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DOVER CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
ARTICLE 1. PURPOSE OF THE PLAN
The purpose of this Dover Corporation Supplemental Executive Retirement
Plan is to promote the long-term success of the Company by providing a uniform
minimum level of retirement benefits to salaried officers and other key
executives on whom major responsibility for the present and future success of
the Company rests.
ARTICLE 2. DEFINITIONS
2.01. "Administrator" means the Dover Corporation Pension Committee.
2.02. "Affiliated Company" means the Company and any other member of the
controlled group of corporations (within the meaning of Section 414(b) of the
Code) of which the Company is a member. Except as otherwise determined by the
Administrator, a corporation shall not be considered as an Affiliated Company
during any period while it is not a member of such controlled group.
2.03. "Applicable Percentage" means (i) 100% in the case of a Participant whose
Termination Date is on or after his or her Normal Retirement Date, (ii) in the
case of a Participant whose Termination Date precedes his or her Normal
Retirement Date by not more than 10 years, 100% minus the product of 5/12 of 1%
and the number of months between the Participant's Termination Date and his or
her Normal Retirement Date, (iii) in the case of a Participant whose Termination
Date precedes his or her Normal Retirement Date by more than 10 years but not
more than 20 years, 50% minus the product of 1/4 of 1% and the number of months
in excess of 120 by which the Participant's Termination Date precedes his or her
Normal Retirement Date, and (iv) in the case of a Participant whose Termination
Date precedes his or her Normal Retirement Date by more than 20 years, 20% minus
the product of 1/12 of 1% and the number of months in excess of 240 by which the
Participant's Termination Date precedes his or her Normal Retirement Date.
2.04. "Beneficiary" means the person or persons designated by the Participant to
receive any payments which may be required to be paid pursuant to the Plan
following his or her death, or, in the absence of any such designated person,
the Participant's estate; provided, however, that a married Participant's
Beneficiary shall be his or her spouse unless the spouse consents in writing to
the designation of a different Beneficiary.
2.05. "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.06. "Company" means Dover Corporation and any successor thereto.
2.07. "Compensation" means an Employee's basic salary, bonuses (including
payments deemed by an Employer to be the equivalent of bonuses), and commissions
paid or made available by an Affiliated Company, including the portion of any
such remuneration deferred under a qualified or nonqualified deferred
compensation plan or arrangement or contributed to a cafeteria plan. Other forms
of remuneration, including but not limited to long-term incentive compensation,
shall not be included in an Employee's Compensation.
2.08. "Death Benefit" means a death benefit payable pursuant to Section 5.01.
2.09. "Disability" means a disability which causes a Participant 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. A Participant's Disability
shall be deemed to have ended on the last day of the last month with respect to
which he or she receives benefits described in the preceding sentence.
2.10. "Effective Date" means January 1, 1997.
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2.11. "Eligible Employee" means an Employee of an Employer who has been granted
by an Affiliated Company a stock option or a cash performance participation
award in each of five years (not necessarily consecutive) under the Dover
Corporation 1995 Incentive Stock Option Plan and 1995 Cash Performance Program
or a predecessor or successor plan or program.
2.12. "Employee" means an employee of an Affiliated Company.
2.13. "Employer" means the Company and any Affiliated Company or division
thereof that has adopted the Plan. A list of Employers is attached hereto as
Exhibit A.
2.14. "Final Average Compensation" means 12 times the average of a Participant's
monthly Compensation during the 60 consecutive complete calendar months of
service during the 120 consecutive complete calendar months of service with an
Affiliated Company prior to the Participant's ceasing to be an Employee during
which his or her Compensation was the highest. Any month in which Compensation
was not received, by reason of a leave of absence or otherwise, shall be omitted
in determining a Participant's Final Average Compensation. In the case of any
periods of part-time employment occurring in a Plan Year in which an Eligible
Employee is credited with less than one Year of Service, Compensation with
respect to such periods of part-time service shall be appropriately adjusted to
a full-time basis. In the event that a Participant is paid an annual bonus
during the 12-month period commencing on his or her Termination Date, for
purposes of calculating the Participant's Final Average Compensation the amount
of such bonus shall be substituted for the amount of the first bonus taken into
account during the applicable 60-month period, but only if (i) the 60-month
period used for purposes of the Final Average Compensation calculation includes
the Participant's last full month of employment, and (ii) the effect of such
substitution is to increase the Participant's Final Average Compensation.
2.15. "Gross Benefit" has the meaning provided in Section 4.01(b).
