8-KMaterial AgreementsExhibits & Filings

DOVER Corp 8-K Report, Material Agreement (Mar 3, 2010)

Filed March 3, 2010For Securities:DOV

Summary

Dover Corporation (DOV) filed an 8-K on March 3, 2010, to report an amendment to an executive deferred income plan (EDIP) with its President and CEO, Robert A. Livingston. The amendment, effective January 1, 2009, modifies the interest rate credited to compensation Mr. Livingston deferred between 1985-1988. Previously, these deferred amounts accrued interest at a fixed 12.5% rate. The new agreement ties the interest rate to Moody's Aa Corporate Bond Index. Starting January 1, 2009, the December 31, 2008 Deferred Compensation Balance will be credited annually at a rate based on this index. For context, the index was 5.54% as of December 31, 2008, and 5.49% as of December 31, 2009, significantly lower than the previous fixed rate. This change impacts the potential future value of the deferred compensation for Mr. Livingston.

Key Highlights

  • 1Dover Corporation amended its Executive Deferred Income Plan (EDIP) agreement with CEO Robert A. Livingston.
  • 2The amendment modifies the interest rate applied to deferred compensation from a fixed 12.5% to a variable rate based on Moody's Aa Corporate Bond Index.
  • 3The change is effective as of January 1, 2009.
  • 4The Moody's Aa Corporate Bond Index rates were 5.54% (Dec 31, 2008) and 5.49% (Dec 31, 2009), indicating a substantial reduction from the previous fixed rate.
  • 5This alteration directly affects the future growth of Mr. Livingston's deferred compensation balance.
  • 6The filing includes Amendment No. 1 to the Executive Employee Supplemental Retirement Agreement as an exhibit.

Frequently Asked Questions

The main purpose of this 8-K filing is to disclose a material definitive agreement: an amendment to the Executive Deferred Income Plan (EDIP) for Dover Corporation's President and CEO, Robert A. Livingston. This amendment changes how interest is credited to his previously deferred compensation.

The interest rate has changed from a fixed 12.5% to a variable rate. Effective January 1, 2009, the deferred compensation balance (as of December 31, 2008) will be credited with interest annually, compounded, at a rate equal to Moody's Aa Corporate Bond Index published on December 31 of the preceding year.

As of December 31, 2008, the index rate was 5.54%. As of December 31, 2009, the index rate was 5.49%. These rates are significantly lower than the prior fixed 12.5% rate.

For investors, this filing primarily highlights a change in executive compensation structure. The shift to a lower, market-based interest rate for deferred compensation could reduce the future financial liability of the company related to this specific executive's deferred income compared to the previous fixed high rate. It demonstrates a move towards more variable, market-linked compensation terms for a portion of executive deferrals.