Exhibit 10.1
DOVER CORPORATION
2005 EQUITY AND CASH INCENTIVE PLAN
(Amended and Restated as of January 1, 2009)
A. PURPOSE AND SCOPE OF
THE PLAN
1. Purpose.
The 2005 Equity and Cash
Incentive Plan (the “ Plan ”) is intended to
promote the long-term success of Dover Corporation by providing
salaried officers and other key employees of Dover Corporation and
its subsidiaries, on whom major responsibility for the present and
future success of Dover Corporation rests, with long-range and
medium-range inducement to remain with the organization and to
encourage them to increase their efforts to make Dover Corporation
successful. The term “ Corporation ” shall mean
Dover Corporation and any present or future corporation which is or
would be a “subsidiary corporation” of Dover
Corporation as defined in Section 424 of the Internal Revenue
Code of 1986, as amended (the “ Code ”), unless
the context requires otherwise.
2. Successor
Plan. The Plan is the
successor to the 1995 Incentive Stock Option Plan and 1995 Cash
Performance Program (the “ Predecessor Plan ”).
No further grants of options, restricted stock or cash performance
awards may be made under the Predecessor Plan after the Predecessor
Plan expires on January 30, 2005. Options, restricted stock,
and performance awards under the Predecessor Plan shall be
administered pursuant to the provisions of the Predecessor
Plan.
3. Administration.
The Plan shall be
administered and interpreted by the Compensation Committee or such
other Committee of the Board of Directors as the Board may
designate if there is no Compensation Committee (the “
Committee ”), consisting of not less than three
(3) persons appointed by the Board of Directors of Dover
Corporation from among its members. A person may serve as a
Committee member provided he or she shall comply in all respects
with any qualifications required by law, including specifically
being a “non-employee director” for purposes of the
rules promulgated under the Securities Exchange Act of 1934, as
amended (the “ Exchange Act ”), and an
“outside director” for purposes of Section 162(m)
of the Code and satisfying any other independence requirement under
applicable law and regulations. The Committee will have sole and
complete authority to administer all aspects of the Plan, including
but not limited to: (a) determining the individuals eligible
to receive stock options, SSARs (as defined in Paragraph 6),
restricted stock, cash performance awards, and/or performance share
awards under the Plan; (b) granting options, SSARs, restricted
stock, cash performance awards, and performance share awards;
(c) determining the number of shares to be subject to options
and SSARs, and the amount of restricted stock, cash performance
awards, and performance share awards to be granted to any such
eligible individuals at any time or from time to time;
(d) determining the terms and conditions under which option
and SSAR grants, restricted stock awards, cash performance awards,
and performance share awards will be made; and (e) determining
whether objectives, conditions and performance targets for cash
performance awards, performance share awards and, if applicable,
other awards have been met. The Committee may, subject to the
provisions of the Plan, from time to time establish such rules and
regulations as it deems appropriate for the proper administration
of the Plan. The Committee’s decisions shall be final,
conclusive, and binding with respect to the interpretation and
administration of the Plan and any grants or awards made
thereunder. The Committee shall have the discretion to make awards
under the Plan that are intended to meet the requirements of
Section 162(m) of the Code as well as awards that are not
intended to meet the requirements of Section 162(m) of the
Code.
4. Eligibility.
Option and SSAR grants,
restricted stock awards, cash performance awards, and performance
share awards may be made to any employee of the Corporation who is
a salaried officer or other key employee, including salaried
officers who are also members of the Board of
Directors (hereinafter sometimes
referred to as “ participants ”). The Committee
shall select the participants eligible for, and determine the terms
of, the grants and awards to each.
5. Shares
Available for Grant. An aggregate maximum of
20,000,000 shares of common stock of Dover Corporation (the
“ Common Stock ”) will be reserved for issuance
upon exercise of options to purchase Common Stock granted under the
Plan, the exercise of SSARs granted under the Plan, and for awards
of restricted stock, and performance share awards. This maximum
number is subject to appropriate adjustment resulting from future
stock splits, stock dividends, recapitalizations, reorganizations,
and other similar changes to be computed in the same manner as that
provided for in Paragraph 14 below. If any option or SSAR
granted under the Plan expires, terminates, or is cancelled without
having been exercised in full, or if any award of restricted stock
or award of performance shares is forfeited or canceled for any
reason, the number of shares underlying such unexercised option or
SSAR and the number of forfeited or cancelled shares under such
award will again be available under the Plan. However, the total
original number of shares subject to any option, SSAR, award of
restricted stock, or award of performance shares granted under the
Plan that is exercised, vests or held until payout shall continue
to be counted against the aggregate maximum number of shares
reserved for issuance under the Plan, even if such grant is settled
in whole or in part other than by the delivery of Common Stock to a
participant (including any netting or withholding of any shares to
satisfy tax withholding obligations).
