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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, 1999
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)
</TABLE>
Registrant's telephone number, including area code
(212) 922-1640
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
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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 29, 2000 was $7,680,269,578.
Registrant's common stock closing price as reported on the New York Stock
Exchange-Composite Transactions for February 29, 2000 was $38.5625 per share.
The number of outstanding shares of the Registrant's common stock as of February
29, 2000 was 202,911,837.
DOCUMENTS INCORPORATED BY REFERENCE
Parts I and II - Certain portions of the Annual Report to
Stockholders for Fiscal Year Ended December 31,
1999 (the "1999 Annual Report").
Part III - Certain portions of the Proxy Statement for
Annual Meeting of Stockholders to be held on April
25, 2000 (the "2000 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 "Outlook" or "Management's Discussion and
Analysis", contain forward-looking statements within the meaning of the
Securities Act of 1933, as amended, 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. Such
statements may also be made by management orally. 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.
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PART I
Item 1. BUSINESS
General
Dover Corporation ("Dover" or the "Company"), incorporated in
1947 in the State of Delaware, is a diversified industrial manufacturing
corporation encompassing over 53 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, construction and
agricultural cabs and specialized bearings and compressors, 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, packaging, welding and
construction equipment industries. Dover Resources manufactures products
primarily for the automotive, fluid handling, petroleum and chemical 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 accounted for as a discontinued operation 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 pursuant to which,
from January 1, 1995 through December 31, 1999, the Company made 68 acquisitions
at a total acquisition cost of $2,021,000,000. For more detail regarding
acquisitions over the past several years, see page 4 of the 1999 Annual Report
as well as Note 2 to the Consolidated Financial Statements on pages 25-27 of the
1999 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 1995. The Company's acquisition program traditionally focused
on acquiring new or stand-alone businesses. However, since 1995, increased
emphasis has been placed on acquiring businesses that can be added on to
existing operations. In 1999, the Company completed 3 stand-alone and 15 add-on
acquisitions at a total cost of about $599 million. The Company aims to be in
businesses 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 becomes involved only to guide and manage capital, assist in major
acquisitions, evaluate, motivate and, if 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
Crenlo, acquired in 1999 (operator cabs for agricultural and construction
machinery and electronic enclosures), Tranter (process industry heat
exchangers), A-C Compressor, acquired in 1992 (specialized centrifugal, oil
free screw and rotary compressors), and expanded in 1997 with the acquisitions
of Preco and Conmec (process industry compressors), and Hill Phoenix, acquired
in 1993-94 (refrigeration cases and systems for supermarkets). Other Dover
Diversified businesses produce such products as fluid film and self-lubricating
bearings, color control systems for web sheet-fed and specialty printing
presses, 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 1999, Dover Diversified
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companies completed four "add-ons": HAS Inc., JE Piston, Hydra-Tight, Ltd. and
Van Dam Machine, BV. In 1999 Dover Diversified sold Pathway Bellows, a
manufacturer of metal and fabric expansion joints.
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, acquired in 1993 (trailerized
tanks and refuse collecting vehicles), Rotary Lift (automotive lifts), Tipper
Tie (clip closures for food packaging), Marathon (solid waste compaction,
transporting and recycling equipment) and DovaTech (welding, cutting and laser
equipment and supplies). Other Dover Industries operations produce auto
collision measuring and repair systems, touchless car washing equipment,
hydraulic cylinders, food service equipment, commercial refrigeration equipment
and concrete spreading machines. In 1999 Dover Industries made one stand-alone
acquisition, Somero Enterprises, Inc., a producer of laser-controlled concrete
floor spreading equipment, and acquired five "add-on" businesses: Heil Asia,
Forward Manufacturing Company, Lee Laser, Inc., Advantage Lift Systems and
Parts, Inc. 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.
Its largest businesses are De-Sta-Co (compressor valves and workholding
devices), OPW Fueling Components (gasoline nozzles and related service station
equipment), Wilden Pump (air operated double diaphragm pumps, acquired in 1998)
and Blackmer (rotary vein and progressive cavity pumps and gas compressors). In
addition to the Wilden purchase, in 1998 Dover Resources acquired Quartzdyne, a
manufacturer of high-pressure quartz transducers used in the petroleum industry.
Other Dover Resources companies produce liquid monitoring, filtration and
control systems, oil and gas production equipment, and other valve,
instrumentation and control systems and products, winch and speed reducers and
cleaning chemical dispensing equipment. During 1999, three Dover Resources
companies made three "add-on" acquisitions: Dp Manufacturing, Richards Industry,
Inc., and EMA Industia e Comercio, Ltda.
Dover Technologies sells assembly and testing equipment,
screen printers, and soldering machines for the printed circuit board industry,
as well as components for communications (including wireless) and military
applications. The most significant business in this segment is Universal
Instruments, which is the world's largest producer of thru-hole printed circuit
board assembly equipment, as well as a significant manufacturer of surface mount
printed circuit board assembly equipment. Other significant businesses are Imaje
(continuous inkjet marking systems), Quadrant (precision microwave, crystal and
capacitor devices), Everett Charles Technologies, Inc. (test equipment and
systems for printed circuit boards and semiconductors) and DEK Printing
Machines, Ltd. (screen printers). Other Dover Technologies companies
manufacture printed circuit board soldering machines, and other specialty
electronic components. In 1999, Dover Technologies companies made three "add-on"
acquisitions: ARCOM, Inc., TTI Testron Consolidated and Alphasem Holding, A.G.
Dover sells its products and services both directly and
through various distributors, sales and commission agents and manufacturers
representatives, in all cases consistent generally with the custom of the
industry and market being served. For more information on these segments and
their products, sales, markets served, earnings before tax and total assets for
the six years ended December 31, 1999, see pages 8-20 and 33-34 of the 1999
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 focused on
manufacturing a variety of products based on sophisticated and developing
technology. Dover Elevator's business was conducted by service employees at
thousands of construction sites and buildings
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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. In 1997, Dover Elevator sold its German and U.K. operations
for a pre-tax gain of $32 million, based upon Dover Elevator's analysis that
they did not represent a sufficiently strong base for developing a meaningful
position in Europe.
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. Temporary shortages may occur
occasionally, but have not resulted in business interruptions or major problems,
nor are any such problems anticipated. To date, fluctuations in the cost of raw
materials 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 1999, approximately $139.3 million was spent on
research and development, compared with $131.3 million and $106.7 million in
1998 and 1997, respectively.
Intellectual Property
Dover holds or is licensed to use a substantial number of U.S.
patents covering a number of its product lines and to a far lesser degree,
patents in certain foreign countries 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. Although patents in the aggregate are important to
Dover, 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.
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, De-Sta-Co, DEK, Dover, Duncan, Everett Charles, Groen, Heil, Hill
Phoenix, Hydro Systems, Imaje, Marathon, Midland, Norris, OPW, PDQ, Quadrant,
Rotary Lift, Sargent, SWEP, Tipper Tie, Tranter, Tulsa Winch, Universal,
Waukesha, Wilden and Wiseco.
In connection with the sale of Dover Elevator, which closed on
January 5, 1999, the Company transferred all its intellectual property used by
Dover Elevator to the buyer, 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 buyer was 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.
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Seasonality
Dover's operations are generally not seasonal, although
performance tends to be stronger in the second and fourth quarters of the year.
Customers
Dover's businesses serve thousands of customers, no one of
which accounted for more than 10% of the Company's consolidated revenues in
1999. Within each of the four segments, no customer accounted for more than 10%
of that segment's sales in 1999.
Backlog
Backlog generally is not a significant factor in 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.
Total Company backlog as of December 31, 1999 and 1998 was
$915 million and $726 million, respectively, excluding that backlog relating to
the elevator business. The Company believes that this backlog may reasonably be
filled during the fiscal year 2000.
Competition
Dover's competitive environment is complex because of the wide
diversity of products manufactured and markets served. In general, 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.
