<PAGE> 1
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
[Amendment No. ............................]
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, For Use of the Commission Only (as permitted by Rule 14a-6(e)
(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
DOVER CORPORATION
-----------------------------------------------------------------------------
(Name of Registrant as Specified in Its Charter)
- -----------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No Fee Required,
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
- -------------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
- -------------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed pursuant to
Exchange Act Rule 0-11 (set forth the amount on which the filing fee is
calculated and state how it was determined):
- -------------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
- -------------------------------------------------------------------------------
<PAGE> 2
5) Total fee Paid:
- -------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials:
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:_______________________________________________
2) Form, Schedule or Registration Statement No.:__________________________
3) Filing Party:_________________________________________________________
4) Date Filed:___________________________________________________________
<PAGE> 3
LOGO
------------------------------
Notice Of Annual Meeting Of Stockholders
------------------------------
March 16, 1998
TO THE STOCKHOLDERS:
Please take notice that the Annual Meeting of Stockholders of DOVER
CORPORATION will be held at the Lobby Conference Room, Wilmington Trust Company,
1100 North Market Street, Rodney Square North, Wilmington, Delaware 19801, on
April 28, 1998, at 10:00 A.M., for the following purposes:
1. To elect ten directors;
2. To ratify and approve the Dover Corporation Executive Officer Annual
Incentive Plan; and
3. To transact such other business as may properly come before the meeting.
Only holders of record of the outstanding common stock at the close of
business on February 27, 1998 are entitled to notice of and to vote at the
meeting or any adjournments thereof.
By authority of the Board of Directors,
ROBERT G. KUHBACH
Secretary
STOCKHOLDERS WHO DO NOT PLAN TO ATTEND THE MEETING ARE REQUESTED TO SIGN
AND DATE THE ENCLOSED PROXY AS SOON AS POSSIBLE AND MAIL IT IN THE ENCLOSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
<PAGE> 4
DOVER CORPORATION
PROXY STATEMENT
GENERAL
This statement is furnished to the stockholders of Dover Corporation
(hereinafter called the "Company" or "Dover"), whose principal executive offices
are at 280 Park Avenue, New York, NY 10017, in connection with the solicitation
of proxies by the Board of Directors for use at the Annual Meeting of
Stockholders (the "Meeting") to be held on April 28, 1998 or any adjournments
thereof, for the purposes set forth in the notice of meeting. Dover will pay the
reasonable and actual costs of soliciting proxies, but no amount will be paid to
any officer or employee of Dover or its subsidiaries as compensation for
soliciting proxies. In addition to solicitation by mail, Dover has retained
Morrow & Co. to solicit brokerage houses and other custodians, nominees or
fiduciaries and to send proxies and proxy material to the beneficial owners of
such shares, at a cost not to exceed $12,000. The approximate date on which this
statement and the proxy form are to be first sent to the stockholders will be
March 16, 1998.
As of the close of business on February 27, 1998, the record date for
voting, Dover had outstanding 222,891,535 shares of common stock. Each share of
common stock is entitled to one vote on all matters. To the best of Dover's
knowledge, no stockholder owns beneficially as much as 5% of the outstanding
common stock other than Magalen O. Bryant, Post Office Box 247, Middleburg, VA
22117, who owns 11,535,043 shares (5.2%), including 1,195,752 shares held in a
trust in which she is a co-trustee sharing voting and investment powers and in
which she disclaims any beneficial interest.
DOVER WILL PROVIDE TO EACH PERSON SOLICITED HEREIN, ON THE WRITTEN REQUEST
OF ANY SUCH PERSON, A COPY OF DOVER'S 1997 ANNUAL REPORT ON FORM 10-K INCLUDING
THE SCHEDULES THERETO, FILED WITH THE SECURITIES AND EXCHANGE COMMISSION, ALL
WITHOUT CHARGE (EXCEPT EXHIBITS). A REQUEST THEREFOR SHOULD BE DIRECTED TO THE
CORPORATE SECRETARY AT DOVER'S OFFICE, 280 PARK AVENUE, NEW YORK, NY 10017.
The shares covered by each proxy will be voted for the election of the ten
(10) nominees or their substitutes as indicated below, and to ratify and approve
the Dover Corporation Executive Officer Annual Incentive Plan unless directed
otherwise in the proxy in which case the shares will be voted as directed. The
proxy also grants discretionary authority to the proxies in connection with
other matters that may properly come before the Meeting.
Abstentions and broker non-votes will be included in determining whether a
quorum exists at the Meeting. Approval of each matter specified in the notice of
meeting requires the affirmative vote of a majority, or, in the case of the
election of directors, a plurality, of shares of common stock present in person
or by proxy at the Meeting and entitled to vote thereon. Stockholders may not
cumulate their votes. In determining whether a proposal specified in the notice
of meeting has received the requisite number of affirmative votes, abstentions
and broker non-votes will have the same effect as votes against the proposal,
except with respect to the election of directors where abstentions and broker
non-votes will result in the respective nominees receiving fewer votes but will
have no effect on the outcome of the vote.
A person giving a proxy may revoke it at any time before it is exercised by
written notice to the Secretary of Dover at the address referred to above or by
attending the Meeting and requesting in writing a return of the proxy.
1
<PAGE> 5
SECURITY OWNERSHIP
The following table provides information as of February 27, 1998, as
reported to the Company by the persons and members of the group listed, as to
the number of shares and the percentage of Dover's common stock beneficially
owned by: (i) each Director and nominee for Director, (ii) each executive
officer listed in the compensation table and (iii) all Directors, nominees and
executive officers of Dover as a group.
<TABLE>
<CAPTION>
NUMBER OF SHARES(1) PERCENTAGE
------------------- ----------
<S> <C> <C>
David H. Benson........................................ 6,800(2) *
Magalen O. Bryant...................................... 10,339,251(3) 5.2%
1,195,752(4)
Lewis E. Burns......................................... 390,093 *
Jean-Pierre M. Ergas................................... 22,800 *
Roderick J. Fleming.................................... 4,800 *
John F. Fort........................................... 100,800 *
Rudolf J. Herrmann..................................... 106,972 *
James L. Koley......................................... 24,800(5) *
John F. McNiff......................................... 370,483(6) *
Anthony J. Ormsby...................................... 118,800(7) *
John E. Pomeroy........................................ 234,337 *
Thomas L. Reece........................................ 503,562(8) *
Gary L. Roubos......................................... 530,959(9) *
Jerry W. Yochum........................................ 110,991 *
Directors and Officers as a Group...................... 14,397,785 6.4%
</TABLE>
* Less than one percent.