B. STOCK OPTION AND SSAR
GRANTS
6. Stock Options
and SSARs. Options to purchase
shares of Common Stock may be granted under the terms of the Plan
and shall be designated as either “non-qualified” stock
options or “incentive” stock options (“
ISOs ”) within the meaning of Section 422 of the
Code. Stock appreciation rights that are settled upon exercise by
the issuance of shares of Common Stock (“ SSARs
”) may be granted under the terms of the Plan. SSARs shall be
granted separately from options and the exercise of an SSAR shall
not be linked in any way to the exercise of an option and shall not
affect any option award then outstanding. Stock option grants and
SSARs shall contain such terms and conditions as the Committee may
from time to time determine, subject to the following
limitations:
(a) Exercise
Price. The price at which shares of Common Stock
may be purchased upon exercise of an option shall be fixed by the
Committee and may be equal to or more than (but not less than) the
fair market value (as defined below) of a share of the Common Stock
as of the date the option is granted.
(b) Base
Price. The base price of an SSAR shall be fixed by
the Committee and may be equal to or more than (but not less than)
the fair market value of a share of the Common Stock as of the date
the SSAR is granted.
(c) Fair Market
Value. For purposes of the Plan, the fair market
value of a share of Common Stock on the date the option or SSAR is
granted shall be determined in good faith by the Committee on the
basis of such considerations as the Committee deems appropriate
from time to time, including, but not limited to, such factors as
the closing price for a share of Common Stock on such day (or, if
such day is not a trading day, on the next trading day) on the
principal United States exchange on which the Common Stock then
regularly trades (the “ Exchange ”), the average
of the closing bid and asked prices for a share of Common Stock on
the Exchange on the date the option or SSAR is granted by the
Committee or the average of the high and low sales price of a share
of Common Stock on the Exchange on the date the option or SSAR is
granted by the Committee (“ fair market value
”). The Committee shall be authorized, in its discretion, to
round up the fair market value of a share of Common Stock to the
nearest whole number or quarterly fraction thereof.
(d) Term.
The term of each option or SSAR will be for such period
as the Committee shall determine as set forth in the stock option
or SSAR agreement, but in no event shall the term of an option or
SSAR be greater than 10 years from the date of
grant.
(e) Rights of
Holder. A recipient of stock options or SSARs shall
have no rights as a shareholder with respect to any shares issuable
or transferable upon exercise thereof until the date of issuance of
such shares. Except as specifically set forth in Paragraph 14
below, no adjustment shall be made for dividends or other
distributions of cash or other property on or with respect to
shares of stock covered by options or SSARs paid or payable to
holders of record prior to such issuance.
(f) Limits on
Individuals. The maximum number of shares of Common
Stock covered by all options and SSARs granted to a single
participant in any year may not exceed 600,000. The aggregate fair
market value (determined on the date of grant) of Common Stock with
respect to which a participant is granted ISOs (including ISOs
granted under the Predecessor Plan) which first become exercisable
during any given calendar year shall not exceed
$100,000.
7. Exercise.
An option or
SSAR granted under the Plan shall be exercisable during the term of
the option or SSAR subject to such terms and conditions as the
Committee shall determine and are specified in the stock option or
SSAR agreement, not inconsistent with the terms of the Plan;
provided , however , that except as set forth in
Paragraphs 11, 14 and 41, no option or SSAR may be exercised
prior to the third (3rd) anniversary of the date of its grant and
any partial exercise of an option or SSAR shall be with respect to
not fewer than 500 shares. In addition, the Committee may
condition the exercise of an option or SSAR upon the attainment by
the Corporation or any subsidiary or division or by the participant
of any performance targets set by the Committee. The shares to be
issued upon exercise of an option or SSAR will be either treasury
or authorized and unissued stock, in the sole discretion of the
Corporation.
(a) Option.
To exercise an option, the option holder must give
written notice to the Corporation of the number of shares to be
purchased accompanied by payment of the full purchase price of such
shares as set forth in Paragraph 8. The date when the
Corporation has actually received both such notice and payment
shall be deemed the date of exercise of the option with respect to
the shares being purchased and the shares shall be issued as soon
as practicable thereafter.
(b) SSAR.