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, Civacon, CRL, De-Sta-Co,
Duncan, L & E, Norris, OPW Fueling Components, Ronningen-Petter, Tipper Tie
Technopak, Tranter, Van Dam, Wilden and Wittemann.
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 31 of the 1999 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 as
domestic markets mature.
The countries where most of Dover's foreign subsidiaries and
affiliates are based are Canada, France, Great Britain, Germany, The
Netherlands, and Sweden.
Environmental Matters
Dover believes its operations generally are in substantial
compliance with applicable regulations. In some instances, particular plants and
businesses have been the subject of administrative
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and legal proceedings with governmental agencies relating to the discharge or
potential discharge of 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.
Employees
The Company had about 26,600 employees as of December 31,
1999.
Item 2. PROPERTIES
The number, type, location and size of the Company's
properties as of December 31, 1999 are shown on the following charts, by
segment.
<TABLE>
<CAPTION>
Number and Nature of Facilities Square Footage (000's)
------------------------------------- ------------------------
Ware- Sales/
Segment Mfg. house Service Owned Leased
------- ---------- ----- ------- ----- ------
<S> <C> <C> <C> <C> <C>
Diversified 36 14 60 2,938 760
Industries 45 12 38 3,589 1,073
Resources 57 13 33 2,502 382
Technologies 67 9 123 1,469 1,270
</TABLE>
<TABLE>
<CAPTION>
Locations Leased Facilities
------------------------------------- ------------------------
expiration dates (years)
North
Segment America Europe Other Minimum Maximum
------- ------- ------ ----- ------- -------
<S> <C> <C> <C> <C> <C>
Diversified 56 34 5 1 23
Industries 74 10 2 1 18
Resources 78 15 5 1 15
Technologies 77 56 64 1 20
</TABLE>
The facilities are generally well maintained and suitable for
the operations conducted, and in substantially all cases where owned, free and
clear of any encumbrances. The productive capacity of its 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 buyers 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
1998, the IRS completed its examination of the Company's 1994 and 1995 Federal
income tax returns. The Company expects to resolve these open years in the near
future, all within the amounts paid and/or reserved for these liabilities. The
IRS is currently examining the Company's 1996 and 1997 Federal income tax
returns. In addition, matters have arisen under various environmental laws, as
well as under local regulatory compliance agencies. For a further description of
such matters, see Note 11 to the Consolidated Financial Statements on page 29-31
of the 1999 Annual Report, which is incorporated herein by reference.
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The Company has also reviewed its exposure with respect to
"Year 2000" issues, which is discussed in detail on page 33 of the 1999 Annual
Report, which is incorporated herein by reference.
Based on insurance availability, established reserves and
periodic reviews of those 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.
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 1999.
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 29, 2000 and their positions with the Company (and, where
relevant, prior business experience) for the past five years are as follows:
<TABLE>
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Name Age Positions Held and Prior Business Experience
- ---- --- --------------------------------------------
<S> <C> <C>
Thomas L. Reece 57 Director, Chairman of the Board (since May 1999) President and (since
May 1994) Chief Executive Officer.
John F. McNiff 57 Director (since May 1996); Vice President-Finance and Treasurer.
Robert G. Kuhbach 52 Vice President, General Counsel and Secretary.
Robert A. Tyre 55 Vice President-Corporate Development (since February 1995); prior
thereto President, Rye Transaction Consultants, Inc. (acquisition
consultants), from February 1993 to January 1995.
George F. Meserole 54 Vice President, Controller (since August, 1998); prior thereto
Assistant Controller.
Charles R. Goulding 50 Vice President, Taxation (since August, 1998); prior thereto Director
of Taxation.
Lewis E. Burns 61 Vice President and President of Dover Industries, Inc.
Rudolf J. Herrmann 49 Vice President and President of Dover Resources, Inc.
John E. Pomeroy 58 Director (since May 1998); Vice President and President of Dover
Technologies International, Inc.
Jerry W. Yochum 61 Vice President and President of Dover Diversified, Inc.