- ---------------
(1) Includes shares which are (a) owned by officers in the Company's Retirement
Savings Plan, totaling 127,481 shares and (b) subject to options exercisable
within 60 days for the following person(s): Mr. Burns, 206,564 shares; Mr.
Herrmann, 66,119 shares; Mr. McNiff, 204,015 shares; Mr. Pomeroy, 173,941
shares; Mr. Reece, 272,300 shares; Mr. Roubos, 9,416 shares; Mr. Yochum,
91,319 shares; and all directors and officers as a group, 1,118,269 shares.
(2) Includes 1,000 shares held by his spouse.
(3) Includes 304,960 shares held by a corporation over which she has control.
(4) Held in a trust of which she is a co-trustee sharing voting and investment
powers and in which she disclaims any beneficial interest.
(5) Includes 10,000 shares held in various retirement trusts for Mr. Koley and
his spouse and 4,000 shares held by a retirement plan as to which Mr. Koley
is a co-trustee and beneficiary.
(6) Includes 1,200 shares held as custodian for a minor.
(7) Includes 100,000 shares in a personal holding company as to which he
disclaims any beneficial interest.
(8) Includes 75,410 shares held by his spouse.
(9) Includes 125,848 shares held by his spouse and 126,994 shares held by a
limited liability company as to which he disclaims any beneficial interest.
2
<PAGE> 6
1. ELECTION OF DIRECTORS
The proxies will vote the shares covered by a proxy for the election as
directors of the ten (10) nominees listed below unless directed otherwise in the
proxy, in which case the shares will be voted as directed. If any such nominee
for election is not for any reason a candidate for election at the Meeting, an
event which management does not anticipate, the proxies will be voted for a
substitute nominee or nominees as may be designated by the Board of Directors
and for the others named below. All the nominees are presently directors, except
Mr. Pomeroy who is succeeding Mr. Ormsby who is retiring from the Board. Each
director elected at the Meeting will serve until the election and qualification
of his or her successor.
Directors will be elected by a plurality of the votes cast. Only votes cast
for a nominee will be counted, except that the accompanying proxy will be voted
for the nominees in the absence of instructions to the contrary.
<TABLE>
<CAPTION>
YEAR FIRST
BUSINESS EXPERIENCE FOR PAST FIVE YEARS, BECAME
NAME AND AGE POSITIONS WITH DOVER, AND OTHER DIRECTORSHIPS DIRECTOR
------------ --------------------------------------------- ----------
<S> <C> <C>
David H. Benson................... Chairman, Kleinwort Charter Investment Trust Plc. 1995
60 (financial management); Director of Kleinwort Benson
Group, Plc.; Director of The Rouse Company (real
estate development); Director of Harrow Corporation
(industrial manufacturing); Director of British Gas
Plc. and; Trustee of The Charities Official Investment
Fund.
Magalen O. Bryant................. Director of Carlisle Companies Incorporated and 1979
69 O'Sullivan Corp. (industrial manufacturing).
Jean-Pierre M. Ergas.............. Executive Vice President, Europe, Alcan Aluminum, Ltd. 1994
58 (aluminum manufacturer); previously Chairman and Chief
Executive Officer of American National Can Company
(beverage can manufacturer); Director of ABC Rail
Products Corporation (rail equipment manufacturer);
and Brockway Standard Holdings Corporation (container
manufacturer).
Roderick J. Fleming............... Director, Robert Fleming Holdings Ltd. (financial 1995
44 management); previously Director, Capital Markets
(through July 1993), and Director of Corporate Finance
UK (through April 1994) at Robert Fleming; Director of
Aurora Exploration and Development Corporation Ltd.
(natural resources); Updown Investment Company Ltd.
(financial management); and West Rand Consolidated
Mines Limited (natural resources).
John F. Fort...................... Consultant, Full Circle Investments; Director of Tyco 1989
56 International Ltd. (fire protection systems and
industrial products) and formerly Chairman (through
January 1993); Director, Roper Industries (industrial
products).
</TABLE>
3
<PAGE> 7
<TABLE>
<CAPTION>
YEAR FIRST
BUSINESS EXPERIENCE FOR PAST FIVE YEARS, BECAME
NAME AND AGE POSITIONS WITH DOVER, AND OTHER DIRECTORSHIPS DIRECTOR
------------ --------------------------------------------- ----------
<S> <C> <C>
James L. Koley.................... Chairman, Koley, Jessen, Daubman & Rupiper, P.C. (law 1989
67 firm); Chairman of the Board of Directors of Arts-Way
Manufacturing Co., Inc. (agricultural manufacturing).
John F. McNiff.................... Vice President-Finance of Dover; Director, The Allen 1996
55 Group (telecommunications products); and The Haven
Fund (financial management).
John E. Pomeroy................... President and CEO of Dover Technologies International, --
56 Inc.; Director of Hadco Corporation (electronic
manufacturing); and Adept Technologies, Inc. (robot
systems manufacturing).
Thomas L. Reece................... President (since May 1993) and Chief Executive Officer 1993
55 (since May 1994) of Dover; prior thereto Vice
President of Dover and President of Dover Resources,
Inc.
Gary L. Roubos.................... Chairman of the Board of Dover; previously Chief 1976
61 Executive Officer (through May 1994) and President
(through May 1993) of Dover for more than five years;
Director of Bell & Howell Company (information
management); and Omnicom Group, Inc. (advertising).
</TABLE>
During 1997, the Board of Directors held four meetings. The Board has three
standing committees, namely an Audit Committee, a Compensation Committee and an
Executive Committee.
The Audit Committee is composed of four directors who are not employees of
the Company. The functions of the Audit Committee consist of recommending
annually to the Board of Directors the appointment of the independent auditors;
reviewing with management and such auditors the audit plan and results of the
auditing engagement; and reviewing management's program for ensuring the
adequacy of Dover's system of internal accounting controls. In 1997, the Audit
Committee held two meetings. Members of the Audit Committee are Anthony J.
Ormsby (Chairman), David H. Benson, Roderick J. Fleming and James L. Koley.
The Compensation Committee is composed of three directors who are not
employees of the Company. It approves compensation for corporate executive
officers, grants, awards and payouts under the stock option plan and performance
program and major compensation plan changes. In 1997, the Compensation Committee
held two meetings. Its members are John F. Fort (Chairman), Magalen O. Bryant
and Jean-Pierre M. Ergas.