2.16. "Normal Retirement Age" means age 65.
2.17. "Normal Retirement Date" means the first day of the month coinciding with
or next following the date a Participant attains his or her Normal Retirement
Age.
2.18. "Offset Benefit" has the meaning provided in Section 4.01(c).
2.19. "Participant" means an individual who has commenced participation in the
Plan pursuant to Article 3 and whose benefit under the Plan has not been
distributed.
2.20. "Plan" means this Dover Corporation Supplemental Executive Retirement
Plan, as amended from time to time.
2.21. "Plan Year" means the calendar year.
2.22. "Prior Plan" means the Dover Corporation Supplemental Executive Retirement
Plan, as in effect prior to the adoption of this Plan.
2.23. "Retirement Benefit" means a retirement benefit payable pursuant to
Section 4.01(a).
2.24. "Termination Date" means the first day of the month coinciding with or
next following date on which a Participant has a Termination of Employment.
2.25. "Termination of Employment" means a Participant's termination of
employment with an Affiliated Company, whether voluntary or involuntary, for any
reason, including but not limited to quitting or discharge, but other than a
family or medical or other leave of absence, transfer of employment to another
Affiliated Company, incurring of a Disability, or death.
2.26. "Year of Service" means 12 consecutive months of service. Any period of
service of less than 12 consecutive months shall be counted on the basis of 1/12
of a Year of Service for each month of service. For purposes of this definition,
a month of service means any calendar month during any part of which an Employee
is employed by an Affiliated Company.
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ARTICLE 3. PARTICIPATION
3.01 Participation as of Effective Date. Any Eligible Employee as of the
Effective Date shall become a Participant as of such date.
3.02 Subsequent Participation. Any other Employee shall become a Participant on
the date he or she becomes an Eligible Employee.
3.03 Cessation of Participation. A Participant shall cease to be a Participant
on the date that all distributions due the Participant or his or her Beneficiary
have been made.
ARTICLE 4. RETIREMENT BENEFIT
4.01 Amount of Benefit.
(a) Each Participant shall be entitled under this Plan following his or her
retirement or other Termination of Employment to a benefit (the "Retirement
Benefit") equal to the Participant's Gross Benefit reduced by his or her Offset
Benefits.
(b) The Gross Benefit under the Plan, expressed as a single life annuity
commencing on the Participant's Termination Date, shall be the Applicable
Percentage of the product of (i) the Participant's Years of Service (not to
exceed 30) and (ii) 2% of the Participant's Final Average Compensation.
(c) The Participant's Offset Benefits shall consist of the following
benefits to which the Participant is or will become entitled, or which the
Participant received prior to the date of determination:
(1) All benefits paid or accrued under all qualified or nonqualified
defined benefit or defined contribution retirement plans sponsored by an
Affiliated Company; provided, however, that only the portion of any such benefit
attributable to Affiliated Company contributions shall be taken into account.
For purposes of the preceding sentence, Affiliated Company contributions shall
not include a Participant's elective deferrals under any such plan, or earnings
credited to any such elective deferrals to the extent such earnings are based on
a reasonable interest rate or on one or more predetermined investments.
(2) The employer portion of any social security or other retirement
benefits provided by any Federal, state, local, or foreign government. Such
employer portion shall be equal, in the case of a social security benefit, to
the employer portion of the Participant's projected social security benefit (at
the Participant's social security full benefit retirement age) multiplied by a
fraction the numerator of which is the Participant's Years of Service and the
denominator of which is 35. For purposes of determining a Participant's
projected social security benefit, it shall be assumed that the social security
wage base remains constant in years following the Participant's Termination of
Employment and that in each of the 35 years prior to the Participant's social
security full benefit retirement age he or she has earned income of at least the
social security wage base applicable to such year.
(d) In the event an Offset Benefit is not payable in the form of a single
life annuity commencing on the Participant's Termination Date, the offset
calculation in Section 4.01(a) shall be performed using such actuarial and other
adjustments as the Administrator shall determine.
4.02 Automatic Cash-Outs. Notwithstanding the provisions of Sections 4.02 and
4.03, in the case of any Participant who has a Termination of Employment:
(1) Before his or her Normal Retirement Age and either before
attaining age 55 or before having completed 10 Years of Service; or
(2) At a time when the lump-sum value of his or her Retirement Benefit
under the Plan is $50,000 or less the Participant's Retirement Benefit shall
automatically be paid in a lump sum within 30 days after his or her Termination
of Employment.