To exercise an SSAR, the SSAR holder must give written
notice to the Corporation of the number of SSARs being exercised as
provided in the SSAR agreement. No payment shall be required to
exercise an SSAR. The date of actual receipt by the Corporation of
such notice shall be deemed to be the date of exercise of the SSAR
and the shares issued in settlement of such exercise therefor shall
be issued as soon as practicable thereafter. Upon the exercise of
an SSAR, the SSAR holder shall be entitled to receive from the
Corporation for the SSARs being exercised that number of whole
shares of Common Stock having a fair market value on the date of
exercise of the SSAR equal in value to the excess of (A) the
fair market value of a share of Common Stock on the exercise date
multiplied by the number of SSARs being exercised over (B) the
sum of (i) the aggregate base prices of the SSARs being
exercised multiplied by the number of SSARs being exercised, plus
(ii) unless the holder elects to pay such tax in cash, any
amount of tax that must be withheld in connection with such
exercise. For this purpose, the fair market value of a share of
Common Stock on the date of exercise of a SSAR shall be the average
of the high and low sales price of a share of Common Stock on the
Exchange on the date a SSAR is exercised or if no sales have
occurred on that date, such value will be the closing price per
share on the next trading date following the exercise of the SSAR.
Fractional shares of Common Stock shall be disregarded upon
exercise of an SSAR unless otherwise determined by the
Committee.
8. Payment of
Exercise Price. Payment of the option
exercise price must be made in full at the time of exercise
(a) by check made payable to the Corporation, (b) by
transfer to the
Corporation of shares of Common
Stock owned by the participant, or (c) with a combination of
the foregoing. If payment is made by the transfer of shares, the
shares of Common Stock to be transferred to the Corporation must
have been owned by the option holder for such minimum period as may
be required to prevent the Corporation from incurring an adverse
accounting charge, the value per share of the shares so transferred
to the Corporation to be credited toward the purchase price will be
the average between the high and the low sales price per share of
Common Stock on the Exchange on the date the option is exercised
or, if no sales have occurred on that date, such value will be the
closing price per share on the Exchange on the next trading day
following the exercise of the option. The shares transferred to the
Corporation will be added to the Corporation’s treasury
shares or canceled and become authorized and unissued shares.
Notwithstanding the foregoing, such shares will continue to be
counted against the maximum number of shares for which options and
SSARs may be granted to a participant pursuant to
Section 6(f).
9. Transfers.
The options and SSARs
granted under the Plan may not be sold, transferred, hypothecated,
pledged, or otherwise disposed of by any of the holders except by
will or by the laws of descent and distribution, or as otherwise
provided herein. The option or SSARs of any person to acquire stock
and all rights thereunder shall terminate immediately if the holder
attempts to or does sell, assign, transfer, pledge, hypothecate or
otherwise dispose of the option or SSAR or any rights thereunder to
any other person except as permitted herein. Notwithstanding the
foregoing, a participant may transfer any non-qualified stock
option (but not ISOs or SSARs) granted under this Plan to members
of the holder’s immediate family (defined as a spouse,
children and/or grandchildren), or to one or more trusts for the
benefit of such family members if the instrument evidencing such
option expressly so provides and the option holder does not receive
any consideration for the transfer; provided that any such
transferred option shall continue to be subject to the same terms
and conditions that were applicable to such option immediately
prior to its transfer (except that such transferred option shall
not be further transferred by the transferee during the
transferee’s lifetime).
10. Registration.
The Corporation will
stamp stock certificates delivered to the shareholder with an
appropriate legend if the shares are not registered under the
Securities Act of 1933, as amended (the “ Securities
Act ”), or are otherwise not free to be transferred by
the holder and will issue appropriate stop-order instructions to
the transfer agent for the Common Stock, if and to the extent such
stamping or instructions may then be required by the Securities Act
or by any rule or regulation of the Securities and Exchange
Commission issued pursuant to the Securities Act.
11. Effect of
Death, or Disability or Retirement.
If an option or SSAR
holder dies or becomes disabled while employed by the Corporation,
all options or SSARs held by such holder shall become immediately
exercisable and the holder or such holder’s estate or the
legatees or distributees of such holder’s estate or of the
options or SSARs, as the case may be, shall have the right, on or
before the earlier of the respective expiration date of an option
or SSAR or sixty (60) months following the date of such death
or disability, to exercise any or all options or SSARs held by such
holder as of such date of death or disability. If an option or SSAR
holder retires at or after age 62, the holder shall have the
right, on or before the earlier of the expiration date of the
option or SSAR or sixty (60) months following the date of such
retirement, to purchase shares under any options or SSARs which at
retirement are, or within sixty (60) months following
retirement become, exercisable.
