| þ | ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| o | TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
| A. | Full title of the plan and the address of the plan, if different from that of the issuer named below: | |
| NORDSON HOURLY-RATED EMPLOYEES’ SAVINGS TRUST PLAN | ||
| B. | Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: | |
| Nordson Corporation, 28601 Clemens Road, Westlake, Ohio 44145 |
| December 31 | ||||||||
| 2007 | 2006 | |||||||
ASSETS |
||||||||
Receivables: |
||||||||
Employer contributions |
$ | 1,248 | $ | 589 | ||||
Dividends |
10,237 | — | ||||||
Total Receivables |
11,485 | 589 | ||||||
Investments: |
||||||||
Nordson Corporation common stock |
3,569,988 | 8,525,614 | ||||||
Hartford Life GA #2374-A, 4% |
3,295,860 | 3,169,098 | ||||||
Mainstay
S&P 500 Index Fund I |
1,522,983 | 1,541,983 | ||||||
Mainstay Large Cap Growth I |
1,267,675 | 1,010,815 | ||||||
KeyBank NA Managed Guaranteed Investment Contract Fund |
1,345,342 | 1,108,257 | ||||||
MFS Intl New Discovery A |
1,182,001 | 1,021,107 | ||||||
Baron Small Cap Fund |
561,124 | 464,916 | ||||||
Mainstay Balanced Fund I |
509,185 | 574,833 | ||||||
Mainstay Cash Reserves Fund I |
561,960 | 514,353 | ||||||
PIMCO Total Return Fund (Admin) |
291,256 | 238,501 | ||||||
Hartford Life GA #2374-B, 4.5% |
310,525 | 307,627 | ||||||
Allianz NFJ Dividend Value A |
7,588 | — | ||||||
Participant Loans |
769,842 | 710,800 | ||||||
Total Investments |
15,195,329 | 19,187,904 | ||||||
TOTAL ASSETS |
15,206,814 | 19,188,493 | ||||||
LIABILITIES AND NET ASSETS |
||||||||
Payable to Nordson Corporation Union Employees Stock
Ownership Plan |
— | 5,416,224 | ||||||
Net Assets Available for Benefits at Fair Value |
15,206,814 | 13,772,269 | ||||||
Adjustment from fair value to contract value for fully benefit-responsive
contracts |
13,449 | 21,782 | ||||||
NET ASSETS AVAILABLE FOR BENEFITS |
$ | 15,220,263 | $ | 13,794,051 | ||||
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| Year Ended December 31 | ||||||||
| 2007 | 2006 | |||||||
Additions to Net Assets Attributed to: |
||||||||
Contributions: |
||||||||
Employer |
$ | 162,955 | $ | 156,413 | ||||
Employee |
430,837 | 422,335 | ||||||
| 593,792 | 578,748 | |||||||
Interest and dividend income |
596,417 | 528,172 | ||||||
Net unrealized/realized appreciation |
775,552 | 2,095,934 | ||||||
Total Additions |
1,965,761 | 3,202,854 | ||||||
Deductions from Net Assets Attributed to: |
||||||||
Benefits paid to participants |
586,515 | 1,633,562 | ||||||
Net Increase |
1,379,246 | 1,569,292 | ||||||
Transfer from (to) another plan: Nordson Corporation
Union Employees Stock Ownership Plan and Trust |
46,966 | (5,416,224 | ) | |||||
Net Assets Available for Benefits: |
||||||||
Beginning of Year |
13,794,051 | 17,640,983 | ||||||
End of Year |
$ | 15,220,263 | $ | 13,794,051 | ||||
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| 1 | Description of Plan | |
| The following description of The Nordson Hourly-Rated Employees’ Savings Trust Plan provides only general information. Participants should refer to the Plan document for a complete description of the Plan’s provisions. | ||
| General: | ||
| The Plan, which began April 16, 1962, is a defined contribution plan covering certain hourly employees of Nordson Corporation (the Company) covered by a collective bargaining agreement. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). | ||
| Effective December 31, 2006, the ESOP feature of the Plan was spun off into a separate plan, the Nordson Corporation Union Employees Stock Ownership Plan. During 2007, $5,416,224 was transferred to the new plan. | ||
| Eligibility: | ||
| All hourly-rated, full time domestic employees of the Company who are covered by a collective bargaining agreement are eligible to participate in the Plan after completion of 90 days of service. | ||
| Contributions: | ||
| Pre-tax employee contribution — Participants may elect between 1% and 16% of their compensation to be contributed to the Plan by the Company. | ||