</TABLE>
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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 32 of the 1999 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 29, 2000, as shown by the records of the Company's transfer
agent was approximately 13,000. This figure includes participants in the
Company's 401(k) program.
On December 16, 1999, pursuant to the 1996 Non-Employee
Directors' Stock Compensation Plan, the Company issued 1,500 shares of its
Common Stock to each of its three U.S. resident outside directors, 1,050 shares
of its common stock to two U.S. resident outside directors elected in May and
700 to a U.S. resident outside director elected in August, as compensation for
serving as a director of the Company during 1999. At that time, the Company
issued 2,000 shares of its Common Stock to each of its three 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 1999. In addition, the Company
issued 350 shares of its Common Stock to Mrs. Magalen O. Bryant, a U.S. resident
outside director who retired from the Board in April, 1999.
Item 6. SELECTED FINANCIAL DATA
The information for the years 1989 through 1999 is set forth in
the table "11-Year Consolidated Summary of Selected Financial Data for
Continuing Operations" in the 1999 Annual Report on pages 36 and 37 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 1999 Annual Report on pages 33
and 34 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 commercial paper borrowings and investments in cash
equivalents. Commercial paper borrowings are at variable interest rates, and
have maturities of three months or less, except for $400 million of one-year
commercial paper sold in February 2000 which bears interest at LIBOR plus 2
basis points and resets quarterly. 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 on its investments) would have an
immaterial impact on Company's pre-tax earnings. The Company does not enter into
derivative financial or derivative commodity instruments for trading or
speculative purposes.
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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,
1999 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 decentralized 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 1999 Annual Report on pages 20
through 32 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
Mr. Gary Roubos, director of various other corporations,
Chairman of the Company (since August 1989), retired as Chairman in April 1999
but remains a director. Ms. Magalen O. Bryant, director of Carlisle Companies
Incorporated and O'Sullivan Corp. a director of the Company since 1979, retired
in April 1999. Mr. John F. Fort, a director of the Company from 1989 until his
resignation on January 29, 1999, was Consultant, Full Circle Investments;
Director of Tyco International Ltd. and formerly Chairman and Chief Executive
Officer; and Director, Roper Industries. The information with respect to the
continuing directors of the Company required to be included pursuant to this
Item 10 is included under the caption "1. Election of Directors" in the 2000
Proxy Statement as defined on page 2 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 2000 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 2000 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 captions "General" and "Security Ownership of
Certain Beneficial Owners and Management" in the 2000 Proxy Statement and is
incorporated in this Item 12 by reference.
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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 under the caption "1. Election of
Directors-Directors' Compensation" in the 2000 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 1999
Annual Report, which financial statements are incorporated
herein by reference:
(A) Report of Independent Accountants.
(B) Consolidated balance sheets as of December 31, 1999 and
1998.
(C) Consolidated statements of earnings, accumulated
comprehensive earnings and retained earnings for the
years ended December 31, 1999, 1998 and 1997.
(D) Consolidated statements of cash flows for the years ended
December 31, 1999, 1998 and 1997.
(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 did not file any reports on Form 8-K during the last
quarter of its fiscal year ended December 31, 1999.
(c) Exhibits:
(2) Purchase Agreement dated as of November 23, 1998 by and
among Thyssen Industrie AG, Thyssen Elevator Holding
Corporation, as buyers, and Dover Corporation, as
seller, filed as Exhibit 2.1 to the Company's Current
Report on Form 8-K filed December 8, 1998, is
incorporated by reference. Schedules relating to
Purchase Price Allocation, U.S. Federal Income Taxes,
Elevator Financial
11
<PAGE> 12
Statements and Executive Employment Arrangements have
been omitted, but will be furnished supplementally to
the Securities and Exchange Commission upon request.
(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.
(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.*
(10.4) 1996 Non-Employee Directors' Stock Compensation Plan,
included as Exhibit A to the Proxy Statement, dated
March 16, 1998 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.*
12
<PAGE> 13
(13) Incorporated portions of Dover's Annual Report to
Stockholders for its fiscal year ended December 31,
1999 as filed with the Commission by EDGAR on March 16,
2000; are incorporated by reference.
