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Exhibit 4.1
DOVER CORPORATION
DEFERRED COMPENSATION PLAN
ARTICLE I
ESTABLISHMENT OF THE PLAN
1.1 Purpose. The purpose of the Plan is to provide a means whereby the
Company may afford a select group of management or highly compensated employees
(as such phrase is defined for the purpose of Title I of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA")) with an opportunity to
irrevocably defer to a future year the receipt of certain compensation. The Plan
is intended to be an unfunded, nonqualified deferred compensation plan.
ARTICLE II
DEFINITIONS
As used in this Plan, the following terms shall have the meanings
herein specified:
2.1 "Adverse Benefit Determination" means a denial, reduction, or
termination of, or a failure to provide or make full or partial payment for, a
Benefit, including any denial, reduction, termination, or failure to provide or
make payment based on a determination of a claimant's eligibility to participate
in the Plan.
2.2 "Appropriate Procedure" means the form, procedure or method
provided or prescribed by the Committee for the purposes stated herein.
2.3 "Beneficiary" means the person, persons or trust who under the
Plan, becomes entitled to receive a Participant's interest in the event of the
Participant's death.
2.4 "Benefit" means the amount credited to a Participant's Deferred
Compensation Account pursuant to such Participant's Deferred Compensation
Agreement, plus or minus Credited Investment Return (Loss).
2.5 "Board" means the Board of Directors of Dover Corporation.
2.6 "Bonus" means any cash incentive or other compensation which is
awarded by the Company in its discretion to a Participant as remuneration based
on annual calendar year performance in addition to the Participant's Salary and
any Cash-Based Long-Term Incentive Compensation. Bonus for purposes of this Plan
shall be determined without regard to any reductions (a) for salary deferral
contributions to a plan qualified under Section 125 or Section
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401(k) of the Code or (b) pursuant to any deferral election in accordance with
Article IV of the Plan.
2.7 "Cash-Based Long-Term Incentive Compensation" means cash awards
under the Cash Performance Awards provisions of the Dover Corporation 1995
Incentive Stock Option Plan and 1995 Cash Performance Program, similar successor
plans and such other plans or programs as the Committee from time to time shall
designate. Cash-Based Long-term Incentive Compensation for purposes of this Plan
shall be determined without regard to any reductions (a) for salary deferral
contributions to a plan qualified under Section 125 or Section 401(k) of the
Code or (b) pursuant to any deferral election in accordance with Article IV of
the Plan.
2.8 "Change of Control" shall have the same meaning as specified in the
Dover Corporation 1995 Incentive Stock Option Plan and 1995 Cash Performance
Program or any successor to such plan and program.
2.9 "Code" means the Internal Revenue Code of 1986, as amended.
2.10 "Committee" means the Plan Committee, or its designee, appointed
pursuant to Article IX to manage and administer the Plan.
2.11 "Company" means Dover Corporation, a Delaware corporation, and any
present or future parent corporation or subsidiary corporation of Dover
Corporation, for the period of time such corporation is owned or controlled by
Dover Corporation, unless the Board determines that such entity should not be
included in the Plan. For purposes of the Plan, the terms "parent corporation"
and "subsidiary corporation" shall be defined as set forth in Sections 424(e)
and 424(f) of the Code.
2.12 "Company Contribution" means an amount added to a Participant's
Deferred Compensation Account by the Company pursuant to Section 5.4.
2.13 "Compensation" means the Salary, Bonus and/or any Cash-Based
Long-Term Incentive Compensation received by a Participant during a Plan Year
and any other form of remuneration as the Committee shall determine.
2.14 "Compensation Limit" means the compensation limit of Section
401(a)(17) of the Code, as adjusted under Section 401(a)(17)(B) of the Code for
increases in the cost of living.
2.15 "Credited Investment Return (Loss)" means the hypothetical
investment return which shall be credited to a Participant's Deferred
Compensation Account pursuant to Article V.
2.16 "Deemed Investment Elections" means the investment elections
described in Article V.
2.17 "Deferred Compensation Account" means the book entry account
established under the Plan for each Participant, to which shall be credited
specified deferrals and contributions attributable to a Participant and the
Participant's Credited Investment Return
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(Loss) determined under Article V and which shall be reduced by any
distributions made to a Participant. A Participant's Deferred Compensation
Account shall include such Sub-Accounts as shall be established pursuant to the
provisions of the Plan.
2.18 "Deferred Compensation Agreement" means the agreement to
participate and defer Compensation in the form attached hereto as Exhibit A, or
such other form of deferred compensation agreement between Participants and the
Company or Appropriate Procedure as the Committee may prescribe from time to
time.
2.19 "Determination Date" means the date on which the amount of a
Participant's Deferred Compensation Account is determined as provided in Article
V hereof. The last day of each month shall be a Determination Date.
2.20 "Disability" shall mean a disability which causes a Participant
who has not met the requirements for Retirement to be eligible to receive
disability benefits under his or her employer's long-term disability program or,
in the case of a Participant who is not covered by a long-term disability
program, a disability which would cause the Participant to be eligible for
social security disability benefits.
2.21 "Distribution Date" means the date on which distribution of a
Participant's Benefits is made or commenced pursuant to Article VI.
