The Board of Directors recognizes that transactions with related persons present a heightened potential for conflict of interest (or the perception of a conflict) and therefore has adopted this policy. This policy is to be followed for all transactions between Nordson Corporation (the “Company”) and its subsidiaries and executive officers, directors and other related persons.
It is the Company’s policy to discourage Interested Transactions with Related Persons (as those terms are defined herein) unless determined to be in the Company’s best interests and approved in accordance with the terms and conditions of this Policy. Accordingly, except as otherwise provided in the Policy, all Interested Transactions with Related Parties require prior approval of the Audit Committee of the Board of Directors. This policy is intended to supplement the Company’s Code of Business and Ethical Conduct.
The Audit Committee shall review the material facts of all Interested Transactions that require approval in accordance with this Policy and either approve or disapprove of the entry into the Interested Transaction, subject to the exceptions described below. In the review process, the Committee shall obtain, or shall direct management to obtain on its behalf, all information that the Committee believes to be relevant and important to a review of the transaction prior to its approval. In its deliberations, the Committee will take into account, among other relevant factors deemed appropriate, whether the Interested 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. The authority to approve an Interested Transaction may be delegated to the Chairperson of the Committee.
The Committee or the Chairperson, as the case may be, shall approve only those Interested Transactions that are determined to be in, or not inconsistent with, the best interests of the Company and its shareholders, taking into account all available facts and circumstances as the Committee or the Chairperson determines in good faith to be necessary. These facts and circumstances will typically include, but not be limited to, the benefits of the transaction to the Company; the impact on a director's independence in the event the related person is a director, an immediate family member of a director or an entity in which a director is a partner, shareholder or executive officer; the availability of other sources for comparable products or services; the terms of the transaction; and the terms of comparable transactions that would be available to unrelated third parties or to employees generally. No member of the Committee shall participate in any review, consideration or approval of any Interested Transaction with respect to which the member or any of his or her immediate family members is the Related Person. The Chairperson of the Audit Committee will review with the Audit Committee at its next regularly scheduled meeting any Interested Transaction occurring since the prior Audit Committee meeting which was approved by the Chairperson under the authority delegated by the Audit Committee.
The Audit Committee has reviewed the Interested Transactions described below in the section captioned “Standing Pre-Approval for Certain Interested Transactions” and determined that each of the Interested Transactions described therein shall be deemed to be pre-approved under the terms of this Policy. A summary of each new Interested Transaction deemed pre-approved pursuant to paragraphs (4)(a) and (6) under "Standing Pre-Approval for Certain Interested Transactions" below shall be provided to the Audit Committee for its review at the next regularly scheduled meeting of the Audit Committee following the transaction.
If an Interested Transaction will be ongoing, the Audit Committee may establish guidelines for the Company’s management to follow in its ongoing dealings with the Related Person. Thereafter, the Audit Committee shall periodically review and assess ongoing relationships with the Related Person to see that they are in compliance with such guidelines and that the Interested Transaction remains appropriate.
An "Interested Transaction" is any transaction, arrangement or relationship or series of similar transactions, arrangements or relationships (including any indebtedness or guarantee of indebtedness) in which:
- the aggregate amount involved will or may be expected to exceed $120,000 in any calendar year,
- the Company is a participant, and
- any Related Person has or will have a direct or indirect interest (other than solely as a result of being a director or a less than 10 percent beneficial owner of another entity).
A "Related Person" is any (a) person who is or was (since the beginning of the last fiscal year for which the Company has filed a Form 10-K and proxy statement, even if they do not currently serve in that role) an executive officer, director or nominee for election as a director, (b) greater than 5 percent beneficial owner of the Company’s common stock, or (c) immediate family member of any of the foregoing. Immediate family member includes a person’s spouse, parents, stepparents, children, stepchildren, siblings, mothers- and fathers-in-law, sons- and daughters-in-law, and brothers- and sisters-in-law and anyone residing in such person’s home (other than a tenant or employee).
Standing Pre-Approval for Certain Interested Transactions
The Audit Committee has reviewed the types of Interested Transactions described below and determined that each of the following Interested Transactions shall be deemed to be pre-approved for purposes of this Policy, even if the aggregate amount involved will exceed $120,000.
- Transactions involving compensation or indemnification of directors or executive officers duly approved by the Compensation Committee or the Board of Directors.
- Transactions involving reimbursement for routine expenses in accordance with Company policy.
- Transactions with another company at which a Related Person’s only relationship is as an employee (other than an executive officer), director or beneficial owner of less than 10% of that company’s voting capital, provided the transaction occurs in the ordinary course of business, is made on substantially the same terms, including rates and collateral, as those prevailing at the time for comparable transactions with other Persons or entities, and which do not involve more than normal risks of collection or present other unfavorable features.
- Contributions or grants by the Company to a charitable organization, foundation or university (a) at which a Related Person’s only relationship is as an employee (other than an executive officer) or a director, if the aggregate amount involved does not exceed the lesser of $200,000, or 2 percent of the charitable organization’s total annual receipts or (b) pursuant to any matching gift program maintained by the Company that is available on a broad basis to employees generally.
- Transaction where the Related Person’s interest arises solely from the ownership of the Company’s common stock or other securities and all holders of the Company’s common stock or such other securities are entitled to receive the same benefit on a pro rata basis (e.g. dividends).
- Any transaction with a Related Person involving services as a bank depositary of funds, transfer agent, registrar, trustee under a trust indenture, or similar services.
All Related Person Transactions that are required to be disclosed in the Company's filings with the Securities and Exchange Commission, as required by the Securities Act of 1933 and the Securities Exchange Act of 1934 and related rules and regulations, shall be so disclosed in accordance with such laws, rules and regulations.
The material features of this policy shall be disclosed in the Company’s annual report on Form 10-K or in the Company’s proxy statement, as required by applicable laws, rules and regulations.
The Board of Directors may amend or otherwise modify this Policy from time to time with the approval of a majority of the Independent Directors.