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[DOVER CORPORATION LOGO]
April 20, 1999
Re: Executive Deferred Income Plan - Replacement of Change of Control
Provisions
Dear ________________:
You (the "Executive") are or were a key executive of Dover Corporation
(the "Corporation") or of a direct or indirect subsidiary of the corporation (a
"Subsidiary") who entered into an Executive Employee Supplemental Retirement
Agreement as of January 1, 1985 with the Corporation (the "EDIP") pursuant to
which you deferred a portion of your compensation in exchange for the
Corporation's agreement to pay a substantial retirement benefit to you beginning
at age 65. You also entered into a separate letter agreement in 1992 (the "Prior
EDIP Amendment") in which you and the Corporation agreed to certain amendments
to the EDIP to provide you with certain benefits in the event that a Change of
Control (as defined in the Prior EDIP Amendment) occurred.
Set forth below is an amendment to the EDIP (the "1999 EDIP
Amendment"), which replaces and supersedes the Prior EDIP Amendment. The purpose
of this 1999 EDIP Amendment is to replace the definition of Change in Control in
the Prior EDIP Amendment with a more favorable definition.
1. In the event any Person attempts to effect a Change of Control, you
will not voluntarily terminate your employment with the Corporation or a
Subsidiary, as the case may be, and unless involuntarily terminated will
continue to render services to the Corporation or such Subsidiary until such
Person has abandoned or terminated all efforts to effect a Change of Control or
until after the Change of Control has occurred. For purposes of this Agreement,
the term, Person is defined in paragraph 2(b) below.
2. (a) A "Change of Control" shall be deemed to have taken place upon
the occurrence of any of the following events (capitalized terms are defined
below):
(i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Corporation or its Affiliates) representing 20% or more of either the then
outstanding shares of common stock of the Corporation or the combined voting
power of the Corporation'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 of the Corporation 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
Corporation) whose appointment or election by the Board of Directors of the
Corporation or nomination for election by the Corporation's stockholders was
approved or recommended by a vote of at least two-thirds (2/3) of the 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
Corporation or any direct or indirect subsidiary of the Corporation with any
other corporation, other than (A) a merger or consolidation which would result
in the voting securities of the Corporation 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 Corporation 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 Corporation (or
similar transaction) in which no Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Corporation (not including in the
securities Beneficially Owned by such Person any securities acquired directly
from the Corporation or its Affiliates) representing
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20% or more of either the then outstanding shares of common stock of the
Corporation or the combined voting power of the Corporation's then outstanding
securities; or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation or there is consummated
an agreement for the sale or disposition by the Corporation of all or
substantially all of the Corporation's assets, other than a sale or disposition
by the Corporation of all or substantially all of the Corporation'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 Corporation in substantially the same
proportions as their ownership of the Corporation immediately prior to such
transaction or series of transactions.
(b) For purposes of this Section 2(a), 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 Corporation or any of
its Affiliates, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Corporation 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 Corporation in substantially the same proportions as their
ownership of stock of the Corporation.
3. Notwithstanding anything to the contrary set forth in the EDIP, in
the event of a Change of Control:
(a) (i) if you are not receiving benefit payments at the date of a Change
of Control all of the benefits provided by the Agreement shall become
immediately vested and immediately payable, in cash, in one lump sum amount
equal to the Actual Deferrals (as defined in the EDIP) together with interest
compounded annually at the rate(s) set forth in the EDIP from the Time of
Deferral (as defined in the Agreement) to the date of payment.
(ii) if you or any beneficiary are receiving benefit payments at the
date of a Change of Control, the Total Benefit (as set forth in the Benefit
Schedule attached to the EDIP), less the amount of benefits actually received
you and/or any beneficiary, present valued at a discount rate of 8% per year or
such other lower rate as is established by the Continuing Directors as defined
in Article Fourteenth of the Corporation's Certificate of Incorporation), shall
be immediately vested and immediately payable in cash in one lump sum.
(b) The Corporation shall pay such lump sum amount to you promptly but in
no event more than five days after a Change of Control.
(c) The first line of text in Section 5 of the EDIP is hereby deleted in
its entirety and replaced with the following:
"The Continuing Directors (as defined in Article Fourteenth of
the Company's Certificate of Incorporation) of the Company shall
appoint"
(d) Section 12 of the EDIP shall be deleted in its entirety and replaced
with the following:
"12. Amendment and Termination. The Continuing Directors (as
defined in Article Fourteenth of the Company's Certificate of
Incorporation) of the Company only with the prior written consent
of the Executive Employee may amend or terminate this Agreement."
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4. Other than as set forth above, the terms and conditions of the EDIP
remain unchanged.
5. Except as otherwise expressly provided herein, this letter shall not
confer any right or impose any obligation on you to continue in the employ of
the Corporation nor shall it limit the right of the Corporation or you to
terminate your employment at any time prior to a Change of Control nor shall it
limit the right of the Board of Directors to amend or terminate the EDIP at any
time prior to a Change of Control.
6. In the event of an inconsistency between the EDIP and this letter, the terms
and conditions of this letter shall control.
Very truly yours,
DOVER CORPORATION
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Agreed and Accepted
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Executive