(21) Subsidiaries of Dover.
(23.1) Consent of PricewaterhouseCoopers LLP.
(24) Form of Power of Attorney.
(27) Financial Data Schedule (in EDGAR filing only).
* Executive compensation plan or arrangement.
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 16, 2000
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 16, 2000
/s/John F. McNiff
- --------------------------------
John F. McNiff Treasurer and Director
(Principal Financial Officer) March 16, 2000
/s/George F. Meserole
- --------------------------------
George F. Meserole Controller March 16, 2000
(Principal Accounting Officer)
/s/Gary L. Roubos
- --------------------------------
Gary L. Roubos Director* March 16, 2000
/s/David H. Benson
- --------------------------------
David H. Benson Director* March 16, 2000
/s/Jean-Pierre M. Ergas
- --------------------------------
Jean-Pierre M. Ergas Director* March 16, 2000
/s/Roderick J. Fleming
- --------------------------------
Roderick J. Fleming Director* March 16, 2000
/s/Kristiane C. Graham March 16, 2000
- --------------------------------
Kristiane C. Graham Director
/s/James L. Koley
- --------------------------------
James L. Koley Director* March 16, 2000
/s/Richard K. Lochridge
- --------------------------------
Richard K. Lochridge Director* March 16, 2000
/s/John E. Pomeroy
- --------------------------------
John E. Pomeroy Director* March 16, 2000
</TABLE>
14
<PAGE> 15
<TABLE>
<S> <C> <C>
/s/Michael B. Stubbs
- --------------------------------
Michael B. Stubbs Director* March 16, 2000
* By: /s/Robert G, Kuhbach
--------------------------
Robert G. Kuhbach
Attorney-in-Fact
</TABLE>
15
<PAGE> 16
EXHIBIT INDEX
(2) Purchase Agreement dated as of November 23, 1998 by and among Thyssen
Industrie AG, Thyssen Elevator Holding Corporation, as buyers, and
Dover Corporation, as seller, filed as Exhibit 2.1 to the Company's
Current Report on Form 8-K filed December 8, 1998, is incorporated by
reference. Schedules relating to Purchase Price Allocation, U.S.
Federal Income Taxes, Elevator Financial Statements and Executive
Employment Arrangements have been omitted, but will be furnished
supplementally to the Securities and Exchange Commission upon
request.
(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.
(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.*
(10.4) 1996 Non-Employee Directors' Stock Compensation Plan, included as
Exhibit A to the Proxy Statement, dated March 16, 1998 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.*
16
<PAGE> 17
(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.*
(13) Incorporated portions of Dover's Annual Report to Stockholders for
its fiscal year ended December 31, 1998 as filed with the Commission
by EDGAR on March 23, 1999; are incorporated by reference.
(21) Subsidiaries of Dover.
(23.1) Consent of PricewaterhouseCoopers LLP.
(24) Form of Power of Attorney.
(27) Financial Data Schedule (in EDGAR filing only).
* Executive compensation plan or arrangement.
17
<PAGE> 18
SCHEDULE II
DOVER CORPORATION AND SUBSIDIARIES
Valuation and Qualifying Accounts
Years Ended December 31, 1999, 1998, 1997
<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, 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
Year Ended December 31, 1997
Allowance for Doubtful Accounts $16,569 $7,248 $4,349 $19,468
</TABLE>
Notes:
(1) Represents uncollectible accounts written off and reduction of prior
years' over-provision less recoveries of accounts previously written
off, net $2,377, $540 and $1,499 related to acquisitions and
divestitures in 1999, 1998 and 1997, respectively.
