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Exhibit 10-e-1
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment is entered into this 10th day of
March, 1993 by and between Nordson Corporation, an Ohio corporation (the
"Company"), and William P. Madar (the "Executive").
WHEREAS, the Company and the Executive entered into
an Employment Agreement dated January 30, 1986 (the "Agreement") providing for
the employment of the Executive by the Company for the consideration and upon
the terms set forth therein; and
WHEREAS, the Company and the Executive desire to
amend the Agreement in certain respects, each of them hereby agrees as follows:
1. All capitalized terms used herein and not
otherwise specifically defined shall have the meanings ascribed thereto in the
Agreement.
2. Section 2 of the Agreement is deleted in its
entirety and a new Section 2 shall read as follows:
The Executive's employment shall continue until
terminated by either party. Either the Company or the
Executive may terminate the Executive's employment by giving
the other party written notice six (6) months in advance, to
the extent reasonably practicable, but in any event, at
least sixty (60) days in advance of the termination date.
3. Section 3 of the Agreement is deleted in its
entirety.
4. Section 4 of the Agreement is deleted in its
entirety.
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5. Section 5 of the Agreement is deleted in its
entirety and a new Section 5 shall read as follows:
5. CASH COMPENSATION. The Company shall set the
Executive's base salary as of the beginning of each fiscal year of the
Company ("Fiscal Year"); provided, however, that for purposes of
Sections 10(a) and 11(a) of the Agreement, the Executive's base salary
shall not be less than $565,150.00. Moreover, the Executive shall
participate in and receive incentive compensation under the terms of
the Company's Management Incentive Compensation Plan for so long as
the Company continues to maintain such plan.
6. Section 6(a) of the Agreement is deleted in its
entirety.
7. Except for purposes of paragraph 10 of this
Amendment, the existing subparagraph (b) of Section 6 of the Agreement is
redesignated as subparagraph (a).
8. Except for purposes of paragraph 10 of this
Amendment, Section 6(c) of the Agreement is deleted in its entirety.
9. Except for purposes of paragraph 10 of this
Amendment, Section 6(d) of the Agreement is redesignated as subparagraph (b)
and amended to insert the following words after "any restricted stock" on line
5:
issued to him by the Company on February 15, 1991 and February 15,
1992,
and to insert the following words after "restricted stock" on line 9:
issued to him by the Company on February 15, 1991 and February 15, 1992
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10. Section 7(a) of the Agreement is hereby deleted
and a new Section 7(a) shall read as follows:
(a) Upon approval by the shareholders of an Omnibus
Stock Plan of the Company to be submitted to the Shareholders of the
Company at the 1993 Annual Meeting of Shareholders, the Company shall
grant to the Executive options to purchase 50,000 shares of the
Company's common stock at an exercise price equal to the lower of (i)
the fair market value of the underlying shares or (ii) $46.50 per
share.
All options granted pursuant to this Section 7(a)
shall vest sixty (60) days after the date of grant and shall be
exercisable by the Executive, or by the executor or administrator of
the Executive's estate, until the tenth anniversary of the date of
grant, notwithstanding the termination of the employment of the
Executive for any reason, or the death or disability of the Executive.
So long as the Executive's employment has not been terminated, the
Executive shall be eligible to receive grants of stock options and
shall be considered for such grants as part of the Company's employee
stock option program.
In the event shareholder approval of such Omnibus
Stock Plan is not obtained at the 1993 Annual Meeting of Shareholders,
the Company shall grant 30,000 shares of restricted stock to the
Executive, of which one-half may not be sold, transferred, pledged,
assigned or otherwise alienated or hypothecated otherwise than by will
or the laws of descent and distribution prior to February 14, 1994 and
the remaining one-half of such shares may not be sold, transferred,
pledged, assigned or otherwise alienated or hypothecated otherwise
than by will or the laws of descent and distribution prior to February
14, 1995. Any restricted stock granted hereunder shall also be
subject to the conditions and obligations of the Executive and the
Company described in Section 6(b), 6(c) and 6(d) of the unamended
January 30, 1986 Agreement and in Section 11 of the Agreement, as
amended by this Amendment.