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4.03 Automatic Payments in Other Circumstances. In the case of any Participant
to whom Section 4.02 does not apply and for whom no valid election under Section
4.04 is in effect, such Participant's Retirement Benefit shall be paid in the
manner set forth in this Section 4.03.
(a) If the Participant participates in one or more qualified defined
benefit plans sponsored by an Affiliated Company, the Participant's benefit
shall commence at the same time and be paid in the same form as the
Participant's benefit under that qualified plan. If the Participant is covered
under more than one such plan, the plan in which he or she has the greatest
benefit will be controlling.
(b) If the Participant does not participate in any qualified defined
benefit plan sponsored by an Affiliated Company, the Participant's benefit shall
be paid as an actuarially reduced 50% joint and survivor annuity (if the
Participant is married) or a single life annuity (if the Participant is
unmarried), commencing in either case at his or her Normal Retirement Date (or,
if later, the first day of the month coinciding with or next following the date
of his or her actual retirement).
4.04 Election of Optional Forms of Benefit.
(a) A Participant may file an election with the Administrator, on such form
as the Administrator shall prescribe, specifying (i) the form in which his
Retirement Benefit is to be paid and (ii) the time at which such benefit is to
commence in the event of the Participant's retirement or other termination of
employment before his or her Normal Retirement Age. Such election may, subject
to Section 4.04(c), be changed at any time.
(b) If a valid election is in effect pursuant to this Section 4.04, except
as otherwise provided in Section 4.02 a Participant's Retirement Benefit shall
be paid in the form specified in such election. Such Retirement Benefit shall
commence (i) on the Participant's Normal Retirement Date (or, if later, the
first day of the month coinciding with or next following the date of the
Participant's actual retirement) if the Participant retires at or after his or
her Normal Retirement Age, (ii) in other cases, on the date specified in the
Participant's election.
(c) An election or change in election pursuant to Section 4.04(a) shall be
valid only if filed with the Administrator either (i) by December 31, 1997 or
within 90 days after a Participant becomes eligible to participate in the Plan,
whichever is later, or (ii) at least 12 months before he or she retires or
otherwise terminates employment. Notwithstanding the preceding sentence, if a
Participant whose most recent valid election is for an annuity form of benefit
demonstrates to the satisfaction of the Administrator that a relevant change in
family circumstances has occurred since the filing of such election, such
participant may change his election to a different form of annuity commencing on
the same date as that specified on such prior election, or may designate a new
contingent Beneficiary, without regard to such 12-month requirement.
(d) If, pursuant to Section 4.04(c), a change in a Participant's election
is not valid, the valid election previously in effect shall determine the form
and timing of the Participant's Retirement Benefit.
(e) The forms of benefit that a Participant may elect under the Plan are
(i) a single life annuity, (ii) a 100% or 50% joint and survivor annuity, or
(iii) a single life annuity with 120-month period certain. A lump-sum payment
generally is not available as an elective form of benefit. A Participant may
indicate on an election that the Participant wishes to receive his or her
benefit in a lump sum, but in that event must also indicate the form in which
the Participant wishes the benefit to be paid if the lump-sum request is denied.
Requests for lump-sum payments will be considered by the Administrator on a
case-by-case basis, and the granting of any such request shall be within the
Administrator's sole discretion.
(f) A participant who elects a joint and survivor form of benefit shall
designate his contingent Beneficiary in conjunction with such election. In the
event of such Beneficiary's death before the Retirement Benefit Date, the
participant's Retirement Benefit shall be paid in the form of a single life
annuity unless he has filed a valid change in election pursuant to Section
4.04(c).
4.05 Disability.
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A Participant who incurs a Disability as an Employee shall continue to
accrue Years of Service during his or her period of Disability. Upon the
Participant's subsequent termination of employment, retirement or death
following cessation of his or her Disability, he or she (or his or her
Beneficiary) shall be entitled to receive distribution of his or her Retirement
Benefit or Death Benefit pursuant to the other provisions of the Plan. For
purposes of calculating such Retirement Benefit, the Participant's Final Average
Compensation shall be determined as of the commencement of his or her
Disability.
ARTICLE 5. DEATH BENEFIT
5.01 In the event of a Participant's death prior to the commencement of payment
of his or her Retirement Benefit, the Participant's Beneficiary shall be paid
within 30 days after the Administrator receives notification of the
Participant's death, a lump-sum Death Benefit equal to the Retirement Benefit
the Participant would have received had he or she had a Termination of
Employment immediately before his or her death (or on the Participant's actual
Termination Date, if earlier) and elected to receive his or her benefit in a
lump sum. In calculating such Retirement Benefit, the amount of any Offset
Benefits shall be determined without regard to the fact of the Participant's
death.
