DENTSPLY INTERNATIONAL INC
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Effective January 1, 1999 as amended)
Revision Date: December 10, 2002
DENTSPLY INTERNATIONAL
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(Effective January 1, 1999)
ARTICLE I
INTRODUCTION
1.1 Name. The name of this Plan is the DENTSPLY INTERNATIONAL
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Supplemental Executive Retirement Plan ("Plan").
1.2 Effective Date. The effective date of the Plan is January 1, 1999.
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1.3 Purpose. This Plan is established, effective January 1, 1999, by
DENTSPLY International Inc. ("DENTSPLY") for the purposes of
providing additional retirement benefits for a select group of
management and/or highly compensated employees of the Employer.
This Plan provides for the crediting by the Employer of retirement
funds to accounts established under this plan for Eligible
Employees. All contributions under the Plan credited to
Participants shall be in the form of unfunded recordkeeping entries
that shall be credited with earnings as specified in this plan.
ARTICLE II
DEFINITIONS
Capitalized terms which are not defined herein shall have the same
meaning as ascribed to them in the Company's Employee Stock Ownership
Plan ("ESOP"). Whenever the following initially capitalized words and
phrases are used in this Plan, they have the meanings specified below
unless the context clearly indicated to the contrary:
2.1 "Administrator" shall be the individual or individuals appointed by
the Committee to assist in administration of this Plan.
2.2 "Affiliates" shall mean any organization which is controlled by or
under common control with DENTSPLY.
2.3 "Beneficiary" shall mean such person or legal entity as may be
designated by a Participant under Section 5.3 to receive benefits
hereunder after such Participant's death.
2.4 "Board" shall mean the Board of Directors of DENTSPLY, as
constituted from time to time.
2.5 "Change in Control" shall mean the occurrence, at any time during
the term of the Plan of any of the following events:
(a) The acquisition of any individual, entity or group (within the
meaning of Section 12(d)(3) of the Exchange Act) (a "Person")
(other than the Company or any benefit plan sponsored by the
Company) of beneficial ownership (within the meaning of Rule
13d-3 under the Exchange Act) of 20% or more of either (i) the
then outstanding shares of the Common Stock (the "Outstanding
Common Stock") or (ii) the combined voting power of the then
outstanding securities of the Company entitled to vote
generally in the election of directors (the "Voting
Securities"); or
(b) Individuals who, as of the effective date of the Plan, constitute
the Board (the "Incumbent Board") cease for any reason to
constitute at least one-third (1/3) of the Board (rounded down
to the nearest whole number), provided that any individual
whose election or nomination for election was approved by a
vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption
of office is in connection with an actual or threatened
election contest relating to the election of the Directors of
the Company (as such terms are used in Rule 14a-11 of
Regulation 14A under the Exchange Act); or
(c) Consummation by the Company of a reorganization, merger, or
consolidation (a "Business Combination"), in each case, with
respect to which all or substantially all of the individuals
and entities who were the respective beneficial owners of the
outstanding common stock and voting securities immediately
prior to such Business Combination do not, following such
Business Combination, beneficially own, directly or indirectly,
more than 50% of, respectively, the then outstanding voting
securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting
from such Business Combination in substantially the same
proportion as their ownership immediately prior to such
Business Combination of the outstanding common stock and voting
securities, as the case may be; or
(d) Consummation of a complete liquidation or dissolution of the
Company, or sale or other disposition of all or substantially
all of the assets of the Company other than to a corporation
with respect to which, following such sale or disposition, more
than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the
election of directors is then owned beneficially, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
outstanding common stock and voting securities immediately
prior to such sale or disposition in substantially the same
proportions as their ownership of the outstanding common stock
and voting securities, as the case may be, immediately prior to
such sale or disposition.
2.6 "Committee" shall mean the Human Resources Committee of the Board.
2.7 "Company" shall mean DENTSPLY and any of its Affiliates.
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2.8 "Compensation" shall mean a Participant's base salary plus any
incentive awards and bonuses payable for a Plan Year but not
including any income from or pertaining to stock options.
2.9 "Credited Service" shall have the same meaning as defined in the
DENTSPLY Employee Stock Ownership Plan; however, Credited Service
prior to January 1, 1992 shall be ignored for purposes of this Plan.
2.10 "DENTSPLY Contribution Account" shall mean the recordkeeping account
established by the Administrator for each Participant to which the
DENTSPLY contribution on each participant's behalf shall be
allocated. A Participant shall immediately become 100% vested in
his/her DENTSPLY Contribution Account if there is a Change in
Control.
2.11 "Disability" shall mean a Participant is unable to perform his/her
duties for six months and the Committee reasonably determines that
Participant is unlikely to return to his/her regular duties.
2.12 "Eligible Employee" shall mean a Vice President or General Manager
employed by the Employer in the United States, any Corporate Officer
and other positions of significant status, who have been designated
by the Board of Directors to be eligible to participate in the plan.
2.13 "Employer" shall mean DENTSPLY International ("DENTSPLY") and any of
its subsidiaries.
2.14 "Participant" shall mean an individual on whose behalf employer
contributions have been credited under this Plan.
2.15 "Plan Year" shall mean the calendar year.
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2.16 "Plan" shall mean DENTSPLY Supplemental Executive Retirement Plan.
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ARTICLE III
PARTICIPATION BY ELIGIBLE EMPLOYEES
3.1 Participation. Participation in this Plan is limited to Eligible
Employees. