ask questions during the Annual Meeting will be set forth in the Annual Meeting’s Rules of Conduct, which will be made available within the virtual Annual Meeting platform.

What if I have technical difficulties accessing the Annual Meeting?    If shareholders encounter any difficulties accessing the Annual Meeting webcast during the check-in or meeting time, there will be a technical support number posted on the virtual meeting login page for assistance. Technical support will be available beginning at 9:45 a.m. Eastern Time on March 2, 2021 through the conclusion of the Annual Meeting. The virtual Annual Meeting platform is fully supported across browsers (Internet Explorer, Firefox, Chrome, and Safari), and devices (desktops, laptops, tablets, and cell phones) running the most updated version of applicable software and plugins. Shareholders should ensure that they have a strong Internet connection if they intend to attend and/or participate in the Annual Meeting. Shareholders should allow plenty of time to log in and ensure that they can provide reasonable assistance. Please send any request for assistancehear streaming audio prior to c/o Secretary, Nordson Corporation, 28601 Clemens Road, Westlake, Ohio 44145.the start of the Annual Meeting.

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.

 

100   |   Nordson Corporation – 2021 Proxy Statement


VOTING MATTERS AND BOARD RECOMMENDATIONS

    
PROPOSALVOTING OPTIONSREQUIRED VOTE

BROKER

  ProposalDISCRETIONARY  

VOTE

PERMITTED

 

Voting Options

BOARD’S VOTING
RECOMMENDATION
 

Required 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. Each nominee must receive a plurality of the votes cast.(1) No 

FOR

the election of each of the director nominees

Nordson Corporation – 2019 Proxy Statement

|  79


VOTING MATTERS AND BOARD RECOMMENDATIONS

  Proposal

Voting Options

Required 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, 20192021

 “FOR” or “AGAINST” or “ABSTAIN” from voting. Thisnon-binding proposal will be considered approved if more votes are cast in favor than against. Yes(1)(2) FOR
    

3.   Advisory vote to approve compensation of named executive officers

 “FOR” or “AGAINST” or “ABSTAIN” from voting. Thisnon-binding proposal will be considered approved if more votes are cast in favor than against.NoFOR

4.   Approve the Nordson Corporation 2021 Stock Incentive and Award Plan

“FOR” or “AGAINST” or “ABSTAIN” from voting.This proposal will be considered approved if more votes are cast in favor than against. No FOR

 

(1)

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 & Nominating Committee of the Board would then consider each resignation and determine whether to accept or reject it. Abstentions and broker non-votes will have no effect on the election of a Director and are not counted under our majority voting policy.

(2)

This is considered to be a routine matter under applicable rules and, therefore, if you hold your shares in street name and do not provide voting instructions to the broker, trustee, 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. However, abstentions will affect the outcome of the votevotes on Proposals 2, 3, and 3,4, 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.

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 personelectronically during the Annual Meeting by entering the 16-digit control number found on your proxy/voting instruction card at the time you log into 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. To vote electronically during the Annual Meeting as a beneficial owner, you will need to

 

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obtain a valid proxy from your broker, bank, or other nominee. Follow the instructions from your broker, bank, or other nominee with these proxy materials, or contact your broker, bank, or other nominee to request a proxy form.

  

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 Time, on February 21, 2019.26, 2020. 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 atelectronically during the Annual Meeting.

Where is Nordson Corporation common stock traded?    Our common stock is traded and quoted on the Nasdaq 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 each share of our common stock that you own.own as of the record date of the Annual Meeting. 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 2024-Cumulative Voting,” cumulative voting is not allowed.

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.

 

HOW TO VOTE
VIA THE INTERNETBY TELEPHONEBY MAILVOTE AT MEETING

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LOGO

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LOGO

LOGO

LOGO

www.proxyvote.com

Call 1-800-690-6903

in the U.S. or Canada

Follow the instructions

on the proxy card

Attend our Annual Meeting and vote electronically


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.

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If you are a shareholder of record, your deadline to cast your vote by proxy is11:59 p.m., Eastern Time, on FebruaryMarch 25, 2019.1, 2021. You may also vote in personelectronically during the Annual Meeting by entering the 16-digit control number found on your proxy/voting instruction card at the time you log into the Annual Meeting.

If you are a Plan participant, your deadline to cast your vote by proxy is11:59 p.m., Eastern Time, on February 21, 2019.26, 2020.

Beneficial owners.    If you are a beneficial owner, you should receive 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 atelectronically during 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 proxy by telephone or via the Internet since only your latest Internet or telephone proxy received by11:59 p.m., Eastern Time, on FebruaryMarch 25, 20191, 2021 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 personvirtually and voting again.again, electronically.

Plan participants.    If you are a Plan participant, you may revoke previously given voting instructions on or before11:59 p.m., Eastern Time, on February 21, 201926, 2020 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.

Beneficial Owners.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 personelectronically 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 theapplicable 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 and 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

PROPOSAL

  

Vote to be Cast

VOTE TO BE CAST

Proposal 1 — Election of threefive nominees as directors to serve for athree-year term: Lee C. Banks, Randolph W. Carson,John A. DeFord, Arthur L. George, Jr., Frank M. Jaehnert, Ginger M. Jones, and Victor L. Richey, Jr.

Jennifer A. Parmentier

  

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, 2019

2021

  

FOR

Proposal 3 — Advisory vote to approve the compensation of our named executive officers

FOR

Proposal 4 — Approve the Nordson Corporation 2021 Stock Incentive and Award Plan

  

FOR

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 personelectronically 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 SECapplicable 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 approval of the Nordson Corporation 2021 Stock Incentive and Award Plan (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 directors or(Proposal 1), the advisory vote on named executive compensation (Proposal 3), or the approval of the Nordson Corporation 2021 Stock Incentive and Award Plan (Proposal 4), 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 have no effect on the outcome of the vote on Proposals 23 or 3.4. 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 receivein person or by mail, telephone, facsimile or electronic communications, but no additional compensation for such solicitation. Copieswill be paid to them. We will also supply, at our expense, 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 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 20202022 Annual Meeting?

Shareholder Proposals Submitted Under Rule14a-8

Assuming that our 20202022 Annual Meeting is held within thirty days of the anniversary of the 20192021 Annual Meeting, any shareholder who wishes to submit a proposal for consideration at the 20202022 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 20, 2019.24, 2021.

Proposals and Director Nominations Submitted Pursuant to our Regulations

Additionally, under our Regulations, a shareholder may submit a proposal for consideration at the 20202022 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 20202022 Annual Meeting. Assuming that the 20202022 Annual Meeting will be held on February 25, 2020,March 1, 2022, that means notice of such proposals must be received no earlier than November 27, 2019December 1, 2021 and no later than December 27, 2019.31, 2021. 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 20202022 Annual Meeting is held on February 25, 2020,March 1, 2022, the deadlines would be no earlier than November 27, 2019December 1, 2021 and no later than December 27, 2019.31, 2021. 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 20202022 Annual Meeting. If the Board chooses to present any

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information submitted after the deadlines set forth in the Regulations (other than pursuant to Rule14a-8 of the Exchange Act) at the 20202022 Annual Meeting, then the persons named in proxies solicited by the Board for the 20202022 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 Chair 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 Chair 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.