2.22 "Hardship" means one (1) or more of the following events which
causes an unforeseen financial hardship to the Participant or his or her family:
(1) A serious illness or accident of the Participant or a
dependent (as defined in Section 152(a) of the Code)
of the Participant;
(2) A loss of the Participant's primary residence due to
casualty; or
(3) Other similar circumstances arising out of events
substantially beyond the control of the Participant,
as determined by the Committee.
2.23 "Investment Allocation Election Form" means the form or
Appropriate Procedure prescribed by the Committee on which a Participant
allocates his or her Deferred Compensation Account among one or more investment
options.
2.24 "Investment Election Change Form" means the form or Appropriate
Procedure prescribed by the Committee on which a Participant can make changes to
his or her initial or any subsequent investment selections.
2.25 "Participant" means a highly compensated or key management
employee of the Company who has been designated by the Committee as eligible to
participate in the Plan pursuant to Section 3.1 and for whom a Deferred
Compensation Account has been established.
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2.26 "Plan" means this Dover Corporation Deferred Compensation Plan, as
it may be amended from time to time.
2.27 "Plan Effective Date" means August 1, 2001.
2.28 "Plan Year" means the calendar year; provided, however, that the
first Plan Year shall be a short year beginning on August 1, 2001 and ending on
December 31, 2001.
2.29 "Retirement" means the Participant's termination of employment on
or after (a) his or her 65th birthday, (b) his or her completion of ten (10)
"years of service" and attainment of age 55 or (c) completion of such other time
as the Committee, in its sole discretion, determines is sufficient to grant a
Participant an approved earlier retirement date. For purposes hereof, a year of
service means each period of twelve (12) months of completed employment with the
Company or with any other entity which is required to be aggregated with Dover
Corporation pursuant to Section 414(b) or (c) of the Code.
2.30 "Salary" for purposes of the Plan shall be the total of the
Participant's base salary paid during a calendar year and considered "wages" for
FICA and federal income tax withholding, but without regard to any deferrals
made pursuant to this Plan and any reductions for salary deferred contributions
to a plan qualified under Section 125 or Section 401(k) of the Code. For
purposes of this Plan, Salary shall not include severance or other payments made
in connection with a Participant's Termination of Service.
2.31 "Scheduled In-Service Withdrawal Date" means the date or dates
elected by a Participant for the early distribution of Benefits, as provided in
Section 4.2 or Section 6.5.
2.32 "Sub-Account" means a separate account or accounts into which a
Participant's Deferred Compensation Account shall be divided. Such Sub-Accounts
may be established with respect to the portion of a Deferred Compensation
Account attributable to contributions made with respect to any Plan Year, or to
reflect the various investments in which the Participant's Deferred Compensation
Account is deemed to be invested or for such other purposes as the Committee may
determine.
2.33 "Termination of Service" means the Participant's ceasing his or
her employment with the Company and each other entity which is required to be
aggregated with Dover Corporation pursuant to Section 414(b) or (c) of the Code
for any reason whatsoever, whether voluntarily or involuntarily, including by
reason of death or Disability.
2.34 "Trust" means the trust referred to in Article VII of the Plan.
2.35 "Trustee" means the trustee of the Trust.
2.36 "Trust Agreement" means the agreement entered into between the
Company and the Trustee to carry out the purposes of the Plan, as amended or
restated from time to time.
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ARTICLE III
ELIGIBILITY
3.1 a. Eligibility to Participate. The employees who shall be eligible
to participate in the Plan shall be limited to key management or highly
compensated employees of the Company who are selected by the Committee, in its
sole discretion, to participate in the Plan, and who, at the time of filing a
deferral election pursuant to Article IV:
(i) are on a regular periodic U.S. payroll of the
Company;
(ii) are expected to have a combination of annual Salary
and Bonus in excess of the Compensation Limit for
such calendar year for which they expect to make
contributions to the Plan;
iii) if not eligible to participate in the Plan as of the
Plan Effective Date, are hired or promoted prior to
October 1st of the year in which they otherwise meet
the requirements to become a Participant; and
(iv) are currently participating in, or if newly hired or
promoted, are expected to be granted in the next
calendar year an award under, the Dover Corporation
1995 Incentive Stock Option Plan and 1995 Cash
Performance Program or any successor to such plan and
program.
The Committee may from time to time, in its sole and absolute
discretion, modify the above eligibility requirements and make such additional
or other requirements for eligibility as it may determine.
b. Cessation of Participation. A Participant may continue to
participate in the Plan unless and until he or she fails to satisfy the minimum
annual compensation threshold of Section 3.1(a)(ii) above.
ARTICLE IV
ELECTION TO DEFER
4.1 Compensation Eligible for Deferral. A Participant may elect to
defer Salary, Bonus and/or Cash-Based Long-Term Incentive Compensation for each
Plan Year as follows:
a. Any whole-number percentage of Salary up to 50%;
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b. Any whole-number percentage or flat dollar amount of
Bonus up to 100%; and/or
c. Any whole-number percentage or flat dollar amount of
Cash-Based Long-Term Incentive Compensation up to
100%.
d. Such combination of flat dollar amount and or
percentage of Bonus or Cash-Based Long-Term Incentive
Compensation (not exceeding the percentages set forth
above) and any other form of Compensation as the
Committee in its sole discretion may determine.
The minimum aggregate amount that may be deferred by a Participant
during a Plan Year is $5,000. Such minimum may be satisfied by deferring Salary,
Bonus and/or Cash-Based Long- Term Incentive Compensation.
