donaldson102858_11k.htm - Generated by SEC Publisher for SEC Filing

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549

 

FORM 11-K

 

 

(Mark One)

 

x

ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2009 or

 

 

o

TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from _____________ to _______________

 

 

Commission file number     1-7891

 

 

A.

Full title of the plan and the address of the plan, if different from that of the issuer named below:

 

 

DONALDSON COMPANY, INC.
RETIREMENT SAVINGS AND
EMPLOYEE STOCK OWNERSHIP PLAN

 

 

B.

Name of issuer of the securities held pursuant to the plan and the address of its principal executive office:

 

 

DONALDSON COMPANY, INC.
1400 WEST 94TH STREET
MINNEAPOLIS, MINNESOTA 55431

 


 

Donaldson Company, Inc.
Retirement Savings and Employee Stock
Ownership Plan

Financial Statements Including Report of Independent Registered Public Accounting Firm and Supplemental Schedule
December 31, 2009 and 2008

 

 

 

 

 

 

 


 

Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Index

 

 

 

Page(s)

Report of Independent Registered Public Accounting Firm

1

Financial Statements

 

Statements of Net Assets Available for Benefits December 31, 2009 and 2008

2

Statement of Changes in Net Assets Available for Benefits Year Ended December 31, 2009

3

Notes to Financial Statements

4-11

Supplemental Schedule

 

Schedule H, line 4i – Schedule of Assets (Held at End of Year) December 31, 2009

12

Signature

13

Exhibit:  Consent of Independent Registered Public Accounting Firm

14

 

Note:

Other schedules required by 29 CFR 2520.103-10 of the Department of Labor’s Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974 have been omitted because they are not applicable.

 

 

 

 


 

Report of Independent Registered Public Accounting Firm

 

 

To the Investment Committee and Administrator of the

Donaldson Company, Inc. Retirement Savings and Employee Stock Ownership Plan

Minneapolis, Minnesota

 

We have audited the accompanying statements of net assets available for benefits of Donaldson Company, Inc. Retirement Savings and Employee Stock Ownership Plan (the Plan) as of December 31, 2009 and 2008 and the related statement of changes in net assets available for benefits for the year ended December 31, 2009. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Plan is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.  Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Plan's internal control over financial reporting.  Accordingly, we express no such opinion.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

 

In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2009 and 2008, and the changes in net assets available for benefits for the year ended December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.

 

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedule of the Plan, as listed in the table of contents, is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental information is the responsibility of the Plan's management. The supplemental information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the basic financial statements taken as a whole.

 

 

/s/ Baker Tilly Virchow Krause, LLP

Baker Tilly Virchow Krause, LLP

Minneapolis, Minnesota

June 9, 2010

 

 

 

1

 

 

Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Statements of Net Assets Available for Benefits

December 31, 2009 and 2008

 

2009

2008

  

 

 

 

Assets

 

 

 

Investments, at fair value

 

 

 

Interest-bearing cash

$

891,042

$

  816,883

 

Mutual funds

 

165,661,966

 

123,195,632

 

Donaldson Company, Inc. common stock fund

 

231,366,722

 

198,328,306

 

Common / collective trust

 

40,200,408

 

41,175,419

 

Participant loans

 

4,269,641

 

4,125,497

 

 

 

 

Total investments, at fair value

 

442,389,779

 

367,641,737

 

 

 

 

Receivables

 

 

 

Employer contributions receivable

 

152,526

 

2,209,092

 

Participant contributions receivable

 

376,118

 

 

 

 

 

Total assets

 

442,918,423

 

369,850,829

 

 

 

 

Net assets available for benefits at fair value

 

442,918,423

 

369,850,829

 

 

 

 

Adjustment from fair value to contract value for fully benefit-responsive investment contract

 

          505,081

 

       1,670,914

 

 

 

 

Net assets available for benefits

$

443,423,504

$

 371,521,743

 

 

 

The accompanying notes are an integral part of these financial statements.