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 first being mailed to shareholders of record on or about January 18, 2019.22, 2021. Nordson’s executive offices are located at 28601 Clemens Road, Westlake, Ohio 44145, telephone number(440) 892-1580.

 

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APPENDIX A

NORDSON CORPORATION

2021 STOCK INCENTIVE AND AWARD PLAN

1. Establishment, Purpose, Duration.

a. Establishment.     Nordson Corporation (the “Company”) hereby establishes this Nordson Corporation 2021 Stock Incentive and Award Plan (the “Plan”) effective after the approval of the Plan by the shareholders of the Company at the annual meeting of shareholders on March 2, 2021 (the “Effective Date”) . Definitions of capitalized terms used in the Plan are contained in Section 2 of the Plan.

b. Purpose.     The purpose of the Plan is to attract and retain Directors, officers and other key employees of the Company and its Subsidiaries and to provide to such persons incentives and rewards for superior performance.

c. Duration.     No Award may be granted under the Plan on or after the tenth (10th) anniversary of the Effective Date, or such earlier date as the Board shall determine. The Plan will remain in effect with respect to outstanding Awards until no Awards remain outstanding.

d. Prior Plan.     Subject to the Company’s shareholders approval of the Plan at the 2021 annual meeting of shareholders, the Nordson Corporation Amended and Restated 2012 Stock Incentive and Award Plan (the “Prior Plan”) will terminate in its entirety effective on the Approval Date; provided that all outstanding awards under the Prior Plan as of the Approval Date shall remain outstanding and shall be administered and settled in accordance with the provisions of the Prior Plan.

2.Definitions.As used in the Plan, the following definitions shall apply.

“Applicable Laws” means the applicable requirements relating to the administration of equity-based compensation plans under U.S. state corporate laws, U.S. federal and state securities laws, the Code, the rules of any stock exchange or quotation system on which the Shares are listed or quoted and the applicable laws of any other country or jurisdiction where Awards are granted or administered or in which Participants work or reside.

“Approval Date” has the meaning given such term in Section 1(a).

“Award” means a Nonqualified Stock Option, Incentive Stock Option, Stock Appreciation Right, Restricted Shares Award, Restricted Share Unit, Other Share-Based Award or Cash-Based Award granted pursuant to the terms and conditions of the Plan.

“Award Agreement” means either: (a) an agreement, either in written or electronic format, entered into by the Company and a Participant setting forth the terms and provisions applicable to an Award granted under the Plan; or (b) a statement, either in written or electronic format, issued by the Company to a Participant describing the terms and provisions of such Award, which need not be signed by the Participant.

“Board” means the Board of Directors of the Company.

“Cash-Based Award” shall mean a cash Award granted pursuant to Section 11 of the Plan.

“Cause” as a reason for a Participant’s termination of employment shall have the meaning assigned such term in the employment agreement (or, if operative, the Change-in-Control Retention Agreement), if any, between the Participant and the Company or Subsidiary. If the Participant is not a party to an employment agreement (or Change-in-Control Retention Agreement) with the Company or a Subsidiary in which such term is defined, then unless otherwise defined in the applicable Award Agreement, “Cause” shall mean (i) the commission of an act of fraud, embezzlement, theft, or other similar criminal act constituting a felony and involving the business of the Company or its Subsidiaries; (ii) the continued failure of the Participant to perform substantially the Participant’s duties with the Company or any of its Subsidiaries (other than any such failure resulting from any medically determined physical or mental impairment or disability) that is not cured by the Participant within 30 days after a written demand for substantial performance is delivered to the Participant by the Company which specifically identifies the manner in which the Company believes that the Participant has not substantially performed the Participant’s duties; (iii) violation of the Company’s Code of Ethics and Business Conduct; or (iv) willful misconduct that causes harm to the financial condition or business reputation of the Company or a Subsidiary.

 

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“Change in Control” means the occurrence of one of the following events: (a) a report is filed with the SEC on Schedule 13D or Schedule 14D-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 has become a beneficial owner, directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company’s then outstanding securities; (b) the Company is merged or consolidated with another corporation and, as a result thereof, securities representing less than 50% of the combined voting power of the surviving or resulting corporation’s securities (or of the securities of a parent corporation in case of a merger in which the surviving or resulting corporation becomes a wholly-owned subsidiary of the parent corporation) are owned in the aggregate by holders of the Company’s securities immediately before such merger or consolidation; (c) all or substantially all of the assets of the Company are sold in a single transaction or a series of related transactions to a single purchaser or a group of affiliated purchasers; or (d) during any period of 24 consecutive months, individuals who were Directors at the beginning of the period cease to constitute at least a majority of the Board unless the election, or nomination for election by the Company’s shareholders, of more than one half of any new Directors was approved by a vote of at least two-thirds of the Directors then still in office who were Directors at the beginning of the 24 month period.

“Change in Control Protection Period” means the period commencing on a Change in Control and ending on the second anniversary of the Change in Control.

“Code” means the Internal Revenue Code of 1986, as amended.

“Committee” means the Compensation Committee of the Board or such other committee or subcommittee of the Board as may be duly appointed to administer the Plan and having such powers in each instance as shall be specified by the Board. To the extent required by Applicable Laws, the Committee shall consist of two or more members of the Board, each of whom is a “non-employee director” within the meaning of Rule 16b-3 promulgated under the Exchange Act and an “independent director” within the meaning of applicable rules of any securities exchange upon which Shares are listed.

“Company” has the meaning given such term in Section 1(a) and any successor thereto.

“Date of Grant” means the date as of which an Award is determined to be effective and designated in a resolution by the Committee and is granted pursuant to the Plan. The Date of Grant shall not be earlier than the date of the resolution and action therein by the Committee. In no event shall the Date of Grant be earlier than the Effective Date.

“Director” means any individual who is a member of the Board who is not an Employee.

“Effective Date” has the meaning given such term in Section 1(a).

“Employee” means any employee of the Company or a Subsidiary; provided, however, that for purposes of determining whether any person may be a Participant for purposes of any grant of Incentive Stock Options, the term “Employee” has the meaning given to such term in Section 3401(c) of the Code, as interpreted by the regulations thereunder and Applicable Law.

“Exchange Act” means the Securities Exchange Act of 1934 and the rules and regulations thereunder, as such law, rules and regulations may be amended from time to time.

“Fair Market Value” means the value of one Share on any relevant date, determined under the following rules: (a) the closing sale price per Share on that date as reported on the principal exchange on which Shares are then trading, if any, or if applicable the NASDAQ Global Select Market, or if there are no sales on that date, on the immediately preceding trading day during which a sale occurred; (b) if the Shares are not reported on a principal exchange or national market system, the average of the closing bid and asked prices last quoted on that date by an established quotation service for over-the-counter securities; or (c) if neither (a) nor (b) applies, (i) with respect to Stock Options, Stock Appreciation Rights and any Award of stock rights that is subject to Section 409A of the Code, the value as determined by the Committee through the reasonable application of a reasonable valuation method, taking into account all information material to the value of the Company, within the meaning of Section 409A of the Code, and (ii) with respect to all other Awards, the fair market value as determined by the Committee in good faith.

