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<SEC-DOCUMENT>0000950123-01-002246.txt : 20010314
<SEC-HEADER>0000950123-01-002246.hdr.sgml : 20010314
ACCESSION NUMBER: 0000950123-01-002246
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 5
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010313
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: DOVER CORP
CENTRAL INDEX KEY: 0000029905
STANDARD INDUSTRIAL CLASSIFICATION: CONSTRUCTION, MINING & MATERIALS HANDLING MACHINERY & EQUIP [3530]
IRS NUMBER: 530257888
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 001-04018
FILM NUMBER: 1567263
BUSINESS ADDRESS:
STREET 1: 280 PARK AVE
STREET 2: 38-W
CITY: NEW YORK
STATE: NY
ZIP: 10017
BUSINESS PHONE: 2129221640
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>y46286e10-k.txt
<DESCRIPTION>DOVER CORPORATION
<TEXT>
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
/X/ Annual Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the fiscal year ended December 31, 2000
OR
/ / Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from to .
Commission File No. 1-4018
DOVER CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 53-0257888
(State or other jurisdiction of Incorporation (I.R.S. Employer Identification No.)
or organization)
280 Park Avenue, New York, NY 10017
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(212) 922-1640
</TABLE>
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of each exchange
Title of each class on which registered
------------------- -----------------------
<S> <C>
Common Stock, par value $1. New York Stock Exchange
</TABLE>
Securities registered pursuant to Section 12(g) of the Act:
Title of class
None
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports) and (2) has been subject to such filing
requirements for the past ninety days. Yes X No
<PAGE> 2
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K.
The aggregate market value of the voting stock held by non-affiliates of the
Registrant as of the close of business February 28, 2001 was $7,480,491,728.
Registrant's closing price as reported on the New York Stock Exchange-Composite
Transactions for February 28, 2001 was $38.36 per share.
The number of outstanding shares of the Registrant's common stock as of February
28, 2001 was 203,297,745.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II - Certain portions of the Annual Report to Stockholders for
Fiscal Year Ended December 31, 2000 (the "2000 Annual
Report").
Part III - Certain portions of the Proxy Statement for Annual Meeting of
Stockholders to be held on April 24, 2001 (the "2001 Proxy
Statement").
Special Notes Regarding Forward Looking Statements
This Annual Report on Form 10-K and the documents that are incorporated
by reference, particularly sections of any Annual Report to Stockholders under
the headings "Chairman's Letter", "Outlook" or "Management's Discussion and
Analysis", contain forward-looking statements within the meaning of the
Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as
amended, and the Private Securities Litigation Reform Act of 1995. Such
statements relate to, among other things, industries in which the Company
operates, the U.S. and global economies, earnings, cash flow and operating
improvements and may be indicated by words or phrases such as "anticipates,"
"supports", "plans", "projects", "expects", "should", "hope", "forecast", "Dover
believes", "management is of the opinion" and similar words or phrases.
Forward-looking statements are subject to inherent uncertainties and risks,
including among others: increasing price and product/service competition by
foreign and domestic competitors, including new entrants; technological
developments and changes; the ability to continue to introduce competitive new
products and services on a timely, cost effective basis; the mix of
products/services; the achievement of lower costs and expenses; domestic and
foreign governmental and public policy changes including environmental
regulations; protection and validity of patent and other intellectual property
rights; the continued success of the Company's acquisition program; the cyclical
nature of the Company's business; and the outcome of pending and future
litigation and governmental proceedings. In addition, such statements could be
affected by general industry and market conditions and growth rates, and general
domestic and international economic conditions including interest rate and
currency exchange rate fluctuations. In light of these risks and uncertainties,
actual events and results may vary significantly from those included in or
contemplated or implied by such statements. Readers are cautioned not to place
undue reliance on such forward-looking statements. The Company undertakes no
obligation to publicly update or revise any forward-looking statements, whether
as a result of new information, future events or otherwise.
2
<PAGE> 3
PART I
Item 1. BUSINESS
General
Dover Corporation ("Dover" or the "Company"), originally incorporated
in 1947 in the State of Delaware, is a diversified industrial manufacturing
corporation encompassing over 50 operating companies which manufacture a broad
range of specialized industrial products and sophisticated manufacturing
equipment.
The Company's businesses are divided into four business segments. Dover
Diversified builds packaging and printing machinery, heat transfer equipment,
food refrigeration and display cases, specialized bearings and compressors,
construction and agricultural cabs, as well as sophisticated products for use in
the defense, aerospace and automotive industries. Dover Industries makes
products for use in the waste handling, bulk transport, automotive service,
commercial food service and packaging, welding, cash dispenser and construction
industries. Dover Resources manufactures products primarily for the automotive,
fluid handling, petroleum, winch and chemical equipment industries. Dover
Technologies builds sophisticated automated assembly and testing equipment for
the electronics industry, industrial printers for coding and marking, and
specialized electronic components. Dover Elevator, which was the Company's fifth
business segment for all of 1998, was sold to Thyssen Industrie AG on January 5,
1999. Dover Elevator manufactured, installed and serviced elevators primarily in
North America and is a discontinued segment in the Company's Consolidated
Financial Statements.
The Company emphasizes growth and strong internal cash flow. It has a
long-standing and successful acquisition program, which traditionally focused on
acquiring new or stand-alone businesses. However, since 1992, increased emphasis
has been placed on acquiring businesses that can be added on to existing
operations. From January 1, 1996 through December 31, 2000, the Company made 82
acquisitions at a total acquisition cost of $2,200,015,000. In 2000, the Company
completed 2 stand-alone and 21 add-on acquisitions at a total cost of about $506
million. For more detail regarding acquisitions over the past several years, see
pages 8, 12, 13, 14, 17 and 21 of the 2000 Annual Report as well as Note 2 to
the Consolidated Financial Statements on pages 29-31 of the 2000 Annual Report,
which are hereby incorporated by reference. These acquisitions have had a
substantial impact on the Company's increase in sales and earnings since 1996.
The Company aims to acquire and develop "platform" businesses which are marked
by growth, innovation and higher than average profit margins. It seeks to have
each of its businesses be a leader in its market as measured by market share,
innovation, profitability and return on assets.
The Company practices a highly decentralized management style. The
presidents of operating companies are very autonomous and have a high level of
independent responsibility for their businesses and their performance. This is
in keeping with the Company's operating philosophy that small independent
operations are better able to serve customers by focusing closely on their
products and reacting quickly to customer needs. The Company's executive
management's role is to provide management oversight, allocate and manage
capital, assist in major acquisitions, evaluate, motivate and, as necessary,
replace operating management, and provide selected other services.
Business Segments
Dover Diversified manufactures equipment and components for industrial,
commercial, and defense applications. The largest operations are Hill Phoenix
(refrigeration cases and systems for supermarkets), Tranter (process industry
heat exchangers), Crenlo (operator cabs for agricultural and construction
machinery and electronic enclosures), A-C Compressor (specialized centrifugal,
oil free screw and rotary compressors) and Mark Andy (specialty printing
presses). Other Dover Diversified businesses produce such products as fluid film
and self-lubricating bearings, color control systems for web sheet-fed,
submarine and aircraft hydraulic controls, remote manipulators, industrial
cleaning equipment, can making equipment, environmental control equipment,
engineered high-performance racing products and packaging machinery. In 2000,
Dover Diversified companies completed five "add-on" acquisitions: Yakima Wire
and Salwasser (SWF), C & H Mfg (Sargent), Vertex Piston (Performance
Motorsports) and National Cooler (Hill-Phoenix).
3
<PAGE> 4
Dover Industries manufactures a diverse mix of equipment and components
for use in the waste handling, bulk transport, automotive service, commercial
food service, packaging, welding and construction equipment industries. The
largest operations are Heil Trailer (trailerized tanks) and Heil Environmental
(refuse collecting vehicles), Rotary Lift (automotive lifts), and DovaTech
(welding, cutting and laser equipment and supplies). Other Dover Industries
operations produce auto collision measuring and repair systems, clip closures
for food packaging, solid waste compaction, transporting and recycling
equipment, touchless car washing equipment, hydraulic cylinders, food service
equipment, commercial refrigeration equipment and concrete spreading machines.
In 2000 Dover Industries made one stand-alone acquisition, Triton Systems, Inc.,
a producer of "off-premises" automated cash dispenser machines and related
systems, and acquired four "add-on" businesses: Hoegger Alpina (Tipper Tie),
Hydromotion (Texas Hydraulics), Kesseltronics (PDQ) and Kalyn/Siebert (Heil
Trailer). In January 2000, Dover Industries sold Davenport Machines, a
manufacturer of screw machines.
Dover Resources manufactures components and equipment primarily for the
automotive, fluid handling, petroleum and chemical industries. The largest
operations are the Petroleum Equipment Group (Norris/AOT - oil and gas
production equipment), OPW Fueling Components (gasoline nozzles and related
service station equipment), and De-Sta-Co Industries (factory automation and
workholding devices). Other Dover Resources companies produce fluid transfer
valves, measuring devices and connectors, air operated double diaphragm, rotary
vein and progressive cavity pumps, gas compressors, high-pressure quartz
transducers, liquid monitoring, valve, filtration and control systems and
products, winch and speed reducers and cleaning chemical dispensing equipment.
During 2000, seven Dover Resources companies made eight "add-on" acquisitions:
SureSeal (Civacon), Greer Company and Pullmaster (Tulsa Winch), Provacon
(Midland), Groupe Aoustin (R-P), Chesterton (Blackmer), Hydro-Cam (De-Sta-Co
Mfg.) and RG Industries (PEG-AOT).