If the employment of a
holder of an option or SSAR terminates for any reason other than
(i) the reasons specified above or (ii) termination for
“cause” (as defined below), and one of the following
sets of circumstances is applicable: (a) the holder has at
least 10 years of service with the Corporation (including
service with any subsidiary corporation of the Corporation while it
is owned by the Corporation), the sum of the holder’s years
of service plus his or her age on the date of such termination
equals at least 65 and the holder satisfies the notice requirements
set forth below (“ Early Retirement I ”),
(b) the holder has at least 15 years of service with the
Corporation (including service with any subsidiary corporation of
the Corporation while is it owned by the
Corporation), the sum of the
holder’s years of service plus his or her age on the date of
such termination equals at least 70 and the holder satisfies the
notice requirements set forth below (“ Early Retirement
II ”), or (c) such holder’s employment with
the Corporation terminates due to the sale of stock or assets of
the subsidiary corporation (or line of business) by which the
holder is employed and the holder is so employed in good standing
by the subsidiary or line of business through the date of such sale
(“ Early Retirement III ”) each of Early
Retirement I, II and III from time to time being
referred to herein as “Early Retirement”), the holder
shall have the right (subject to the provisions of
Paragraph 42 below), (x) in the event of Early
Retirement I, on or before the earlier of the expiration date
of the option or SSAR or twenty-four (24) months following the
date of such Early Retirement, to exercise, and acquire shares
under, any options or SSARs which at such termination are, or
within twenty-four (24) months following such termination
become, exercisable, (y) in the event of Early Retirement II,
on or before the earlier of the expiration date of the option or
SSAR or thirty-six (36) months following the date of such
Early Retirement, to exercise, and acquire shares under, any
options or SSARs which at such termination are, or within
thirty-six (36) months following such termination become,
exercisable, or (z) in the event of Early Retirement III, on
or before the earlier of the expiration date of the option or SSAR
or twelve (12) months following the date of such Early
Retirement, to exercise, and acquire shares under, any options or
SSARs which at such termination are, or within twelve
(12) months following such termination become, exercisable.
Notwithstanding the above, if a holder taking Early
Retirement III would also qualify for Early Retirement I
or II excluding the notice requirement, the holder shall be
entitled to the benefits of Early Retirement I or II, as
appropriate.
In order to be eligible
for Early Retirement I or II, the holder must give six
(6) months advance notice of retirement and must continue to
be employed by the Corporation (or any subsidiary corporation
provided such subsidiary corporation continues to be owned by the
Corporation throughout the notice period) and perform his or her
duties throughout such notice period. Failure to satisfy the notice
requirement will render the holder ineligible for Early Retirement
I or II notwithstanding the satisfaction by the holder of all
other applicable requirements. Dover’s Chief Executive
Officer shall have the authority to reduce or waive the required
notice period.
12. Voluntary or
Involuntary Termination. If any option or SSAR
holder’s employment with the Corporation is voluntarily or
involuntarily terminated for any reason, other than for reasons or
in circumstances specified above or for “cause” (as
defined below), the holder shall have the right at any time on or
before the earlier of the expiration date of the option or SSAR or
three (3) months following the effective date of such
termination of employment, to exercise, and acquire shares under,
any options or SSARs which at such termination are
exercisable.
13. Termination
for Cause. If an option or SSAR holder’s
employment with the Corporation is terminated for cause (defined as
(a) a felony conviction of the holder; (b) the commission
by the holder of an act of fraud or embezzlement against the
Corporation; or (c) the holder’s willful misconduct or
gross negligence materially detrimental to the Corporation), the
option or SSAR shall be canceled and the holder shall have no
further rights to exercise any such option or SSAR and all of such
holder’s rights thereunder shall terminate as of the
effective date of termination of employment.
14. Effect of
Stock Dividends, Merger, Recapitalization or Reorganization or
Similar Events. If any Common Stock dividend is paid
by the Corporation, if any non-cash distribution is made by the
Corporation as respects its Common Stock, if the shares of Common
Stock are split or reclassified, if the Corporation should be
reorganized or consolidated or merged with or into another
corporation, or if all or substantially all the assets of the
Corporation are transferred to any other corporation in a
reorganization, each option or SSAR holder shall be entitled, upon
exercise of such holder’s option or SSAR, to receive for the
same aggregate exercise price in the case of an option, or upon
exercise of the SSAR, the same number and kind of shares of stock
(to the nearest whole number) as he or she would have been entitled
to receive upon the happening of such stock dividend, distribution,
stock split, reclassification, reorganization, consolidation,
merger or transfer,
if he or she had been, immediately
prior to such event, the holder of such shares. Outstanding options
and SSARs shall be appropriately amended as to exercise price or
base price and other terms in a manner consistent with the
aforementioned adjustment to the shares of Common Stock subject to
the Plan. The adjustments to be made pursuant to this
Paragraph 14 shall meet the requirements of Section 409A
of the Code and the regulations thereunder. The Board of Directors
shall have the power, in the event of any disposition of
substantially all of the assets of the Corporation, its
dissolution, any merger or consolidation, or the merger or
consolidation of any other corporation into the Corporation, to
amend all outstanding options and SSARs to permit their exercise
prior to the effectiveness of any such transaction and to terminate
such options or SSARs as of such effectiveness. If the Board of
Directors shall exercise such power, all options and SSARs
outstanding shall be deemed to have been amended to permit the
exercise thereof in whole or in part by the holder at any time or
from time to time as determined by the Board of Directors prior to
the effectiveness of such transaction and such options and SSARs
shall be deemed to terminate upon such effectiveness.
15. Change in
Control. Options and SSARs and grantees of
options and SSARs shall be subject to the terms of
Paragraph 41 below related to a change in control of the
Corporation.
C. RESTRICTED STOCK
AWARDS
16. Grant.
Subject to
the provisions and as part of the Plan, the Committee shall have
the discretion and authority to award to persons eligible to
participate in the Plan shares of Common Stock which are subject to
specified forfeiture restrictions during a specified restriction
period and subject to the other applicable terms of the Plan
(“ restricted stock ”). Subject to the
provisions of the Plan, awards of restricted stock shall contain
such terms and conditions as the Committee may determine at the
time of award; provided , however , in no event shall
the aggregate number of shares of restricted stock awarded under
the Plan plus the aggregate number of performance shares awarded
under the Plan exceed ten percent (10%) of the total number of
shares reserved for issuance under the Plan in accordance with
Paragraph 5 hereof. The maximum number of shares of Common
Stock that may be paid to a single participant in any year as
restricted stock may not exceed 600,000. The Committee may
condition the vesting of restricted stock awards upon the
attainment of performance targets established by the Committee as
provided in paragraphs 33-36 below.
17. Term of
Restriction Period. The Committee may adopt such vesting
schedules, not less than one (1) year and not longer than five
(5) years from the date of the award, as it may deem
appropriate with respect to awards of restricted stock and may
condition the lapse of the restrictions applicable to an award upon
the attainment by the Corporation or any subsidiary or division or
by the participant of any performance targets set by the Committee
as provided in paragraphs 33-36 below.
18. Issuance of
Shares. Certificates issued for restricted
stock shall be registered in the name of the participant and
deposited by the participant with the Secretary of the Corporation,
together with a stock power endorsed in blank. Upon lapse of the
applicable restriction period and/or attainment of any applicable
performance targets and/or satisfaction of any other restrictions,
the Corporation shall deliver such shares of stock to the
participant. In the event that the shares of restricted stock are
forfeited, such shares automatically shall be transferred back to
the Corporation. The Corporation will stamp any stock certificates
delivered to the participant with an appropriate legend if the
shares are not registered under the Securities Act, or are
otherwise not free to be transferred by the participant and will
issue appropriate stop-order instructions to the transfer agent for
the Common Stock, if and to the extent such stamping or
instructions may then be required by the Securities Act or by any
rule or regulation of the Securities and Exchange Commission issued
pursuant to the Securities Act.
19. Dividends
and Voting Rights. In the discretion of the Committee,
dividends which become payable with respect to restricted stock
during the restriction period may be reinvested in additional
shares of restricted stock for the account of the award recipient,
or accumulated for later distribution to vested participants (in
each case, such amounts shall be payable upon fixed dates or events
in accordance with the requirements of Section 409A of the
Code), or distributed to the award recipient as paid. An employee
who receives an award of restricted stock may also, in the
discretion of the Committee, be entitled, during the restriction
period, to exercise voting rights with respect to such restricted
stock.
20. Nontransferability.
Shares of restricted
stock may not be sold, assigned, transferred, pledged or otherwise
encumbered and shall not be subject to execution, attachment,
garnishment or other similar legal process, except as otherwise
provided in the applicable award agreement. Upon any attempt to
sell, transfer, assign, pledge, or otherwise encumber or dispose of
the restricted stock contrary to the provisions of the award
agreement or the Plan, the restricted stock shall immediately be
forfeited to the Corporation.
21. Termination
of Employment. In the case of a participant’s
disability, death, termination of employment by the Corporation
other than for cause (as defined in Paragraph 13 above) or
special circumstances, as determined by the Committee, any
pur
|