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“Good Reason” as a reason for a Participant’s termination of employment shall have the meaning assigned such term in the Change-in-Control Retention Agreement, if any, between the Participant and the Company or Subsidiary.

“Incentive Stock Option” or “ISO” means a Stock Option that is designated as an Incentive Stock Option and that is intended to meet the requirements of Section 422 of the Code.

“Nonqualified Stock Option” means a Stock Option that is not intended to meet the requirements of Section 422 of the Code or otherwise does not meet such requirements.

“Other Share-Based Award” means an equity-based or equity-related Award not otherwise described by the terms of the Plan, granted in accordance with the terms and conditions set forth in Section 10.

“Participant” means any eligible individual as set forth in Section 5 who holds one or more outstanding Awards.

“Performance Objectives” means the performance objective or objectives established by the Committee pursuant to the Plan. Any Performance Objectives may relate to the performance of the Company or one or more of its Subsidiaries, divisions, departments, units, functions, partnerships, joint ventures or minority investments, product lines or products, or the performance of the individual Participant, and may include, without limitation, the Performance Objectives set forth in Section 14(b). The Performance Objectives may be made relative to the performance of a group of comparable companies, or published or special index that the Committee, in its sole discretion, deems appropriate, or the Company may select Performance Objectives as compared to various stock market indices. Performance Objectives may be stated as a combination of the listed factors.    

“Plan” means this Nordson Corporation 2021 Stock and Incentive Award Plan, as amended from time to time.

“Prior Plan” has the meaning given such term in Section 1(d).

“Qualified Termination” means any termination of a Participant’s employment during the Change in Control Protection Period: (i) by the Company, any of its Subsidiaries or the resulting entity without Cause, or (ii) solely with respect to a Participant who is a party to a Change-in-Control Retention Agreement with the Company or a Subsidiary immediately prior to a Change in Control, by the Participant for Good Reason.

“Restricted Shares” means Shares granted or sold pursuant to Section 8 as to which neither the substantial risk of forfeiture nor the prohibition on transfers referred to in such Section 8 has expired.

“Restricted Share Unit” means a grant or sale of the right to receive Shares or cash at the end of a specified restricted period made pursuant to Section 9.

“SEC” means the United States Securities and Exchange Commission.

“Share” means a share of common stock of the Company, without par value, or any security into which such Share may be changed by reason of any transaction or event of the type referred to in Section 16.

“Stock Appreciation Right” means a right granted pursuant to Section 7.

“Stock Option” means a right to purchase a Share granted to a Participant under the Plan in accordance with the terms and conditions set forth in Section 6. Stock Options may be either Incentive Stock Options or Nonqualified Stock Options.

“Subsidiary” means: (a) with respect to an Incentive Stock Option, a “subsidiary corporation” as defined under Section 424(f) of the Code; and (b) for all other purposes under the Plan, any corporation or other entity in which the Company owns, directly or indirectly, a proprietary interest of more than fifty (50%) by reason of stock ownership or otherwise.

“Substitute Award” means an Award that is granted in assumption of, or in substitution or exchange for, an outstanding award granted by an entity acquired (directly or indirectly) by the Company or with which the Company (directly or indirectly) combines.

“Ten Percent Shareholder” shall mean any Participant who owns more than 10% of the combined voting power of all classes of stock of the Company, within the meaning of Section 422 of the Code.

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3. Shares Available Under the Plan.

a. Shares Available for Awards.     The maximum number of Shares that may be issued or delivered pursuant to Awards under the Plan shall be 900,000, including the number of Shares that, on the Approval Date, were available to be granted under the Prior Plan but which were not then subject to outstanding awards under the Prior Plan, all of which may be granted with respect to Incentive Stock Options. Shares issued or delivered pursuant to an Award may be authorized but unissued Shares, treasury Shares, including Shares purchased in the open market, or a combination of the foregoing. The aggregate number of Shares available for issuance or delivery under the Plan shall be subject to adjustment as provided in Section 16.

b. Share Counting.     The following Shares shall not count against the Share limit in Section 3(a): (i) Shares covered by an Award that expires or is forfeited, canceled, surrendered, or otherwise terminated without the issuance of such Shares; (ii) Shares covered by an Award that is settled only in cash; and (iii) Substitute Awards (except as may be required by reason of the rules and regulations of any stock exchange or other trading market on which the Shares are listed). Without limiting the foregoing, with respect to any Stock Appreciation Right that is settled in Shares, the full number of Shares subject to the Award shall count against the number of Shares available for Awards under the Plan, regardless of the number of Shares used to settle the Stock Appreciation Right upon exercise. In addition, Shares subject to outstanding awards under the Prior Plan as of the Approval Date that on or after the Approval Date are forfeited, canceled, surrendered or otherwise terminated without the issuance of such Shares shall be available for issuance or delivery under this Plan. Notwithstanding anything contained herein to the contrary, Shares that are repurchased by the Company with Stock Option proceeds, Shares tendered in payment of the exercise price of a Stock Option and Shares withheld by the Company or any Subsidiary to satisfy a tax withholding obligation shall not be added back to the number of Shares reserved in Section 3(a). This Section 3(b) shall apply to the number of Shares reserved and available for Incentive Stock Options only to the extent consistent with applicable Treasury regulations relating to Incentive Stock Options under the Code.

c. Per Participant Limits for Employees.     Subject to adjustment as provided in Section 16 of the Plan, the following limits shall apply with respect to Awards granted to Employees: (i) the maximum aggregate number of Shares that may be subject to Stock Options or Stock Appreciation Rights granted in any calendar year to any one Employee shall be 750,000 Shares; (ii) the maximum aggregate number of Restricted Shares granted in any calendar year to any one Employee shall be 250,000 Shares; (iii) the maximum aggregate number of shares that may be issued or delivered pursuant to Restricted Share Units or Other Share-Based Awards granted in any calendar year to any one Employee shall be 250,000 Shares, provided that if the Restricted Share Units or Other Share-Based Awards are subject to a performance period of more than one year, the maximum shall equal the product of 250,000 Shares and the full number of years in the performance period; and (iv) the maximum aggregate compensation that may be paid under a Cash-Based Award granted in any calendar year to any one Employee shall be $5,000,000 or a number of Shares having an aggregate Fair Market Value not in excess of such amount, provided that if the Cash-Based Award is subject to a performance period of more than one year, the maximum shall equal the product of $5,000,000 and the full number of years in the performance period. Notwithstanding the foregoing, the Committee may approve Awards to Employees in excess of such limits in extraordinary circumstances, as determined by the Committee in its sole discretion.

d. Per Participant Limits for Directors.     Notwithstanding any other provision of the Plan to the contrary, the aggregate grant date fair value (determined as of the applicable Date(s) of Grant in accordance with applicable financial accounting rules) of all Awards granted to any Director during any single calendar year, taken together with any cash fees paid or payable, whether or not deferred, to such Director during such calendar year, shall not exceed $700,000.

4.Administration of the Plan.

a. In General.     The Plan shall be administered by the Committee. Except as otherwise provided by the Board, the Committee shall have full and final authority in its discretion to take all actions determined by the Committee to be necessary in the administration of the Plan, including, without limitation, discretion to: select Award recipients; determine the sizes and types of Awards; determine the terms and conditions of Awards in a manner consistent with the Plan; grant waivers of terms, conditions, restrictions and limitations applicable to any Award, or accelerate the vesting or exercisability of any Award, in a manner consistent with the Plan;

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construe and interpret the Plan and any Award Agreement or other agreement or instrument entered into under the Plan; establish, amend, or waive rules and regulations for the Plan’s administration; and take such other action, not inconsistent with the terms of the Plan, as the Committee deems appropriate. To the extent permitted by Applicable Laws, the Committee may, in its discretion, delegate to one or more Directors or Employees any of the Committee’s authority under the Plan. The acts of any such delegates shall be treated hereunder as acts of the Committee with respect to any matters so delegated.

b. Determinations.     The Committee shall have no obligation to treat Participants or eligible Employees or Directors uniformly, and the Committee may make determinations under the Plan selectively among Participants who receive, or Employees or Directors who are eligible to receive, Awards (whether or not such Participants or eligible Employees or Directors are similarly situated). All determinations and decisions made by the Committee pursuant to the provisions of the Plan and all related orders and resolutions of the Committee shall be final, conclusive and binding on all persons, including the Company, its Subsidiaries, its shareholders, Directors, Employees, Participants, and their estates and beneficiaries.

c. Authority of the Board.     The Board may reserve to itself any or all of the authority or responsibility of the Committee under the Plan or may act as the administrator of the Plan for any and all purposes. To the extent the Board has reserved any such authority or responsibility or during any time that the Board is acting as administrator of the Plan, it shall have all the powers of the Committee hereunder, and any reference herein to the Committee (other than in this Section 4(c)) shall include the Board. To the extent that any action of the Board under the Plan conflicts with any action taken by the Committee, the action of the Board shall control.

5.Eligibility and Participation.     Each Employee and Director is eligible to participate in the Plan, upon selection by the Committee. Subject to the provisions of the Plan, the Committee may, from time to time, select from all eligible Employees and Directors those to whom Awards shall be granted and shall determine, in its sole discretion, the nature of any and all terms permissible by Applicable Law and the amount of each Award.

6.Stock Options.     Subject to the terms and conditions of the Plan, Stock Options may be granted to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.

a. Award Agreement.     Each Stock Option shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the Stock Option, the number of Shares covered by the Stock Option, the conditions upon which the Stock Option shall become vested and exercisable and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan (including, but not limited to, the minimum vesting provisions of Section 12). The Award Agreement also shall specify whether the Stock Option is intended to be an Incentive Stock Option or a Nonqualified Stock Option. No dividend equivalents may be granted with respect to the Shares underlying a Stock Option.

b. Exercise Price.     The exercise price per Share of a Stock Option shall be determined by the Committee at the time the Stock Option is granted and shall be specified in the related Award Agreement; provided, however, that in no event shall the exercise price per Share of any Stock Option (other than a Substitute Award) be less than one hundred percent (100%) of the Fair Market Value of a Share on the Date of Grant.

c. Term.     The term of a Stock Option shall be determined by the Committee and set forth in the related Award Agreement; provided, however, that in no event shall the term of any Stock Option exceed ten (10) years from its Date of Grant.

d. Exercisability.     Stock Options shall become vested and exercisable at such times and upon such terms and conditions as shall be determined by the Committee and set forth in the related Award Agreement. Such terms and conditions may include, without limitation, the satisfaction of (a) performance goals based on one or more Performance Objectives, and/or (b) time-based vesting requirements.

e. Exercise of Stock Options.     Except as otherwise provided in the Plan or in a related Award Agreement, a Stock Option may be exercised for all or any portion of the Shares for which it is then exercisable. A Stock Option shall be exercised by the delivery of a notice of exercise to the Company or its designee in a form specified by the Company which sets forth the number of Shares with respect to which the Stock Option is to be exercised and full payment of the exercise price for such Shares. The exercise price of a Stock Option may be paid, in the discretion of the Committee and as set forth in the applicable Award Agreement: (i) in cash or its equivalent; (ii) by tendering (either by actual delivery or attestation) previously acquired Shares

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having an aggregate Fair Market Value at the time of exercise equal to the aggregate exercise price; (iii) by a cashless exercise (including by withholding Shares deliverable upon exercise and through a broker-assisted arrangement to the extent permitted by Applicable Laws); (iv) by a combination of the methods described in clauses (i), (ii) and/or (iii); or (v) through any other method approved by the Committee in its sole discretion. As soon as practicable after receipt of the notification of exercise and full payment of the exercise price, the Company shall cause the appropriate number of Shares to be issued to the Participant.

f. Special Rules Applicable to Incentive Stock Options.     Notwithstanding any other provision in the Plan to the contrary:

(i) Incentive Stock Options may be granted only to Employees of the Company and its Subsidiaries. The terms and conditions of Incentive Stock Options shall be subject to and comply with the requirements of Section 422 of the Code.

(ii) To the extent that the aggregate Fair Market Value of the Shares (determined as of the Date of Grant) with respect to which an Incentive Stock Option is exercisable for the first time by any Participant during any calendar year (under all plans of the Company and its Subsidiaries) is greater than $100,000 (or such other amount specified in Section 422 of the Code), as calculated under Section 422 of the Code, then the amount over the limit of the Stock Option shall be treated as a Nonqualified Stock Option.

(iii) No Incentive Stock Option shall be granted to any Participant who, on the Date of Grant, is a Ten Percent Shareholder, unless (x) the exercise price per Share of such Incentive Stock Option is at least one hundred and ten percent (110%) of the Fair Market Value of a Share on the Date of Grant, and (y) the term of such Incentive Stock Option shall not exceed five (5) years from the Date of Grant.

7.Stock Appreciation Rights.     Subject to the terms and conditions of the Plan, Stock Appreciation Rights may be granted to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.

a. Award Agreement.     Each Stock Appreciation Right shall be evidenced by an Award Agreement that shall specify the exercise price, the term of the Stock Appreciation Right, the number of Shares covered by the Stock Appreciation Right, the conditions upon which the Stock Appreciation Right shall become vested and exercisable and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan (including, but not limited to, the minimum vesting provisions of Section 12). No dividend equivalents may be granted with respect to the Shares underlying a Stock Appreciation Right.

b. Exercise Price.     The exercise price per Share of a Stock Appreciation Right shall be determined by the Committee at the time the Stock Appreciation Right is granted and shall be specified in the related Award Agreement; provided, however, that in no event shall the exercise price per Share of any Stock Appreciation Right (other than a Substitute Award) be less than one hundred percent (100%) of the Fair Market Value of a Share on the Date of Grant.

c. Term.     The term of a Stock Appreciation Right shall be determined by the Committee and set forth in the related Award Agreement; provided, however, that in no event shall the term of any Stock Appreciation Right exceed ten (10) years from its Date of Grant.

d. Exercisability of Stock Appreciation Rights.     A Stock Appreciation Right shall become vested and exercisable at such times and upon such terms and conditions as may be determined by the Committee and set forth in the related Award Agreement. Such terms and conditions may include, without limitation, the satisfaction of (i) performance goals based on one or more Performance Objectives, and/or (ii) time-based vesting requirements.

e. Exercise of Stock Appreciation Rights.     Except as otherwise provided in the Plan or in a related Award Agreement, a Stock Appreciation Right may be exercised for all or any portion of the Shares for which it is then exercisable. A Stock Appreciation Right shall be exercised by the delivery of a notice of exercise to the Company or its designee in a form specified by the Company which sets forth the number of Shares with respect to which the Stock Appreciation Right is to be exercised. Upon exercise, a Stock Appreciation Right shall entitle a Participant to an amount equal to (a) the excess of (i) the Fair Market Value of a Share on the exercise date over (ii) the exercise price per Share, multiplied by (b) the number of Shares with respect to

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which the Stock Appreciation Right is exercised. A Stock Appreciation Right may be settled in whole Shares, cash or a combination thereof, as specified by the Committee in the related Award Agreement.