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11. Section 7(b) of the Agreement is deleted in its
entirety.
12. Section 9 of the Agreement is hereby deleted in
its entirety and a new Section 9 shall read as follows:
9. SUPPLEMENTAL PENSION BENEFITS.
(a) DEFINITIONS. For purposes of this Section 9,
the following terms shall have the meanings hereinafter set forth.
(1) The term "Highest Consecutive 36-Month Average
Annual Compensation" shall mean one-third of the aggregate
amount of the Executive's base salary and incentive
compensation as determined under Section 5 with respect to the
36-consecutive-calendar-month period which produces a higher
average than any other 36-consecutive-calendar-month period;
provided, however, that in the event the Executive becomes
disabled prior to the attainment of age 65, he shall be deemed
to receive the base salary and incentive compensation he
received during the Fiscal Year prior to his disability for
the period of such disability until the earlier of attainment
of age 65 or commencement of supplemental pension benefits
under this Section 9. For purposes of this Section 9, 1/12th
of the Executive's incentive compensation for each Fiscal Year
shall be allocated to each month of the Fiscal Year for which
the incentive compensation is awarded and any portion of the
Executive's base salary or incentive compensation that is
deferred pursuant to any deferred compensation program
sponsored by the Company shall be included as base salary or
incentive compensation, respectively, for the month in which
it would otherwise have been paid or allocated, as the case
may be.
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(2) The term "Highest Consecutive 36-Month Average
Annual Compensation Percentage" shall mean a percentage of the
Executive's Highest Consecutive 36-Month Average Annual
Compensation that is equal to the lesser of: (i) 56 percent,
or (ii) the product of 1.6 percent multiplied by a fraction
the numerator of which is 248 plus the number of months of
service for benefit accrual purposes credited to the Executive
under the Nordson Pension Plan and the denominator of which is
12.
(3) The term "IRS Tables" shall mean tables attached
hereto as Exhibit A.
(4) The term "PBGC Interest Rates" shall mean the
interest rate or rates for immediate or deferred annuities, as
applicable, utilized by the Pension Benefit Guaranty
Corporation for plans terminating on the date a determination
of a lump sum benefit is made.
(b) COMPUTATION OF BENEFITS. Upon termination of
the Executive's employment with the Company, the Executive shall be
eligible to receive an annual straightlife supplemental pension
benefit equal to his Highest Consecutive 36-Month Average Annual
Compensation multiplied by his Highest Consecutive 36-month Average
Annual Compensation Percentage reduced by .4166% for each full
calendar month by which the Executive's supplemental pension benefit
commences prior to age 60, and reduced further by the sum of:
(i) $42,956 upon attainment of age 65 by the
Executive;
(ii) the annual straight-life pension benefit
payable to the Executive under any tax-qualified defined
benefit pension plan of the Company which is attributable to
contributions of the Company; and
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(iii) 50 percent of the annual Primary Social
Security Benefit payable to the Executive at age 65.
Any reduction of the Executive's supplemental pension benefit under
subparagraphs (i) and (iii) above shall be made only on and after
November 3, 2004 and any such reduction under subparagraph (ii) above
shall be made only when such benefits are actually payable to the
Executive. Exhibit B attached hereto illustrates the method by which
such annual supplemental pension benefit is to be calculated.
(c) METHOD OF PAYMENT. The annual supplemental
pension benefit computed under Section 9(b) shall be payable to the
Executive in either (i) a lump sum utilizing the IRS Tables and the
PBGC Interest Rates and/or (ii) any optional method of payment
available to a participant in the Nordson Pension Plan utilizing the
IRS Tables and the PBGC Interest Rates.