The Executive Committee is composed of six directors. The Executive
Committee is generally empowered to act unanimously on behalf of the Board and
meets or otherwise takes action on an as needed basis between the regularly
scheduled quarterly Board meetings. The Executive Committee held one meeting
during 1997. Members of the Executive Committee are Gary L. Roubos (Chairman),
Magalen O. Bryant, John F. Fort, James L. Koley, Anthony J. Ormsby and Thomas L.
Reece.
4
<PAGE> 8
DIRECTORS' COMPENSATION
Management directors receive no compensation for services as a director or
as a member of any Committee. Effective January 1, 1996, the Company adopted the
Dover 1996 Non-Employee Directors' Stock Compensation Plan (the "Directors'
Plan"). Under the Directors' Plan, non-employee directors are granted 2,000
shares of the Company's Common Stock per year as their primary compensation for
serving as directors. Such number of shares was increased in accordance with the
terms of the Plan as a result of a 2 for 1 stock split effective December 15,
1997. If any director serves for less than a full calendar year, the number of
shares to be granted to that director for the year will be adjusted pro rata,
based on the number of days served. For 1997, each non-employee director
received 2,000 shares and received a fee of $2,000 for serving on any of the
Board Committees. Each of the non-executive directors also received $1,500 for
each Board or Committee meeting attended.
James L. Koley is Chairman of Koley, Jessen, Daubman & Rupiper, P.C., a
Nebraska law firm which has performed legal services on behalf of Dover.
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The Summary Compensation Table below shows all remuneration paid by Dover
and its subsidiaries on an accrual basis to the Chief Executive Officer and the
four other most highly paid executive officers for services in all capacities
for each of the three calendar years ended December 31, 1997.
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION(1)(2) COMPENSATION
-------------------------- -----------------------
AWARDS PAYOUTS
---------- ----------
SECURITIES LONG-TERM
UNDERLYING INCENTIVE ALL
NAME AND OPTIONS PLAN OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (#)(3) PAYOUTS COMPENSATION(4)
------------------ ---- -------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Reece....................... 1997 $800,000 $875,000 109,926 $1,481,588 $11,519
CEO of Dover since May 1994; 1996 780,000 850,000 100,058 855,168 12,391
Director and President of Dover 1995 650,000 650,000 121,588 764,541 7,392
since May 1993
Lewis E. Burns........................ 1997 485,000 340,000 29,456 1,203,888 3,800
Vice President of Dover; 1996 470,000 320,000 29,982 949,939 66,896
Director and President of Dover 1995 450,000 310,000 43,576 670,320 54,800
Industries, Inc.
Rudolf J. Herrmann.................... 1997 450,000 305,000 27,078 604,489 7,392
Vice President of Dover; 1996 425,000 290,000 25,178 416,813 7,392
Director and President of Dover 1995 400,000 230,000 39,760 274,968 7,392
Resources, Inc.
</TABLE>
5
<PAGE> 9
<TABLE>
<CAPTION>
ANNUAL LONG-TERM
COMPENSATION(1)(2) COMPENSATION
-------------------------- -----------------------
AWARDS PAYOUTS
---------- ----------
SECURITIES LONG-TERM
UNDERLYING INCENTIVE ALL
NAME AND OPTIONS PLAN OTHER
PRINCIPAL POSITION YEAR SALARY BONUS (#)(3) PAYOUTS COMPENSATION(4)
------------------ ---- -------- -------- ---------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
John E. Pomeroy....................... 1997 490,000 370,000 29,822 1,875,911 89,591
Vice President of Dover; 1996 450,000 325,000 29,406 1,056,957 89,487
Director and President of Dover 1995 390,000 315,000 38,168 986,076 63,696
Technologies, Inc.
Jerry W. Yochum....................... 1997 450,000 300,000 26,894 919,213 26,793
Vice President of Dover; 1996 430,000 285,000 25,754 708,923 26,793
Director and President 1995 395,000 240,000 39,124 458,790 12,962
of Dover Diversified, Inc.
</TABLE>
- ---------------
(1) The bonus amount is determined as described in the Compensation Committee
Report on page 11 of this proxy statement. Cash bonuses for the calendar
years shown have been listed in the year earned, and were generally paid in
February of the following calendar year.
(2) Perquisites and other personal benefits paid to each officer in each
instance aggregated less than $50,000 or 10% of total salary plus bonus,
and accordingly are omitted from the table.
(3) Retroactively adjusted for the 2 for 1 stock splits in September 1995 and
December 1997.
(4) Represents Company contributions to the Dover Retirement Savings Plan,
reportable annual increase in the Company's obligation to participants
under the Executive Deferred Income Plan or similar accrual, Company
payments to other defined contribution plans and Company paid life
insurance premiums on split-dollar term life insurance. For 1997, these
amounts are detailed as follows:
<TABLE>
<CAPTION>
OTHER
DOVER EXECUTIVE EXECUTIVE
SAVINGS DEFERRED RETIREMENT INSURANCE
NAME PLAN INCOME PLAN PLANS PREMIUMS TOTAL
---- ------- ----------- ---------- --------- -------
<S> <C> <C> <C> <C> <C>
T. L. Reece............................ $7,392 $4,127 $ -- $ -- $11,519
L. E. Burns............................ 3,800 -- -- -- 3,800
R. J. Herrmann......................... 7,392 -- -- -- 7,392
J. E. Pomeroy.......................... 3,800 4,388 81,403 -- 89,591
J. W. Yochum........................... 7,392 8,261 -- 5,570 26,793
</TABLE>
6
<PAGE> 10
STOCK OPTION PLAN AND CASH PERFORMANCE PROGRAM
The Company has an Incentive Stock Option Plan and Cash Performance
Program, adopted in 1995 (replacing a similar plan which expired in January
1995), which provides for stock options coordinated with performance awards. At
the time of grant, allocations are made such that of each combined award,
greater emphasis is given to cash performance awards at the operating level, and
greater emphasis is given to stock options at the corporate level. Information
on current grants and cash performance awards is given below. For payouts on
prior awards under this program see the Summary Compensation Table on pages 5
and 6.