In the event that a Participant's Compensation remaining after the
Participant elects to defer an amount of his or her Salary, Bonus and/or
Cash-Based Long-Term Incentive Compensation is not sufficient to allow for the
full payment of all FICA, federal, state and/or local income tax liabilities or
benefit plan withholding requirements, the actual amount which shall be credited
to the Participant's Deferred Compensation Account shall be reduced to the
extent necessary for the maximum amount allowable after all applicable taxes and
withholding requirements have been met.
4.2 Deferral Election.
An employee eligible to make a deferral election or who anticipates
becoming eligible to make a deferral election in the upcoming Plan Year shall
become a Participant by timely executing a Deferred Compensation Agreement and
such other documents as the Committee shall designate and delivering such
agreement and other documents or complying with the Appropriate Procedure as
directed by the Committee. The Deferred Compensation Agreement shall specify:
a. the portion of Salary, Bonus and/or Cash-Based Long-Term
Incentive Compensation to be deferred and any other form of Compensation
permitted by the Committee; and
b. the time for the commencement of payment of Benefits which
must be either on account of Retirement, Disability, other Termination of
Service, or at a Scheduled In-Service Withdrawal Date to be specified by the
Participant. A Participant may select a different time for commencement of
payment of Benefits attributable to Compensation deferred with respect to each
Plan Year.
Once a properly completed Deferred Compensation Agreement is received
by the Committee, the elections of the Participant shall be irrevocable, except
as otherwise provided herein.
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4.3 Timing of Deferral Election.
a. Election to Defer Salary. The initial election to defer the
receipt of Salary under the Plan must be received by the Committee by July 20,
2001 to be effective with respect to the first pay period commencing on or after
August 1, 2001. Subsequent elections to defer the receipt of Salary must be
received by the Committee by November 30 of each year to be effective with
respect to the first pay period of the following Plan Year.
b. Election to Defer Bonus and/or Cash-Based Long-Term Incentive
and Other Compensation. The initial election to defer receipt of Bonus and/or
Cash-Based Long-Term Incentive Compensation must be received by the Committee by
July 20, 2001 to be effective for any Bonus and/or Cash-Based Long-Term
Incentive Compensation paid in year 2002. Subsequent elections to defer receipt
of any Bonus and/or Cash-Based Long-Term Incentive Compensation must be received
by the Committee by November 30 of each year to be effective for the Bonus
and/or Cash-Based Long-Term Incentive Compensation paid in the second Plan Year
following the Plan Year during which the election is made. The Committee shall
determine the timing of deferrals of other forms of Compensation.
c. Changing an Election. A Participant's deferral election shall
be irrevocable for the Plan Year and shall continue in effect from year to year
thereafter unless, and until, increased, decreased, or terminated by the
Participant for any subsequent Plan Year by filing an election pursuant to
Section 4.3 a. or b. above.
ARTICLE V
DEFERRED COMPENSATION ACCOUNT
5.1 Establishment of Deferred Compensation Account. Compensation
deferred hereunder shall be credited to a Deferred Compensation Account (or
Sub-Account) established by the Committee for each Participant. The amount of
Compensation deferred by a Participant shall be credited to his or her Deferred
Compensation Account (or Sub-Account) within five (5) business days of the date
on which such amounts would have been paid to the Participant but for the
Participant's election to defer receipt hereunder, or as soon thereafter as is
administratively practicable.
Each Participant's Deferred Compensation Account (or Sub-Account) as of
each Determination Date shall consist of the balance of the Participant's
Deferred Compensation Account as of the immediately preceding Determination Date
adjusted for:
(i) additional deferrals pursuant to Section 4.2,
(ii) Company Contributions (if any) pursuant to Section 5.4;
(iii) distributions (if any); and
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(iv) the appropriate Credited Investment Return (Loss).
All adjustments and earnings related thereto, will be determined on a
daily basis and recorded to the Participants' Deferred Compensation Accounts as
of each Determination Date.
5.2 Deemed Investment Elections. The Committee shall designate from
time to time one or more investment options in which Deferred Compensation
Accounts (or Sub-Accounts) may be deemed invested. A Participant or Beneficiary
shall allocate his or her Deferred Compensation Account among the deemed
investment options in one percent (1%) increments by filing with the Committee
an Investment Allocation Election Form. Notwithstanding the foregoing, the
Committee may disapprove a Participant's investment elections and allocate a
Participant's Deferred Compensation Account in any manner as it, in its sole
discretion, shall determine.
The Committee shall have the sole discretion to determine the number of
investment options to be designated hereunder and the nature of the options and
may change or eliminate any of the investment options from time to time. In the
event of such change or elimination, the Committee shall give each Participant
timely notice and opportunity to make a new election. Failure to do so shall
grant the Committee absolute discretion to make an election for such
Participant. No such change shall be considered to be an amendment to the Plan
pursuant to Section 10.1.
5.3 Change of Investment Election. After selecting his or her initial
investment selections under Section 5.2, a Participant may make changes to his
or her investment selections for amounts deferred for a Plan Year and all
amounts in such Participant's Deferred Compensation Account. Such changes may be
made only in whole percentages. Any such change shall be effective the first day
of the month (or such other date as the Committee shall determine) if an
Investment Election Change Form is received by the Committee no later than the
25th day of the prior month (or such other date as the Committee shall
determine).