2

 


 

 

Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Statement of Changes in Net Assets Available for Benefits

Year Ended December 31, 2009

 

 

Additions to net assets attributed to:

Investment income

 

 

 

Interest and dividend income

 

$

6,218,633

 

Net appreciation of the fair value of investments

 

 

81,083,971

 

 

 

 

87,302,604

 

 

 

 

 

 

Contributions

 

 

 

 

Employer

 

 

4,138,158

 

Participants

 

 

11,985,440

 

Rollovers

 

 

457,880

 

     Total additions

 

 

16,581,478

 

 

 

 

 

 

Deductions from net assets attributable to:

 

 

 

 

Benefits paid to participants

 

 

(31,944,333

)

Administrative expenses

 

 

(37,988

)

     Total deductions

 

 

(31,982,321

)

 

 

 

 

 

Net increase in net assets available for benefits

 

 

71,901,761

 

 

 

 

 

 

Net assets available for benefits

 

 

 

 

Beginning of year

 

 

371,521,743

 

 

 

 

 

 

End of year

 

$

443,423,504

 

 

 

 

The accompanying notes are an integral part of these financial statements.

3

 


Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Notes to Financial Statements

December 31, 2009 and 2008

 

1.     Description of the Plan

The Donaldson Company, Inc. Retirement Savings and Employee Stock Ownership Plan (the “Plan”) is a defined contribution plan sponsored and administered by Donaldson Company, Inc. (the “Company”). The Plan is subject to the applicable provisions of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

 

The following description of the Plan is provided for general information purposes only. Participants should refer to the summary plan description for a more complete description of the Plan’s provisions.

 

Fidelity Management Trust Company is the Plan’s trustee (the “Trustee”) and recordkeeper.

 

Eligibility

All regular full-time and part-time employees are eligible to participate in the Plan upon employment, as defined by the Plan document. Employees covered by a labor agreement are not eligible for any Company contributions, unless their labor agreement and the Plan document provides for it.

 

Contributions

Each year, eligible participants may contribute to the Plan up to 25% of pre-tax annual compensation, as defined by the Plan. Effective March 29, 2010, participants may contribute up to 40% of pre-tax annual compensation, as defined by the Plan.  The Plan was amended in April 2009 to limit contributions that highly compensated individuals can make to the Plan to 6% of pre-tax annual compensation. This limit will be eliminated effective January 1, 2011.  For 2009, per IRS regulations, highly compensated individuals have been defined as those that earned more than $110,000.  Participants may also contribute amounts representing rollover distributions from other qualified retirement plans with the approval of the Administrative Committee. The Administrative Committee consists of members appointed from time to time by the Donaldson Company, Inc. Chief Executive Officer.  Participants over age 50 may contribute an additional catch-up contribution.

 

The Company makes fixed matching contributions to the Plan based on participant contributions into the Plan, for employees eligible for the matching contribution as defined in the Plan document. Fixed matching contributions are calculated at 100% of up to 3% of compensation deferred by the participant and deposited into the Plan and 50% of the next 2% of compensation deferred by the participant and deposited into the Plan.  The Plan was amended effective April 13, 2009, to reduce Company fixed matching contributions to the Plan for Exempt employees.  After April 13, 2009, fixed matching contributions for Exempt employees were calculated at 50% of up to 3% of compensation deferred by the participant and deposited into the Plan and 25% of the next 2% of compensation deferred by the participant and deposited to the Plan.  In addition, the Company’s fixed matching contribution was eliminated for Company Executive Officers and Vice Presidents.  The Plan was amended effective March 29, 2010, to return the Plan to its state prior to the April 13, 2009 amendment as discussed above.  Effective October 2008, the Plan was amended to limit the amount of the Company match that is invested in the Company’s common stock.  The fixed matching contributions are made in cash. Fifty percent of the matching contribution is invested directly in the Company’s common stock while the other fifty percent is invested as the participant’s pre-tax contribution are invested. 