8.Restricted Shares.     Subject to the terms and conditions of the Plan, Restricted Shares may be granted or sold to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.

a. Award Agreement.     Each Restricted Share Award shall be evidenced by an Award Agreement that shall specify the number of Restricted Shares, the restricted period(s) applicable to the Restricted Shares, the conditions upon which the restrictions on the Restricted Shares will lapse and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan (including, but not limited to, the minimum vesting provisions of Section 12).

b. Terms, Conditions and Restrictions.     The Committee shall impose such other terms, conditions and/or restrictions on any Restricted Shares as it may deem advisable, including, without limitation, a requirement that the Participant pay a purchase price for each Restricted Share, restrictions based on the achievement of specific Performance Objectives, time-based restrictions or holding requirements or sale restrictions placed on the Shares by the Company upon vesting of such Restricted Shares. Unless otherwise provided in the related Award Agreement or required by applicable law, the restrictions imposed on Restricted Shares shall lapse upon the expiration or termination of the applicable restricted period and the satisfaction of any other applicable terms and conditions.

c. Custody of Certificates.     To the extent deemed appropriate by the Committee, the Company may retain the certificates, if any, representing Restricted Shares in the Company’s possession until such time as all terms, conditions and/or restrictions applicable to such Shares have been satisfied or lapse.

d. Rights Associated with Restricted Shares during Restricted Period.     During any restricted period applicable to Restricted Shares: (i) the Restricted Shares may not be sold, transferred, pledged, assigned or otherwise alienated or hypothecated; (ii) unless otherwise provided in the related Award Agreement, the Participant shall be entitled to exercise full voting rights associated with such Restricted Shares; and (iii) the Participant shall be entitled to all dividends and other distributions paid with respect to such Restricted Shares during the restricted period. Notwithstanding the preceding sentence, any dividends or other distributions with respect to unvested Restricted Shares shall be accumulated or deemed reinvested in additional Restricted Shares until such Award is earned and vested, and shall be subject to the same terms and conditions as the original Award (including service-based vesting conditions and any Performance Objectives).

9.Restricted Share Units.     Subject to the terms and conditions of the Plan, Restricted Share Units may be granted or sold to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion.

a. Award Agreement.     Each Restricted Share Unit Award shall be evidenced by an Award Agreement that shall specify the number of units, the restricted period(s) applicable to the Restricted Share Units, the conditions upon which the restrictions on the Restricted Share Units will lapse, the time and method of payment of the Restricted Share Units, and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan (including, but not limited to, the minimum vesting provisions of Section 12).

b. Terms, Conditions and Restrictions.     The Committee shall impose such other terms, conditions, and/or restrictions on any Restricted Share Units as it may deem advisable, including, without limitation, a requirement that the Participant pay a purchase price for each Restricted Share Unit, restrictions based on the achievement of specific Performance Objectives, and/or time-based restrictions or holding requirements.

c. Form of Settlement.     Restricted Share Units may be settled in whole Shares, cash, or a combination thereof, as specified by the Committee in the related Award Agreement.

d. Dividend Equivalents.     Restricted Share Units may provide the Participant with dividend equivalents, payable either in cash or in additional Shares, as determined by the Committee in its sole discretion and set forth in the related Award Agreement; provided that any dividend equivalents with respect to unvested Restricted Share Units shall be accumulated or deemed reinvested in additional Restricted Share Units until

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such Award is earned and vested, and shall be subject to the same terms and conditions as the original Award (including service-based vesting conditions and any Performance Objectives).

10.Other Share-Based Awards.     Subject to the terms and conditions of the Plan, Other Share-Based Awards may be granted to Participants in such number, and upon such terms and conditions, as shall be determined by the Committee in its sole discretion. Other Share-Based Awards are Awards that are valued in whole or in part by reference to, or otherwise based on the value of, Shares, and shall be in such form as the Committee shall determine, including without limitation, time-based or performance-based units that are settled in Shares and/or cash and stock equivalent units.

a. Award Agreement.     Each Other Share-Based Award shall be evidenced by an Award Agreement that shall specify the terms and conditions upon which the Other Share-Based Award shall become vested, if applicable, the time and method of settlement, the form of settlement and such other terms and conditions as the Committee shall determine and which are not inconsistent with the terms and conditions of the Plan (including, but not limited to, the minimum vesting provisions of Section 12).

b. Form of Settlement.     An Other Share-Based Award may be settled in whole Shares, cash or a combination thereof, as specified by the Committee in the related Award Agreement.

c. Dividend Equivalents.     Other Share-Based Awards may provide the Participant with dividend equivalents, payable either in cash or in additional Shares, as determined by the Committee in its sole discretion and set forth in the related Award Agreement; provided that any dividend equivalents with respect to unvested Other Share-Based Awards shall be accumulated or deemed reinvested until such Award is earned and vested, and shall be subject to the same terms and conditions as the original Award (including service-based vesting conditions and any Performance Objectives).

11.Cash-Based Awards.     Subject to the terms and conditions of the Plan, Cash-Based Awards may be granted to Participants in such amounts and upon such other terms and conditions as shall be determined by the Committee in its sole discretion. Each Cash-Based Award shall be evidenced by an Award Agreement that shall specify the payment amount or payment range, the time and method of settlement and the other terms and conditions, as applicable, of such Award which may include, without limitation, restrictions based on the achievement of specific Performance Objectives.

12.Minimum Vesting Provisions.     Subject to Sections 19, 21, and 22(b) of the Plan, (a) no condition on vesting or exercisability of an Award (other than a Substitute Award), whether based on continued employment or other service or based upon the achievement of Performance Objectives, shall be based on service or performance (as applicable) over a period of less than one year, and (b) upon and after such minimum one-year period, restrictions on vesting or exercisability may lapse on a pro-rated, graded, or cliff basis as specified in the Award Agreement; provided, however, that Awards covering up to five percent (5%) of the Sharesreserved for issuance pursuant to Section 3(a) may be granted under this Plan as unrestricted Shares or otherwise as Awards with a performance period or vesting period of less than one year and includes grants made to non-U.S. participants that have less than one-year vesting.