| Post tax employee contribution — Participants may elect between 1% and 16% of their compensation to be contributed to the Plan by the Company. | ||
| Employer Contributions — The Company makes contributions equal to 50% of each participant’s contributions which were attributable to the first 6% of compensation, subject to Plan restrictions. | ||
| The Company may also make additional discretionary contributions, if authorized by its Board of Directors. | ||
| Rollover contributions from other Plans are also accepted, providing certain specified conditions are met. | ||
| Contributions are subject to limitations on annual additions and other limitations imposed by the Internal Revenue Code as defined in the Plan agreement. |
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| 1 | Description of Plan, Continued | |
| Participants’ Accounts: | ||
| A separate account in each fund is maintained for each participant. The account balances for participants are adjusted periodically, as follows: |
| a) | As of the date with respect to which the contribution was earned. | ||
| b) | Daily for a pro rata share of each respective Fund’s net investment income, determined by the percentage increase or decrease in the value of the Fund using a synthetic net asset value approach. | ||
| c) | Annually for a pro rata share of forfeitures, determined by the ratio that each active participant’s percentage of regular contribution (1 to 3%) for the Plan year bears to the aggregate percentage of employee’s regular contributions for such Plan year of all active participants. However, no forfeitures of a participant’s account shall be allocated prior to the earlier of a five year period commencing from the date on which the participant’s employment was terminated or upon the participant requesting distribution. |
| Vesting: | ||
| Participants are fully vested in all employee contributions and rollover contributions and the related gains and losses. Participants vest in employer contributions (adjusted for gains and losses) 331/3% for each year of service. Prior to January 1, 2007, participants vested at the rate of 20% for each year of service. | ||
| Forfeitures: | ||
| Forfeitures due to termination from the Plan before a participant is 100% vested shall be allocated to remaining participants. Forfeitures for the years ended December 31, 2007 and 2006 were $125 and $1,939, respectively. |
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| 1 | Description of Plan, Continued | |
| Participants’ Loans: | ||
| Loans are permitted under certain circumstances and are subject to limitations. Participants may borrow from their fund accounts up to a maximum equal to the lesser of $50,000 or 50% of their account balance. Loans are repaid over a period not to exceed 5 years with exceptions for the purchase of a primary residence. | ||
| The loans are secured by the balance in the participant’s account and bear interest at rates established by the Company. Principal and interest are paid ratably through monthly payroll deductions. | ||
| Payment of Benefits: | ||
| Upon retirement after age 55, or death or disability if earlier, the balance in the separate account is paid to the participant or his beneficiaries either in a lump sum or in installments. Until distribution, each account shall participate in the allocation of earnings and appreciation of assets. | ||
| If the employment of a participant is terminated for any cause other than death or total disability prior to the attainment of the age of 55 years, there shall be a distribution based on the number of years the participant participated in the Plan. The portion of the account to be distributed will be equal to all the employee’s contributions and related earnings, plus 33 1/3% of the remainder of the balance (the employer’s matching contribution, forfeitures and related earnings) in the separate account for each full year of participation in the Plan up to 100%. Any portion not distributed shall be forfeited. | ||