 

The Company may make discretionary contributions to the Plan from time to time, for employees eligible for the discretionary contribution as defined in the Plan document. Discretionary contributions are allocated among the participants pro rata based upon the total annual compensation of participants who have 1,000 hours of service in the Plan year and are in employment of the Company on the last day of the Plan year. Subsequent to each Plan year end, the Company made a discretionary contribution of $0 and $1,822,051 for the Plan years ended December 31, 2009 and 2008, respectively. The 2008 discretionary contribution was made in the Company’s common stock.

 

4

 


Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Notes to Financial Statements

December 31, 2009 and 2008

 

Effective October 2008, the discretionary contributions may be made in cash or in the Company’s common stock.  If the contribution is made in cash, it will be invested according to the participant’s investment election for their pre-tax contributions.

 

Effective August 1, 2009, the Plan was amended to provide an annual Company contribution to employees in the Chillicothe, Missouri facility covered by a collective bargaining agreement.  A Company contribution equal to 4% of the eligible employees pay is made subsequent to the Plan year end.  For the Plan year ended December 31, 2009 the Company contribution for Chillicothe employees was $31,119.  The contribution is invested according to the participant’s investment election for their pre-tax contributions.  For employees not making pre-tax contributions, this contribution will be made to the default investment fund.

 

Participant Accounts

Participants direct the investment of their contributions into various investment options offered by the Plan. If a participant does not allocate his or her contributions, the contributions are placed in the age appropriate Fidelity Freedom Fund. Effective October 2008, the Plan was amended to limit the amount of contributions the participant may directly invest in the Company’s common stock to 15% of their contributions.

 

Company contributions were allocated to the Donaldson Company, Inc. common stock fund.  Effective October 2008, the Plan was amended to change the investment of Company contributions.  Fifty percent of the fixed matching contributions is now allocated to the Donaldson Company, Inc. common stock fund and the other fifty percent of the fixed matching contributions is allocated to the investments as directed by the participants for their own pre-tax contributions.

 

The allocation of the participant’s contributions to the investment funds may be changed daily. There are no restrictions on transfers among or between the various investment options for employee contributions. Effective October 2008, participants may transfer money out of the Donaldson Company, Inc. common stock fund, but they may not transfer money into the Donaldson Company, Inc. common stock fund.  Each participant’s account is credited with his or her contributions, including rollover distributions, and his or her share of Company contributions, and an allocation of related investment earnings thereon. Allocation of investment earnings is based on the value of the participant’s account at the close of each day.

 

Vesting

Participants are 100% vested in their accounts at all times.

 

Payment of Benefits

Upon termination of employment, disability or termination of the Plan, a participant or designated beneficiary will receive the participant’s account balance in a lump-sum payment. Hardship withdrawals, as defined in the Plan document, are allowed at any time, subject to approval by the Administrative Committee.

 

Participant Loans

Under the Plan document, participants may borrow up to 50% of their account balance or $50,000, whichever is less. Loans must be repaid by the participant within five years, unless the loan is used to acquire the participant’s primary residence in which case the term may not exceed ten years. The loan interest is 1% over the prime lending rate on the first day of the Plan year (January 1) coinciding with the year in which the loan is granted. Interest rates on outstanding loans at December 31, 2009, ranged from 4.25% to 10.50%. Loans mature at various dates through October 2019 and are generally paid through payroll deductions.

 

5

 


Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Notes to Financial Statements

December 31, 2009 and 2008

 

Plan Termination

The Company has the right under the Plan document to amend or terminate the Plan. In the event of termination of the Plan, the assets of the Plan will be distributed to the participants in accordance with the Plan document.

 

Subsequent Events

For the year ended December 31, 2009, the Company has evaluated subsequent events for potential recognition and disclosure through the issuance date of the financials. No items requiring disclosure were noted.

 

2.     Summary of Significant Accounting Policies

The accompanying financial statements have been prepared on an accrual basis. The following is a summary of significant policies which are in conformity with accounting principles generally accepted in the United States of America and are consistently followed by the Plan in the preparation of its financial statements.