ARTICLE 6. ADMINISTRATION
6.01 This Plan shall be administered by the Administrator. The Administrator
shall have discretionary authority to interpret the Plan and to adopt rules and
regulations consistent with the Plan. The Administrator's good-faith
determination with respect to any issue relating to the interpretation of the
Plan shall be conclusive and final.
ARTICLE 7. GENERAL PROVISIONS
7.01 No Contract of Employment. The establishment of the Plan shall not be
construed as conferring any legal rights upon any Participant for a continuation
of employment, nor shall it interfere with the rights of the Company to
discharge a Participant and to treat him without regard to the effect which such
treatment might have upon him as a Participant in the Plan.
7.02 Withholding. As a condition to a Participant's entitlement to benefits
hereunder, the Company shall have the right to deduct (or cause to be deducted)
from any amounts otherwise payable to a Participant, whether pursuant to the
Plan or otherwise, or otherwise to collect from the Participant, any required
withholding taxes with respect to benefits under the Plan.
7.03 Anti-Alienation Provisions. Subject to any applicable law, no benefit under
the Plan shall be subject in any manner to, nor shall the Company be obligated
to recognize, any purported anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, or charge, and any attempt to do so shall be
void. No such benefit shall in any manner be liable for or subject to
garnishment, attachment, execution, or a levy, or liable for or subject to the
debts, contracts, liabilities, engagements, or torts of the Participant.
7.04 Unfunded Benefits. The Plan is an unfunded plan maintained by the Company
for the purpose of providing deferred compensation for a select group of
management or highly compensated employees. The Plan shall not be construed as
conferring on a Participant any right, title, interest, or claim in or to any
specific asset, reserve, account, or property of any kind possessed by the
Company. To the extent that a Participant or any other person acquires a right
to receive payments from the Company, such rights shall be no greater than the
rights of an unsecured general creditor.
7.05 Claim for Benefits. Any claim for benefits under the Plan shall be made in
writing to the Administrator. If a claim is denied, the Administrator shall so
notify the Participant within 90 days after receipt of the claim. The notice of
denial shall state (i) the specific reason for the denial of the claim, (ii)
specific references to the pertinent Plan provisions upon which the denial is
based, (iii) a description of any additional material or information necessary
to perfect the claim together with an explanation of why such material or
information is necessary, and (iv) an explanation of the claims review
procedure.
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Within 60 days after the Participant's receipt of notice of denial of a
claim, the Participant may (i) file a request with the Administrator that it
conduct a full and fair review of the denial of the claim, (ii) review pertinent
documents, and (iii) submit questions and comments to the Administrator in
writing.
The decision by the Administrator with respect to the review must be given
within 60 days after receipt of the request, unless special circumstances
require an extension. In no event shall the decision be delayed beyond 120 days
after receipt of the request for review. The decision shall be written in a
manner calculated to be understood by the Participant and shall contain specific
reasons for the decision and a specific reference to the Plan provisions upon
which the decision is based.
7.06 Incapacity. If the Administrator determines that any person to whom a
benefit is payable under the Plan is unable to care for his or her affairs
because of illness or accident, any payment due may be paid to the individual's
spouse, child, parent, sibling, or to any person deemed by the administrator to
have incurred expense for such person otherwise entitled to payment unless a
prior claim therefor shall have been made by a duly appointed guardian,
committee, or other legal representative.
7.07 Successor Entities. This plan shall be binding upon the successors and
assigns of the Company. The Company shall require any successor (whether direct
or indirect, and whether by purchase, merger, consolidation, or otherwise) to
all or substantially all of the business or assets of the Company, by written
agreement to expressly assume and agree to perform the Company's obligations
under the Plan in the same manner and to the same extent that the Company would
be required to perform them if no such succession had taken place. The
provisions of this Section 7.07 shall continue to apply to each subsequent
employer of the Participant hereunder in the event of any subsequent merger,
consolidation, or transfer of assets of such subsequent employer.
7.08 Prior Plan. Effective as of the date of adoption of this Plan, the Prior
Plan has been terminated, and Participants are entitled to no further benefits
thereunder. In no event shall the accrued benefit of such a Participant under
this Plan be less than his or her accrued benefit under the Prior Plan
immediately prior to such termination.