5.4 Company Contributions. In addition to the deferrals elected by the
Participants, the Company may choose at any time to make discretionary Company
Contributions, based on individual or overall corporate performance or such
other criteria as the Committee shall determine, to the Deferred Compensation
Accounts of Participants in such amounts as it, in its sole discretion,
determines.
5.5 Credited Investment Return (Loss). Each Participant's Deferred
Compensation Account (or Sub-Account) shall be credited monthly, or more
frequently as the Committee may specify, with the Credited Investment Return
(Loss) attributable to his or her Deferred Compensation Account (or
Sub-Account). The Credited Investment Return (Loss) is the amount which the
Participant's Deferred Compensation Account would have earned if the amounts
credited to the Deferred Compensation Account had, in fact, been invested in
accordance with the Participant's Deemed Investment Elections.
5.6 Vesting. A Participant shall be one hundred percent (100%) vested
in the amounts the Participant elects to defer into his or her Deferred
Compensation Account and the Credited
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Investment Return (Loss) credited thereon. In the event a Company Contribution
is credited to a Participant's Deferred Compensation Account pursuant to Section
5.4, the Company Contribution and the Credited Investment Return (Loss) thereon
shall vest as determined in the discretion of the Committee.
ARTICLE VI
PAYMENT OF DEFERRED COMPENSATION ACCOUNT
6.1 Time of Payment. Except as otherwise specifically provided herein,
distribution of the vested balance of a Participant's Deferred Compensation
Account (or Sub-Account) shall be made to such Participant as set forth in
Section 6.9.
6.2 Distribution upon Retirement or Disability. Upon a Participant's
Retirement or Disability, his or her Deferred Compensation Account (or
Sub-Account) shall be payable over a period of five (5), ten (10) or fifteen
(15) years, or in a single lump sum payment, as elected by the Participant in
his or her Deferred Compensation Agreement or as otherwise elected pursuant to
the provisions of the Plan. If a Participant fails to make a valid distribution
election, the distribution shall be made in annual installments over a ten (10)
year period. Notwithstanding the above, distributions as a result of Retirement
shall commence no later than the last day of the first calendar quarter of the
year following the year in which the Participant attains age seventy (70),
regardless of whether the Participant has terminated employment with the
Company. A Participant may change the method of distribution (from lump sum to
installments or vice versa or to change the period over which the installments
would be made) by giving at least twelve (12) months notice to the Committee by
following the Appropriate Procedure prior to his or her Retirement or attainment
of age seventy (70), if applicable. If, prior to distribution of the
Participant's Deferred Compensation Account, a Participant no longer meets the
definition of Disability and returns to work with the Company, no payment shall
be made from the Plan on account of the prior Disability, and distribution of
the Participant's Deferred Compensation Account shall be made as otherwise
provided in this Article VI. All distributions shall be determined and paid
pursuant to, and shall otherwise be subject to, the provisions of Section 6.9.
6.3 Distribution upon Death. In the event a Participant dies prior to
the distribution of the Participant's entire Deferred Compensation Account,
distribution of the Participant's Deferred Compensation Account (or the
remaining balance thereof) shall be made in a single lump sum payment on such
date as the Committee shall determine; provided, however, that such date shall
be within twelve (12) months following receipt of notice by the Committee of the
Participant's Death. All distributions shall be determined and paid pursuant to,
and shall otherwise be subject to, the provisions of Section 6.9.
6.4 Distribution Upon Other Termination of Service. If a Participant
incurs a Termination of Service, voluntarily or involuntarily, for reasons other
than Retirement, death or Disability, the value of the Participant's Deferred
Compensation Account balance shall be paid in a single lump sum payment pursuant
to Section 6.9.
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6.5 Scheduled In-Service Withdrawals.
a. A Participant may elect a Scheduled In-Service Withdrawal Date
applicable to all or a portion of his or her Deferred Compensation Account or
applicable to all or a portion of a Sub-Account attributable to contributions
made with respect to any specified Plan Year. Such initial election shall be
made in the Participant's original Deferred Compensation Agreement and shall
specify the portion or amount of the Participant's Deferred Compensation Account
(or, if applicable, Sub-Account) to be distributed; provided that such portion
or amount specified shall not exceed the portion or amount credited to the
Participant's Deferred Compensation Account which is vested as of any Scheduled
In-Service Withdrawal Date. A Participant may elect to extend to a later date a
Scheduled In-Service Withdrawal Date by filing a written request to do so with
the Committee at least twelve (12) months prior to such date. A Participant
shall be granted no more than two (2) such extensions with respect to any
initial Scheduled In-Service Withdrawal Date. The minimum period of extension is
two (2) years from the original Scheduled In-Service Withdrawal Date with
respect to the first extension and two (2) years from the extended date of
distribution with respect to the second extension.
b. No election of a Scheduled In-Service Withdrawal Date shall be
given effect unless such election specifies a Scheduled In-Service Withdrawal
Date which is at least two (2) years after the end of the Plan Year in which the
election is received by the Committee. The distribution of the elected amount or
portion of the Participant's Deferred Compensation Account (or Sub-Account) must
commence no later than the last day of the first calendar quarter of the year
following the year in which the Participant attains age seventy (70), regardless
of whether the Participant has terminated employment with the Company.