Dover Technologies International sells assembly and testing equipment,
screen printers, and soldering machines for the printed circuit board industry,
components for the consumer and commercial datacom and telecom communications
industry (including wireless) and industrial marking systems. The largest
business in this segment - and in the Company - is Universal Instruments, which
is one of the major worldwide manufacturers of surface mount printed circuit
board assembly equipment. Other significant businesses are Quadrant (precision
microwave, crystal and capacitor devices), Everett Charles Technologies, Inc.
(test equipment and systems for printed circuit boards and semiconductors), DEK
Printing Machines, Ltd. (screen printers) and Imaje (continuous inkjet marking
systems). Other Dover Technologies companies manufacture printed circuit board
soldering machines, and other specialty electronic components. In 2000, Dover
Technologies completed one "stand alone" acquisition, OK International
(specialized electronic assembly equipment), and four "add-on" acquisitions:
Prime Yield Systems and Vitech (ECT), Syfer Technology (Novacap) and Cinox
(Quadrant).
In general, Dover sells its products and services directly and through
various distributors, sales and commission agents and manufacturers
representatives, in all cases generally consistent with the custom of the
industry and market being served. However, the larger Dover companies, and those
companies selling more highly engineering products and services, or those
companies supplying products and services to markets characterized by a few
major customers, typically sell direct because of the specialized nature of the
equipment and products being sold. For more information on these segments and
their products, sales, markets served, earnings before tax and total assets for
the five years ended December 31, 2000, see inside front cover and pages 6-21,
24 and 38-39 of the 2000 Annual Report, which are hereby incorporated by
reference.
Discontinued Operation
Dover Elevator, which was the Company's fifth business segment for all
of 1998, was sold to Thyssen Industrie AG on January 5, 1999 for $1.1 billion
plus the sharing of certain expenses arising out of the transaction.
Dover Elevator's business, principally the installation and service of
a product based on largely mature technology, was seen as fundamentally
different from Dover's other businesses which focus on manufacturing a variety
of products based on sophisticated and developing technology. Dover Elevator's
4
<PAGE> 5
business was conducted by service employees at thousands of construction sites
and buildings around the country, while Dover's other businesses are conducted
largely by manufacturing employees centered in factories. As a result, Dover
found that its experience in managing its other businesses, while transferable
among those businesses, was not equally applicable to the elevator business,
which consequently required a disproportionate amount of management attention.
At the time of sale, Dover Elevator was the nation's largest
manufacturer and installer, and one of the largest servicers of elevators for
low and mid-rise buildings. Dover Elevator also participated in the high-rise
market for new equipment and service and sold and serviced elevators in foreign
markets, principally in Canada and Asia. Somewhat less than half of Dover
Elevator's sales and almost all of its profits in 1998 were generated by the
service business.
Raw Materials
Dover's operating companies use a wide variety of raw materials,
primarily metals and semi-processed or finished components, which are generally
available from a number of sources. During 2000 temporary shortages and/or
increased delivery times occurred more frequently, but did not result in any
material business interruptions or major problems. To date, the cost of raw
materials while trending upward, have not had a material impact on operating
profits.
Research and Development
Dover's operating companies are encouraged to develop new products as
well as upgrade and improve existing products to satisfy customer needs, expand
sales opportunities, improve product reliability and reduce production costs.
During 2000, approximately $175.3 million was spent on research and development,
compared with $139.3 million and $131.3 million in 1999 and 1998, respectively.
For the Dover Technologies companies, efforts in these areas tend to be
particularly significant because the rate of product development by their
customers is often quite high. In general, Dover Technologies companies which
provide electronic assembly equipment and services can anticipate that the
performance "metrics" of such equipment are expected to improve significantly
over time, with a concurrent expectation of lower operating costs and increasing
efficiency. Likewise, Dover Technologies companies developing specialty
electronic components for the datacom and telecom commercial markets anticipate
a continuing rate of product performance improvement and reduced cost, such that
product life cycles generally average less than five years with meaningful sales
price reductions over that time period.
Dover Industries, Dover Resources and Dover Diversified contain many
businesses that are also involved in important product improvement initiatives.
These businesses also concentrate on working closely with customers on specific
applications, expanding product lines and market applications, and continuously
improving manufacturing processes.
Intellectual Property
Dover owns over 1,100 patents and is also licensed to use a number of
patents covering a few of its product lines, primarily in the U.S. but also in
certain important non-U.S. markets where it conducts business. Dover licenses
some of its patents to other companies for which it collects royalties which are
not significant. These patents have been obtained over a number of years and
expire at various times and, the loss or expiration of any one patent or group
of patents would not materially affect Dover or any of its segments. Where
patents have expired, Dover believes that its commitment to leadership in
continuous engineering improvements, manufacturing techniques, and other sales,
service and marketing efforts are significant to maintaining its general market
leadership position. From time to time Dover has had disputes regarding its
alleged use of other patented technology. Dover expects to resolve any such
matters without any material impact on its businesses.
Dover also owns more than 1,000 registered trademarks and tradenames.
Many of the Company's products are sold under various registered and
unregistered trademarks and tradenames owned or licensed by the Company. Among
the most significant are: A-C Compressor, Belvac, Blackmer, Crenlo,
5
<PAGE> 6
De-Sta-Co, DEK, Dover, Duncan, Everett Charles, Groen, Heil, Hill Phoenix, Hydro
Systems, Imaje, Marathon, Midland, Norris, OK International, OPW, PDQ, Quadrant,
Rotary Lift, Sargent, Somero, SWEP, Tipper Tie, Tranter, Triton, Tulsa Winch,
Universal, Waukesha, Wiseco and Wilden.
Dover also owns over 100 copyrights, the majority of which relate to
machine software.
In connection with the sale of Dover Elevator, which closed on January
5, 1999, the Company transferred all the intellectual property used by Dover
Elevator to the buyers, with the exception of the Dover name and logo and
certain patents in the United States, Australia, Canada and Great Britain which
were used by Dover Elevator and other Dover segments. The Company granted the
buyers a 3 1/2 year royalty-free license to use the Dover name and logo on
Dover Elevator products made in the ordinary course of business within the
territories in which Dover Elevator operated as of the sale. The buyers were
granted an exclusive, paid-up, irrevocable, worldwide license to use the 25
patents used by Dover Elevator and other Dover segments within the conduct of
Dover Elevator's business after the sale, but only to the extent such business
was conducted as of the sale.
Seasonality
In general, Dover's operations are not seasonal. However, those
companies serving the transportation, construction, waste hauling, petroleum,
commercial refrigeration and food service markets tend to be strong during the
second and third quarters. Companies serving the major equipment markets, such
as power generation, chemical and processing industries, tend to have long lead
times geared to seasonal commercial or consumer demands, which tend to delay or
accelerate product ordering and delivery to coincide with those market trends.
Customers
Dover's businesses serve thousands of customers, no one of which
accounted for more than 10% of the Company's consolidated revenues in 2000.
Within each of the four segments, no customer accounted for more than 10% of
that segment's sales in 2000. However, Dover Technologies companies have
experienced increasing concentration of customer demand with the respective top
five customers in 2000 accounting for 39% of Universal Instrument's revenue, 25%
of CBAT revenue and 20% of the segment revenue.
In the Dover Technologies segment, the rapid growth in datacom/telecom
infastructure market development, involving both equipment providers and
software developers, such as Lucent, Motorola, Nortel, Cisco, Siemens, Phillips,
and Qualcomm, has tended to concentrate the new product development and demand
into a relatively few customers. At the same time, a number of these customers
have "outsourced" a significant amount of their manufacturing capability to
contract manufacturers ("CEM's") such as Jabil, Solectron, Celestica, and
Flextronics, which firms are now the direct customers of Dover Technologies
companies for a number of different OEM customers. This has tended to increase
the concentration of manufacturing with CEM's and hence machine and specialty
component demand is concentrated with a smaller number of "customers".
In the other Dover segments, customer concentrations are quite varied.
Companies supplying the automotive and commercial refrigeration industries tend
to deal with a few large customers which are significant within those
industries. This also tends to be true for companies supplying the power
generation, aerospace and chemical industries as well. In the other markets
served, there is usually much less concentration of customers, particularly
where the companies provide a substantial number of products and services,
applicable to a broad range of end use applications.
Backlog
Backlog generally is not a significant factor in most of Dover's
businesses, as most of Dover's products have relatively short delivery periods.
It is more relevant to those businesses in the segments which produce larger and
more sophisticated machines or have long-term government contracts, primarily
A-C Compressor, Belvac, Heil Environmental, Heil Trailer, Mark Andy, Sargent
Controls and Universal. In
6
<PAGE> 7
2000, backlog did become somewhat significant, particularly for the specialty
electronic component manufacturers, driven largely by significant increases in
demand, which could not be satisfied by then existing productive capacity.
During 2000, several of the Dover Technologies companies committed to
significant plant expansion in response to this large demand, including
Universal Instruments, some of the Quadrant companies, as well as Novacap, K & L
and DT Magnetics.
In the other segments, there were isolated cases of increasing backlog,
and as appropriate, plant expansion was undertaken in 2000 to address those
situations.
Total Company backlog as of December 31, 2000 and 1999 was $1,059
million and $928 million, respectively. Based on the steps taken during 2000,
the Company believes that this backlog may reasonably be filled during the
fiscal year 2001.
Competition
Dover's competitive environment is complex because of the wide
diversity of products manufactured and markets served. In general, most Dover
companies are market leaders which compete with only a few companies and the key
competitive factors are customer service, product quality and innovation. In
addition, since most of Dover's manufacturing operations are in the United
States, Dover usually is a more significant competitor domestically than in
foreign markets.
In the Technologies segment, Dover competes globally against a few very
large companies, primarily based in Japan or Europe. Its primary competitors are
Japanese producers, including Fuji Machine, Panasonic and TDK and European
manufacturers like Philips and Siemens.