OPTION GRANTS IN LAST CALENDAR YEAR
<TABLE>
<CAPTION>
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES IN PRICE EXPIRATION PRESENT
NAME GRANTED(#)(1) CALENDAR YEAR ($/SHARE) DATE VALUE($)(2)
---- ------------- ------------- --------- ---------------- -----------
<S> <C> <C> <C> <C> <C>
Thomas L. Reece................. 109,906 11 $24.72 February 6, 2007 $548,431
Lewis E. Burns.................. 29,456 3 24.72 February 6, 2007 146,985
Rudolf J. Herrmann.............. 27,078 3 24.72 February 6, 2007 135,119
John E. Pomeroy................. 29,822 3 24.72 February 6, 2007 148,812
Jerry W. Yochum................. 26,894 3 24.72 February 6, 2007 134,201
</TABLE>
- ---------------
(1) The options become exercisable on February 6, 2000.
(2) The Black-Scholes model used to calculate the hypothetical values at date of
grant considers the following factors to estimate the option's present
value: the stock's historic volatility calculated using the average daily
market price of the Company's common stock over a suitable current period,
the expected life of the option, risk-free interest rates and the stock's
expected dividend yield. The assumptions used in the model for this
valuation were: average stock price volatility 16.65%; expected life 6
years; risk-free interest rate of 6.06%; and an expected dividend yield of
1.1%. This resulted in a discounted per share value of $7.12 (29% of the
option price). The Black-Scholes model assumes that an option is not
cancelable and that it can be sold at any time for cash. Since those
assumptions are not applicable here, the Company has reduced the above grant
date present values by 20% based upon its historical cancellation rates and
another 10% based upon the Company's expectation that, except in cases of
unusual need, shares acquired through the exercise of options are to be held
by participants for the duration of their employment with Dover. This
resulted in a final grant date present value of $4.99 per share.
7
<PAGE> 11
AGGREGATED OPTION EXERCISES IN LAST CALENDAR YEAR AND YEAR-END OPTION VALUES
(AS ADJUSTED FOR THE 2 FOR 1 STOCK SPLITS IN 1995 AND 1997)
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING VALUE(1) OF UNEXERCISED
UNEXERCISED OPTIONS AT IN-THE-MONEY OPTIONS AT
SHARES YEAR END(#) YEAR END($)
ACQUIRED ON VALUE(1) --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ----------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Thomas L. Reece.............. -- $ -- 150,710 331,552 $3,148,932 $3,809,442
Lewis E. Burns............... -- -- 190,654 103,014 4,442,390 1,243,169
Rudolf J. Herrmann........... 6,362 100,012 33,296 92,016 627,623 1,117,318
John E. Pomeroy.............. -- -- 135,774 97,396 2,942,450 1,144,800
Jerry W. Yochum.............. -- -- 52,196 91,772 984,938 1,109,549
</TABLE>
- ---------------
(1) Calculated by determining the difference between the exercise price and the
average of high and low market price of Dover common stock (as reported on
the New York Stock Exchange-Composite Transactions) for the exercise dates
or December 31, 1997 as the case may be.
LONG-TERM INCENTIVE PLAN AWARDS FOR CALENDAR YEAR 1998
<TABLE>
<CAPTION>
PERFORMANCE OR ESTIMATED FUTURE
OTHER PERIOD PAYOUTS UNDER
FEBRUARY 1998 UNTIL MATURATION NON-STOCK PRICE
NAME AWARD OR PAYOUT BASED PLANS(1)
---- ------------- ---------------- ----------------
<S> <C> <C> <C>
Thomas L. Reece................................. $345,950 1998-2000 $345,950
Lewis E. Burns.................................. 371,993 1998-2000 371,993
Rudolf J. Herrmann.............................. 343,035 1998-2000 343,035
John E. Pomeroy................................. 389,813 1998-2000 389,813
Jerry W. Yochum................................. 340,808 1998-2000 340,808
</TABLE>
- ---------------
(1) The actual cash payout at the end of the three year performance measurement
period will be equal to the award amount multiplied by a percentage which is
derived from a performance matrix, or table, which uses two performance
parameters, namely: (1)(a) real (inflation adjusted) growth in earnings per
share, or (b) real growth in operating earnings; and (2)(a) return on
equity, or (b) return on investment (ROI). Parameters (1)(a) and 2(a) apply
to Mr. Reece and other Corporate officers and parameters (1)(b) and 2(b)
apply to the other four listed officers and those participating officers at
independent subsidiaries and operating companies.
8
<PAGE> 12
There is no payout if growth in earnings is not achieved; there is no
payout if return on equity or ROI is less than 10 percent. Moreover, the
earnings in the base year (the year preceding the award year) from which
earnings growth is measured may not be less than an amount equal to 10 percent
of equity or 10 percent of ROI.
There is a $2 million limit on the amount of any annual individual payout,
and the aggregate payout at each appropriate business unit may not exceed an
amount equal to 20% of average annual nominal earnings increase over the three
year performance period. Beginning with 1998 earned payouts, if any, at the
operating company level, the 20% limitation has been increased to 30%. The same
plan is applied to three separate "Business Units" as follows: (a) the entire
company for corporate officers, (b) the market segment subsidiaries for their
respective officers, and (c) operating businesses for their respective officers.
Given the foregoing, the range of payouts is large. For the past three
years, the amounts shown in the Payout Column of the Summary Compensation Table
represent percentage payouts from zero to 1,466% of the award given three years
prior to the year of the payout. Earned payouts may not exceed 1,528%. Given
this range, it is difficult to forecast the required estimates called for by
this column; the amounts shown above, payable in February 2001, represent
payouts at the 100% level on the aforementioned matrix. This could be achieved
with real average annual earnings growth of 7% and a ROI/Return on Equity of 13%
over the three-year performance period, or various other similar combinations of
growth and ROI. Actual payouts for the three-year performance period ended
December 31, 1997 (shown on the Summary Compensation Table, pages 5 and 6) were:
Mr. Reece 687%, Mr. Burns 395%, Mr. Herrmann 217%, Mr. Pomeroy 702% and Mr.
Yochum 336%.
RETIREMENT PLANS
Dover has many defined benefit and defined contribution pension plans
covering substantially all employees of the Company and its domestic and foreign
subsidiaries. Dover also has unfunded supplemental executive retirement plans
and other similar unfunded retirement programs ("SERPs") which provide
supplemental retirement benefits for eligible employees including certain
officers of Dover and its subsidiaries. These supplemental plans basically
extend retirement benefits to cover compensation not covered by underlying
qualified plans because of Federal statutory limitations. Pursuant to those
plans, payments will be made at the appropriate time (e.g., retirement) to such
officers and other plan participants.