c. A Participant may elect to receive the distribution in a
single lump sum payment or annual installments over two (2), three (3), four (4)
or five (5) years. The form of distribution may be amended by the Participant up
to twelve (12) months prior to any elected Scheduled In-Service Withdrawal Date
by giving prior written notice to the Committee. All Distributions shall be
determined and paid pursuant to, and shall otherwise be subject to, the
provisions of Section 6.9.
d. If a Participant incurs a Termination of Service by reason of
Retirement or Disability prior to a Scheduled In-Service Withdrawal Date, the
amount of the distribution shall be distributed as the Participant elected for
Retirement or Disability, as the case may be. If the Participant incurs a
Termination of Service for any other reason, the distribution will be in the
form of a single lump sum payment. If a Participant incurs a Termination of
Service by reason of Retirement or Disability while he or she is receiving
scheduled in-service installment distributions, the balance of the Participant's
Deferred Compensation Account shall be distributed to the Participant as elected
for Retirement or Disability, as the case may be. If the Participant incurs a
Termination of Service for any other reason, the remaining installments will be
distributed in a single lump sum payment.
6.6 Non-Scheduled In-Service Withdrawals. Other provisions of the Plan
notwithstanding, a Participant may at any time request a distribution of some or
all of his or her vested Deferred Compensation Account (with a minimum
distribution amount of $5,000) for any
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reason. In such event, ten percent (10%) of the amount deducted from the
Participant's Deferred Compensation Account will be forfeited and not paid to
the Participant, and the Participant may make no further deferrals for the
balance of that Plan Year and the following Plan Year. Notwithstanding the
foregoing, if the distribution is requested within one (1) year following a
Change of Control, five percent (5%) of the amount deducted from the
Participant's Deferred Compensation Account will be forfeited and not paid to
the Participant, and the Participant may make no further deferrals for the
balance of that Plan Year and the following Plan Year. Any amounts forfeited
may, at such time as the Committee shall determine, be returned to the Company,
to the extent such amounts are then held in the Trust.
6.7 Hardship Distributions. In the event that the Committee, upon
written petition of a Participant or Beneficiary, determines in its sole
discretion that the Participant or Beneficiary has suffered a Hardship, the
Committee shall distribute to the Participant or Beneficiary as soon as
reasonably practicable following such determination, an amount, not in excess of
the value of the Participant's vested Deferred Compensation Account, necessary
to alleviate the Hardship. A Participant claiming Hardship will be required to
submit such documentation of the Hardship and proof that the loss is not covered
by other means as the Committee shall request. A Participant who has been
granted a distribution on account of Hardship may make no further deferrals for
the balance of that Plan Year and the following Plan Year.
6.8 Designation of Beneficiary. The Participant shall have the right to
designate, on such form as may be prescribed by the Company, a Beneficiary or
Beneficiaries to receive any Benefits due under Article VI which may remain
unpaid at the Participant's death and shall have the right at any time to revoke
such designation and to substitute another such Beneficiary or Beneficiaries.
If, upon the death of the Participant, there is no valid designation of a
Beneficiary or no designated Beneficiary survives the Participant, the
Beneficiary shall be the Participant's estate. If a Beneficiary survives the
Participant and dies prior to the distribution of all Benefits to which such
Beneficiary is entitled from the Plan, any remaining amounts payable from the
Plan shall be paid to the Beneficiary's estate.
6.9 Distributions Generally. a. All distributions from the Plan (other
than Non-Scheduled In-Service Withdrawals or distributions on account of
Hardship) shall be made in accordance with the following procedure: the
Participant's Deferred Compensation Account or Sub-Account from which the
distribution is to be made shall be valued as of the January 31st of the Plan
Year next following the Participant's Retirement, Disability, death, Termination
of Service or other distributable event. If the distribution is to be made in a
single lump sum payment, the lump sum shall be paid as soon as administratively
practicable following the January 31st on which the valuation described above is
made, but in no event later than the March 31st following such valuation. If the
distribution is to be made in installments, the same January 31st valuation
described above shall be made and then divided by the number of years over which
the installment payments are to be made. Such amount shall be paid as soon as
administratively practicable after the determination is made, but in no event
later than the March 31st following such January 31st valuation. A new valuation
and annual installment amount (based on the number of remaining annual
installments to be made) shall be determined as of each subsequent January 31st
during which installment payments are to be made and such payments shall be made
no later than the March 31st following each such determination.
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b. Notwithstanding the foregoing, if the Deferred Compensation
Account or Sub-Account or Sub-Accounts from which all initial installment
payments which begin to be made during a year is $50,000 or less as of the
applicable January 31st valuation described in 6.9 a. above, the entire amount
remaining in such Deferred Compensation Account or Sub-Account shall be
distributed in a single lump sum payment as soon as administratively practicable
following such January 31st valuation, but in no event later than the March 31st
following such January 31st valuation.
c. Distributions of Non-Scheduled In-Service Withdrawals and on
account of Hardship shall be made as soon as administratively practicable
following, if applicable, approval of such distributions by the Committee, or,
if later, in the case of Non-Scheduled In-Service Withdrawals, the date
requested by the Participant or, if applicable, approved by the Committee for
such distribution.
d. Notwithstanding the foregoing, the Committee in its sole
discretion may revise any of the distribution procedures or timing described
above; provided that no such distribution shall be made or commence to be made
later than the March 31st following the date of the relevant distribution event.
e. The distribution to a Participant or Beneficiary of the full
amount of the Participant's Deferred Compensation Account under the Plan shall
be in full satisfaction of all claims the Participant or Beneficiary may have
against the Company, Committee or Trustee with respect to the Plan, and the
Committee in its discretion may require that any payee under the Plan execute a
receipt and release as a condition precedent to the receipt of any distribution
from the Plan.