Within the other segments, competition is primarily domestic, although
an increasing number of Dover subsidiaries see more international competitors
and several serve markets which are predominantly international, particularly
A-C Compressor, Alberta Oil Tool, Belvac, Central Research Labs, De-Sta-Co,
Duncan, L & E, Norris, OPW Fueling Components, Ronningen-Petter, Tipper
Tie-Technopak, Tranter, Triton, SWEP, Van Dam, Wilden and Wittemann.
During 2000, due to the generally unfavorable currency situation,
Dover's competitive situation became somewhat more difficult for two related
reasons. First, export sales and opportunities were hampered by the high value
of the dollar versus foreign currencies. Second, in select domestic markets,
sales were adversely impacted by competitive foreign products. So long as the
U.S. dollar continues generally strong compared to other foreign currencies,
this trend is likely to continue.
International
For foreign sales, export sales and an allocation of the assets of the
Company's continuing operations, see Note 15 to the Consolidated Financial
Statements on page 36 of the 2000 Annual Report, which is incorporated herein by
reference.
Although international operations are subject to certain risks, such as
price and exchange rate fluctuations and foreign governmental restrictions,
Dover intends to increase its expansion into foreign markets.
The countries where most of Dover's foreign subsidiaries and affiliates
are based are, France, Germany, Great Britain, The Netherlands, Sweden and
Switzerland.
Environmental Matters
Dover believes its operations generally are in substantial compliance
with applicable regulations. In a few instances, particular plants and
businesses have been the subject of administrative and legal proceedings with
governmental agencies relating to the discharge or potential discharge of
regulated substances. Where necessary, these matters have been addressed with
specific consent orders to achieve compliance. Dover believes that continued
compliance will not have any material impact on the Company's financial position
going forward and will not require significant capital expenditures.
7
<PAGE> 8
Employees
The Company had about 29,500 employees as of December 31, 2000.
Item 2. PROPERTIES
The number, type, location and size of the Company's properties as of December
31, 2000 are shown on the following charts, by segment.
<TABLE>
<CAPTION>
Number and Nature of Facilities Square Footage (000's) Locations Leased Facilities
------------------------------- ---------------------- -------------------------- expiration dates (years)
Ware- Sales/ North ------------------------
Segment Mfg. house Service Owned Leased American Europe Other Minimum Maximum
- ------- ----- ----- ------- ----- ------ -------- ------ ----- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Diversified 49 17 63 3,207 1,188 70 38 6 1 21
Industries 54 12 45 3,676 1,149 87 12 4 1 18
Resources 71 15 40 2,763 563 86 15 6 1 14
Technologies 108 17 140 1,679 1,568 83 68 69 1 18
</TABLE>
The facilities are generally well maintained and suitable for the
operations conducted. While some capacity limitations arose during 2000 in the
Technologies segment, with current expansion programs the productive capacity of
the Company's plants is generally adequate for current needs.
Item 3. LEGAL PROCEEDINGS
Dover is party to a number of legal proceedings arising out of the
normal course of its businesses. In general, most claims arose in connection
with activities of its Elevator segment operations and certain of its other
businesses, which make products used by the public. In connection with the sale
of Dover Elevator, which closed on January 5, 1999, all liabilities of Dover
Elevator were transferred to the buyer who has given the Company an appropriate
indemnity.
Dover is continuously involved with an examination by the Internal
Revenue Service (the "IRS") of the Company's Federal income tax returns. The
Company and the IRS have settled tax years through 1989, and during 2000, the
IRS completed its examination of the Company's 1996 and 1997 Federal income tax
returns. The Company expects to resolve open years (1990-1995) in the near
future, all within the amounts paid and/or reserved for these liabilities. The
IRS is currently examining the Company's 1998 and 1999 Federal income tax
returns. Additionally, the Company routinely is involved in state and local
income tax audits, and on occasion, foreign jurisdiction tax audits.
Based on insurance availability, established reserves and periodic
reviews of these matters, management is of the opinion that the ultimate
resolution of current pending claims and known contingencies should not have a
material adverse effect on the financial position, results of operations or cash
flows of the Company and its subsidiaries, taken as a whole.
8
<PAGE> 9
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to the vote of the Company's security holders in
the last quarter of 2000.
EXECUTIVE OFFICERS OF THE REGISTRANT
All officers are elected annually at the first meeting of the Board of
Directors following the annual meeting of stockholders and are subject to
removal at any time by the Board of Directors. The executive officers of Dover
as of February 28, 2001, and their positions with the Company (and, where
relevant, prior business experience) for the past five years are as follows:
<TABLE>
<CAPTION>
Name Age Positions Held and Prior Business Experience
- ---- --- --------------------------------------------
<S> <C> <C>
Thomas L. Reece 58 Director, Chairman of the Board (since May 1999),
President and Chief Executive Officer.
Lewis E. Burns 62 Vice President and President of Dover Industries, Inc.
Charles R. Goulding 50 Vice President, Taxation (since August 1998); prior
thereto Director of Taxation.
Rudolf J. Herrmann 50 Vice President and President of Dover Resources, Inc.
Robert G. Kuhbach 53 Vice President, General Counsel and Secretary.
George F. Meserole 55 Vice President, Controller (since August 1998); prior
thereto Assistant Controller.
John E. Pomeroy 59 Vice President and President of Dover Technologies
International, Inc.
David S. Smith 43 Vice President, Finance and Chief Financial Officer
(since April 2000), prior thereto for more than five
years Vice President and Chief Financial Officer of
Crane Company, Inc. (industrial products).
Robert A. Tyre 56 Vice President-Corporate Development.
Jerry W. Yochum 62 Vice President and President of Dover Diversified, Inc.
</TABLE>
9
<PAGE> 10
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK
AND RELATED STOCKHOLDER MATTERS
The principal market in which the Company's Common Stock is traded is
the New York Stock Exchange. Information on the high and low sales prices of
such stock, and the frequency and the amount of dividends paid during the last
two years is set forth on Page 42 of the 2000 Annual Report and incorporated
herein by reference. The Company's Common Stock is also listed on the London
Stock Exchange.
The number of holders of record of the Company's Common Stock as of
February 28, 2001, as shown by the records of the Company's transfer agent was
approximately 15,138. This figure includes participants in the Company's 401(K)
program.
On December 15, 2000, pursuant to the 1996 Non-Employee Directors'
Stock Compensation Plan, the Company issued 1,400 shares of its Common Stock to
each of its six U.S. resident outside directors (after withholding 600
additional shares to satisfy tax obligations), and the Company issued 2,000
shares of its Common Stock to each of its two non-U.S. resident outside
directors who are not subject to U.S. withholding tax, as compensation for
serving as a director of the Company during 2000.
Item 6. SELECTED FINANCIAL DATA
The information for the years 1990 through 2000 is set forth in the
table "11-Year Consolidated Summary of Selected Financial Data" in the 2000
Annual Report on pages 40 and 41 and is incorporated herein by reference.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The information set forth in the 2000 Annual Report on pages 37-39 is
incorporated herein by reference.
Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
INTEREST RATES
The Company's exposure to market risk for changes in interest rates
relates primarily to the fair value of long-term fixed interest rate debt,
commercial paper borrowings and investments in cash equivalents. Generally, the
fair market value of fixed-interest rate debt will increase as interest rates
fall and decrease as interest rates rise. A 65 basis point increase in interest
rates (10% of the Company's long-term debt interest rate) would have an
immaterial effect on the fair value of the Company's long-term debt. Commercial
paper borrowings under revolving credit facilities are at variable interest
rates, and have maturities of three months or less. A 55 basis point increase in
the interest rates (10% of the Company's weighted average commercial paper
interest rate) on commercial paper borrowings would have an immaterial impact on
the Company's pre-tax earnings. All highly liquid investments, including highly
liquid debt instruments purchased with an original maturity of three months or
less, are considered cash equivalents. The Company places its investments in
cash equivalents with high credit quality issuers and limits the amount of
exposure to any one issuer. A 54 basis point decrease in interest rates (10% of
the Company's weighted average interest rate) would have an immaterial impact on
the Company's pre-tax earnings. The Company does not enter into derivative
financial or derivative commodity instruments for trading or speculative
purposes.
10
<PAGE> 11
FOREIGN EXCHANGE
The Company conducts business in various foreign currencies, primarily
in Canada, Europe, Japan and other Asian countries. Therefore, changes in the
value of the currencies of these countries affect the Company's financial
position and cash flows when translated into U.S. Dollars. As of December 31,
2000 the Company had not established a foreign-currency hedging program. The
Company has mitigated and will continue to mitigate a portion of its currency
exposure through operation of decentralized foreign operating companies in which
all costs are local-currency based. A 10% change in the value of all foreign
currencies would have an immaterial effect on the Company's financial position
and cash flows.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The information set forth in the 2000 Annual Report on pages 24 through
36 is incorporated herein by reference.
Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Not Applicable
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information with respect to the directors of the Company required
to be included pursuant to this Item 10 is included under the caption "1.
Election of Directors" in the 2001 Proxy Statement relating to the 2001 Annual
Meeting of Stockholders filed with the Securities and Exchange Commission (the
"Commission") pursuant to Rule 14a-6 under the Securities Exchange Act of 1934,
as amended, and is incorporated in this Item 10 by reference. The information
with respect to the executive officers of the Company required to be included
pursuant to this Item 10 is included under the caption "Executive Officers of
the Registrant" in Part I of this Annual Report on Form 10-K and is incorporated
in this Item 10 by reference. The information with respect to Section 16(a)
reporting compliance required to be included in this Item 10 is included under
the caption "Section 16(a) Beneficial Ownership Reporting Compliance" in the
2001 Proxy Statement and is incorporated in this Item 10 by reference.
Item 11. EXECUTIVE COMPENSATION
The information with respect to executive compensation required to be
included pursuant to this Item 11 is included under the caption "Executive
Compensation" in the 2001 Proxy Statement and is incorporated in this Item 11 by
reference.