Benefits under various defined benefit plans and related SERPs are based
generally upon (i) final average compensation, defined as the highest 60 months
of compensation out of the last 120 months and (ii) the years of benefit
service. Compensation for plan purposes includes salary and annual bonus but
excludes any payments under the cash performance award program or stock option
awards. Generally, vesting occurs after completion of five years of employment
subsequent to age 18. The following table shows the estimated annual benefits
payable upon retirement to persons in the specified remuneration and years of
service classifications. The years of covered employment for eligible persons
named in the Summary Compensation Table are: Mr. Reece 30, Mr. Burns 30, Mr.
Herrmann 9, and Mr. Yochum 15. All of these persons are vested. The benefit
amounts listed in the table include the annuitized portion of the defined
contribution accumulation attributable to company contributions and one half of
the social security benefits to which the covered employee may be entitled.
9
<PAGE> 13
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------
FINAL AVERAGE COMPENSATION 15 20 25 30 35
- -------------------------- -- -- -- -- --
<S> <C> <C> <C> <C> <C>
$ 500,000 $150,000 $200,000 $250,000 $300,000 $300,000
600,000 180,000 240,000 300,000 360,000 360,000
700,000 210,000 280,000 350,000 420,000 420,000
800,000 240,000 320,000 400,000 480,000 480,000
900,000 270,000 360,000 450,000 540,000 540,000
1,000,000 300,000 400,000 500,000 600,000 600,000
1,100,000 330,000 440,000 550,000 660,000 660,000
1,200,000 360,000 480,000 600,000 720,000 720,000
1,300,000 390,000 520,000 650,000 780,000 780,000
1,400,000 420,000 560,000 700,000 840,000 840,000
1,500,000 450,000 600,000 750,000 900,000 900,000
1,600,000 480,000 640,000 800,000 960,000 960,000
</TABLE>
In addition to participating in one of Dover's qualified defined
contribution plans, Mr. Pomeroy also participates in the Supplemental Executive
Retirement Program of Dover Technologies. This is a non-qualified account
balance plan which, based on annual salary and bonus, credits to individuals the
amounts which an employer could have made to the account of such individual
under an existing qualified defined contribution plan but for current Federal
statutory limitations, less amounts actually contributed to such qualified plans
for such individual. For 1997, Mr. Pomeroy's account was credited with $65,403.
Account balances are currently credited with interest at the rate of 10% per
annum, compounded monthly, so long as such individual remains an employee.
Amounts credited are payable in a lump sum upon retirement.
CHANGE OF CONTROL PROVISIONS
The Company has agreements with Mr. Roubos, Mr. Reece and other officers
including those shown on the Summary Compensation Table designed to encourage
each such officer to continue to carry out his duties with the Company in the
event of a potential change of control of the Company. For purposes of these
agreements, a "change of control" occurs generally when (a) a person becomes
beneficial owner of 20% or more of the Company's common stock, (b) as a result
of a business combination or tender offer, a majority of the Board of Directors
changes, or (c) the stockholders approve a merger or other business combination,
as a result of which the Company ceases to be an independent public company. The
agreements provide that if within eighteen (18) months following a change of
control of the Company the officer's employment is terminated (all as defined in
the agreements) either by the Company for other than "cause" or "disability" or
by such officer for "good reason", then such officer will receive a lump sum
payment equal to three times the highest base salary and annual bonus (but not a
bonus under the Performance Plan or any other compensation) received by such
officer in any of the most recent five years. The severance amounts to be paid
may be subject to reduction if the officer, at the time of termination, is
within 36 months from his normal retirement age. In addition, upon termination,
all cash performance awards outstanding will immediately vest and be paid to the
officer and all stock options which have been held by the officer for more than
six months will immediately vest and become exercisable. Also, in the event of a
change of control, the present value of certain unfunded deferred compensation
plans, including the Company's SERP plans, will be paid immediately to such
officers in a lump sum.
10
<PAGE> 14
The Internal Revenue Code of 1986, as amended (the "Code"), imposes certain
excise taxes on, and limits the deductibility of, certain compensatory payments
made by a corporation to or for the benefit of certain individuals if such
payments are contingent upon certain changes in the ownership or effective
control of the corporation or in the ownership of a substantial portion of the
assets of the corporation, and have an aggregate present value of at least three
times the individual's annualized includable compensation for the base period,
as defined in the Code. Although Dover payments would not be expected to reach
this amount in most cases, if excise taxes are paid they would be grossed-up.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee (the "Committee") of the Board of Directors is
composed entirely of independent outside directors. The Committee approves
annual compensation for the Company's executive officers, administers the Dover
incentive stock option and cash performance program and any minor changes in
other compensation programs. From time to time, but not less than once every
five years, the Committee reviews studies done by its independent compensation
consultant as to the competitiveness of the Company's overall executive
compensation program. This was last done in 1994, and to a limited extent in
both 1996 and 1997, and the results of those reviews are reflected in this
report.
A. EXECUTIVE COMPENSATION POLICY
The Committee's basic overriding compensation principle is that
compensation at the corporate level, the independent subsidiary level, and at
the operating president level should be linked to total return to stockholders
generally and relative to other comparable companies. The Committee also
believes that all compensation, i.e., annual, medium-term and long-term, should
be closely aligned to the performance of the business over which the executive
has the most control. This is done annually with salaries and bonuses, on a
medium-term (three-year) basis with the cash performance program, and on a
long-term basis with stock options. The relative "mix" of medium-term and
long-term opportunity is also adjusted with increasingly larger percentages
allocated to long-term reward potential based on the breadth of the executive's
responsibility across the organization. Performance awards and stock option
grants are annual, but payouts on cash awards, if earned, occur three years
later and options generally have a 10-year term, but are not exercisable for
three years. With respect to pensions and other benefit type programs, the
Committee has set a target at the median of comparable companies. All
compensation to be paid to the executive officers for 1998 is expected to
qualify for deductibility for federal income tax purposes under Section 162(m)
of the Code.
Annual Compensation: The Committee reviews the Company's performance
annually. The compensation programs of the Company are highly leveraged on the
basis of performance. The Company has for years performed in the top quartile as
measured by the Management Compensation Services Project 777 database (the
"Project 777 database"), which currently includes in excess of 40% of the
manufacturing companies included in the Fortune 500 Listings. The Project 777
database includes a substantially larger number of companies than the peer index
group referred to in connection with the Stock Performance Graph below. The
average rank in the Project 777 database, which determines the overall standing,
is the average of the following nine separate measurements: return on equity for
one year and five years; return on capital for one year and five years; return
on sales for the current year; return on assets for one year and five years; and
total capital return for one and five years. As a result of the 1994
compensation review mentioned above, the Committee has determined that as long
as the Company continues to perform in the top quartile, salaries and bonuses
will be targeted at the 60th to the 75th percentile for all company executives.