| Investment Options: | ||
| Each participant may direct that all of his contributions and, when the participant is fully vested or attains age 55, all matching employer contributions, be invested jointly in 10% increments in any of the investment funds offered by the Plan. For participants not fully vested and less than 55 years old, all Company matching contributions are deposited in the Nordson Match Stock Fund. A participant who has completed at least 3 years of service may elect to have his separate account which is attributable to employer matching contributions and which is invested in the Nordson Match Stock Fund transferred to any other investment option. |
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| 2 | Summary of Significant Accounting Policies | |
| Basis of Accounting: | ||
| The Plan’s transactions are reported on the accrual basis of accounting. | ||
| Investment Valuation: | ||
| Investments in equity and debt securities, traded on a national exchange, and mutual funds are valued at the market price on the last business day of the Plan year. Securities traded in the over-the-counter market are valued at the mean between the last reported bid and ask prices. Deposits under group annuity contracts are valued at the fair value as reported by the insurance companies. Guaranteed investment contracts are valued at contract value which represents contributions and reinvested income, less any withdrawals plus accrued interest, because these investments have fully benefit-responsive features. Participant loans are valued at amortized cost, which represents fair value. | ||
| As described in Financial Accounting Standards Board Staff Position, FSP AAG INV-1 and SOP 94-4-1, Reporting of Fully Benefit-Responsive Investment Contracts Held by Certain Investment Companies Subject to the AICPA Investment Company Guide and Defined Contribution Health and Welfare and Pension Plans (the FSP), investment contracts held by a defined contribution plan are required to be reported at fair value. However, contract value is the relevant measurement attribute for that portion of the net assets available for benefits of a defined-contribution plan attributable to fully benefit-responsive investment contracts because contract value is the amount participants would receive if they were to initiate permitted transactions under the terms of the plan. As required by the FSP, the Statement of Net Assets Available for Benefits presents the fair value of the investment contracts as well as the adjustment of the fully benefit-responsive investment contracts from fair value to contract value. The fair value is based on various valuation approaches dependent on the underlying investments of the contract. | ||
| Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date. | ||
| Interest is calculated and paid using money market interest rates on late transfers of money between the various funds. This is done to record the proper investment earnings within each fund. |
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| 2 | Summary of Significant Accounting Policies, Continued | |
| Use of Estimates: | ||
| The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. | ||
| Plan Termination: | ||
| Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of Plan termination, participants will become 100% vested in their accounts. | ||
| Risks and Uncertainties: | ||
| The Plan invests in various investment securities. Investment securities are exposed to various risks such as interest rate, market and credit risks. Due to the level of risk associated with certain investment securities, it is at least reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect participants’ account balances and the amounts reported in the statements of net assets available for benefits. | ||
| 3 | Tax Status | |