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information regarding security ownership of certain beneficial
owners and management that is required to be included pursuant to this Item 12
is included under the caption "Security Ownership" of certain beneficial owners
and management in the 2001 Proxy Statement and is incorporated in this Item 12
by reference.
Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information with respect to any reportable transaction, business
relationship or indebtedness between the Company and the beneficial owners of
more than 5% of the Common Stock, the directors or nominees for director of the
Company, the executive officers of the Company or the members of the immediate
families of such individuals that is required to be included pursuant to this
Item 13 is included
11
<PAGE> 12
under the caption "1. Election of Directors-Directors' Compensation" in the 2001
Proxy Statement and is incorporated in this Item 13 by reference. PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
(a) (1) Financial Statements
The following consolidated financial statements of Dover
Corporation and its subsidiaries are set forth in the 2000
Annual Report, which financial statements are incorporated
herein by reference:
(A) Report of Independent Accountants.
(B) Consolidated balance sheets as of December 31, 2000 and
1999.
(C) Consolidated statements of earnings, accumulated
comprehensive earnings and retained earnings for the
years ended December 31, 2000, 1999 and 1998.
(D) Consolidated statements of cash flows for the years
ended December 31, 2000, 1999 and 1998.
(E) Notes to consolidated financial statements.
(2) Financial Statement Schedule
The following financial statement schedule is attached to Part
IV of this report on form 10-K:
Schedule II--Valuation and Qualifying Accounts
Report of Independent Accountants.
All other schedules are not required and have been omitted.
(3) See (c) below.
(b) Current Reports on Form 8-K:
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated November 13, 2000, furnishing
information under Item 9, regarding a Regulation FD Disclosure.
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated December 1, 2000, furnishing
information under Item 9, regarding a Regulation FD Disclosure.
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated January 18, 2000, furnishing
information under Item 9, regarding a Regulation FD Disclosure.
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated January 22, 2000, under Item 5.
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated February 7, 2000, under Items 5 and 7
regarding its registration statement on Form S-3.
The Company filed with the Securities and Exchange Commission a
report on Form 8-K, dated February 12, 2000, under Items 5 and 7
regarding the completion of its underwritten offering under its
registration statement on Form S-3.
(c) Exhibits:
(3)(i) Restated Certificate of Incorporation, filed as Exhibit
3.1 to the Company's Quarterly Report on Form 10-Q for
the Period Ended June 30, 1998, is incorporated by
reference.
(3)(ii) By-Laws of the Company filed as Exhibit 3.1 to
Quarterly Report on Form 10-Q for Period Ended
September 30, 2000, are incorporated by reference.
(4.1) Amended and Restated Rights Agreement, dated as of
November 15, 1996, between Dover Corporation and Harris
Trust Company of New York, filed as Exhibit 1 to Form
8-A/A dated November 15, 1996, is incorporated by
reference.
12
<PAGE> 13
(4.2) Indenture, dated as of June 8, 1998 between Dover
Corporation and The First National Bank Chicago, as
Trustee, filed as Exhibit 4.1 to the Company's Current
Report on Form 8-K filed June 12, 1998, is incorporated
by reference.
(4.3) Form of 6.25% Note due June 1, 2008 ($150,000,000
aggregate principal amount), filed as Exhibit 4.3 to
the Company's Current Report on Form 8-K filed June 12,
1998, is incorporated by reference.
(4.4) Form of 6.65% Note due June 1, 2028 ($200,000,000
aggregate principal amount), filed as Exhibit 4.4 to
the Company's Current Report on Form 8-K filed June 12,
1998, is incorporated by reference.
(4.5) Form of Indenture, dated as of November 14, 1995
between the Company and The First National Bank of
Chicago, as Trustee, relating to the 6.45% Notes due
November 15, 2005 (including the form of the note),
filed as Exhibit 4 to the Company's Registration
Statement on Form S-3 (Reg. No. 33-63713) filed under
the Securities Act of 1933, is incorporated by
reference.
(4.6) Form of 6.50% Notes due February 15, 2011 ($400,000,000
aggregate principal amount), filed as exhibit 4.3 to
the Company's current report on Form 8-K filed February
12, 2001, is incorporated by reference
(4.7) Form of Indenture, dated as of February 8, 2001 between
the Company and BankOne Trust Company, N.A., as
trustee, relating to the 6.50% Notes due February 15,
2011 (including the form of the note), filed as Exhibit
4.1 to the Company's current report on Form 8-K filed
February 12, 2001, relating to the Company's
registration statement on Form S-3 (Reg. No. 333-47396)
filed under the Securities Act of 1933, is incorporated
by reference.
(4.8) Form of officers' certificate, dated February 12, 2001,
pursuant to Section 301 of the Indenture, filed as
Exhibit 4.2 to the Company's current report on Form 8-K
filed February 12, 2001, is incorporated by reference.
(4.9) The Company agrees to furnish to the Securities and
Exchange Commission upon request, a copy of any
instrument with respect to long-term debt under which
the total amount of securities authorized does not
exceed 10 percent of the total consolidated assets of
the Company.
(10.1) 1984 Incentive Stock Option and Cash Performance
Program, filed as Exhibit 10(a) to Annual Report on
Form 10-K for year ended December 31, 1984, is
incorporated by reference.*
(10.2) Employee Savings and Investment Plan, filed as Exhibit
99 to Registration Statement on Form S-8 filed under
Securities Act of 1933 (Reg. No.33-01419), is
incorporated by reference.*
(10.3) 1995 Incentive Stock Option and 1995 Cash Performance
Program, as amended, filed as Exhibit 10.3 to Annual
Report on Form 10-K for the year-ended December 31,
1999, is incorporated by reference.*
(10.4) 1996 Non-Employee Directors' Stock Compensation Plan,
included as Exhibit A to the Proxy Statement, dated
March 15, 1996 is incorporated by reference.*
(10.5) Executive Officer Annual Incentive Plan, included as
Exhibit A to the Proxy Statement, dated March 16, 1998,
is incorporated by reference.*
(10.6) Form of Executive Severance Agreement, filed as Exhibit
10.6 to Annual Report on Form 10-K for year ended
December 31, 1998, is incorporated by reference.*
(10.7) 1995 Incentive Stock Option and Cash Performance
Program, as amended.*
(13) Incorporated portions of Dover's Annual Report to
Stockholders for its fiscal year Ended December 31,
2000 as filed with the Commission by EDGAR on March 14,
2001; are incorporated by reference.
(21) Subsidiaries of Dover.
(23.1) Consent of Independent Accountants.
(24) Form of Power of Attorney.
* Executive compensation plan or arrangement.
(d) Not applicable.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned thereunto duly authorized.
DOVER CORPORATION
By:/s/Thomas L. Reece
-------------------------------
Thomas L. Reece
Chairman, President
and Chief Executive Officer
Date: March 14, 2001
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below by the following persons on behalf of the
Registrant in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/Thomas L. Reece
- ---------------------------
Thomas L. Reece Chairman, President and Chief
Executive Officer and Director
(Principal Executive Officer) March 14, 2001
/s/David S. Smith
- ---------------------------
David S. Smith Vice President, Finance and Chief Financial
Officer (Principal Financial Officer) March 14, 2001
/s/George F. Meserole
- ---------------------------
George F. Meserole Vice President and Controller March 14, 2001
(Principal Accounting Officer)
- ---------------------------
David H. Benson Director* March 14, 2001
- ---------------------------
Jean-Pierre M. Ergas Director* March 14, 2001
- ---------------------------
Roderick J. Fleming Director* March 14, 2001
- ---------------------------
Kristiane C. Graham Director*
- ---------------------------
James L. Koley Director* March 14, 2001
- ---------------------------
Richard K. Lochridge Director* March 14, 2001
- ---------------------------
Gary L. Roubos Director* March 14, 2001
- ---------------------------
Michael B. Stubbs Director* March 14, 2001
</TABLE>
* By: /s/Robert G, Kuhbach
---------------------------
Robert G. Kuhbach
Attorney-in-Fact
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<S> <C>
(3)(i) Restated Certificate of Incorporation, filed as Exhibit 3.1 to the
Company's Quarterly Report on Form 10-Q for the Period Ended June 30,
1998, is incorporated by reference.
(3)(ii) By-Laws of the Company filed as Exhibit 3.1 to Quarterly Report on
Form 10-Q for Period Ended June 30, 1998, are incorporated by
reference.
(4.1) Amended and Restated Rights Agreement, dated as of November 15, 1996,
between Dover Corporation and Harris Trust Company of New York, filed
as Exhibit 1 to Form 8-A/A dated November 15, 1996, is incorporated
by reference.
(4.2) Indenture, dated as of June 8, 1998 between Dover Corporation and The
First National Bank Chicago, as Trustee, filed as Exhibit 4.1 to the
Company's Current Report on Form 8-K filed June 12, 1998, is
incorporated by reference.
(4.3) Form of 6.25% Note due June 1, 2008 ($150,000,000 aggregate principal
amount), filed as Exhibit 4.3 to the Company's Current Report on Form
8-K filed June 12, 1998, is incorporated by reference.
(4.4) Form of 6.65% Note due June 1, 2028 ($200,000,000 aggregate principal
amount), filed as Exhibit 4.4 to the Company's Current Report on Form
8-K filed June 12, 1998, is incorporated by reference.
(4.5) Form of Indenture, dated as of November 14, 1995 between the Company
and The First National Bank of Chicago, as Trustee, relating to the
6.45% Notes due November 15, 2005 (including the form of the note),
filed as Exhibit 4 to the Company's Registration Statement on Form
S-3 (Reg. No. 33-63713) filed under the Securities Act of 1933, is
incorporated by reference.