13.Compliance with Section 409A.     Awards granted under the Plan shall be designed and administered in such a manner that they are either exempt from the application of, or comply with, the requirements of Section 409A of the Code. To the extent that the Committee determines that any award granted under the Plan is subject to Section 409A of the Code, the Award Agreement shall incorporate the terms and conditions necessary to avoid the imposition of an additional tax under Section 409A of the Code upon a Participant. Notwithstanding any other provision of the Plan or any Award Agreement (unless the Award Agreement provides otherwise with specific reference to this Section): (i) an Award shall not be granted, deferred, accelerated, extended, paid out, settled, substituted or modified under the Plan in a manner that would result in the imposition of an additional tax under Section 409A of the Code upon a Participant; and (ii) if an Award is subject to Section 409A of the Code, and if the Participant holding the award is a “specified employee” (as defined in Section 409A of the Code, with such classification to be determined in accordance with the methodology established by the Company), then, to the extent required to avoid the imposition of an additional tax under Section 409A of the Code upon a Participant, no distribution or payment of any amount shall be made before the date that is six (6) months following the date of such Participant’s “separation from service” (as defined in Section 409A of the Code) or, if earlier, the date of the Participant’s death. Although the Company intends to administer the Plan so that Awards will be exempt from, or

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will comply with, the requirements of Section 409A of the Code, the Company does not warrant that any Award under the Plan will qualify for favorable tax treatment under Section 409A of the Code or any other provision of federal, state, local, or non-United States law. The Company shall not be liable to any Participant for any tax, interest, or penalties the Participant might owe as a result of the grant, holding, vesting, exercise, or payment of any Award under the Plan.

14. Performance Objectives.

a. In General.     As provided in the Plan, the vesting, exercisability, and/or payment of any Award may be conditioned upon the achievement of one or more Performance Objectives (any such Award, a “Performance Award”). Any Performance Objectives shall be based on the achievement of one or more criteria selected by the Committee, in its discretion, which may include, but shall not be limited to, the following: return on net assets, return on capital employed, economic value added, sales, revenue, earnings per share, operating income, net income, earnings before interest and taxes, return on equity, total shareholder return, market valuation, cash flow, completion of acquisitions, product and market development, inventory management, working capital management, and customer satisfaction. The foregoing business criteria may be clarified by reasonable definitions adopted from time to time by the Committee, which may include or exclude any items as the Committee may specify, including but not limited to: extraordinary, unusual or non-recurring items; effects of accounting changes; effects of currency fluctuations; effects of financing activities; effects relating to the impairment of goodwill or other intangible assets; expenses for restructuring or productivity initiatives; non-operating items; acquisition expenses; and effects of acquisitions, divestitures, or reorganizations.

b. Establishment of Performance Goals.     With respect to any Performance Award, the Committee shall establish in writing the Performance Objectives, the performance period, and any formula for computing the payout of the Performance Awards. Such terms and conditions shall be established in writing during the first ninety days of the applicable performance period (or by such other date as may be determined by the Committee, in its discretion).

c. Certification of Performance.     Prior to payment, exercise or vesting of any Performance Award, the Committee will certify in writing whether the applicable Performance Objectives and other material terms imposed on such Performance Award have been satisfied, and, if they have, ascertain the amount of the payout or vesting of the Performance Award.

d. Adjustments.     If the Committee determines that a change in the Company’s business, operations, corporate structure or capital structure, or in the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may, in its discretion and without the consent of any Participant, adjust such Performance Objectives or the related level of achievement, in whole or in part, as the Committee deems appropriate and equitable, including, without limitation, to exclude the effects of events that are unusual in nature or infrequent in occurrence (as determined in accordance with applicable financial accounting standards), cumulative effects of tax or accounting changes, discontinued operations, acquisitions, divestitures and material restructuring or asset impairment charges.

15.Transferability.     Except as otherwise determined by the Committee, no Award or dividend equivalents paid with respect to any Award shall be transferable by the Participant except by will or the laws of descent and distribution; provided, that if so determined by the Committee, each Participant may, in a manner established by the Board or the Committee, designate a beneficiary to exercise the rights of the Participant with respect to any Award upon the death of the Participant and to receive Shares or other property issued or delivered under such Award. Except as otherwise determined by the Committee, Stock Options and Stock Appreciation Rights will be exercisable during a Participant’s lifetime only by the Participant or, in the event of the Participant’s legal incapacity to do so, by the Participant’s guardian or legal representative acting on behalf of the Participant in a fiduciary capacity under state law and/or court supervision.

16.Adjustments.     In the event of any equity restructuring (within the meaning of Financial Accounting Standards Board Accounting Standards Codification Topic 718, Compensation – Stock Compensation), such as a stock dividend, stock split, reverse stock split, spinoff, rights offering, or recapitalization through a large, nonrecurring cash dividend, the Committee shall cause there to be an equitable adjustment in the numbers and kind of Shares specified in Section 3 of the Plan and, with respect to outstanding Awards, in the number and kind

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of Shares subject to outstanding Awards and the exercise price or other price of Shares subject to outstanding Awards, in each case to prevent dilution or enlargement of the rights of Participants. In the event of any other change in corporate capitalization, or in the event of a merger, consolidation, liquidation, or similar transaction, the Committee may, in its sole discretion, cause there to be an equitable adjustment as described in the foregoing sentence, to prevent dilution or enlargement of rights; provided, however, that, unless otherwise determined by the Committee, the number of Shares subject to any Award shall always be rounded down to a whole number. Notwithstanding the foregoing, the Committee shall not make any adjustment pursuant to this Section 16 that would (i) cause any Stock Option intended to qualify as an ISO to fail to so qualify, (ii) cause an Award that is otherwise exempt from Section 409A of the Code to become subject to Section 409A, or (iii) cause an Award that is subject to Section 409A of the Code to fail to satisfy the requirements of Section 409A. The determination of the Committee as to the foregoing adjustments, if any, shall be conclusive and binding on all Participants and any other persons claiming under or through any Participant.

17.Fractional Shares.     The Company shall not be required to issue or deliver any fractional Shares pursuant to the Plan and, unless otherwise provided by the Committee, fractional shares shall be settled in cash.

18.Withholding Taxes.     To the extent required by Applicable Law, a Participant shall be required to satisfy, in a manner satisfactory to the Company or Subsidiary, as applicable, any withholding tax obligations that arise by reason of a Stock Option or Stock Appreciation Right exercise, the vesting of or settlement of Shares under an Award, an election pursuant to Section 83(b) of the Code or otherwise with respect to an Award. The Company and its Subsidiaries shall not be required to issue or deliver Shares, make any payment or to recognize the transfer or disposition of Shares until such obligations are satisfied. The Committee may permit or require these obligations to be satisfied by having the Company withhold a portion of the Shares that otherwise would be issued or delivered to a Participant upon exercise of a Stock Option or Stock Appreciation Right or upon the vesting or settlement of an Award, or by tendering Shares previously acquired, provided that in no event will the value of the Shares to be withheld or tendered pursuant to this Section 18 to satisfy applicable withholding taxes exceed the amount of taxes required to be withheld based on the maximum statutory tax rates in the applicable taxing jurisdictions. Any such elections are subject to such conditions or procedures as may be established by the Committee and may be subject to disapproval by the Committee.