| On December 12, 2003, the Internal Revenue Service stated that the Plan, as then designed, was in compliance with the applicable requirements of the Internal Revenue Code. The Plan has been amended, however, the Plan Administrator and the Plan’s tax counsel believe that the Plan is currently designed and being operated in compliance with the applicable requirements of the Internal Revenue Code. Therefore, they believe that the Plan was qualified and the related trust was tax-exempt as of the financial statement date. |
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| 4 | Investments | |
| The Plan’s funds are invested in the common stock of the Company, mutual funds, and guaranteed investment contracts. Investments which constitute more than 5% of the Plan’s net assets are: |
| 2007 | 2006 | |||||||
Nordson Corporation common stock |
$ | 3,569,988 | $ | 8,525,614 | ||||
Hartford Life GA #2374-A, 4% |
$ | 3,295,860 | $ | 3,169,098 | ||||
Mainstay
S&P 500 Index Fund I |
$ | 1,522,983 | $ | 1,541,983 | ||||
Mainstay Large Cap Growth I |
$ | 1,267,675 | $ | 1,010,815 | ||||
KeyBank NA Managed Guaranteed Investment Contract Fund |
$ | 1,345,342 | $ | 1,108,257 | ||||
MFS Intl New Discovery A |
$ | 1,182,001 | $ | 1,021,107 | ||||
Participant Loans |
$ | 769,842 | $ | 710,800 | ||||
| During 2007 and 2006, the Plan’s investments changed in fair value as follows: |
| 2007 | 2006 | |||||||
Mutual funds |
$ | 146,094 | $ | 359,959 | ||||
Common/collective funds |
60,803 | 65,898 | ||||||
Nordson Corporation common stock |
568,655 | 1,670,077 | ||||||
| $ | 775,552 | $ | 2,095,934 | |||||
| 5 | Guaranteed Investment Contracts | |
| Guaranteed investment contracts are valued at contract value because the investments are fully benefit-responsive. For example, participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. However, withdrawals influenced by Company-initiated events, such as in connection with the sale of a business, may result in distributions at other than contract value. There are no reserves against contract value for credit risk of contract issuers or otherwise. The fair value of the investment contracts at December 31, 2007 and 2006 was $1,345,342 and $1,108,257. The average yield was approximately 4.49% for 2007 and 4.71% for 2006 and the crediting interest rate was approximately 4.54% for 2007 and 4.63% for 2006. The crediting rate for this investment contract is reset annually by the issuer but cannot be less than zero. |
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| 6 | Nonparticipant-Directed Investments | |
| Information about the net assets and the significant components of changes in net assets related to nonparticipant-directed investments, which are included within the Nordson Corporation Stock Fund and the Mainstay Cash Reserves Fund I, is as follows: |
| 2007 | 2006 | |||||||
Nordson Match Stock Fund |
||||||||
Net Assets: |
||||||||
Nordson Corporation common stock |
$ | 470,318 | $ | 431,310 | ||||
Mainstay Cash Reserves Fund I |
18,331 | 28,859 | ||||||
Dividend receivable |
8,888 | — | ||||||
| $ | 497,537 | $ | 460,169 | |||||
Changes in Net Assets: |
||||||||
Contributions |
$ | 7,388 | $ | 3,501 | ||||
Interest and dividend income |
6,236 | 6,470 | ||||||
Net realized and unrealized gains |
64,892 | 88,585 | ||||||
Distributions to participants |
(26,166 | ) | (26,441 | ) | ||||
Net transfers to participant-directed funds |
(14,982 | ) | (12,808 | ) | ||||
| $ | 37,368 | $ | 59,307 | |||||
| 2007 | 2006 | |||||||
Nordson ESOP Stock Fund |
||||||||
Net Assets: |
||||||||
Nordson Corporation common stock |
$ | — | $ | 5,403,565 | ||||
Mainstay Cash Reserves Fund I |
— | 12,659 | ||||||
Payable to Nordson Corporation Union
Employees Stock Ownership Plan |
— | (5,416,224 | ) | |||||
| $ | — | $ | — | |||||
Changes in Net Assets: |
||||||||
Interest and dividend income |
$ | — | $ | 84,402 | ||||
Net realized and unrealized gains |
— | 1,058,876 | ||||||
Distributions to participants |
— | (478,664 | ) | |||||
Fees and expenses |
— | (294 | ) | |||||
Net transfers to participant-directed funds |
— | (28,323 | ) | |||||