(4.6) The Company agrees to furnish to the Securities and Exchange
Commission, upon request, a copy of any instrument with respect to
long-term debt under which the total amount of securities authorized
does not exceed 10 percent of the total consolidated assets of the
Company.
(4.7) Form of Indenture, dated as of February 8, 2001 between the Company
and BankOne Trust Company, N.A., as trustee, relating to the 6.50%
Notes due February 15, 2011 (including the form of the note), filed
as Exhibit 4.1 to the Company's current report on Form 8-K filed
February 12, 2001, relating to the Company's registration statement
on Form S-3 (Reg. No. 333-47396) filed under the Securities Act of
1933, is incorporated by reference.
(4.8) Form of officers' certificate, dated February 12, 2001, pursuant to
Section 301 of the Indenture, filed as Exhibit 4.2 to the Company's
current report on Form 8-K filed February 12, 2001, is incorporated
by reference.
(4.9) The Company agrees to furnish to the Securities and Exchange
Commission upon request, a copy of any instrument with respect to
long-term debt under which the total amount of securities authorized
does not exceed 10 percent of the total consolidated assets of the
Company.
(10.1) 1984 Incentive Stock Option and Cash Performance Program, filed as
Exhibit 10(a) to Annual Report on Form 10-K for year ended December
31, 1984, is incorporated by reference.*
(10.2) Employee Savings and Investment Plan, filed as Exhibit 99 to
Registration Statement on Form S-8 filed under Securities Act of 1933
(Reg. No.33-01419), is incorporated by reference.*
(10.3) 1995 Incentive Stock Option and 1995 Cash Performance Program, as
amended, filed as Exhibit 10.3 to Annual Report on Form 10-K for the
year-ended December 31, 1999, is incorporated by reference.*
(10.4) 1996 Non-Employee Directors' Stock Compensation Plan, included as
Exhibit A to the Proxy Statement, dated March 15, 1996 is
incorporated by reference.*
(10.5) Executive Officer Annual Incentive Plan, included as Exhibit A to the
Proxy Statement, dated March 16, 1998, is incorporated by reference.*
(10.6) Form of Executive Severance Agreement, filed as Exhibit 10.6 to
Annual Report on Form 10-K for year ended December 31, 1998, is
incorporated by reference.*
(10.7) 1995 Incentive Stock Option and Cash Performance Program, as amended.*
(13) Incorporated portions of Dover's Annual Report to Stockholders for
its fiscal year Ended December 31, 2000 as filed with the Commission
by EDGAR on March 14, 2001; are incorporated by reference.
</TABLE>
15
<PAGE> 16
<TABLE>
<S> <C>
(21) Subsidiaries of Dover.
(23.1) Consent of Independent Accountants.
(24) Form of Power of Attorney.
</TABLE>
* Executive compensation plan or arrangement.
16
<PAGE> 17
Schedule II
DOVER CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years Ended December 31, 2000, 1999, 1998
<TABLE>
<CAPTION>
Additions
Balance at Charged to Balance at
Beginning of Cost and Deductions Close of
Year Expense (1) Year
------------ ---------- ---------- ----------
(000's omitted)
<S> <C> <C> <C> <C>
Year Ended December 31, 2000
Allowance for Doubtful Accounts $23,375 $8,045 $5,311 $26,109
Year Ended December 31, 1999
Allowance for Doubtful Accounts $20,955 $6,803 $4,383 $23,375
Year Ended December 31, 1998
Allowance for Doubtful Accounts $19,468 $6,542 $5,055 $20,955
</TABLE>
Notes:
(1) Represents uncollectible accounts written off and reduction of prior years'
over-provision less recoveries of accounts previously written off, net of
$3,684, $2,377 and $540 related to acquisitions and divestitures in 2000,
1999 and 1998, respectively.
<TABLE>
<CAPTION>
Charged,
Balance at (Credited) to Acquired by Balance at
Beginning of Cost and Merger or Close of
Year Expense Disposition Year
------------ ---------- ------------ ----------
(000's omitted)
<S> <C> <C> <C> <C>
Year Ended December 31, 2000
Lifo Reserve $ 39,581 $(394) $(3,320) $35,867
Year Ended December 31, 1999
Lifo Reserve $40,440 $(859) $ -- $39,581
Year Ended December 31, 1998
Lifo Reserve $40,629 $(189) $ -- $40,440
</TABLE>
17
<PAGE> 18
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Shareholders of Dover Corporation:
Our audits of the consolidated financial statements referred to in our report
dated February 2, 2001 appearing in the 2000 Annual Report to Shareholders of
Dover Corporation (which report and consolidated financial statements are
incorporated by reference in this Annual Report on Form 10-K) also included an
audit of the financial statement schedule listed in Item 14(a)(2) of this Form
10-K. In our opinion, this financial statement schedule presents fairly, in all
materials respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
PricewaterhouseCoopers LLP
New York, New York
February 2, 2001
18
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>2
<FILENAME>y46286ex10-7.txt
<DESCRIPTION>1995 INCENTIVE STOCK PLAN
<TEXT>
<PAGE> 1
Exhibit 10.7
DOVER CORPORATION
1995 INCENTIVE STOCK OPTION PLAN
AND
1995 CASH PERFORMANCE PROGRAM
(AS AMENDED FEBRUARY 8, 2001)
A. PURPOSE AND SCOPE OF
PLAN AND PROGRAM
1. Purpose. The 1995 Incentive Stock Option Plan (the "Plan") and 1995
Cash Performance Program (the "Program") are 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 a long-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 and Program. The Plan and the Program are successors
to the 1984 Incentive Stock Option Plan and Cash Performance Program
(hereinafter the "Predecessor Plans"). No further grants of options or incentive
awards may be made under the Predecessor Plans. Options and incentive awards
under the Predecessor Plans shall be administered pursuant to the provisions of
those respective Plans.
3. Administration. The Plan and the Program 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;
hereinafter the "Committee"), consisting of not less than three persons
appointed by the Board of Directors of the 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
"disinterested person" 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. The Committee
will have sole and complete authority to administer all aspects of the Plan and
the Program, including but not limited to: (a) determining the individuals
eligible to receive options and restricted stock under the Plan and/or to
participate in the Program; (b) granting options, restricted stock and
participations; (c) determining the number of options and the amount of
restricted stock and participations to be granted to any such eligible
individuals at any time or from time to time; (d) determining the terms and
conditions under which grants and participations will be made; and (e)
determining whether objectives and conditions for performance bonuses have been
met. The Committee may, subject to the provisions of the Plan and Program, from
time to time establish such rules and regulations as it deems appropriate for
the proper administration of the Plan and the Program. The Committee's decisions
shall be final, conclusive and binding with respect to the interpretation and
administration of the Plan and the Program and any grants or awards made
thereunder.
4. Eligibility. Grants may be made to any employee of the Corporation
who is a salaried officer or other key employee, including salaried members of
the Board of Directors (hereinafter sometimes referred to as "participants").
The Committee shall select the participants eligible and determine the terms of
the grants and participations to each.
5. Shares Available for Grant. 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, which
options may be granted at any time prior to January 30, 2005, and for awards of
restricted stock. These maximum numbers are 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 award of restricted
stock granted under the Plan expires, terminates or is canceled for any reason
without having been exercised in
<PAGE> 2
full, the number of unpurchased shares under such option or restricted stock
under such award will again be available for the purpose of the Plan.
B. STOCK OPTION AWARDS
6. Stock Options. Options granted under the terms of this Plan shall be
designated as either "non-qualified" stock options or "incentive" stock options
within the meaning of Section 422 of the Code, and shall contain such terms and
conditions as the Committee may from time to time determine, subject to the
following limitations:
(a) Option Price. The fair market value of a share of Common
Stock on the date the option 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 New York Stock Exchange (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 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 is granted by the Committee. The Committee shall be
authorized, in its discretion, to round the fair market value of a share of
Common Stock to the nearest whole number or quarterly fraction thereof.
(b) Option Exercise Period. The term of each option will be
for such period as the Committee may determine, but in no event may an option be
exercised more than 10 years following the granting thereof.
(c) Rights of Option Holder. A recipient of stock options shall
have no rights as a stockholder with respect to any shares issuable or
transferable upon exercise thereof until the date of issuance of a stock
certificate for 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 these options
paid or payable to holders of record prior to such issuance.
(d) Limits on Individuals. Options on a maximum number of
600,000 shares may be granted each year to a single participant. The aggregate
fair market value (determined on the date of grant) of Common Stock with respect
to which a participant is granted incentive stock options (including incentive
stock options granted under any Predecessor Plan) which first become exercisable
during any given calendar year shall not exceed $100,000.
7. Exercise of Option. Stock options may be exercised at such time or
times and subject to such terms and conditions as the Committee shall determine
and are specified in the option instrument, not inconsistent with the terms of
the Plan; provided, however, that except as set forth in Paragraphs 11 and 14,
no option may be exercised prior to the third anniversary of such Option grant
and any partial exercise of an option shall be for not less than 500 shares. 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 of
actual receipt by the Corporation of such notice and payment shall be deemed the
date of exercise of the option with respect to the shares being purchased and
the stock certificates therefor shall be issued as soon as practicable
thereafter. The shares to be issued upon exercise of an option will be either
treasury or authorized and unissued stock, in the sole discretion of the
Corporation.
8. Payment. 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) if
available, through the Loan Program (as hereinafter described), (c) by transfer
to the Corporation of shares of Common Stock owned by the participant or (d)
with a combination of the foregoing. If payment is made by the transfer of
shares, 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
<PAGE> 3
Dover will be added to the Corporation's treasury shares or canceled and become
authorized and unissued shares.