 

Valuation of Investments

Investments in mutual funds are stated at fair value based on quoted market prices. Investments in the Donaldson Company, Inc. common stock fund are valued based on the fair value of the underlying investments, primarily Donaldson Company, Inc. common stock, which is valued at quoted market prices. 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.  The Statements of Net Assets Available for Benefits present the fair value of the investment in the common collective trust as well as the adjustment of the common/collective trust from fair value to contract value relating to the underlying investment contracts. Loans are valued at amortized cost (approximates fair value), which consists of outstanding principal and any related accrued interest.

 

Investment Earnings

Investment income is recorded as earned. Dividend income is recorded on the ex-dividend date. The Plan presents the net appreciation in the fair value of its investments in the Statement of Changes in Net Assets Available for Benefits. Net appreciation consists of the realized gains or losses and the unrealized appreciation (depreciation) on those investments.

 

Contributions

Participant contributions and Company matching contributions are recorded in the period the Company makes the payroll deductions. Company discretionary contributions, if any, are recorded in the period in which they were declared.

 

Benefits Paid to Participants

Benefits paid to participants are recorded when paid.

 

Plan Expenses

Investment management fees and administrative fees charged by the Trustee are paid by the Plan. All other expenses, including legal, accounting and other services, are paid by the Company.

 

Use of Estimates

The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of net assets available for benefits at the date of the financial statements and the reported amounts of changes in net assets available for benefits during the reporting period. Ultimate results could differ from those estimates.

 

6

 


Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Notes to Financial Statements

December 31, 2009 and 2008

 

Risks and Uncertainties

The Plan provides for various investment options in various combinations of investment securities. Investment securities are exposed to various risks including, but not limited to, interest rates, market conditions and credit risks. Due to the level of risk associated with certain investment securities and the level of uncertainty related to changes in the value of 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 Statement of Net Assets Available for Benefits in future periods.

 

Concentration of Market Risk

At December 31, 2009 and 2008, approximately 52% and 53% of the Plan’s net assets available for benefits were invested in the Donaldson Company, Inc. Common Stock Fund, respectively. The underlying value of this fund is dependent on the performance of the Company and the market’s evaluation of such performance. It is at least reasonably possible that changes in the fair value of the Company’s common stock in the near term could materially affect participants’ account balances and the amounts reported in the Statement of Net Assets Available for Benefits and the Statement of Changes in Net Assets Available for Benefits in future periods.

 

Reclassification

For comparability, certain 2008 amounts have been reclassified to conform with classifications adopted in 2009.

 

3.     Investments

The fair values of individual investments that represent 5% or more of the Plan’s net assets available for benefits were as follows as of December 31, 2009 and 2008, respectively:

 

 

 

2009

 

2008

 

Donaldson Company, Inc. Common Stock Fund

 

$

231,366,722

 

$

198,328,306

 

Fidelity Managed Income Portfolio II Fund

 

 

40,200,408

 

 

41,175,419

 

Fidelity Contrafund

 

 

40,480,217

 

 

32,401,357

 

Fidelity Equity Income Fund

 

 

25,392,144

 

 

20,680,993

 

 

During the year ended December 31, 2009, investments had net appreciation in value as follows:

 

Net appreciation of mutual funds

 

$

31,878,495

 

Net appreciation of Company common stock

 

 

49,205,476

 

 

 

$

81,083,971

 

 

At December 31, 2009, the Donaldson Company, Inc. common stock fund consisted of 5,438,784 shares of the Company’s common stock valued at $231,365,886 and $836 in the Fidelity Institutional Cash Portfolio which consists mainly of cash. At December 31, 2008, the Donaldson Company, Inc. common stock fund consisted of 5,893,824 shares of the Company’s common stock valued at $198,327,166 and $1,140 of cash in the Fidelity Institutional Cash Portfolio.