19.Foreign Employees.     Without amending the Plan, the Committee may grant Awards to Participants who are foreign nationals, or who are subject to Applicable Laws of one or more non-United States jurisdictions, on such terms and conditions different from those specified in the Plan as may in the judgment of the Committee be necessary or desirable to foster and promote achievement of the purposes of the Plan, and, in furtherance of such purposes, the Committee may approve such sub-plans, supplements, modifications, amendments, restatements, procedures, and the like as may be necessary or advisable to comply with provisions of Applicable Laws of other countries in which the Company or its Subsidiaries operate or have Employees.

20. Termination for Cause; Forfeiture of Awards.    If a Participant’s employment or service is terminated by the Company or a Subsidiary for Cause, as determined by the Committee in its sole discretion, then the Participant shall forfeit all Awards granted under the Plan to the extent then held by the Participant. In addition, any Award granted to a Participant shall be subject to forfeiture or repayment pursuant to the terms of any applicable compensation recovery policy maintained by the Company from time to time, including any such policy that may be adopted or amended to comply with the Dodd-Frank Wall Street Reform and Consumer Protection Act or any rules or regulations issued by the Securities and Exchange Commission or applicable securities exchange.

21.Change in Control.

a. In General.     The treatment of any outstanding Award in the event of a Change in Control shall depend upon whether and to what extent outstanding the Award is assumed, converted or replaced by the resulting entity in connection with the Change in Control (or, if the Company is the resulting entity, whether the Award is continued by the Company), in each case subject to equitable adjustments in accordance with Section 16 of the Plan.

b. Awards that are Assumed.     To the extent outstanding Awards granted under the Plan are assumed, converted or replaced by the resulting entity in the event of a Change in Control (or, if the Company is the resulting entity, to the extent such Awards are continued by the Company) as provided in Section 21(a) of the

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Plan, then, except as otherwise provided in the applicable Award Agreement or in another written agreement with the Participant, or in a Company severance plan applicable to the Participant:

(i) The performance period with respect to each such outstanding Award that is subject to one or more Performance Objectives shall end as of the date immediately prior to such Change in Control (or such earlier date as determined by the Committee) and such Awards shall be converted to service-based Awards based on the extent to which the Committee determines that the applicable Performance Objectives have been satisfied at such time, or if not determinable, based on the assumed achievement of “target” performance, and, in either case, such converted Awards shall continue to vest and become exercisable (as applicable) based on continued service during the remaining vesting period;

(ii) All other such outstanding Awards shall continue to vest and become exercisable (as applicable) based on continued service during the remaining vesting period, if any; and

(iii) Notwithstanding the foregoing, if a Participant incurs a Qualified Termination during the Change in Control Protection Period:

(A) A pro-rata portion of each such outstanding Award that was subject to one or more Performance Objectives immediately prior to the Change in Control shall become vested, based on the length of time (in days) within the originally scheduled vesting period that elapsed prior to the date of the Participant’s Qualified Termination;

(B) All other such outstanding Awards shall become vested and exercisable (as applicable) in full (without pro-ration), effective as of the date of such Qualified Termination; and

(C) Any such Awards that are Stock Options or Stock Appreciation Rights shall remain exercisable for the full duration of their term.

c. Awards that are not Assumed.     To the extent outstanding Awards granted under the Plan are not assumed, converted or replaced by the resulting entity in connection with a Change in Control (or, if the Company is the resulting entity, to the extent such Awards are not continued by the Company) in accordance with Section 21(a) of the Plan, then, except as otherwise provided in the applicable Award Agreement or in another written agreement with the Participant, or in a Company severance plan applicable to the Participant, then, effective immediately prior to the Change in Control:

(i) The performance period with respect to each such outstanding Award that is subject to one or more Performance Objectives shall end as of the date immediately prior to such Change in Control (or such earlier date as determined by the Committee) and a portion of each such Award shall be deemed earned based on (A) the extent to which the Committee determines that the applicable Performance Objectives have been satisfied at such time (if at all), or if not determinable, based on the assumed achievement of “target” performance, and (B) pro-ration for the length of time (in days) within the originally scheduled vesting period that elapsed prior to the Change in Control;

(ii) All other restrictions with respect to all outstanding Awards shall lapse effective immediately prior to the Change in Control; and

(iii) All such outstanding Awards (to the extent earned on a pro-rata basis as provided in Section 21(c)(i) above, with respect to Awards that were subject to one or more Performance Objectives immediately prior to the Change in Control) shall become fully vested and exercisable (subject to Section 21(d)) effective immediately prior to the Change in Control.

d. Cancellation Right.     The Committee may, in its sole discretion and without the consent of Participants, either by the terms of the Award Agreement applicable to any Award or by resolution adopted prior to the occurrence of the Change in Control, provide that any outstanding Stock Options and Stock Appreciation Rights (or a portion thereof) shall, upon the occurrence of such Change in Control, be cancelled in exchange for a payment in cash or other property (including shares of the resulting entity in connection with a Change in Control) in an amount equal to the excess, if any, of the Fair Market Value of the Shares subject to the Award, over any exercise price related to the Award, which amount may be zero if the Fair Market Value of a Share on the date of the Change in Control does not exceed the exercise price per Share of the applicable Awards.

Nordson Corporation – 2021 Proxy Statement   |   A-11


22.Amendment, Modification and Termination.

a. In General.     The Board may at any time and from time to time, alter, amend, suspend or terminate the Plan in whole or in part; provided, however, that no alteration or amendment that requires shareholder approval in order for the Plan to comply with any rule promulgated by the SEC or any securities exchange on which Shares are listed or any other Applicable Laws shall be effective unless such amendment shall be approved by the requisite vote of shareholders of the Company entitled to vote thereon within the time period required under such applicable listing standard or rule.

b. Adjustments to Outstanding Awards.     The Committee may, in its sole discretion and without the consent of any Participant, at any time (i) provide that all or a portion of a Participant’s Stock Options, Stock Appreciation Rights and other Awards in the nature of rights that may be exercised shall become fully or partially exercisable; (ii) provide that all or a part of the time-based vesting restrictions on all or a portion of the outstanding Awards shall lapse, and/or that any Performance Objectives or other performance-based criteria with respect to any Awards shall be deemed to be wholly or partially satisfied; or (iii) waive any other limitation or requirement under any such Award, in each case, as of such date as the Committee may, in its sole discretion, declare. The Committee shall not make any adjustment pursuant to this Section 22(b) that would cause an Award that is otherwise exempt from Section 409A of the Code to become subject to Section 409A, or that would cause an Award that is subject to Section 409A of the Code to fail to satisfy the requirements of Section 409A.

c. Prohibition on Repricing.     Except for adjustments made pursuant to Sections 16 or 21, the Board or the Committee will not, without the further approval of the shareholders of the Company, authorize the amendment of any outstanding Stock Option or Stock Appreciation Right to reduce the exercise price. No Stock Option or Stock Appreciation Right will be cancelled and replaced with an Award having a lower exercise price, or for another Award, or for cash without further approval of the shareholders of the Company, except as provided in Sections 16 or 21. Furthermore, no Stock Option or Stock Appreciation Right will provide for the payment, at the time of exercise, of a cash bonus or grant or sale of another Award without further approval of the shareholders of the Company. This Section 22(c) is intended to prohibit the repricing of “underwater” Stock Options or Stock Appreciation Rights without shareholder approval and will not be construed to prohibit the adjustments provided for in Sections 16 or 21. This prohibition on repricing also does not apply to Substitute Awards.

d. Effect on Outstanding Awards.     Notwithstanding any other provision of the Plan to the contrary (other than Sections 16, 21, 22(b) and 24(d), which specifically do not require the consent of Participants), no termination, amendment, suspension, or modification of the Plan or an Award Agreement shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant holding such Award; provided that the Committee may modify an ISO held by a Participant to disqualify such Stock Option from treatment as an “incentive stock option” under Section 422 of the Code without the Participant’s consent.

23.Applicable Laws.     The obligations of the Company with respect to Awards under the Plan shall be subject to all Applicable Laws and such approvals by any governmental agencies as the Committee determines may be required. The Plan and each Award Agreement shall be governed by the laws of the State of Ohio, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan to the substantive law of another jurisdiction.

24.Miscellaneous.

a. Deferral of Awards.     Except with respect to Stock Options, Stock Appreciation Rights, and Restricted Shares, the Committee, in its discretion, may permit Participants to elect to defer the issuance or delivery of Shares or the settlement of Awards in cash under the Plan pursuant to such rules, procedures or programs as it may establish for purposes of the Plan. The Committee also may provide that deferred issuances and settlements include the payment or crediting of dividend equivalents or interest on the deferral amounts. All elections and deferrals permitted under this provision shall comply with Section 409A of the Code, including setting forth the time and manner of the election (including a compliant time and form of payment), the date on which the election is irrevocable, and whether the election can be changed until the date it is irrevocable.

b. No Right of Continued Service.     The Plan shall not confer upon any Participant any right with respect to continuance of employment or other service with the Company or any Subsidiary, nor shall it interfere in any

A-12   |   Nordson Corporation – 2021 Proxy Statement


way with any right the Company or any Subsidiary would otherwise have to terminate such Participant’s employment or other service at any time. No Employee or Director shall have the right to be selected to receive an Award under the Plan, or, having been so selected, to be selected to receive future Awards. Awards granted under the Plan shall not be considered a part of any Participant’s normal or expected compensation or salary for any purposes, including, but not limited to, for purposes of calculating any severance, resignation, termination, redundancy, dismissal, or end of service payments, bonuses, long-service awards, pension, retirement or welfare benefits, or any similar payments or benefits.

c. Unfunded, Unsecured Plan.     Neither a Participant nor any other person shall, by reason of participation in the Plan, acquire any right or title to any assets, funds or property of the Company or any Subsidiary, including without limitation, any specific funds, assets or other property which the Company or any Subsidiary may set aside in anticipation of any liability under the Plan. A Participant shall have only a contractual right to an Award or the amounts, if any, payable under the Plan, unsecured by any assets of the Company or any Subsidiary, and nothing contained in the Plan shall constitute a guarantee that the assets of the Company or any Subsidiary shall be sufficient to pay any benefits to any person.

d. Severability.     If any provision of the Plan or an Award Agreement is or becomes invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended or limited in scope to conform to Applicable Laws or, in the discretion of the Committee, it shall be stricken and the remainder of the Plan shall remain in full force and effect.

e. Acceptance of Plan.     By accepting any benefit under the Plan, each Participant and each person claiming under or through any such Participant shall be conclusively deemed to have indicated their acceptance and ratification of, and consent to, all of the terms and conditions of the Plan and any action taken under the Plan by the Committee, the Board or the Company, in any case in accordance with the terms and conditions of the Plan.

f. Successors.     All obligations of the Company under the Plan and with respect to Awards shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or other event, or a sale or disposition of all or substantially all of the business and/or assets of the Company and references to the “Company” herein and in any Award Agreements shall be deemed to refer to such successors.

[END OF DOCUMENT]

Nordson Corporation – 2021 Proxy Statement   |   A-13


LOGO

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

Before The Meeting - Go to www.proxyvote.com

 

Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card in hand when you access the websiteweb site and follow the instructions to obtain your records and to create an electronic voting instruction form.

 

ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALSDuring The Meeting - Go to www.virtualshareholdermeeting.com/NDSN2021

 

If you would like to reduceYou may attend the costs incurred by our company in mailing proxy materials, you may consent to receiving all future proxy statements, proxy cards and annual reports electronicallymeeting via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and when prompted, indicatevote during the meeting. Have the information that you agree to receive or access proxy materials electronicallyis printed in future years.the box marked by the arrow available and follow the instructions.

 

VOTE BY PHONE -1-800-690-6903

Use any touch-tone telephone to transmit your voting instructions up until11:until 11:59 P.M. Eastern Time the day before the cut-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 Time the day before the cut-off date.

 

TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS:

  

E54397-P16269-Z73728

D28259-P47537-Z78693

  KEEP THIS PORTION FOR YOUR RECORDS

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DETACH AND RETURN THIS PORTION ONLY

THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED.

 

NORDSON CORPORATION

 

    1.  The election of threefive nominees as directors to serve for a three year term.

Board recommendation: FOR all 35 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‘snominee’s number on the line provided below.

 

    

LOGO

LOGO

  
   

01)  Lee C. BanksJohn A. DeFord

02)  Randolph W. CarsonArthur L. George, Jr.

03)  Victor L. Richey, Jr.Frank M. Jaehnert

04)  Ginger M. Jones

05)  Jennifer A. Parmentier

                   
   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, 2019.2021. Board recommendation: FOR        
     3.  Advisory vote to approve the compensation of our named executive officers.Board recommendation: FOR        
    4.To approve the Nordson Corporation 2021 Stock Incentive and Award Plan. Board recommendation: FOR  
     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)     

Signature (Joint Owners)

Date            
 

Date


Important Notice Regarding the Availability of Proxy Materials for the Annual Meeting:

The Notice and Proxy Statement and Annual Report are available at www.proxyvote.com.

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D28260-P47537-Z78693    

 

E54398-P16269-Z73728

NORDSON CORPORATION

Annual Meeting of Shareholders

February 26, 2019March 2, 2021

This proxy is solicited on behalf of the Board of Directors

The herein signed shareholder hereby appoints Joseph P. Keithley, Michael J. Merriman, Jr., and Mary G. Puma, and Victor L. Richey, Jr., or any of them, as proxies, each with the full power to appoint a substitute, to attend the 20192021 Annual Meeting of Shareholders of the Company (the “Annual Meeting”) to be held virtually, via audio-only, at Baker & Hostetler LLP, Key Tower, 127 Public Square, Suite 2000, Cleveland, Ohio 44114,www.virtualshareholdermeeting.com/NDSN2021 on Tuesday, March 2, 2021, at 8:10:00 A.M.a.m., Eastern Time, on February 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 Time, on February 25, 2019.March 1, 2021.

 

 

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 be voted by 11:59 P.M.,Eastern Time, on February 21, 2019. 26, 2021.

 

Continued and to be signed on reverse side