Equity Incentive Program

9 Months Ended

Sep. 30, 2013

Equity Incentive Program [Abstract]

Share-based Compensation

12. Equity Incentive Program

The Company typically grants stock settled appreciation rights (“SARs”) and performance shares annually at its regularly scheduled first quarter Compensation Committee meeting. In the first quarters of 2013 and 2012, the Company issued SARs covering 1,613,884 and 1,719,943 shares, respectively, and 47,032 and 50,416 performance shares, respectively.

The fair value of each SARs grant was estimated on the date of grant using the Black-Scholes option pricing model. The performance share awards are market condition awards and have been assessed at fair value on the date of grant using a Monte Carlo simulation model. The following assumptions were used in determining the fair value of the SARs and performance shares awarded during the respective periods:

	SARs						Performance Shares
	2013			2012			2013			2012
Risk-free interest rate	1.39		%	1.05		%	0.40		%	0.37		%
Dividend yield	2.06		%	2.03		%	2.06		%	2.03		%
Expected life (years)	7.1			5.7			2.9			2.9
Volatility	33.78		%	36.41		%	30.36		%	34.10		%
Grant price	$	71.86		$	65.38		n/a			n/a
Fair value at date of grant	$	20.62		$	18.51		$	80.47		$	71.98

Stock-based compensation is reported within selling and administrative expenses in the accompanying unaudited Condensed Consolidated Statements of Comprehensive Earnings. The following table summarizes the Company’s compensation expense relating to all stock-based incentive plans:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2013			2012			2013			2012
Pre-tax compensation expense	$	7,081		$	7,483		$	23,384		$	23,589
Tax benefit	(2,493		)	(2,643		)	(8,241		)	(8,330		)
Total stock-based compensation expense, net of tax	$	4,588		$	4,840		$	15,143		$	15,259

On May 3, 2012, the shareholders approved the Dover Corporation 2012 Equity and Cash Incentive Plan (the "2012 Plan"), to replace the 2005 Equity and Cash Incentive Plan, which otherwise would terminate according to its terms on January 31, 2015, and the 1996 Non-Employee Directors Stock Compensation Plan, which would otherwise terminate according to its terms on December 31, 2012. Officers and other key employees, as well as non-employee directors, are eligible to participate in the 2012 Plan, which has a ten year term and will terminate on May 3, 2022. The 2012 Plan provides for stock options and SARs grants, restricted stock awards, restricted stock unit awards, performance share awards, cash performance awards, directors' shares and deferred stock units. Under the 2012 Plan, a total of 17,000,000 shares of common stock are reserved for issuance, subject to adjustments resulting from stock dividends, stock splits, recapitalizations, reorganizations and other similar changes.