6.10 Distributions in Cash. All distributions of Deferred Compensation
Accounts shall be paid in United States dollars.
6.11 Limitation on Distributions to Covered Employees. Notwithstanding
any other provision of this Article VI, in the event that a Participant is a
"covered employee" as defined in Section 162(m)(3) of the Code, or would be a
covered employee if the Benefits were distributed in accordance with his or her
distribution election or withdrawal request, the maximum amount which may be
distributed from the Participant's Deferred Compensation Account in any Plan
Year, shall not exceed one million dollars ($1,000,000) less the amount of
compensation paid to the Participant in such Plan Year which is not
"performance-based" (as defined in Section 162(m)(4)(C)), which amount shall be
reasonably determined by the Company at the time of the proposed distribution.
Any amount which is not distributed to the Participant in a Plan Year as a
result of the limitation set forth in this Section 6.11 shall be distributed to
the Participant in the next Plan Year, subject to compliance with the foregoing
limitation set forth in this Section 6.11.
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ARTICLE VII
ESTABLISHMENT OF TRUST
7.1 Establishment of Trust. The Company may, in its sole discretion,
establish a grantor trust, as described under Section 671 of the Code, which is
subject to the claims of the general creditors of the Company, for the purpose
of accumulating assets to provide for the obligations hereunder. The
establishment of such a trust shall not affect the Company's liability to pay
benefits hereunder except that the Company's liability shall be offset by any
payments actually made to a Participant under such a trust. In the event such a
trust is established, the amount to be contributed shall be determined by the
Company and the investment of such assets shall be in accordance with the trust
document.
Notwithstanding the foregoing, in the event a Change of Control is
likely to occur, at least fifteen (15) days prior to the expected date of the
Change of Control, the Company shall establish and contribute to a grantor trust
as described above, if no such trust is then in effect with respect to the Plan,
or shall contribute to an existing grantor trust, an irrevocable contribution to
such Trust equal to the sum of
a. two (2) times the average of the total annual deferrals of
Compensation made by Participants to the Plan for the three
(3) calendar years (or the number of full calendar years since
the Effective Date, if less than three (3) years) immediately
preceding the expected date of the Change of Control; and
b. the excess, if any, of (i) 125% of the value of all
Participants' account balances as of thirty days prior to the
expected date of the Change of Control and (ii) the cash out
value of the assets in the Trust as of thirty (30) days prior
to the expected date of the Change of Control.
The amount of the contribution shall be determined in good faith by
Towers Perrin (or other actuarial consulting firm of national repute as the
Committee shall determine), and the Company, Trustee and the recordkeeper with
respect to the Plan shall promptly provide Towers Perrin (or other actuarial
consulting firm) with such information as the firm shall reasonably request in
order to make such determination.
Any Trustee appointed coincident with or after a Change of Control
shall have occurred shall be federally or state chartered bank or trust company
with assets of not less than one billion dollars ($1,000,000,000).
7.2 Status of Trust. Participants shall have no direct or secured claim
in any asset of the trust or in specific assets of the Company and will have the
status of general unsecured creditors of the Company for any amounts due under
this Plan. Trust assets and income will be subject to the claims of the
Company's creditors.
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ARTICLE VIII
CLAIM FOR BENEFITS PROCEDURE
8.1 Claim for Benefits. Any claim for benefits under the Plan shall be
made in writing to the Committee. If such claim for benefits is wholly or
partially denied (i.e., is an "Adverse Benefit Determination"), the Committee
shall notify the claimant of such Adverse Benefit Determination within a
reasonable period of time, but not later than ninety (90) days after receipt of
the claim by the Committee, unless the Committee determines that special
circumstances warrant an extension of time for processing the claim. If the
Committee determines that special circumstances require an extension of time for
processing a claim, the Committee shall furnish written notification of the
extension to the claimant prior to the termination of the initial 90-day period.
The notice of extension shall indicate the special circumstances requiring an
extension of time and the date by which the Committee expects to render the
final decision.
The Committee shall provide the claimant with written or electronic
notice of the Adverse Benefit Determination. Such notice shall contain:
a. The specific reason or reasons for the Adverse Benefit
Determination;
b. A reference to the relevant Plan provisions (including
internal rules, guidelines, etc.) upon which the determination is based;
c. A description of any additional material or information
necessary for the claimant to perfect the claim, together with an explanation of
why such material or information is necessary; and
d. A description of the Plan's claim review procedure, including
time limits applicable to those procedures, and a statement of the claimant's
right to bring a civil action under Section 502(a) of ERISA following an adverse
determination.
8.2 Request for Review of a Denial of a Claim for Benefits. Upon the
receipt by the claimant of written or electronic notice of the Adverse Benefit
Determination, the claimant may, within sixty (60) days, file a written request
to the Committee requesting a review of the denial of the claim, which review
shall include a hearing if deemed necessary by the Committee. In connection with
the claimant's appeal of the denial of his or her claim, he or she may review
relevant documents and may submit written comments, documents, records and other
information relating to the claim for benefits, regardless of whether the
information was submitted or considered in the initial benefit determination.
