DEFERRED
COMPENSATION PLAN
(As Amended and Restated effective as of January 1,
2009)
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.
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 or persons designated by
a 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. For
purposes hereof, Beneficiary may be a natural person or an estate
or trust.
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 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, the Dover Corporation 2005 Equity and Cash
Incentive Plan, 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 2005 Equity and Cash Incentive
Plan 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 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 term “subsidiary corporation” shall be
defined as set forth in Section 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 for 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 (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 in the Plan and defer Compensation between
Participants and the Company in the form 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” means 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 insurance program,
provided that any such disability meets the criteria
specified in Section 1.409A-3(i)(4) of the Treasury
Regulations, or, in the case of a Participant who does not meet the
criteria specified above, a disability which would cause the
Participant to be determined to be totally disabled by the Social
Security Administration and eligible for social security disability
benefits. An Employee’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.
2.21
“Distribution Affidavit” means the affidavit of a
Participant or Beneficiary submitted to the Company to claim that
he or she is entitled to a different Benefit distribution than the
Trustee has been directed to pay to the Participant or Beneficiary
under the Plan. A Distribution Affidavit shall be considered a
claim for benefits by the Participant or Beneficiary pursuant to
Article VIII hereof.
2.22
“Distribution Date” means the date on which
distribution of a Participant’s Benefits is made or commenced
pursuant to Article VI.
2.23
“Effective Date” of the Plan as amended and restated as
set forth herein means January 1, 2009. The original effective date
of the Plan is August 1, 2001. For the period from
January 1, 2005 through December 31, 2008, the Plan was
administered in good
faith
compliance with Section 409A of the Code and applicable
guidance issued by the Treasury Department and the Internal Revenue
Service.
2.24
“Grandfathered Benefit” means a Sub-Account that
consists of the amount credited to a Participant’s Deferred
Compensation Account as of December 31, 2004, plus or minus
Credited Investment Return (Loss) on such amount thereafter, or any
amount accrued to a Participant under a Supplemental Plan that was
vested as of December 31, 2004.
2.25
“Hardship” means one (1) or more of the following
events which causes an unforeseen financial hardship to the
Participant or his or her family:
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(1)
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A serious illness or accident of the Participant or a dependent (as
defined in Section 152(a) of the Code) of the
Participant;
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(2)
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A loss of the Participant’s primary residence due to
casualty; or
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(3)
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Other similar circumstances arising out of events substantially
beyond the control of the Participant, as determined by the
Committee.
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2.26
“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 deemed investment options.
2.27
“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 deemed investment elections.
2.28
“Non-Grandfathered Benefit” means a Sub-Account that
consists of the amount of deferrals and contributions credited to a
Participant’s Deferred Compensation Account after
December 31, 2004, plus or minus Credited Investment Return
(Loss) thereon.
2.29
“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.
2.30
“Plan” means this Dover Corporation Deferred
Compensation Plan, as it may be amended from time to
time.
2.31
“Plan Year” means the calendar year.
2.32
“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) with respect to
a Participant’s Grandfathered Benefit, 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.
2.33
“Salary” for purposes of the Plan shall be the total of
the Participant’s base salary paid by the Company for 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.
2.34
“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.
2.35
“Specified Employee” means an employee within the
meaning of Section 409A(a)(2)(B)(i) of the Code and any
applicable regulations or other pronouncements issued by the
Internal Revenue Service with respect thereto. The determination of
who the Specified Employees are as of any time shall be made by the
Board or by such committee, person or persons as the Board shall
delegate for such purpose.
2.36
“Sub-Account” means a separate account or accounts into
which a Participant’s Deferred Compensation Account shall be
divided, including without limitation separate accounts with
respect to a Participant’s Grandfathered Benefit and
Non-Grandfathered Benefit. 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
the liability for which was transferred from the Supplemental Plan
to this Plan, or which was established 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.
2.37
“Supplemental Plan” means (a) the Dover
Corporation Supplemental Executive Retirement Plan and (b) any
other non-qualified plan which (i) is unfunded and maintained
primarily for the purpose of providing deferred compensation to a
select group of management or highly compensated employees and
(ii) is designated by the Committee as a “Supplemental
Plan” for purposes of this Plan .
2.38
“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, in each instance that would meet the
requirements to be considered a “Separation from
Service” within the meaning of Section 1.409A-1(b) of
the Treasury Regulations.
2.39
“Trust” means the trust referred to in Article VII
of the Plan.
2.40
“Trustee” means the trustee of the Trust.
2.41
“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.