 

7

 


Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Notes to Financial Statements

December 31, 2009 and 2008

 

4.     Nonparticipant-Directed Investments

At December 31, 2009 and 2008 the balance in the nonparticipant-directed portion of the Donaldson Company, Inc. common stock fund totaled $231,366,722 and $198,328,306, respectively.  Information about the significant components of the changes in net assets available for benefits relating to the nonparticipant-directed investments is as follow:

 

 

 

Year-ended
December 31,
2009

 

Changes in Nonparticipant-Directed Net Assets of Donaldson Company, Inc. common stock fund:

 

 

 

Contributions

 

$

4,749,103

 

Interest and dividend income

 

 

1,751,945

 

Net appreciation

 

 

49,205,476

 

Benefits paid to participants

 

 

(15,307,688

)

Transfers to participant-directed investments

 

 

(7,360,420

)

 

 

$

33,038,416

 

 

5.     Tax Status

The Plan has received a favorable determination letter from the Internal Revenue Service, dated September 20, 2002, stating that the Plan is designed in accordance with the applicable sections of the Internal Revenue Code (the “Code”) and is therefore generally exempt from federal income taxes under provisions of Section 501(a). The Plan has been amended since receiving the determination letter. However, the Plan administrator believes that the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. Therefore, no provision for income taxes has been included in the Plan’s financial statements.

 

6.     Related Party Transactions

Participants have the option to direct their contributions to be invested in mutual funds which are sponsored by the Trustee and a Company stock fund comprised primarily of Donaldson Company, Inc. common stock. The Trustee is authorized, under contract provisions and by exemption under 29 CFR 408(b) of ERISA regulations, to invest in securities under its control and in the Company’s common stock. For the year ended December 31, 2009, purchases and sales of the Company’s common stock were $61,902,679 and $80,935,332, respectively.

 

7.     Fair Value Measurements

Financial Accounting Standards Board Statement Accounting Standards Codification Topic 820 (ASC 820) establishes a framework for measuring fair value.  That framework provides a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value.  The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (level 1 measurements) and the lowest priority to unobservable inputs (level 3 measurements).  The three levels of the fair value hierarchy under ASC 820 are described below.

 

8

 


Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Notes to Financial Statements

December 31, 2009 and 2008

 

Level 1 –  Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Plan has the ability to access.

 

Level 2 – Inputs to the valuation methodology include:

Quoted prices for similar assets or liabilities in active markets;

Quoted prices for identical or similar assets or liabilities in inactive markets;

Inputs other than quoted prices that are observable for the asset or liability; and

Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

 

Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

 

The asset’s or liability’s fair value measurement level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement.  Valuation techniques used need to maximize the use of observable inputs and minimize the use of unobservable inputs.

 

The following is a description of the valuation methodologies used for assets measured at fair value.   There have been no changes in the methodologies used during the year ended December 31, 2009.

 

Donaldson Company, Inc. Common Stock Fund: Investments in the Donaldson Company, Inc. common stock fund are valued based on the fair value of the underlying investments, primarily Donaldson Company, Inc. common stock, which is valued at quoted market prices.

 

Mutual funds:  Investments in mutual funds are stated at fair value based on quoted market prices.

 

Common / Collective trusts:  Investments in the common / collective trust are valued at contract value, which approximates fair value. 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.  The Statements of Net Assets Available for Benefits present the fair value of the investment in the common collective trust as well as the adjustment of the common/collective trust from fair value to contract value relating to the underlying investment contracts.

 

Participant loans:  Participant loans are valued at amortized cost (approximates fair value), which consists of outstanding principal and any related accrued interest.

 

The methods described above may produce a fair value calculation that may not be indicative of the net realizable value or reflective of future fair values.  Furthermore, while the Plan believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.