The claimant must be given, upon request and without charge, reasonable access
to, and copies of, all documents, records, and other information relevant to the
claimant's claim for benefits. To provide for fair review and a full record, the
claimant must submit in writing all facts, reasons and arguments in support of
his or her position within the time allowed for filing a written request for
review. All issues and matters not raised for review will be deemed waived by
the claimant.
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8.3 Decision Upon Review of a Denial of a Claim for Benefits. The
Committee shall render a decision on the claim review promptly, but no more than
sixty (60) days after the receipt of the claimant's request for review, unless
special circumstances (such as the need to hold a hearing) require an extension
of time, in which case the sixty (60) day period shall be extended to one
hundred-twenty (120) days. If the Committee determines that special
circumstances require an extension of time for deciding the determination on
review, the Committee shall furnish written notification of the extension to the
claimant prior to the termination of the initial 60-day period. The notice of
extension shall indicate the special circumstances requiring an extension of
time and the date by which the Committee expects to render the determination on
review.
The Committee shall provide the claimant with written or electronic
notice of the Committee's determination on review. In the case of an Adverse
Benefit Determination, such notice shall:
a. Include specific reasons for the adverse determination;
b. Be written in a manner calculated to be understood by the
claimant;
c. Contain specific references to the relevant Plan provisions
upon which the determination is based;
d. Include a statement that the claimant may receive, upon
request and free of charge, reasonable access to, and copies of, all documents,
records, and other information relevant to the claimant's claim for benefits;
and
e. Include a statement describing any voluntary appeal procedures
offered by the Plan and the claimant's right to obtain the information about
such procedures, along with a statement of the claimant's right to bring an
action under Section 502(a) of ERISA.
The decision of the Committee shall be final and binding in all
respects on the Company, the claimant and any other person claiming an interest
in the Plan through or on behalf of the claimant. No arbitration pursuant to
Section 8.4 may be commenced by or on behalf of a claimant with respect to this
Plan until after and unless the claim and review process described above in this
Article VIII has been exhausted.
8.4 Mandatory Arbitration Procedure. Any claim remaining after the
claim review process described above in this Article VIII has been exhausted
shall, to the extent permitted by applicable law, be submitted exclusively to
mandatory arbitration in New York City or, at the Company's election, another
agreed-upon location. Except as otherwise set forth herein, said arbitration
shall be pursuant to the National Rules for Resolution of Employment Disputes of
the American Arbitration Association, as amended from time to time. The matter
shall be submitted to one Arbitrator who shall be a lawyer with at least ten
(10) years professional experience and who has familiarity with employee
compensation plans. All information regarding the claim or arbitration,
including the arbitration award, shall not be disclosed by the claimant or the
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Arbitrator to any third party, except pursuant to legal process, without the
written consent of Dover Corporation. In no event may the Arbitrator allow the
claimant to join claims of any other claimant in a single arbitration proceeding
without the written consent of Dover Corporation. The Arbitrator shall have no
authority to add to, detract from, or otherwise modify any provisions of the
Plan (including this Section 8.4) or of the Trust Agreement. The Arbitrator
shall apply the substantive law of the State of New York, and the Arbitrator's
decision shall be final and binding. The Arbitrator's fees shall be borne by the
party which does not prevail. If neither party prevails entirely, the
Arbitrator's fees shall be paid as determined by the Arbitrator.
ARTICLE IX
ADMINISTRATION
9.1 Plan Administration. The Plan shall be administered by a Committee,
consisting of not less than three (3) members to be appointed by the Board. In
the absence of any such appointment, the Compensation Committee of the Board
shall be the Committee. The Committee shall administer the Plan in accordance
with its terms, and shall have all powers necessary to accomplish such purpose,
including the power and authority to construe and interpret the Plan, to define
the terms used herein, to prescribe, amend and rescind rules and regulations,
agreements, forms and notices relating to the administration of the Plan, and to
make all other determinations necessary or advisable for the administration of
the Plan. Any actions of the Committee with respect to the Plan shall be
conclusive and binding upon all persons interested in the Plan. The Committee
may delegate any of its powers or duties to others as it shall determine and may
retain counsel, agents and such clerical and accounting services as it may
require in carrying out the provisions of the Plan. An employee of the Company
or Committee member who is also a Participant in the Plan shall not be involved
in the decisions of the Company or Committee regarding any determination of any
specific claim for benefit with respect to himself or herself.
9.2 Information. The records of the Company shall be determinative of
each Participant's period of employment, Termination of Service, leave of
absence, reemployment, years of service, personal data, and Salary, Bonus and/or
Cash-Based Long Term Compensation. Participants and their Beneficiaries shall
furnish to the Committee such evidence, data or information, and execute such
documents as the Committee requests.
9.3 Periodic Statements. The Committee shall furnish statements to each
Participant reflecting the amount credited to a Participant's Deferred
Compensation Account and transactions therein not less frequently than once each
calendar year.
9.4 Indemnification. No employee of the Company or member of the
Committee shall be liable to any person for any action taken or omitted in
connection with the administration of this Plan, and the Company shall indemnify
and hold harmless each member of the Committee therefore, including
indemnification for any expenses and legal fees incurred in connection
therewith, unless attributable to his or her own fraud or willful misconduct.