9. Option Transfers. The options 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 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 any rights thereunder to any other person except as permitted herein.
Notwithstanding the foregoing, a participant may transfer any non-qualified
option 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 stockholder with an appropriate legend if the shares are not
registered under the Securities Act of 1933, as amended (the "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 Act or by
any rule or regulation of the Securities and Exchange Commission issued pursuant
to the Act.
11. Effect of Death, or Permanent Disability or Retirement. If an
option holder dies or becomes permanently disabled while employed by the
Corporation, the option holder or such holder's estate or the legatees or
distributees of such holder's estate or of the option, as the case may be, shall
have the right, on or before the earlier of the expiration date of the option or
sixty (60) months following the date of such death or permanent disability, to
purchase under the option the number of shares, if any, which the option holder
was entitled to purchase as of such date of death or permanent disability. If an
option holder retires at or after age 65 (or at an earlier retirement date
approved by the Committee and subject to the provisions of Paragraph 37 below),
the option holder shall have the right, on or before the earlier of the
expiration date of the option or sixty (60) months following the date of such
retirement, to purchase shares under any options which at retirement are, or
within sixty (60) months following retirement would become, exercisable.
12. Voluntary or Involuntary Termination. If any option holder's
employment with the Corporation is voluntarily or involuntarily terminated for
any reason, other than for reasons specified above or for "cause" (as defined
below), the option holder shall have the right to purchase under the option the
number of shares, if any, which such holder was entitled to purchase at the time
of such termination at any time on or before the earlier of three (3) months
following the effective date of such termination of employment or the expiration
date of the option.
13. Termination for Cause. If an option holder's employment with the
Corporation is terminated for cause (defined as (a) a felony conviction of the
option holder; (b) the commission by the option holder of an act of fraud or
embezzlement against the Corporation; or (c) the option holder's willful
misconduct or gross negligence materially detrimental to the Corporation), the
option shall be canceled and the holder shall have no further rights to exercise
any such option 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 holder shall be entitled, upon exercise of such holder's option, to
receive for the same aggregate exercise price 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,
<PAGE> 4
reclassification, reorganization, consolidation, merger or transfer, if he or
she had been, immediately prior to such event, the holder of such shares.
Outstanding options shall be appropriately amended as to price and other terms
in a manner consistent with the aforementioned adjustment to the shares of
Common Stock subject to the Plan. 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 to permit their exercise prior to the effectiveness of any
such transaction and to terminate such options as of such effectiveness. If the
Board of Directors shall exercise such power, all options 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 shall
be deemed to terminate upon such effectiveness.
15. Loan Program. Except in unusual circumstances, it is the
Corporation's expectation that shares acquired through the exercise of options
are to be held by participants for the duration of their employment with the
Corporation. In order to help participants finance the exercise of their options
and resulting income taxes, if any, the Corporation may provide for loans to
Plan participants at any time and from time to time after May 1, 1995. If
established by the Board, any loan program will be administered by the Committee
and may apply to all existing unexercised options, with the exception of
incentive options, and/or all future option grants, as the Committee shall
decide. The terms of any loans shall be specified by the Committee, as they may
deem appropriate, provided that the following terms shall apply:
(a) The maximum amount of any loan cannot be greater than the
option exercise price of the acquired stock, together with the amount of any
taxes due as a result of such exercise, and in any event cannot exceed the fair
market value of the acquired stock. In the event the participant chooses to
satisfy all or a portion of the option exercise price by surrender, at fair
market value, of other Common Stock already owned by the participant, the
maximum amount of the loan will be reduced by the value of the stock
surrendered.
(b) Loans will be evidenced by promissory notes having a term
of not more than ten (10) years, which notes shall be subject to further
extension for additional periods of time not exceeding ten (10) years at each
such extension. Prepayment of loan principal may not be required during the
participant's employment with the Corporation and/or subsidiaries. Repayment in
full must be made within one (1) month of termination of employment; however,
this period is extended to six (6) months if employment ceases due to death,
permanent disability or retirement. Loan prepayment may be made by the
participant at the participant's discretion but, once reduced, the loan may not
be subsequently increased.
(c) The Corporation shall have the right to hold as collateral
all stock acquired under a particular option instrument, regardless of the
amount of the loan, until the loan is fully repaid. Such stock will be
registered in the participant's name (or such other name as the Plan permits) so
that the participant may vote the stock and receive the dividends applicable
thereto, provided the loan is current.
(d) The participant will be responsible for the full repayment
of the loan, regardless of the value of the stock. However, no additional
collateral for the loan will be required regardless of the fair market value of
the stock.
(e) Interest on the loan balance will be due quarterly, in
arrears, and will be at a sufficient rate so as not to result in any imputed
income to the participant under the terms of the Code.
16. Change of Control. Options and grantees of options shall be subject
to the terms of Paragraph 36 below related to a change of control of the
Corporation.
C. RESTRICTED STOCK AWARDS
17. Grant. Subject to the provisions and as part of the Plan, the
Committee shall have sole and complete discretion and authority to determine the
eligible persons who shall receive shares of Common Stock which are subject to
certain forfeiture restrictions during the restriction period and subject to the
terms
<PAGE> 5
of the Plan ("restricted stock"). Awards of restricted stock shall contain
such terms and conditions as the Committee may from time to time determine,
subject to the following limitations.
18. Term of Restriction Period. The Committee may adopt such vesting
schedules, 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 objectives set by the Committee.
19. 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, the Corporation shall
deliver such certificates 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 the stock certificates
delivered to the participant with an appropriate legend if the shares are not
registered under the 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 Act or by any rule or regulation of the Securities
and Exchange Commission issued pursuant to the Act.
20. Dividends and Voting Rights. In the discretion of the Committee,
dividends which become payable with respect to restricted stock during the
restriction period will be reinvested in additional shares of restricted stock
for the account of the award recipient, accumulated for later distribution to
vested participants, 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.
21. 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.
22. Termination of Employment. In the case of a participant's permanent
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 restrictions remaining with respect to shares of
restricted stock as of the date of the participant's termination of employment
shall lapse. If the participant's employment with the Corporation is terminated
as a result of the retirement of the participant at or after age 65 (or at an
earlier retirement date approved by the Committee and subject to the provisions
of Paragraph 37 below), the shares of restricted stock shall continue to vest as
if the participant's employment had not terminated until such time as the
remaining restrictions lapse. If a participant's employment with the Corporation
is voluntarily or involuntarily terminated for any other reason during the
restriction period, the shares of restricted stock shall be forfeited.
23. Effect of Stock Dividends, Merger, Recapitalization or
Reorganization or Similar Events. In the event of a stock dividend, merger,
recapitalization, reorganization or other transaction described in Paragraph 14
above, the terms and conditions of the restricted stock awards shall be adjusted
in a manner consistent with adjustments made to options granted under the Plan.
24. Change of Control. Awards of restricted stock and persons who are
awarded restricted stock shall be subject to the terms of Paragraph 36 below.
25. Cancellation. The Committee may at any time require the
cancellation of any award of restricted stock in consideration of a cash payment
or alternative award under the Plan equal to the fair market value of the
cancelled award of restricted stock.
<PAGE> 6
D. CASH PERFORMANCE AWARDS
26. Awards and Period of Contingency. The Committee may, concurrently
with, or independently of, the granting of an option under the Plan, in its sole
discretion, grant to a participant the opportunity to earn a cash performance
payment, conditional upon the attainment of an objective performance goal during
a performance period. The performance period shall be not less than three fiscal
years of the Corporation, including the year in which the conditional grant is
made. Any performance goal established by the Committee shall include an
objective formula or standard for determining the amount of the performance
payment payable to a participant if the goal is attained. The performance goal
may be fixed by the Committee for the Corporation as a whole or for a subsidiary
or division of the Corporation, depending on the Committee's judgment as to what
is most appropriate for the individual involved, and shall be set by the
Committee before the 90th day after the commencement of the period of services
to which the performance payment relates. Performance goals shall be based on at
least one or more of the following factors which the Committee deems
appropriate, as they apply to the Corporation as a whole or to a subsidiary or a
division: (a) earnings per share, (b) operating earnings, (c) return on equity
and (d) return on investment. The performance goal with respect to a performance
period will be the same for all persons within the same business unit. The
material terms of the performance goals shall be subject to stockholder approval
to the extent provided in regulations promulgated under Section 162(m) of the
Code.
27. Determination of Payment Amount. The aggregate maximum cash payout
for any business unit within the Corporation or the Corporation as a whole shall
not exceed a fixed percentage of the annual average earnings increase of the
relevant entity during the performance period, such percentages and dollar
amounts to be determined by the Committee annually when performance goals are
established. In no event can an individual receive an annual payment which
exceeds $2 million. A performance payment shall be payable with respect to a
performance period only if the Committee shall have certified that the
applicable performance target has been attained. The Committee shall also have
the power to approve proportional or adjusted payments under the Program to
address situations where participants join the Corporation, or transfer within
the Corporation, during a performance period. The Committee shall have the
discretion to decrease the amount payable upon attainment of the performance
goal (as determined under such formula or standard) to take into account the
effect of any unusual, non-recurring circumstance, but shall have the discretion
to increase the amount payable to take into account any such effect only if such
discretion would not cause such compensation to fail to qualify as "qualified
performance-based compensation" for purposes of Section 162(m) of the Code.
28. Effect of Death, Disability or Other Early Termination of
Employment. If the participant in the Program (a) dies, (b) becomes permanently
disabled while employed by the Corporation or (c) terminates employment for any
reason (other than related to retirement covered by Paragraph 29 below) approved
by the Committee as an "approved termination", then, subject to the provisions
of Paragraph 37 below, the participant (or the participant's estate or the
legatees or distributees of the participant's estate, as the case may be) shall
be entitled to receive on the payment date the cash payment which the
participant would have earned had the participant then been an employee of the
Corporation, multiplied by a fraction, the numerator of which is the number of
months the participant was employed by the Corporation during the performance
measurement period and the denominator of which is the number of months of the
performance measurement period (treating fractional months as whole months in
each case).