7.09 Governing Law. The laws of the State of New York shall govern the
construction of this Plan and the rights and the liabilities hereunder of the
parties hereto.
7.10 Plan Year. The plan year shall be the calendar year.
7.11 Headings. All headings are inserted solely for reference and shall not
constitute a part of this Plan, nor affect its meaning, construction, or effect.
ARTICLE 8. CHANGE OF CONTROL
8.01 Definition of Change of Control.
(a) For purposes hereof, a "Change of Control" shall be deemed to have
taken place upon the occurrence of any of the following events (capitalized
terms not previously defined in the Plan are defined in Section (b) below):
(i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Affiliates) representing 20% or more of either the then
outstanding shares of common stock of the Company or the combined voting power
of the Company's then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause (A)
of paragraph (iii) below; or
(ii) the following individuals cease for any reason to constitute
a majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board of Directors and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board of Directors or nomination for election by
the Company's stockholders was approved or recommended by a vote of at least
two-thirds (2/3) of the
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directors then still in office who either were directors on the date hereof or
whose appointment, election or nomination for election was previously so
approved or recommended; or
(iii) there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
corporation, other than (A) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof) at least 50% of the combined voting power of the voting securities of
the Company or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (B) a merger or consolidation
effected to implement a recapitalization of the Company (or similar transaction)
in which no Person is or becomes the Beneficial Owner, directly or indirectly,
of securities of the Company (not including in the securities Beneficially Owned
by such Person any securities acquired directly from the Company or its
Affiliates) representing 20% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the Company's then
outstanding securities; or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets, other than a sale or disposition by the Company of all or
substantially all of the Company's assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
stockholders of the Company in substantially the same proportions as their
ownership of the Company immediately prior to such transaction or series of
transactions.
(b) For purposes of this Section 8.01, the following terms shall have the
meanings indicated:
(i) "Affiliate" shall have the meaning set forth in Rule 12b-2
under Section 12 of the Exchange Act.
(ii) "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 under the Exchange Act, except that a Person shall not be deemed to be the
Beneficial Owner of any securities which are properly filed on a Form 13-G.
(iii) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(iv) "Person" shall have the meaning given in Section 3(a)(9) of
the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any of its
Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its Affiliates, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
8.02 Payments Upon Change of Control.
(a) In the event of a Change of Control, the value of each Participant's
Retirement Benefit accrued through the date of the Change of Control (and based
on the Participant's Years of Service through the date of the Change of Control)
shall be paid to the Participant (or if the Participant has died to the
Beneficiary of the Participant) in a single lump sum payment within five days
after the Change of Control. For purposes hereof, the amount of the lump sum
payment shall be determined using (i) the actuarial assumptions set forth in the
Administration Manual for the Plan as in effect immediately prior to the Change
of Control, or (ii) such actuarial assumptions as shall be specified by the
Continuing Directors (as defined in Article Fourteenth of the Company's
Certificate of Incorporation) of the Company, provided that in no event shall
the amount of the lump sum payment be less than the amount as determined
pursuant to (i) above.
(b) All determinations as to eligibility for and amount of benefits payable
pursuant to (a) above shall be made by the Continuing Directors (as defined in
Article Fourteenth of the Company's Certificate of Incorporation) of the
Company, and the decision of such persons shall be final and binding on the
Company and the Participant.
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ARTICLE 9. AMENDMENT OR TERMINATION
9.01 The Company's Board of Directors or the Administrator may amend or
terminate this Plan at any time; provided, however, that no amendment or
termination of the Plan shall adversely affect the right of any Participant to
receive his or her accrued benefit under the Plan, as determined as of the date
of such amendment or termination.
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APPENDIX A
PARTICIPATING EMPLOYERS AS OF FEBRUARY 4, 1999
INDEPENDENT SUBSIDIARY SUBSIDIARY/DIVISION
Dover Corporation Corporate Headquarters
OPW Fueling Components
Civacon
OPW Engineered Systems
Dover Diversified Inc. Corporate Headquarters
Sargent Controls
Sargent Technologies *
Waukesha Bearings Corp.
SWEP North America, Inc.
Tranter, Inc.
Central Research Laboratories
* Includes Kahr Bearing and
Precision Kinetics
Dover Industries, Inc. Corporate Headquarters
Rotary Lift
Dover Resources, Inc. Corporate Headquarters
Blackmer Pump
C. Lee Cook
De-Sta-Co
Norris Sucker Rods
O'Bannon Pump
Norriseal
Ronningen-Petter