Should the Company's performance fall below that level, compensation targets
will be adjusted downward. Annual bonuses vary with
11
<PAGE> 15
annual performance based upon earnings growth, return on investment and
achievement of special Company goals as well as the Committee's judgment of
overall performance.
Long-Term Compensation: Dover's management, the Committee and the Board of
Directors believe that tangible (cash) and intangible (stock) incentives should
be provided to key management at each of the three levels within the Company
over some longer period of time. Given the different levels and opportunities to
impact Dover's long-term growth, and hence benefit Dover's stockholders, Dover
has a long-term compensation program including both stock options and cash
incentive awards (the "Plan").
Only officers and executives who are in a position to affect materially the
profitability and growth of the Company are eligible for stock options and
incentive awards. The Plan basically provides a "mix" of the two incentives,
with operating management receiving a substantial percentage of their respective
gain opportunity in the form of cash incentive awards, and the executive
officers receiving a substantial portion of their opportunity in the form of
stock options. The basic calculation begins with the individual's base salary
and may include the most current annual cash bonus, which is then multiplied by
a factor to determine the size of the incentive award (100% payout case) and the
value of the stock option grant, which is then converted into shares. For the
officers identified in the Summary Compensation Table above, the cash incentive
awards under the Plan were based on multiples ranging from .13 to .45, and the
number of shares granted was based on a multiple ranging from .90 to 1.65. In
all cases, the multiples were initially determined by an independent consultant,
and confirmed by the Committee. Cash incentive awards are annual and prior
awards are not considered by the Committee when current awards are made.
Likewise, the number of shares that may be granted to each participant is not
otherwise limited and prior grants are not considered by the Committee when
current grants are awarded, however, a schedule of outstanding stock options for
executive officers is reviewed by the Committee. The number of optionees in each
annual grant averages just under one percent of the total number of Dover
employees. The annual shares granted has averaged less than 1/2 of 1% of shares
outstanding over the past five years and was also less than 1/2 of 1% in 1998.
Dover expects that, except in cases of unusual need, shares acquired through
options will be held by participants (including participant's family members)
for the duration of their employment with the Company.
B. CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee awarded Mr. Thomas L. Reece, Chief Executive
Officer, a bonus of $875,000 for 1997, which was equal to 109% of his 1997
salary. This determination was based upon: (a) outside independent compensation
survey data, which places the compensation of Mr. Reece near the high end of the
median range of the comparative group for companies of Dover's size; (b) the
record sales and earnings achieved in 1997; (c) the 1997 operating earnings
increase of 14%; (d) the general business environment during 1997; and (e) a
subjective judgment factor which is the prerogative of the Committee. The first
three factors were given the greatest weight by the Committee.
Compensation Committee: John F. Fort, Chairman
Magalen O. Bryant
Jean-Pierre M. Ergas
12
<PAGE> 16
STOCK PERFORMANCE GRAPH
COMPARISON OF FIVE YEAR CUMULATIVE TOTAL RETURN*
DOVER CORPORATION, S&P 500 INDEX & PEER GROUP INDEX
TOTAL STOCKHOLDER RETURNS
<TABLE>
<CAPTION>
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) PEER GROUP DOVER CORP. S&P 500 INDEX
<S> <C> <C> <C>
DEC-92 100.00 100.00 100.00
DEC-93 123.00 139.07 110.08
DEC-94 124.98 120.28 111.53
DEC-95 171.31 174.58 153.45
DEC-96 230.87 242.36 188.68
DEC-97 325.69 350.92 251.63
</TABLE>
This graph assumes $100 invested on December 31, 1992 in Dover Corporation
common stock, S&P 500 index and a peer group index. Each mark on the axis
displaying the years 1992 through 1997 represents December 31 of that year. The
peer index consists of the following companies selected by the Company based on
its assessment of businesses with similar industrial characteristics: Ametek
Inc., AMP Inc., Applied Power-CL A, Carlisle Cos. Inc., Coltec Industries,
Cooper Industries Inc., Crane Co., Danaher Corp., Eaton Corp., EG&G Inc.,
Emerson Electric Co., Federal Signal Corp., General Electric Co., General Signal
Corp., Harnischfeger Industries Inc., Hubbell Inc. CL B, Illinois Tool Works,
Ingersoll-Rand Co., ITT Industries Inc., Keystone International, Parker-Hannifin
Corp., Pentair Inc., Tecumseh Products Co., TRW Inc., Tyco International Inc.
and United Technologies Corp.
* Total return assumes reinvestment of dividends.
13
<PAGE> 17
2. PROPOSAL TO APPROVE AND RATIFY THE DOVER CORPORATION EXECUTIVE OFFICER ANNUAL
INCENTIVE PLAN
The executive compensation policy of Dover's Compensation Committee (which
is described in detail on page 11) has traditionally included annual cash
bonuses to executive officers based upon earnings growth, return on investment
and other criteria. Under Section 162(m) of the Internal Revenue Code of 1986
(as amended) (the "Code"), it is necessary to obtain stockholder approval to
ensure that such performance-based compensation will be fully tax deductible to
the Company. To make this deductibility available to the Company, the Board of
Directors of the Company adopted, effective as of January 1, 1998, and subject
to stockholder approval, the Dover Corporation Executive Officer Annual
Incentive Plan (the "Incentive Plan"). If the Incentive Plan is approved by the
stockholders, the executive officers who are selected by the Compensation
Committee each year to participate therein will receive their annual bonus, if
any, under the Incentive Plan instead of the Company's traditional bonus
program.
The following plan summary is qualified in its entirety by reference to the
full text of the Incentive Plan, which is attached to this Proxy Statement as
Exhibit A.
RECOMMENDATION
The Board of Directors unanimously adopted and recommends that the
stockholders approve and ratify the Incentive Plan and the business criteria set
forth therein on which the performance goals will be based. Unless otherwise
indicated, the accompanying form of Proxy will be voted FOR the proposal to
adopt the Incentive Plan. The affirmative vote of holders of a majority of the
shares of the Common Stock present in person or by proxy at the Meeting is
required for approval of the Incentive Plan.