29. Effect of Normal Retirement. If before the date of payment, the
participant retires on or after age 65 years (or earlier as an "approved early
retirement" approved by the Committee and subject to the provisions of Paragraph
37 below), the participant shall be entitled to receive on the payment date the
same amount of cash which the participant would have earned had such participant
then been an employee of the Corporation as of such date.
30. Effect of Other Terminations of Employment.
(a) General Termination. If a participant's employment with the
Corporation is terminated for any reason, whether voluntary, involuntary, or for
cause (as defined as Paragraph 13 above), other than those
<PAGE> 7
described in Paragraphs 28 or 29 above or in Paragraph 30 (b) below, then his or
her participation shall be canceled and all of the participant's rights under
the grant shall terminate as of the effective date of the termination of such
employment.
(b) Pre-Payment Termination. If, after the end of a performance
measurement period and before the date of payment or distribution of any final
award, a participant's employment is terminated, whether voluntarily or
involuntarily for any reason other than for cause (as defined in Paragraph 13
above), the participant shall be entitled to receive on the payment or
distribution date the cash payment which the participant would have earned had
the participant continued to be an employee of the Corporation as of the payment
or distribution date.
31. Change of Control. The terms of a performance goal and each
participant in the Cash Performance Program shall be subject to the terms of
Paragraph 36 below.
E. GENERAL PROVISIONS
32. Legal Compliance. It is the intent of the Corporation that the Plan
comply in all respects with applicable provisions of the Exchange Act, including
Section 16 and Rule 16b-3, so that any grant of options or restricted stock to,
or other transaction by, a participant who is subject to the reporting
requirements of Section 16(a) of the Exchange Act shall not result in
short-swing profits liability under Section 16(b) (except for any transaction
exempted under alternative Exchange Act rules or intended by such participant to
be a non-exempt transaction). It is also the intent of the Corporation that any
compensation income realized in connection with options or restricted stock and
any performance payments made under the Plan and Program constitute
"performance-based compensation" within the meaning of Section 162(m)(4)(C) of
the Code so that any deduction to which the Corporation is entitled in
connection with such compensation will not be subject to the limitations of
Section 162(m)(1) of the Code. Accordingly, if any provision of the Plan or
Program or any agreement relating to an option, grant of restricted stock or
participation does not comply with the requirements of Rule 16b-3 as then
applicable to any such transaction so that such a participant would be subject
to Section 16(b) liability (except for any transaction exempted under
alternative Exchange Act rules or intended by such participant to be a
non-exempt transaction), or if any provision of the Plan or Program or any
agreement relating to an option, grant of restricted stock or participation
would limit, under Section 162(m)(1) of the Code, the amount of compensation
income to an optionee or participant that the Corporation would otherwise be
entitled to deduct, such provision shall be construed or deemed amended to the
extent necessary to conform to such requirements, or to eliminate such
deductibility limitation, and the participant shall be deemed to have consented
to such construction or amendment.
33. Withholding Taxes. The Committee shall make arrangements for the
collection of any Federal, State or local taxes of any kind required to be
withheld with respect to any transactions effected under the Plan or the
Program. The obligations of the Corporation under the Plan and the Program shall
be conditional on satisfaction of such obligations and the Corporation, to the
extent permitted by law, shall have the right to deduct any such taxes from any
payment of any kind otherwise due to a participant.
34. Effect of Recapitalization or Reorganization. The obligations of
the Corporation with respect to an option or restricted stock granted under the
Plan or a participation under the Program shall be binding upon the Corporation,
its successors or assigns, including any successor or resulting company either
in liquidation or merger of the Corporation into another company owning all the
outstanding voting stock of the Corporation or in any other transaction whether
by merger, consolidation or otherwise under which such succeeding or resulting
company acquires all or substantially all the assets of the Corporation and
assumes all or substantially all its obligations unless options are terminated
in accordance with Paragraph 14.
35. Employment Rights and Obligations. Neither the granting of any
option or award of restricted stock under the Plan or participation under the
Program nor the provisions related to a change of control of the Corporation (as
defined below) or a Person seeking to effect a change of control of the
Corporation shall alter or otherwise affect the rights of the Corporation to
change any and all the terms and conditions of employment of any participant
including, but not limited to, the right to terminate such participant's
employment.
<PAGE> 8
36. Change of Control.
(a) Each participant, upon acceptance of a grant of options or
restricted stock or the opportunity to earn a cash performance payment, and as a
condition to such grant, shall be deemed to have agreed that, in the event any
Person begins a tender or exchange offer, circulates a proxy to shareholders, or
takes other steps seeking to effect a change of control of the Corporation (as
defined below), such participant will not voluntarily terminate his or her
employment with the Corporation or with a direct or indirect subsidiary of the
Corporation, as the case may be, and, unless terminated by the Corporation or
such subsidiary, will continue to render services to the Corporation or such
subsidiary until such Person has abandoned or terminated efforts to effect a
change of control.
(b) In the event of a change of control,
(i) all options to purchase shares of common stock of
the Corporation shall immediately vest and become exercisable in accordance with
the terms of the appropriate stock option agreement;
(ii) all outstanding restrictions with respect to any
restricted stock shall immediately expire;
(iii) with respect to performance awards under the
Cash Performance Program:
(A) all performance awards outstanding shall
immediately vest and become immediately due and payable;
(B) the performance measurement period of
all performance awards outstanding shall terminate on the last day of the month
prior to the month in which the change of control occurs;
(C) the participant shall be entitled to a
cash payment the amount of which shall be determined in accordance with the
terms and conditions of the Program and the appropriate program award agreement,
which amount shall be multiplied by a fraction, the numerator of which is the
actual number of months in the performance measurement period (as determined in
accordance with clause (iii)(B) above) and the denominator of which is 36 (or 48
if the performance measurement period established at the date of grant is four
years or more); and
(D) the Continuing Directors (as defined in
Article Fourteenth of the Corporation's Certificate of Incorporation) shall
promptly determine whether the participant is entitled to any performance award,
and any performance award payable shall be paid to the participant promptly but
in no event more than five days after a change of control;
(iv) the Continuing Directors shall have the sole and
complete authority and discretion to decide any questions concerning the
application, interpretation or scope of any of the terms and conditions of any
grant or participation under the Plan or the Program, and their decisions shall
be binding and conclusive upon all interested parties; and
(v) other than as set forth above, the terms and
conditions of all grants and participations shall remain unchanged.
(c) 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
<PAGE> 9
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 February 1, 1995, constituted the Board 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 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 in office at the time of such approval or
recommendation who either were directors on February 1, 1995 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) any such merger or consolidation after the
consummation of which the voting securities of the Corporation outstanding
immediately prior to such merger or consolidation continue 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) any such 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 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.
(d) For purposes of this Paragraph 36, 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.
37. Non-compete. (a) Any approval by the Committee of a participant who
takes early retirement being accorded the same treatment as a participant
retiring at or after age 65, as contemplated in
<PAGE> 10
Paragraphs 11, 22 and 29, and any designation by the Committee of a termination
as an "approved termination" under Paragraph 28(c) shall be subject to the
provisions of this Paragraph 37. Any participant who is the beneficiary of any
such approval or designation by the Committee shall be deemed to have expressly
agreed not to compete with the Corporation or any subsidiary of the Corporation
at which such participant was employed at any time in the three years
immediately prior to termination of employment, as the case may be, in the
geographic area in which the Corporation or such subsidiary actively carried on
business at the end of the participant's employment there, for the period with
respect to which such approval or designation affords the participant enhanced
benefits, which period shall be, (a) with respect to stock options, the
additional period allowed the participant for the vesting and exercise of
options outstanding at termination of employment, (b) with respect to restricted
stock, the period remaining after the participant's termination of employment
until the end of the original restriction period for such restricted stock, and
(c) with respect to performance awards under the Cash Performance Program, the
period until the payment date following the end of the last applicable
performance period.
(b) In the event that a participant shall fail to comply with
the provisions of this Paragraph 37, the Committee's approval and/or
designation, as applicable, described above shall be automatically rescinded and
the participant shall forfeit the enhanced benefits referred to above and shall
return to the Corporation the economic value theretofore realized by reason of
such benefits as determined by the Committee. If the provision of this Paragraph
37, or the corresponding provisions of a grant, award or participation
agreement, shall be unenforceable as to any participant, the Committee may
rescind any such approval or designation with respect to such participant.
(c) If any provision of this Paragraph 37, or the corresponding
provisions of a grant, award or participation agreement, is determined by a
court to be unenforceable because of its scope in terms of geographic area or
duration in time or otherwise, the Corporation and the participant agree that
the court making such determination is specifically authorized to reduce the
duration and/or geographical area and/or other scope of such provision and, in
its reduced form, such provision shall then be enforceable; and in every case
the remainder of this Paragraph 37, or the corresponding provisions of a grant,
award or participation agreement, shall not be affected thereby and shall remain
valid and enforceable, as if such affected provision were not contained herein
or therein.
38. Interpretation. The Committee shall have the sole and complete
authority and discretion to decide any questions concerning the application,
interpretation or scope of any of the terms and conditions of the Plan and the
Program, of any stock option agreement, loan or restricted stock award agreement
entered into pursuant to the Plan, or of any participation under the Program,
and its decisions shall be binding and conclusive upon all interested parties.