 

9

 

Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Notes to Financial Statements

December 31, 2009 and 2008

 

The following table sets forth by level, within the fair value hierarchy, the Plan’s assets at fair value:

 

 

Assets at Fair Value as of December 31, 2009

 

 

Level 1

Level 2

Level 3

Total

 

 

 

 

 

 

 

Donaldson Company, Inc. Common Stock Fund

 

$

231,366,722

$

$

$

231,366,722

 

Mutual Funds and Interest Bearing Cash

 

 

166,553,008

 

 

 

166,553,008

 

Common/Collective Trust

 

 

 

40,200,408

 

 

40,200,408

 

Participant loans

 

 

 

 

 

4,269,641

 

4,269,641

 

Total assets at fair value

 

$

397,919,730

$

40,200,408

$

4,269,641

$

442,389,779

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets at Fair Value as of December 31, 2008

 

 

Level 1

Level 2

Level 3

Total

 

 

 

 

 

 

 

Donaldson Company, Inc. Common Stock Fund

 

$

198,328,306

$

$

$

198,328,306

 

Mutual Funds and Interest Bearing Cash

 

 

124,012,515

 

 

 

124,012,515

 

Common/Collective Trust

 

 

 

41,175,419

 

 

41,175,419

 

Participant loans

 

 

 

 

 

4,125,497

 

4,125,497

 

Total assets at fair value

 

$

322,340,821

$

41,175,419

$

4,125,497

$

367,641,737

 

 

 

The table below sets forth a summary of changes in the fair value of the Plan’s level 3 assets for the year ended December 31, 2009:

 

 

 

Level 3 Assets

 

 

Year Ended
December 31,
2009

 

 

Participant Loans

 

 

 

 

Balance, January 1, 2009

 

$

4,125,497

Purchases, sales, issuances and settlements (net)

 

 

144,144

Balance, December 31, 2009

 

$

4,269,641

 

10

 


Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Notes to Financial Statements

December 31, 2009 and 2008

 

8.     Investment Contract with Insurance Company

The Plan has a fully benefit-responsive investment contract with Fidelity Management Trust Company (FMTC), the Fidelity Managed Income Portfolio II (MIP II). The objective of the MIP II is to seek the preservation of capital and to provide a competitive level of income over time that is consistent with the preservation of capital.  To achieve its investment objective, the Portfolio invests in assets and enters into contracts issued by third-parties, and invests in cash equivalents represented by shares in a money market fund.  The contract is included in the financial statements at fair value and then adjusted to contract value as reported to the Plan by FMTC.  Contract value represents contributions made under the contract, plus interest and dividends credited, less participant withdrawals and administrative expenses. Participants may ordinarily direct the withdrawal or transfer of all or a portion of their investment at contract value. The contract has certain restrictions that impact the ability to collect the full contract value. Withdrawals prompted by certain events, including premature termination of the contract by the Plan, plant closings, layoffs, Plan termination, bankruptcy, mergers and early retirement incentives, may be paid at market value, which may be less than book value.  The Company believes that the occurrence of events that would cause the plan to transact at less than contract value is not probable.

 

FMTC is contractually obligated to pay the principal and any interest and dividends that have been credited to the Plan.  The crediting interest rate is based on a formula agreed upon with the issuer, but may not be less than 0%.

 

 

2009

 

2008

 

Rate of return on investments underlying the contract*

 

2.74%

3.40%

 

Based on interest rate credited to participants**

 

1.53%

3.48%

 

 

 

*Computed by dividing the annualized one-day actual earnings of the contract on the last day of the plan year by the fair value of the investments on the same date.

 

**Computed by dividing the annualized one-day earnings credited to participants on the last day of the plan year by the fair value of the investments on the same date.

 

 

11

 


 

 

 

 

 

 

SUPPLEMENTAL SCHEDULE

 

 

 

 

 

 

 

 

 

 

 


 

Donaldson Company, Inc.

Retirement Savings and Employee Stock Ownership Plan

Schedule H, line 4i — Schedule of Assets (Held at End of Year)

December 31, 2009

EIN 41-0222640

Plan Number 007

 

(a)

(b)

 

(c)

 

 

(d)

 

 

(e)

 

Identity of Issuer,
Borrower, Lessor
or Similar Party

 

Description of Investment
Including the Maturity Date,
Rate of Interest, Collateral,
Par or Maturity Value

 

 

Cost

 

 

Current
Value

*

Donaldson Company, Inc. Common Stock Fund

 

Common Stock, 5,438,784 shares participation

 

$

69,823,999

 

$

231,366,722

*

Fidelity Managed Income Portfolio II Fund

 