PURPOSE OF THE PLAN
The Incentive Plan has been established to make certain that amounts
payable under the plan are deductible to the Company for Federal income tax
purposes in accordance with Section 162(m) of the Code, which denies certain tax
deductions for annual compensation paid to the Company's Chief Executive Officer
and the next four highest paid executives which is in excess of $1 million in
any year. The Incentive Plan has been adopted to meet the requirements of
Section 162(m) of the Code so that amounts paid under the plan will be fully tax
deductible to the Company. By approving the Incentive Plan, the stockholders
also will be approving the material terms of the performance measures,
eligibility requirements and annual bonus limits contained in the plan.
The Incentive Plan, like the Company's traditional bonus program which it
will replace for the executive officers chosen to participate, will provide
annual amounts of performance-based incentive compensation to certain executive
officers of the Company who are in a position to make a material contribution to
the successful operation of the Company's business, as selected each year by the
Compensation Committee. Granting such persons incentive compensation based on
the financial success of the Company is intended to motivate them to achieve the
Company's business goals. The Incentive Plan is also intended to encourage
executive officers to remain in the employ of the Company, and to attract and
motivate new executive officers.
DURATION AND MODIFICATION
The Incentive Plan does not have a predetermined period over which it will
remain in existence. The Board of Directors of the Company may at any time
suspend or terminate the Incentive Plan, or make such modifications to the
Incentive Plan with respect to future performance periods, as it may deem
advisable.
14
<PAGE> 18
However, no amendments which are expected to materially increase amounts payable
under the Incentive Plan to those executive officers who are subject to Section
162(m) of the Code may be made unless appropriate measures have been taken to
cause the increased benefits to be deductible under Section 162(m).
ADMINISTRATION
The Incentive Plan is administered by the Compensation Committee, which
consists of not less than two members of the Board of Directors who are "outside
directors" within the meaning of Section 162(m) of the Code.
ELIGIBILITY
The Compensation Committee shall in its sole discretion determine the
"executive officers" eligible to participate in the Incentive Plan each year.
The "executive officers" of the Company shall mean the Company's chief executive
officer and the executives of the Company or its affiliates (as determined by
the Compensation Committee) who report directly to the chief executive officer.
There is currently one executive officer who has been designated to participate
in the Incentive Plan.
PLAN FEATURES
Performance Goals. The Incentive Plan provides for the payment of an
annual cash bonus to any executive officer designated as described above, which
payment is conditioned upon the attainment of pre-established performance goals
measured over a "performance period" which corresponds to each calendar year
(commencing with calendar year 1998). The performance goals must be established
in writing by the Compensation Committee within the first 90 days of each year.
Performance goals are determined by reference to the Company's net income,
earnings per share and/or return on investment, in the case of participants
employed by the Company, and operating earnings and/or return on investment, in
the case of participants employed with an affiliate of the Company, during each
performance period.
Certain Adjustments. The Compensation Committee shall have the discretion
to reduce or eliminate any amounts otherwise payable under the Incentive Plan.
Payment of Incentive Compensation. The determination of whether any amount
is payable under the Incentive Plan is made by the Compensation Committee which
shall certify, in writing and before any amount under the Incentive Plan is
paid, the amount that is payable with respect to each participant during each
performance period. All payments from the Incentive Plan shall be made in cash.
The maximum annual cash bonus that could be payable under the Incentive Plan to
any covered individual with respect to any performance period is one-half
percent of the Company's net income for the performance period.
NEW PLAN BENEFITS
Because amounts payable under the Incentive Plan are based on performance
goals each year determined at the discretion of the Compensation Committee, it
cannot be determined at this time what benefits or amounts, if any, will be
received by or allocated to any person or group of persons under the Incentive
Plan if the Incentive Plan is approved, or what benefits or amounts would have
been received by or allocated to any person or group of persons for the last
fiscal year if the Incentive Plan had been in effect. However, if the Incentive
Plan had been in effect during the last fiscal year, it is likely that the
amount payable to any participant pursuant to the Incentive Plan would have
approximated the amount paid to such person for that year under the Company's
traditional bonus program.
15
<PAGE> 19
MISCELLANEOUS
OTHER MATTERS
Management does not know of any other business to be taken up at the
Meeting. If, however, any other business properly comes before the Meeting or
any adjournments thereof, the persons named as proxies will vote the shares
covered by a proxy in accordance with their best judgment on such matters.
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS
The independent certified public accounting firm of Coopers & Lybrand
L.L.P. is the principal independent public accountant selected in May 1997 to
audit the annual accounts of Dover and its subsidiaries. This firm also audited
the financial statements for 1996 and 1995. Representatives of Coopers & Lybrand
L.L.P. are not expected to be present at the Meeting.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires that the
Company's directors and officers file reports of ownership and changes of
ownership of the Company's Common Stock with the Securities and Exchange
Commission and the New York Stock Exchange. Based solely on copies provided to
the Company, the Company believes that all directors and officers filed on a
timely basis all such reports required of them with respect to stock ownership
and changes in ownership during 1997, except that (a) Magalen O. Bryant was four
days late in reporting a sale of shares in May 1997, (b) Robert A. Tyre was late
in reporting a gift received by his spouse in 1996 and a purchase by his spouse
in October 1997, which were reported in his February 1998 Form 5, and (c) Mr.
Herrmann was late in reporting an option exercise in February 1997, which
exercise was reported on his February 1998 Form 5.
STOCKHOLDER PROPOSALS FOR 1999 ANNUAL MEETING
In order for stockholder proposals to be included in Dover's proxy
statement for the 1999 Annual Meeting, they must be received by Dover at its
principal executive offices, 280 Park Avenue, New York, NY 10017 by December 22,
1998. All other stockholder proposals, including nominations for directors, must
be received by Dover not less than 60 days nor more than 90 days prior to the
Meeting, which is scheduled for April 27, 1999.
Dated: March 16, 1998
By authority of the Board of
Directors,
ROBERT G. KUHBACH
Secretary
16
<PAGE> 20
EXHIBIT A
DOVER CORPORATION
EXECUTIVE OFFICER ANNUAL INCENTIVE PLAN
1. PURPOSE. The purposes of the Dover Corporation Executive Officer Annual
Incentive Plan (the "Plan") are to provide annual incentive compensation to
designated executive officers of Dover Corporation (the "Company") based on the
achievement of established performance goals, to encourage such executive
officers to remain in the employ of the Company, to assist the Company in
attracting and motivating new executive officers and to qualify the incentive
payments awarded under the Plan (the "Awards") as qualified "performance-based
compensation" so that all payments under the Plan shall be deductible in
accordance with Section 162(m) of the Internal Revenue Code of 1986, as amended
(the "Code").