39. Amendment. Except as expressly provided in the next sentence, the
Board of Directors may amend the Plan or Program in any manner it deems
necessary or appropriate (including any of the terms, conditions or definitions
contained herein), or terminate the Plan and/or Program at any time prior to
January 30, 2005; provided, however, that any such termination will not affect
the validity of any then outstanding options or restricted stock awards
previously granted under the Plan or outstanding participations under the
Program, as the case may be. Without the approval of the Corporation's
stockholders, the Board cannot: (a) increase the maximum number of shares
covered by the Plan or change the class of employees eligible to receive options
or restricted stock awards; (b) reduce the option price below the fair market
value of the Common Stock on the date of the option grant; or (c) extend beyond
120 months from the date of the grant the period within which an option may be
exercised.
40. Effectiveness, and Termination of Plan. The Plan and the Program
will become effective on the date of their adoption by the Board of Directors,
subject to ratification of the adoption of the Plan and the Program by
affirmative vote of holders of a majority of the issued and outstanding shares
of Common Stock. The Plan and Program will both terminate on January 30, 2005
and no option or restricted stock award grant or participation grant, as the
case may be, may be made on or after such date.
<PAGE> 11
41. Foreign Jurisdictions. The Committee may adopt, amend, and
terminate such arrangements, not inconsistent with the intent of the Plan and
the Program, as it may deem necessary or desirable to make available tax or
other benefits of the laws of foreign jurisdictions to participants who are
subject to such laws.
42. Governing Law. The Plan, the Program and all grants, options,
awards and payments made hereunder shall be governed by and interpreted in
accordance with the internal laws of the State of New York, without regard to
conflicts of law principles.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>3
<FILENAME>y46286ex21.txt
<DESCRIPTION>SUBSIDIARIES OF DOVER
<TEXT>
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF DOVER
Domestic Subsidiaries
<TABLE>
<CAPTION>
State of
Name Incorporation
- ---- -------------
<S> <C>
A-C Compressor Corporation Delaware
Arcom Wireless, Inc. Delaware
Avtec Industries, Inc. Delaware
Belvac Production Machinery, Inc. Virginia
CCI Field Services, Inc. Delaware
Chief Automotive Systems, Inc. Delaware
Communications Techniques, Inc. Delaware
Conmec, Inc. Delaware
C-U Acquisition, Inc. Delaware
Crenlo. Inc. Delaware
DDI Properties California
DEK U.S.A., Inc. Delaware
Delaware Capital Formation, Inc. Delaware
Delaware Capital Holdings, Inc. Delaware
De-Sta-Co Cylinders, Inc. Delaware
Dielectric Laboratories, Inc. Delaware
Dover Diversified De, Inc. Delaware
Dover Diversified, Inc. Delaware
Dover Europe, Inc. Delaware
Dover France Holdings Corp. Delaware
Dover Global Holdings, Inc. Delaware
Dover Industries, Inc. Delaware
Dover Resources Inc. Delaware
Dover Technologies International, Inc. Delaware
Dow-Key Microwave, Inc. Delaware
DT Magnetics, Inc. Delaware
Duncan Industries. Delaware
Everett Charles Technologies, Inc. Delaware
Ferguson/Beauregard/Logic Delaware
Graphic Microsystems, Inc. California
Groen, Inc. Delaware
Hill Phoenix Inc. Delaware
Hydro Systems Company Delaware
Kayln/Siebert Inc. Delaware
K&L Microwave, Inc. Delaware
Knappco Corporation Delaware
Marathon Equipment Company Delaware
Mark Andy, Inc. Missouri
Midland Manufacturing Company Delaware
Novacap, Inc. Delaware
OK International, Inc. Delaware
Petro Vend, Inc. Delaware
PDQ Manufacturing, Inc. Delaware
PRC Corporation Delaware
Preco Turbine and Compressor Services, Inc. Texas
Quartzdyne, Inc. Delaware
Randell Manufacturing, Inc. Delaware
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
State of
Name Incorporation
- ---- -------------
<S> <C>
Refrigeration Systems, Inc. Delaware
Revod Corporation Delaware
Robohand, Inc. Delaware
Rotary Lift Delaware
Somero Enterprises New Hampshire
Sonic Industries, Inc. California
Sanger Works Factory Holdings, Inc. California
Tarby Delaware
Texas Hydraulics, Inc. Delaware
The Heil Company Delaware
The Wittemann Company, Inc. Delaware
Thermal Equipment Corporation California
Tipper Tie, Inc. Delaware
TNI, Inc. Delaware
Tranter, Inc. Michigan
Triton Systems, Inc. Mississippi
Tulsa-Winch, Inc. Delaware
Universal Instruments Corporation Delaware
Vectron International, Inc. Delaware
Vitronics International, Inc. Delaware
Waukesha Bearings Corporation Wisconsin
Weldcraft Products, Inc. Delaware
Wilden Pump and Engineering Company, Inc. Delaware
Wiseco Piston Company, Inc. Delaware
</TABLE>
Foreign Subsidiaries
<TABLE>
<CAPTION>
Name Jurisdiction
- ---- ------------
<S> <C>
atg test systems GmbH Germany
A-C Compressor Canada Canada
A-C Compressor (UK) Limited United Kingdom
Alphasem Holding AG Switzerland
Chief Automotive Limited United Kingdom
DEK Printing Machines Ltd. United Kingdom
De-Sta-Co Manufacturing Limited (Asia) Thailand
De-Sta-Co Manufacturing, Ltd United Kingdom
De-Sta-Co Metallerzeugnisse GmbH Germany
Dorana Neunundfunfzigste Velwaltungsg Esellschaft GmbH Germany
Dover Corporation (Canada) Ltd. Canada
Dover Corporation International United Kingdom
Dover Europe Afzug GmbH Germany
Dover Germany GmbH Germany
Dover Exports, Ltd. Barbados
Dover France Holdings SARL France
Dover International Finance Services Ltd. United Kingdom
Dover UK Holdings Ltd. United Kingdom
Dti Arb, Inc. Canada
Eleven Ind. E. Com. Ltd. Brazil
Everett Charles Technologies, Ltd. United Kingdom
Heil Europe United Kingdom
Heil Trailer International Holdings, Ltd. United Kingdom
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
Name Jurisdiction
- ---- ------------
<S> <C>
HTT Heat Transfer Technologies, S.A. Switzerland
Hydratight Ltd. United Kingdom
Hydro Systems Europe, Ltd. United Kingdom
Imaje S.A. France
Imaje GmbH Germany
Langbein & Engelbracht, GmbH Germany
Luther & Maezler GmbH Germany
Mark Andy, UK Limited United Kingdom
Pullmaster Winch Corporation Canada
Rotary Lift Europe Italy
Rotary Lift (UK) Limited United Kingdom
Soltec International, B.V. Netherlands
Somero Enterprises, Ltd. United Kingdom
SWEP International AB Sweden
SWEP Technologies AB Sweden
Syfer Technology Limited United Kingdom
Tranter Ltd. United Kingdom
Universal Electronics Systems H.K. Ltd. Hong Kong
Universal Instruments GmbH Germant
Universal Instruments Korea Ltd. South Korea
Universal Instruments (Electronics) Ltd. United Kingdom
Universal Instruments Corp. (Singapore) Pte. Ltd. Singapore
Van Dam Machine B.V. Netherlands
Vitronics Soltec GmbH Germany
</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>4
<FILENAME>y46286ex23-1.txt
<DESCRIPTION>CONSENT OF INDEPENDENT ACCOUNTANTS
<TEXT>
<PAGE> 1
Exhibit 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in (a) the Registration
Statement of Dover Corporation on Form S-8 (File No. 33-45661), (b) the
Registration Statement of Dover Corporation on Form S-8 (File No. 33-11229), (c)
the Registration Statement of Dover Corporation on Form S-8 (File No. 33-01419),
and (d) the Registration Statement of Dover Corporation on Form S-3 (File No.
333-47396) of our report dated February 2, 2001, relating to the financial
statements, which appear in the Annual Report to Shareholders, which is
incorporated in this Annual Report on Form 10-K. We also consent to the
incorporation by reference of our report dated February 2, 2001, relating to the
financial statement schedule, which appears in this Form 10-K.
PricewaterhouseCoopers LLP
New York, New York
March 14, 2001
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>5
<FILENAME>y46286ex24.txt
<DESCRIPTION>FORM OF POWER OF ATTORNEY
<TEXT>
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that, the undersigned, each a
director of Dover Corporation, a Delaware corporation (the "Company"), hereby
constitutes and appoints Thomas L. Reece, David S. Smith and Robert G. Kuhbach,
and each of them (with full power to each of them to act alone), his true and
lawful attorney-in-fact and agent, on behalf of and in the name, place and stead
of the undersigned, to sign, execute and affix the undersigned's name thereto
and file the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2000, and any amendments thereto, with the Securities and Exchange
Commission and any other appropriate authority, granting unto said attorneys and
each of them, full power and authority to do and perform each and every act and
thing required and necessary to be done in and about the premises in order to
effectuate the same as fully to all intents and purposes as the undersigned
might or could do if personally present, hereby ratifying and confirming all
that said attorneys-in-fact and agents, of any of them may lawfully do or cause
to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set his/her hand
this 31th day of January, 2001.
/s/David H. Benson
--------------------------------
David H. Benson
/s/ John-Pierre M. Ergas
--------------------------------
John-Pierre M. Ergas
/s/ Roderick J. Fleming
--------------------------------
Roderick J. Fleming
/s/Kristiane C. Graham
--------------------------------
Kristiane C. Graham
/s/James L. Koley
--------------------------------
James L. Koley
/s/Richard K. Lochridge
--------------------------------
Richard K. Lochridge
/s/Thomas L. Reece
--------------------------------
Thomas L. Reece
/s/Gary L. Roubos
--------------------------------
Gary L. Roubos
/s/Michael B. Stubbs
--------------------------------
Michael B. Stubbs
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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