13. Section 10(a) of the Agreement is deleted in its
entirety and a new Section 10(a) shall read as follows:
(a) CASH COMPENSATION. The Executive or his estate
shall continue for the two-year period following his death or
Disability Termination Date to receive his base salary at the rate
then in effect under Section 5 for the Fiscal Year in which his death
or Disability Termination Date occurs.
14. Section 10(d) of the Agreement is deleted and a
new Section 10(d) shall read as follows:
(d) INSURANCE AND PENSION BENEFITS. The Company
shall continue to provide medical coverage for so long as the
Executive, his spouse or any dependent child is living and shall
continue to provide group life insurance coverage to the Executive for
so long as he is living. In addition, the Company's obligations under
Section 9 shall remain in full force and effect. Any supplemental
pension benefit payable under Section 9 shall be payable to the
Executive in the event of his disability without any reduction
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for commencement of benefits prior to age 60. In the event of the
Executive's death prior to the termination of his employment, the
Company shall, in satisfaction of its obligations under Section 9,
provide a monthly survivor benefit to the Executive's surviving spouse
which is equal to one-half of the actuarial equivalent of the
supplemental pension benefit computed under Section 9 as of the date
of the Executive's death, but without any reduction for early
commencement under Section 9(b)(iv), and payable immediately in a 50
percent joint and survivor form computed using the IRS Tables and PBGC
Interest Rates. In the event of the Executive's disability, the
Executive shall be deemed to continue in the employ of the Company and
shall accrue months of benefit service for purposes of the
supplemental pension benefit computed under Section 9 until the
earlier of (i) attainment of age 65 and (ii) commencement of the
Executive's supplemental pension benefit. If the employment of the
Executive is terminated by reason of disability, any supplemental
pension benefits paid to the Executive prior to his attainment of age
65 pursuant to the provisions of Section 9 shall be reduced by the
amount of disability benefits received by the Executive from or
through the Company or the Social Security Administration.
15. The caption of Section 11 and the first
paragraph thereof shall be revised to read in their entirety as follows:
11. EFFECTS OF TERMINATION BY THE COMPANY OR
RESIGNATION OR RETIREMENT BY THE EXECUTIVE. If the Company terminates
the Executive's employment other than pursuant to Section 13 hereof,
or if the Executive's employment is terminated by reason of his
resignation or retirement, the Company's obligations under Part II
hereof shall terminate except as provided below.
16. Section 11(a) of the Agreement is deleted in its
entirety and a new Section 11(a) shall read as follows:
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(a) CASH COMPENSATION. The Executive shall continue
for the one-year period following the date of his termination of
employment to receive his base salary at the rate then in effect under
Section 5 with respect to the Fiscal Year in which his termination of
employment occurs, plus an additional amount equal to 20 percent of
such base salary.
17. Section 11(d) of the Agreement is deleted in its
entirety and a new Section 11(d) shall read as follows:
(d) INSURANCE AND PENSION BENEFITS. The Company
shall continue to provide medical coverage for so long as the
Executive, his spouse, or any dependent child is living and shall
continue to provide group life insurance coverage to the Executive for
so long as the Executive is living; provided, however, that such
medical coverage or group life insurance coverage, as the case may be,
shall cease if the Executive receives medical coverage or group life
insurance coverage through other employment. In addition, the
Company's obligations under Section 9 shall remain in full force and
effect. For purposes of Section 9, if the Executive elects to receive
payment of his supplemental pension benefits thereunder on or after
the date of his termination of employment and has not attained age 56,
he shall be deemed to have attained age 56 for purposes of computing
any reduction in his supplemental pension benefit under Section
9(b)(iv) with respect to commencement of benefits prior to age 60.
18. Sections 5 through 11 of the Agreement are
redesignated as Sections 3 through 9, and any references to such Sections shall
be redesignated consistent therewith.
19. Section 12 of the Agreement is deleted in its
entirety.
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20. Sections 13 through 21 of the Agreement are
redesignated as Sections 10 through 18, and any references to such Sections
shall be redesignated consistent therewith.