2. ELIGIBILITY. The Compensation Committee of the Board of Directors of
the Company (the "Committee") shall each year determine the Executive Officers
of the Company eligible to participate in the Plan (the "Participants"). For
purposes hereof, "Executive Officers" shall mean the Chief Executive Officer of
the Company and each executive of the Company or an Affiliate of the Company who
reports directly to the Chief Executive Officer of the Company. As used herein,
"Affiliate" shall mean (i) any entity that, directly or indirectly, is
controlled by or under common control with the Company and (ii) any entity in
which the Company has a significant equity interest, in either case as
determined by the Committee.
3. PERFORMANCE PERIODS. Each performance period for purposes of the Plan
shall have a duration of one calendar year, commencing January 1 and ending the
next December 31. The first Performance Period under the Plan shall commence on
January 1, 1998.
4. ADMINISTRATION. The Committee shall have the full power and authority
to administer and interpret the Plan and to establish rules for its
administration. Such power and authority shall include proration or adjustment
of awards in the case of retirement, termination, changes in base salary,
dismissal, death and other conditions as appropriate; provided, however, that
the discretion granted above with respect to an Award earned by a Participant
who is a "covered employee" within the meaning of Section 162(m) of the Code (a
"Covered Employee") may be used by the Committee only to reduce or eliminate
such Award.
5. PERFORMANCE GOALS. On or before the 90th day of each Performance
Period, the Committee shall establish in writing one or more performance goals
and criteria for the Performance Period. The performance criteria shall in all
instances be determined on the basis of Dover Corporation net income, earnings
per share and/or return on investment with respect to Participants employed by
the Company and operating earnings and/or return on investment with respect to
Participants employed by an Affiliate, in each case as reflected in the
Company's audited financial statements for the relevant Performance Period.
6. INCENTIVE PAYOUT CALCULATION. As soon as practicable after the end of
each Performance Period, the Committee will certify in writing the Company's
attainment of the financial performance goals and criteria established for such
Performance Period pursuant to Section 5 and will calculate the possible payout
of incentive awards for each Participant.
7. REDUCTION OF CALCULATED PAYOUTS. The Committee shall have the power and
authority to reduce or eliminate for any reason the payout calculated pursuant
to Section 6 that would otherwise be payable to a Participant based on the
established target Award and payout schedule.
A-1
<PAGE> 21
8. PAYOUTS. After calculation of incentive payouts pursuant to Section 6
and any reduction or elimination thereof pursuant to Section 7, the Committee
shall certify the amount of the payout to each Participant under the Plan for
the Performance Period. In no event shall the payout under the Plan to any
Participant for any Performance Period exceed one-half percent (.5%) of the
Dover Corporation net income for the relevant Performance Period. Payment of the
Award determined in accordance with the Plan for each Performance Period shall
be made to a Participant in cash.
9. MISCELLANEOUS PROVISIONS.
(a) The Board of Directors of the Company shall have the right to suspend
or terminate the Plan at any time and may amend or modify the Plan with respect
to future Performance Periods prior to the beginning of any Performance Period,
provided that no such amendment or modification which is expected to materially
increase benefits payable to Covered Employees who are Participants under the
Plan shall be made unless such measures as the Committee deems necessary for the
increased benefit to be deductible pursuant to Section 162(m) of the Code have
been taken.
(b) Nothing contained in the Plan or any agreement related hereto shall
affect or be construed as affecting the terms of the employment of any
Participant except as specifically provided herein or therein. Nothing contained
in the Plan or any agreement related hereto shall impose or be construed as
imposing any obligation on (i) the Company or any Affiliate to continue the
employment of any Participant or (ii) any Participant to remain in the employ of
the Company or any Affiliate.
(c) No person shall have any claim to be granted an Award under the Plan
and there is no obligation of uniformity of treatment of eligible employees
under the Plan. Awards under the Plan may not be assigned or alienated.
(d) The Company or Affiliate, as applicable, shall have the right to deduct
from any Award to be paid under the Plan any federal, state or local taxes
required by law to be withheld with respect to such payment.
(e) If any provision of the Plan would cause the Awards granted to a
Covered Employee not to be qualified "performance-based compensation" under
Section 162(m), that provision, insofar as it pertains to such Covered Employee
shall be severed from, and shall be deemed not to be a part of, the Plan, but
the other provisions hereof shall remain in full force and effect.
10. ADOPTION. The Plan shall become effective as of January 1, 1998,
subject to approval by the stockholders of the Company.
A-2
<PAGE> 22
PROXY PROXY
DOVER CORPORATION
PROXY SOLICITED BY BOARD OF DIRECTORS FOR ANNUAL MEETING, APRIL 28, 1998.
The undersigned hereby appoints Gary L. Roubos, Thomas L. Reece and Robert G.
Kuhbach, or any of them, as the undersigned's proxy or proxies, with full power
of substitution, to vote all shares of Common Stock of Dover Corporation which
the undersigned is entitled to vote at the Annual Meeting of Stockholders to be
held in Wilmington, Delaware, on April 28, 1998 at 10:00 A.M., local time, and
any adjournments thereof, as fully as the undersigned could if personally
present, upon the proposals set forth on the reverse side hereof revoking any
proxy or proxies heretofore given.
IMPORTANT -- This Proxy must be signed and dated on the reverse side.
THIS PROXY WILL BE VOTED IN ACCORDANCE WITH THE SPECIFICATIONS MADE ON THE
REVERSE SIDE, BUT IF NO CHOICES ARE INDICATED, THIS PROXY WILL BE VOTED FOR ALL
NOMINEES LISTED ON THE REVERSE SIDE.
<TABLE>
<CAPTION>
PROXY DOVER CORPORATION PROXY
<S> <C> <C> <C>
1998
1. Election of Directors-- For Withhold For All (Except Nominee(s) written below)
All All
</TABLE>
Nominees: D. H. Benson,
M. O. Bryant, J-P. M. Ergas,
R.J. Fleming, J.F. Fort, J.L. Koley,
J.F. McNiff, J. E. Pomeroy,
T .L. Reece, and G L. Roubos.
2. To ratify and approve the
Dover Corporation Executive Officer Annual
Incentive Plan. For Against Abstain
3. To transact such other business as may For Against Abstain
properly come before the meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 AND 2.
Please Sign Here and Return Promptly
Signature (s)____________________ Dated: __________, 1998
____________________
Please sign exactly as your name or names appear above. For joint accounts,
each owner should sign. When signing as executor, administrator, attorney,
trustee or guardian, etc., please give your full title.