<TABLE>
<CAPTION>
Charged,
Balance at (Credited) to Balance at
Beginning of Cost and Acq. by Close of
Year Expense Merger Year
---- ------- ------ ----
(000's omitted)
<S> <C> <C> <C> <C>
Year Ended December 31, 1999
Lifo Reserve $40,440 $(859) $ - $39,581
Year Ended December 31, 1998
Lifo Reserve $40,629 $(189) $ - $40,440
Year Ended December 31, 1997
Lifo Reserve $39,787 $ 842 $ - $40,629
</TABLE>
18
<PAGE> 19
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULE
To the Board of Directors and Stockholders of Dover Corporation:
Our audits of the consolidated financial statements referred to in our report
dated February 4, 2000 appearing in the 1999 Annual Report to Stockholders 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 4, 2000
19
<PAGE> 1
EXHIBIT 10.3
DOVER CORPORATION
1995 INCENTIVE STOCK OPTION PLAN
AND
1995 CASH PERFORMANCE PROGRAM
(AS AMENDED FEBRUARY 10, 2000)
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.
1
<PAGE> 2
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 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
2
<PAGE> 3
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 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.
3
<PAGE> 4
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,
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.
4
<PAGE> 5
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
5
<PAGE> 6
shares of Common Stock which are subject to certain forfeiture restrictions
during the restriction period and subject to the terms 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.
6
<PAGE> 7
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.
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.
7
<PAGE> 8
28. Effect of Death, Disability or Other Early Termination of
Employment. If the participant in the Program (a) dies, becomes permanently
disabled while employed by the Corporation or terminates employment for any
reason designated by the Committee, subject to the provisions of Paragraph 37
below, as an "approved termination" (other than related to retirement), in each
case before the date of payment or distribution of any final award, or (b)
otherwise ceases to be an employee, whether voluntarily or involuntarily, after
the performance measurement period and before the payment date for any reason
other than termination by the employer for cause, 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 at an earlier retirement date
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 Termination. If the participant's employment with
the Corporation is terminated for any reason during or after the performance
period and before the payment date other than as set forth in the preceding two
paragraphs, whether such termination be voluntary or involuntary, such
participation shall be canceled and all of the participant's rights under the
grant shall terminate as of the effective date of termination of such
employment.
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
8
<PAGE> 9
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.
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;
9
<PAGE> 10
(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 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
10
<PAGE> 11
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.
11
<PAGE> 12
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 Paragraphs 11, 22 and 29, and
any designation by the Committee of a termination as an "approved termination"
under Paragraph 28(a) 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
12
<PAGE> 13
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.
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.
13
<PAGE> 1
EXHIBIT 21
SUBSIDIARIES OF DOVER
<TABLE>
<CAPTION>
Domestic Subsidiaries
- ---------------------
State of
Name Incorporation
- ---- -------------
<S> <C>
A-C Compressor Corporation Delaware
Avtec Industries, Inc. Delaware
Belvac Production Machinery, Inc. Virginia
Chief Automotive Systems, Inc. Delaware
Communications Techniques, Inc. Delaware
Conmec, Inc. Delaware
Crenlo. Inc. Delaware
DEK U.S.A., Inc. Delaware
Delaware Capital Formation, Inc. Delaware
Delaware Capital Holdings, Inc. Delaware
Dielectric Laboratories, Inc. Delaware
Dover Diversified, Inc. Delaware
Dover Europe Corporation Delaware
Dover France Holdings Corp. Delaware
Dover Industries, Inc. Delaware
Dover Resources Inc. Delaware
Dover Technologies International, Inc. Delaware
Dow-Key Microwave, Inc. Delaware