21. Except as expressly provided in this Amendment,
the terms and conditions of the Agreement shall remain in full force and effect
as set forth therein.
IN WITNESS WHEREOF, the parties hereto have executed
this Amendment as of the date first set forth above.
NORDSON CORPORATION
By: /s/ Eric T. Nord
-----------------------------
Eric T. Nord
/s/ William P. Madar
-----------------------------
William P. Madar
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EXHIBIT A
APPENDIX E. Life Expectancy Tables
TABLE 1
(Single Life Expectancy)*
AGE DIVISOR AGE DIVISOR
- ----------------------------------------------------------------
35 47.3 73 13.9
36 46.4 74 13.2
37 45.4 75 12.5
38 44.4 76 11.9
39 43.5 77 11.2
40 42.5 78 10.6
41 41.5 79 10.0
42 40.6 80 9.5
43 39.6 81 8.9
44 38.7 82 8.4
45 37.7 83 7.9
46 36.8 84 7.4
47 35.9 85 6.9
48 34.9 86 6.5
49 34.0 87 6.1
50 33.1 88 5.7
51 32.2 89 5.3
52 31.3 90 5.0
53 30.4 91 4.7
54 29.5 92 4.4
55 28.6 93 4.1
56 27.7 94 3.9
57 26.8 95 3.7
58 25.9 96 3.4
59 25.0 97 3.2
60 24.2 98 3.0
61 23.3 99 2.8
62 22.5 100 2.7
63 21.6 101 2.5
64 20.8 102 2.3
65 20.0 103 2.1
66 19.2 104 1.9
67 18.4 105 1.8
68 17.6 106 1.6
69 16.8 107 1.4
70 16.0 108 1.3
71 15.3 109 1.1
72 14.6 110 1.0
*Table I does not provide for IRA owners younger than 35 years of age. For
additional life expectancy tables, see Publication 939.
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EXHIBIT B
February 9, 1993
Ref: NDP 1012
MEMO TO: W. W. Colville
COPY TO: Mary Ann Jorgenson
W. P. Madar
FROM: N. D. Pellecchia
SUBJECT: W. P. MADAR PENSION CALCULATION
Bill Madar asked me to forward the attached pension calculation (assuming an
age 56 retirement) to you for your review.
Some additional information regarding the assumptions noted on the worksheets
follows:
1. Pensionable earnings for purposes of the calculation are based on
average estimated calendar year earnings for 1993-1995. A gross
annual pension amount was arrived at by applying the service formula
stated in the contract against average annual earnings for the period.
We reduced the gross amount by 18.33% to reflect a February 1996
retirement date. This factor is the product of .4166 multiplied by 44
months (the number of months that the retirement date precedes age
60).
2. Pensionable earnings for Nordson qualified plan calculations are
higher than previous calculations provided. In brief, the qualified
plan bases pensionable earnings on a "highest five out of ten year
salary history." An age 56 retirement assumption would include
earnings from the years 1986 through 1988 in the ten year history.
Pensionable earnings in these years are higher than later years since
starting in 1990, pensionable earnings for purposes of qualified plan
calculations were "capped" by law. Limits range from $200,000 in 1990
to $228,860 in 1992. Earlier calculations were based on an age 60
retirement. Accordingly, the 1986-1988 period was not included in the
ten year history.
3. The interest rate assumption used for calculating lump sum amounts is
5.75%--the current PBGC rate in effect for calculating immediate
annuities - PBGC regulation 2619.26(b)(2)(IV).
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Memo To: W. Colville Page 2 February 9, 1993
SUBJECT: W. P. MADAR PENSION CALCULATION
4. The life expectancy assumption is based on Appendix E (Table I, Single
Life Expectancy), IRS Publication 590, 1992 edition. Prior
calculations were based on life expectancy data included in IRS
Publication 575, 1988 edition. Life expectancies under both tables
are the same.