2.42
“Unforeseeable Emergency” means one or more of the
following events which causes a severe financial hardship to the
Participant:
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a.
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illness or accident of the Participant or his or her spouse,
Beneficiary or dependent;
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b.
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loss of the Participant’s property due to casualty, including
the need to repair or rebuild such property with such repair or
rebuild not covered by insurance;
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c.
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other similar extraordinary and unforeseeable circumstances arising
as a result of events beyond the Participant’s control,
including, without limitation the need to pay medical expenses for
the Participant or his or her spouse, Beneficiary or dependent,
foreclosure of or eviction of the Participant from his or her
primary residence or the payment of funeral expenses of the
Participant or his or her spouse, Beneficiary or
dependent.
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For purposes of this Section 2.42, “dependent”
shall mean such term as defined in Section 152 of the Code,
without regard to Sections 152(b)(1), (b)(2) and
(d)(1)(B).
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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:
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(i)
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are on a regular periodic U.S. payroll of the Company;
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(ii)
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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;
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(iii)
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are hired or promoted prior to October 1
st
of the year in which they otherwise meet the requirements to become
a Participant; and
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(iv)
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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 Cash
Performance Program, the Dover Corporation 2005 Equity and Cash
Incentive Plan or any successor to such plans and
programs.
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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 Deferrals . A Participant’s future
deferrals under the Plan shall cease, and the Participant may not
defer any Compensation under the Plan, during any year in which he
or she fails to satisfy the minimum annual compensation threshold
of Section 3.1(a)(ii) above.
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:
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a.
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Any whole-number percentage of Salary up to 50%;
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b.
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Any whole-number percentage or flat dollar amount of Bonus up to
100%;
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c.
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Any whole-number percentage or flat dollar amount of Cash-Based
Long-Term Incentive Compensation up to 100%; and/or
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d.
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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.
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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 or other amounts
permitted to be deferred hereunder 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.
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 to be deferred of Salary, Bonus and/or Cash-Based Long-Term
Incentive Compensation and any other form of Compensation permitted
by the Committee, and the portion of the distribution a Participant
expects to receive in a lump sum pursuant to a Supplemental Plan
which the Participant elects to have transferred and paid pursuant
to the provisions of this Plan; and
b. the
time for the commencement of payment of Benefits which must be
either on account of Retirement, Disability, 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 or with
respect to amounts transferred from a Supplemental Plan.
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.
4.3
Timing of Deferral Election .
a.
Election to Defer Salary . Elections to defer the receipt of
Salary must be received by the Committee by November 30 (or
such later date as the Committee shall determine) of each year to
be effective with respect to the first pay period of the following
Plan Year.
b.
Election to Defer Bonus, Cash-Based Long-Term Incentive
Compensation, A Supplemental Plan Lump Sum Distribution and Other
Compensation . Elections to defer receipt of any Bonus and/or
Cash-Based Long-Term Incentive Compensation must be received by the
Committee by November 30 (or such later date as the Committee
shall determine) of each year to be effective for the Bonus and/or
Cash-Based Long-Term Incentive Compensation payable in the second
Plan Year following the Plan Year during which the election is
made. Any election made by a Participant to have any amount
transferred to the Plan from a Supplemental Plan shall be given
effect only if such election was made not less than twelve
(12) months prior to the Participant’s retirement or
other termination of employment for any reason and shall be
applicable
only
with respect to a participant’s Grandfathered Benefit in a
Supplemental Plan. 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; provided , however ,
that an election to have all or a portion of a lump sum
distribution from a Supplemental Plan transferred to this Plan may
be revoked if a new election to do so is made at least twelve
(12) months prior to the Participant’s retirement or
other termination of employment for any reason
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:
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a.
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additional deferrals pursuant to Section 4.2,
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b.
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Company Contributions (if any) pursuant to
Section 5.4;
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c.
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distributions (if any); and
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d.
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the appropriate Credited Investment Return (Loss).
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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 deemed
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
deemed investment options to be designated hereunder and the nature
of the options and may change or eliminate any of the deemed
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 of a
Participant 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 deemed investment elections under Section 5.2, a
Participant may make changes to his or her deemed investment
elections 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 25
th
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 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.
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 may be deferred
as elected by a Participant; provided , however , in
no event may any distribution commence 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 on account of
Retirement or Disability (from lump sum to installments or vice
versa or to change the date on which a distribution would be made
or commence to be made or 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
and, if such election is on account of Retirement or Disability,
the election shall not take effect until at least 12 months after
the date
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