Duncan Industries Parking Control Systems Corp. Delaware
Everett Charles Technologies, Inc. Delaware
Graphic Microsystems, Inc. California
Groen, Inc. Delaware
Hill Phoenix Inc. Delaware
Hydro Systems Company Delaware
K&L Microwave, Inc. Delaware
Marathon Equipment Company Delaware
Mark Andy, Inc. Missouri
Midland Manufacturing Company 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
Refrigeration Systems, Inc. Delaware
Revod Corporation Delaware
Robohand, Inc. Delaware
Ronningen-Petter Delaware
Somero Enterprises New Hampshire
Sonic Industries, Inc. California
Sanger Works Factory Holdings, Inc. California
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
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
State of
Name Incorporation
- ---- -------------
<S> <C>
Tulsa-Winch, Inc. Delaware
Universal Instruments Corporation Delaware
Vectron Laboratories, Inc. Delaware
Vectron Technologies, Inc. Delaware
Vitronics Corporation Delaware
Waukesha Bearings Corporation Wisconsin
Weldcraft Products, Inc. Delaware
Wilden Pump and Engineering Company, Inc. Delaware
Wiseco Piston Company, Inc. Delaware
</TABLE>
<TABLE>
<CAPTION>
Foreign Subsidiaries
- --------------------
Name Jurisdiction
- ---- ------------
<S> <C>
atg test systems GmbH Germany
Alphasem Holding AG Switzerland
DEK Printing Machines Ltd. United Kingdom
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
HTT Heat Transfer Technologies, S.A. Switzerland
Hydratight Ltd. United Kingdom
Imaje S.A. France
Imaje GmbH Germany
Langbein & Engelbracht, GmbH Germany
Luther & Maezler GmbH Germany
Soltec International, B.V. Netherlands
SWEP International AB Sweden
SWEP Technologies AB Sweden
Universal Electronics Systems H.K. Ltd. Hong Kong
Van Dam Machine B.V. Netherlands
</TABLE>
Other subsidiaries of the Registrant have been omitted from this listing since,
considered in the aggregate as a single subsidiary, they would not constitute a
"significant subsidiary".
<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) and
(c) the Registration Statement of Dover Corporation on Form S-8 (File No.
33-01419), of our report dated February 4, 2000, relating to the financial
statements, which appears in the annual report to stockholders, which is
incorporated in this annual report on Form 10-K. We also consent to the
incorporation by reference into this Form 10-K of our report dated February 4,
2000, relating to the financial statement schedule.
PricewaterhouseCoopers LLP
New York, New York
March 16, 2000
<PAGE> 1
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that, a director of Dover
Corporation, a Delaware corporation (the "Company"), hereby constitutes and
appoints Thomas L. Reece, John F. McNiff 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, for him/her on his/her behalf and in his/her name,
place and stead, to sign, execute and affix his/her name thereto and file the
Corporation's Annual Report on Form 10-K for the fiscal year ended December 31,
1998, 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 he/she himself 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 29th day of January, 2000.
/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/John F. McNiff
---------------------------
John F. McNiff
/s/John E. Pomeroy
---------------------------
John E. Pomeroy
/s/Thomas L. Reece
---------------------------
Thomas L. Reece
/s/Gary L. Roubos
---------------------------
Gary L. Roubos
/s/Michael B. Stubbs
---------------------------
Michael B. Stubbs
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This Schedule contains summary financial information extracted from the Dover
Corporation Annual Report to stockholders for the fiscal year ended December 31,
1999, and is qualified in its entirety by reference to such financial
statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 138,038
<SECURITIES> 0
<RECEIVABLES> 774,292
<ALLOWANCES> 23,375
<INVENTORY> 639,379
<CURRENT-ASSETS> 1,611,562
<PP&E> 1,480,833
<DEPRECIATION> 834,359
<TOTAL-ASSETS> 4,131,940
<CURRENT-LIABILITIES> 1,334,865
<BONDS> 608,025
0
0
<COMMON> 236,246
<OTHER-SE> 1,802,510
<TOTAL-LIABILITY-AND-EQUITY> 4,131,940
<SALES> 4,446,420
<TOTAL-REVENUES> 4,446,420
<CGS> 2,837,960
<TOTAL-COSTS> 3,811,009
<OTHER-EXPENSES> (14,466)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 53,401
<INCOME-PRETAX> 615,004
<INCOME-TAX> 209,950
<INCOME-CONTINUING> 405,054
<DISCONTINUED> 523,938
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 928,992
<EPS-BASIC> 4.44
<EPS-DILUTED> 4.41
</TABLE>