5. The lump sum amount noted on the attached calculation is approximately
$1.3 million higher than the lump sum amount (calculated using
identical life expectancy and interest rate assumptions) noted in my
memorandum to you dated September 2, 1992.
The most significant factor contributing to this difference is a
higher assumed average annual earnings amount. For the attached
calculation, we assumed that base salary will grow at a 5% annual
rate, while annual bonus amounts will be earned at a rate of 135% of
target or roughly 108% of base salary. For purposes of the September
calculation, we applied a 5% annual increase factor to actual total
annual compensation amounts through 1991. During this period, the
relation of bonus to base pay averaged 85%.
If you need any further information, please let me know.
NDP/bcr
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NORDSON CORPORATION PREP. BY: JRL
PENSION CALCULATION DATE: 03/09/93
AGE 56 RETIREMENT 09:17 AM
FILE: WPMPENPV.WQ!
Note: Pension benefit paid from Nordson is paid at beginning of each period.
Life Expectancy - 27.7 years at age 56.
YEAR: 0 1 2 3 4 5 6 7 8
PAYMENT NUMBER: 1 2 3 4 5 6 7 8 9
DATE: Feb-96 Feb-97 Feb-98 Feb-99 Feb-2000 Feb-2001 Feb-2002 Feb-2003 Feb-2004
AGE: 56 57 58 59 60 61 62 63 64
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL CALCULATED
PENSION BENEFIT (1) 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977
LESS:
STANDARD OIL PENSION (2)
NORDSON QUAL. PLAN
PENSION (3)
SOCIAL SECURITY (7)
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL OFFSETS 0 0 0 0 0 0 0 0 0
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
PAYABLE FROM NORDSON 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977
========= ========= ========== ========== ========= ========= ========= ========= =========
YEAR: 9 10 11 12 13 14 15 16 17
PAYMENT NUMBER: 10 11 12 13 14 15 16 17 18
DATE: Feb-2005 Feb-2006 Feb-2007 Feb-2008 Feb-2009 Feb-2010 Feb-2011 Feb-2012 Feb-2013
AGE: 65 66 67 68 69 70 71 72 73
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL CALCULATED
PENSION BENEFIT (1) 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977
LESS:
STANDARD OIL PENSION (2) 42,956 42,956 42,956 42,956 42,956 42,956 42,956 42,956 42,956
NORDSON QUAL. PLAN
PENSION (3) 70,785 70,785 70,785 70,785 70,785 70,785 70,785 70,785 70,785
SOCIAL SECURITY (7) 7,019 7,019 7,019 7,019 7,019 7,019 7,019 7,019 7,019
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL OFFSETS 120,760 120,760 120,760 120,760 120,760 120,760 120,760 120,760 120,760
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
PAYABLE FROM NORDSON 374,217 374,217 374,217 374,217 374,217 374,217 374,217 374,217 374,217
========= ========= ========== ========== ========= ========= ========= ========= =========
YEAR: 18 19 20 21 22 23 24 25 26
PAYMENT NUMBER: 19 20 21 22 23 24 25 26 27
DATE: Feb-2014 Feb-2015 Feb-2016 Feb-2017 Feb-2018 Feb-2019 Feb-2020 Feb-2021 Feb-2022
AGE: 74 75 76 77 78 79 80 81 82
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL CALCULATED
PENSION BENEFIT (1) 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977 494,977
LESS:
STANDARD OIL PENSION (2) 42,956 42,956 42,956 42,956 42,956 42,956 42,956 42,956 42,956
NORDSON QUAL. PLAN
PENSION (3) 70,785 70,785 70,785 70,785 70,785 70,785 70,785 70,785 70,785
SOCIAL SECURITY (7) 7,019 7,019 7,019 7,019 7,019 7,019 7,019 7,019 7,019
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
TOTAL OFFSETS 120,760 120,760 120,760 120,760 120,760 120,760 120,760 120,760 120,760
--------- --------- ---------- ---------- --------- --------- --------- --------- ---------
PAYABLE FROM NORDSON 374,217 374,217 374,217 374,217 374,217 374,217 374,217 374,217 374,217
========= ========= ========== ========== ========= ========= ========= ========= =========
YEAR: 27 27.7 (6)
PAYMENT NUMBER: 28 29 PRESENT
DATE: Feb-2023 Oct-2023 VALUE AT
AGE: 83 84 TOTAL 5.75%
--------- --------- ---------- ----------
TOTAL CALCULATED
PENSION BENEFIT (1) 494,977 346,484 14,205,840 7,273,090
LESS:
STANDARD OIL PENSION (2) 42,956 30,069 846,233 318,823
NORDSON QUAL. PLAN
PENSION (3) 70,785 49,549 1,394,455 525,369
SOCIAL SECURITY (7) 7,019 4,913 138,274 52,096
--------- --------- ---------- ----------
TOTAL OFFSETS 120,760 84,532 2,378,963 896,288
--------- --------- ---------- ----------
PAYABLE FROM NORDSON 374,217 261,952 11,826,877 6,376,802
========= ========= ========== ==========
(1): ESTIMATED AS FOLLOWS:
AMOUNT SHOULD BE AVERAGE OF 36 HIGHEST
CONSECUTIVE MONTHS DURING SERVICE.
ESTIMATED BY FOLLOWING CALCULATION:
1,175,450 EST. CY 1993 PENSIONABLE EARNINGS
1,234,233 EST. CY 1994 PENSIONABLE EARNINGS
1,295,934 EST. CY 1995 PENSIONABLE EARNINGS
---------
3,705,606 SUBTOTAL
0.33 /36 MO. X 12 MO.
---------
1,235,202 AVERAGE FOR HIGHEST 36 MONTHS
TIMES: LESSER OF 56% OR
49.07% 1.6% X ((248 + MOS. OF NORDSON SERVICE) / 12)
---------
606,072 TOTAL PENSION INCOME
81.67% 0.4166% REDUCTION FOR EACH MONTH PRIOR TO AGE 60
---------
494,977 ADJUSTED TOTAL PENSION INCOME
=========
2/15/86 THROUGH 2/15/96
MONTHS OF NORDSON SERVICE = 120
2/15/96 THROUGH 11/03/99
MONTHS PRIOR TO AGE 60 = 44
(2): ASSUMES EMPLOYEE CONTRIBUTIONS ARE WITHDRAWN; EMPLOYER PAYOUT
BEGINS AT AGE 65. AGE 65 AMT FACTOR
42,956 X 100% = 42,956
(3): ESTIMATED AS FOLLOWS:
428,122 AVERAGE ANNUAL SALARY + BONUS;
EARNINGS ARE REDUCED BY IRS LIMIT (when applicable)
55% TIMES 55%
-------
235,467 PENSION BEFORE OFFSET/REDUCTION
(14,038) LESS SOCIAL SECURITY (ESTIMATED 1996 BENEFIT)
-------
221,429 PENSION AFTER S. S. OFFSET
33.32% SERVICE OFFSET (.0833 X MONTHS OF NORSDON SERVICE) / 30
-------
73,780 CALCULATED NORDSON PENSION BENEFIT
100% REDUCTION FOR AGE 65 DRAW
-------
73,780 NORDSON PENSION PAYABLE AT AGE 65
======= Section 415 test passed? NO
70,785 NORDSON PENSION PAYABLE AT AGE 65 After Section 415 Limit
=======
(4): Life Expectancy is from Appendix E (Table 1, Single Life Expectancy),
IRS Publication 590, 1992 Edition.
(5): Payments are 70% of full year amounts.
(6): Interest rate is based on PBGC Regulation Section 2619.26(b)(2)(iv).
This is the PBGC interest rate for immediate annuities in effect on the
valuation date.
On 01/01/93 the rate in effect is 5.75%
(7): 50% of estimated Social Security benefit for the year in which employee
attains age 65.
From Hewitt Associates table (1993 version).