Transfer to Nordson Corporation Union
Employees Stock Ownership Plan |
— | (5,416,224 | ) | |||||
| $ | — | $ | (4,780,227 | ) | ||||
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| 7 | Party-in-Interest Transactions | |
| Certain legal, accounting and administrative expenses are paid by the Company. | ||
| 8 | Diversification | |
| An employee who has participated under the Nordson Corporation Union Employees Stock Ownership Plan for ten or more years and who has attained age 55 may elect, within the 90 day election period following the close of each plan year during his qualified period, to transfer up to 25% of the aggregate balance of his separate account from the Nordson Corporation Union Employees Stock Ownership Plan to the Nordson Hourly-Rated Employees’ Savings Trust Plan. For the last Plan year in his qualified period he may elect to transfer up to 50% of the aggregate balance of his separate account. The qualified period is the six Plan year period beginning with the Plan year following the Plan year in which the participant attains age 55 or completes ten years as a participant, whichever is later. |
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| (b) | ( c ) | |||||||||||
| Identity of Issue, | Description of Investment Including | (e) | ||||||||||
| Borrower, Lessor, | Maturity Date, Rate of Interest, | (d) | Current | |||||||||
| (a) | or Similar Party | Collateral, Par or Maturity Value | Cost** | Value | ||||||||
*
|
Nordson Corporation common stock | 53,479 shares, Common Stock | N/A | $ | 3,099,670 | |||||||
*
|
Nordson Corporation common stock | 8,115 shares, Common Stock | $ | 294,329 | 470,318 | |||||||
| Allianz NFJ Dividend Value A | 455 shares, Mutual Fund | N/A | 7,588 | |||||||||
| Hartford Life GA #2374-A, 4% | GA #2374-A, 4%, Group Annuity Contract | N/A | 3,295,860 | |||||||||
| Mainstay S&P 500 Index Fund I | 45,059 shares, Mutual Fund | N/A | 1,522,983 | |||||||||
| Mainstay Large Cap Growth I | 174,371 shares, Mutual Fund | N/A | 1,267,675 | |||||||||
^^
|
KeyBank NA Managed Guaranteed Investment Contract Fund |
64,141 shares, Guaranteed Investment Contract | N/A | 1,358,791 | ||||||||
| MFS Intl New Discovery A | 48,582 shares, International Stock Fund | N/A | 1,182,001 | |||||||||
| Baron Small Cap Fund | 23,547 shares, Mutual Fund | N/A | 561,124 | |||||||||
| Mainstay Balanced Fund I | 19,390 shares, Mutual Fund | N/A | 509,185 | |||||||||
| Mainstay Cash Reserves Fund I | 25,870 shares, Money Market Fund | $ | 25,870 | 25,870 | ||||||||
| Mainstay Cash Reserves Fund I | 536,090 shares, Money Market Fund | N/A | 536,090 | |||||||||
| PIMCO Total Return Fund (Admin) | 27,246 shares, Bond fund | N/A | 291,256 | |||||||||
| Hartford Life GA #2374-B, 4.5% | GA #2374-B, 4.5%, Group Annuity Contract | N/A | 310,525 | |||||||||
*
|
Participant Loans | Notes receivable (interest ranging from 4% to 10%) | N/A | 769,842 | ||||||||
| $ | 15,208,778 | |||||||||||
| * | Party-in-interest to the Plan. | |
| ** | Historical cost provided only for nonparticipant-directed investments. | |
| ^^ | Amount reported at contract value. |
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| (h) Current | ||||||||||||||||||||||||
| (a) | (f) Expense | Value of | ||||||||||||||||||||||
| Identity | Incurred | Asset on | ||||||||||||||||||||||
| of Party | (c) Purchase | (d) Selling | (e) Lease | with | (g) Cost of | Transaction | (i) Net Gain | |||||||||||||||||
| Involved | (b) Description of Asset | Price | Price | Rental | Transaction | Asset | Date | (Loss) | ||||||||||||||||
New York Life
|
Mainstay Cash Reserves Fund I | $ | 1,326,145 | $ | — | $— | $— | $ | 1,326,145 | $ | 1,326,145 | $— | ||||||||||||
Trust Company
|
Mainstay Cash Reserves Fund I | $ | — | $ | 1,496,061 | $— | $— | $ | 1,496,061 | $ | 1,496,061 | $— | ||||||||||||
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| By | /s/ GREGORY A. THAXTON | |||||
| Vice President, Chief Financial Officer | ||||||
| Nordson Corporation | ||||||