The Company shall not be liable to any person for any such action unless
attributable to fraud or willful misconduct on the part of a director, officer
or employee of the Company.
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9.4 Expenses of Administration. Any expense incurred by the Company or
the Committee relative to the administration of the Plan shall be paid by the
Company.
ARTICLE X
MISCELLANEOUS
10.1 Amendment and Termination. The Plan may be amended at any time by
the Board and may be terminated at any time by the Board; provided, however,
that no such amendment or termination shall adversely affect the rights of
Participants or their beneficiaries with respect to amounts credited to the
Deferred Compensation Accounts prior to such amendment or termination, without
the written consent of the Participant.
10.2 No Implied Rights. Neither the establishment of the Plan nor any
amendment thereof shall be construed as giving any Participant, Beneficiary, or
any other person any legal or equitable right unless such right shall be
specifically provided for in the Plan or conferred by specific action of the
Committee or Company in accordance with the terms and provisions of the Plan.
Except as expressly provided in this Plan, the Company shall not be required or
be liable to make any payment under this Plan.
10.3 No Right to Company Assets. Neither a Participant, a Beneficiary,
nor any other person shall acquire by reason of the Plan any right in or title
to any assets, funds or property of the Company whatsoever, including, without
limiting the generality of the foregoing, any specific funds, assets or other
property which the Company, in its sole discretion, may set aside in
anticipation of a liability hereunder in a Trust. Any benefits which become
payable hereunder shall be paid from the general assets of the Company. Each
Participant and his or her Beneficiary shall have only a contractual right to
the amounts, if any, payable hereunder, unsecured by any asset of the Company.
Nothing contained in the Plan constitutes a guarantee by the Company that the
assets of the Company shall be sufficient to pay any benefits to any person.
Nothing herein shall preclude the Company from purchasing life insurance
policies to provide any of the Benefits or to have any such policies purchased
held by the Trust.
10.4 No Employment Rights. Nothing contained herein shall be construed
as conferring upon any Participant the right to continue in the employ of the
Company as an employee.
10.5 Offset. If, at the time payments or installments of payments are
to be made hereunder, either the Participant or Beneficiary is indebted or
obligated to the Company, then the payments remaining to be made to the
Participant or the Beneficiary may, at the discretion of the Company, be reduced
by the amount of such indebtedness or obligation. However, an election by the
Company not to reduce any such payment or payments shall not constitute a waiver
of its claim, or prohibit or otherwise impair the Company's right to offset
future payments for such indebtedness or obligation.
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10.6 Non-assignability. Neither a Participant, a Beneficiary, nor any
other person shall have any voluntary or involuntary right to commute, sell,
assign, pledge, anticipate, mortgage or otherwise encumber, transfer,
hypothecate, or convey in advance of actual receipt the amounts, if any, payable
hereunder, or any part thereof, which are expressly declared to be unassignable
and non-transferable. No part of the amounts payable shall be, prior to actual
payment, subject to seizure or sequestration for the payment of any debts,
judgments, alimony or separate maintenance owed by a Participant, a Beneficiary,
or any other person, or be transferable by operation of law in the event of a
Participant's, a Beneficiary's, or any other person's bankruptcy or insolvency.
10.7 Notice. Any notice required or permitted to be given under the
Plan shall be sufficient if in writing and hand delivered, or sent by registered
or certified mail, and if given to the Committee or the Company, delivered to
the principal office of the Company, directed to the attention of the Committee,
or if delivered in such other manner as the Committee or Company may direct.
Such notice shall be deemed given as of the date of delivery, or, if delivery is
made by mail, as of the third business day after the date shown on the postmark
or the receipt for registration or certification.
10.8 Governing Laws. The Plan shall be construed and administered
according to the laws of the State of New York, to the extent not pre-empted by
federal law.
10.9 Severability. If a provision of the Plan shall be held illegal or
invalid, the illegality or invalidity shall not affect the remaining parts of
the Plan, and the Plan shall be construed and enforced as if the illegal or
invalid provision had not been included in the Plan.
10.10 Successors. The terms and conditions of this Plan shall be
binding upon and inure to the benefit of the Company, its successors and assigns
and the Participant and his or her heirs, executors, administrators and legal
representatives.
10.11 Compliance. The Committee shall impose such restrictions on the
Plan, any interest therein or any interest constituting a security as it may
deem advisable in order to comply with the Securities Act of 1933, as amended,
the requirements of the New York Stock Exchange or any other applicable stock
exchange or automated quotation system, any state securities laws applicable to
such a transfer, any provision of the Company's Certificate of Incorporation or
Bylaws, or any other law, regulation or binding contract to which the Company is
a party.
10.12 Tax Withholding. The Company shall have the right to deduct from
amounts otherwise payable in settlement of a Participant's Deferred Compensation
Account any sums that federal, state, local or foreign tax law requires to be
withheld with respect to such payment.
10.13 Entire Agreement. This Plan constitutes the entire understanding
and agreement with respect to the subject matter contained herein, and there are
no agreements, understandings, restrictions, representations or warranties among
any Participant and the Company other than those set forth or provided for
herein.
10.14 Effective Date. The Plan shall be effective August 1, 2001.
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