Common / Collective Trust, 40,200,408 units of participation

 

 

**

 

 

40,200,408

*

Fidelity Contrafund

 

Mutual Fund, 694,939 units of participation

 

 

**

 

 

40,480,217

*

Fidelity Equity Income Fund

 

Mutual Fund, 648,752 units of participation

 

 

**

 

 

25,392,144

*

Fidelity Diversified International Fund

 

Mutual Fund, 678,449 units of participation

 

 

**

 

 

18,996,575

 

PIMCO Total Return Fund

 

Mutual Fund, 1,431,774 units of participation

 

 

**

 

 

15,463,163

 

Schroeder U.S. Opportunities Fund

 

Mutual Fund, 727,071 units of participation

 

 

**

 

 

14,432,352

*

Fidelity Balanced Fund

 

Mutual Fund, 809,952 units of participation

 

 

**

 

 

13,250,820

 

Spartan 500 Index Fund

 

Mutual Fund, 150,321 units of participation

 

 

**

 

 

5,927,163

 

Brokeragelink Fund

 

Mutual Fund, 3,099,831 units of participation

 

 

**

 

 

3,099,831

 

WFA Small Company Value Fund

 

Mutual Fund, 245,186 units of participation

 

 

**

 

 

2,574,449

 

Chesapeake Core Growth Fund

 

Mutual Fund, 83,060 units of participation

 

 

**

 

 

1,149,546

Fidelity Freedom Income Fund

 

Mutual Fund, 97,842 units of participation

 

 

**

 

 

1,050,827

 

Roxbury Small Cap Growth Fund

 

Mutual Fund, 66,633 units of participation

 

 

**

 

 

908,210

*

Fidelity Freedom 2005 Fund

 

Mutual Fund, 23,502 units of participation

 

 

**

 

 

235,724

*

Fidelity Freedom 2010 Fund

 

Mutual Fund, 168,163 units of participation

 

 

**

 

 

2,103,714

*

Fidelity Freedom 2015 Fund

 

Mutual Fund, 475,344 units of participation

 

 

**

 

 

4,953,082

*

Fidelity Freedom 2020 Fund

 

Mutual Fund, 519,486 units of participation

 

 

**

 

 

6,519,550

*

Fidelity Freedom 2025 Fund

 

Mutual Fund, 304,619 units of participation

 

 

**

 

 

3,164,990

*

Fidelity Freedom 2030 Fund

 

Mutual Fund, 201,679 units of participation

 

 

**

 

 

2,498,808

*

Fidelity Freedom 2035 Fund

 

Mutual Fund, 172,228 units of participation

 

 

**

 

 

1,767,063

*

Fidelity Freedom 2040 Fund

 

Mutual Fund, 350,821 units of participation

 

 

**

 

 

2,511,875

*

Fidelity Freedom 2045 Fund

 

Mutual Fund, 4,102 units of participation

 

 

**

 

 

34,746

*

Fidelity Freedom 2050 Fund

 

Mutual Fund, 4,570 units of participation

 

 

**

 

 

38,159

*

Participant Loans

 

Participant loans receivable, interest rates from 4.25% to 10.50%, payable through October 2019

 

$

0

 

 

4,269,641

 

 

 

 

 

 

 

 

$

442,389,779

*      Denotes party-in-interest.

**    Historical cost information is omitted as it is not required by the Department of Labor under the instructions to the Form 5500 for participant-directed accounts.

 

12

 


 

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

 

 

 

 

 

DONALDSON COMPANY, INC. RETIREMENT
SAVINGS AND EMPLOYEE STOCK
OWNERSHIP PLAN
(Name of Plan)

 

 

 

 

 

 

 

 

Date

  June  9, 2010

 

By:

Donaldson Company, Inc., the Plan Administrator

 

 

 

 

 

 

 

 

 

 

 

 

 

By:

/s/   Thomas R. VerHage

 

 

 

 

Thomas R. VerHage
Vice President, Chief Financial Officer

 

 

 

 

 

13