UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): November 4, 2010
DOVER CORPORATION
(Exact Name of Registrant as Specified in Charter)
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Delaware
(State or other Jurisdiction
of Incorporation)
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1-4018
(Commission File Number)
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53-0257888
(I.R.S. Employer
Identification No.) |
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3005 Highland Parkway, Suite 200 60515
Downers Grove, Illinois (Zip Code)
(Address of Principal Executive Offices) |
(630) 541-1540
(Registrant’s telephone number, including area code)
Not Applicable
(Former Name or Former address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy
the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12(b) under the Exchange Act (17 CFR 240.14a-12(b))
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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| Item 5.02 |
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Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(d) On November 4, 2010, the Board of Directors of Dover Corporation (the “Corporation”)
elected Stephen M. Todd and Stephen K. Wagner directors of the Corporation, expanding the number of
seats on the Board from 11 to 13.
Mr. Todd is the retired Global Vice Chairman of Ernst & Young’s Assurance Professional
Practice. He retired earlier this year after a 40 year career with Ernst & Young.
Mr. Wagner
is Senior Advisor to and, from 2005 to 2009, served as managing
partner of
Deloitte & Touche’s Center for Corporate Governance. Mr. Wagner first joined Deloitte & Touche in
1977 and retired as a partner of the firm in 2009.
There are no family relationships among either Mr. Todd or Mr. Wagner and other directors or
officers of the Corporation. There have been no transactions nor are there any proposed
transactions between the Corporation and Mr. Todd or Mr. Wagner that would require disclosure
pursuant to Item 404(a) of Regulation S-K. From time to time, Ernst & Young provides non-audit
services to the Corporation. It is expected that each of these two new directors will be
independent under all applicable standards but the Board has not yet made an affirmative
determination of the directors’ status.
(e) On November 4, 2010, the Board of Directors of the Corporation, upon the recommendation of
the Compensation Committee, adopted the Dover Corporation Executive Severance Plan (the “Severance
Plan”) and the Dover Corporation Senior Executive Change-in-Control Severance Plan (the “CIC
Severance Plan”).
The Severance Plan creates a consistent and transparent severance policy for determining
benefits for all similarly situated executives. The Plan formalizes the Corporation’s current
practice of providing a single year of salary and bonus continuation to executives terminated
without cause and prorating bonus payments based on the months actually worked. The CIC Severance
Plan likewise establishes a consistent policy regarding change-in-control severance payments based
on current market practices. The terms of the CIC Severance Plan modify and update the double
trigger change-in-control benefits the Corporation has historically offered certain executives
under individual agreements. Among such changes are the elimination of tax gross-up payments, the
reduction of the benefit continuation period to one year and the reduction of the base severance
payment multiple beginning in 2016.
Prior to the adoption of the CIC Severance Plan, the Corporation had historically provided
double trigger change-in-control payments under individual agreements that had been put in place
for some but not all of the current executive officers. Of the Corporation’s named executive
officers as set forth in its proxy statement for the Annual Meeting of Shareholders held May 6,
2010, all but Mr. Cerepak have individual change-in-control agreements. Those agreements will
expire according to their terms upon the next applicable annual renewal date. Until they expire
(and for 18 months thereafter) those agreements will continue to govern change-in-control benefits
to the executives with such agreements.
Each of the Severance Plan and CIC Severance Plan expressly conditions the Corporation’s
obligations to make severance payments to an executive upon the executive executing a separation
agreement and a general release of all claims related to his or her employment and termination
thereof.
In addition, each Plan gives the Corporation the right to recover amounts paid to an executive
under the respective Plan if the executive breaches the provisions of the separation agreement and
release or if required under any claw-back policy of the Corporation as in effect from time to time
or under applicable law.
Set forth below is a summary of benefits provided under each Plan.
Severance Plan. The Severance Plan establishes a uniform methodology for determining
severance benefits for employees upon involuntary termination without cause. The Corporation’s CEO
and all US-based executives and US expatriate executives with annual base salaries within specified
salary ranges are eligible to participate in the Severance Plan. Under the Plan, if the
Corporation terminates an eligible executive’s employment without cause (as defined in the
Severance Plan), the executive will be entitled to receive the following severance payments:
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Base salary continuation for a 12 month period following the termination
date plus an additional monthly amount equal to the then cost of COBRA health
continuation coverage based on the level of health care coverage in effect on the
termination date, if any, for the lesser of 12 months or the period that the executive
receives COBRA benefits. |
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An amount equal to the pro rata portion (based on completed calendar
months worked in the year in which the termination occurs) of the annual incentive
bonus paid to the executive for the prior year, in the case of executives who are
“covered employees” under Section 162(m) of the Internal Revenue Code, as amended (the
“Code”), on the termination date and who participate in an annual incentive plan
designed to meet the requirements of Section 162(m). Executives who are not “covered
employees” will receive an amount equal to the pro rata portion (based on completed
calendar months worked in the year in which the termination occurs) of the target
annual incentive bonus payment for the year in which the termination occurs. In each
case, the Compensation Committee has the discretion to reduce the payment amount. |
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With respect to the cash performance award under the 2005 Cash and Equity
Incentive Plan (the “2005 Plan”) with a scheduled payment date next following the date
of termination, a pro rata portion (based on the completed calendar months worked
during the applicable performance period) of the payment, if any, the executive would
have earned had he or she been an employee on the payment date, based upon the
attainment of the performance criteria applicable to the award for the applicable
period (subject to the terms of the 2005 Plan, including the discretion of the
Compensation Committee to reduce such payments). The Severance Plan has special
provisions with respect to such payment in the event of an executive who is treated as
eligible for retirement under the 2005 Plan on the date of termination. Any cash
performance award amount payable to the executive under the Severance Plan will be
reduced by the amount of any cash performance award payable to the executive under the
2005 Plan for the same year. |
CIC Severance Plan. The CIC Severance Plan establishes the severance benefits payable to
eligible executives if they are involuntarily terminated following a change-in-control. The CIC
Severance Plan will apply to all executives who are notified they are subject to Dover’s senior
executive shareholding guidelines and who remain subject to the guidelines on the date of a
change-in-control (as defined in the Plan). An executive eligible to participate in the CIC
Severance Plan as of the date of a change-in-control will be entitled to receive severance payments
under the Plan if, within 18 months after the change-in-control, either his or her employment is
terminated by the Corporation without “cause” or he or she terminates employment for “good reason”
(as such terms are defined in the Plan). The severance payments will consist of the following:
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a lump sum payment equal to 2.99 (2.0 for a termination date that occurs
after December 31, 2015) multiplied by the sum of (i) the executive’s annual base
salary on the termination date or the change-in-control date, whichever is higher, and
(ii) the |
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executive’s target annual incentive bonus for the year in which the termination date
or the date of the change-in-control occurs, whichever is higher; and |
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a lump sum payment equal to the then cost of COBRA health continuation
coverage, based on the level of health care coverage in effect on the termination date,
if any, for one year. |
No executive may receive severance benefits under more than one plan or arrangement.
If the Corporation determines that (i) any payment or distribution by the Corporation to an
executive in connection with a change-in-control, whether under the CIC Severance Plan or
otherwise, would be subject to excise tax as an excess parachute payment under the Code and (ii)
the executive would receive a greater net-after-tax amount by reducing the amount of the severance
payment, the Corporation will reduce the severance payments made under the CIC Severance Plan to
the maximum amount that might be paid (but not less than zero) without the executive becoming
subject to the excise tax.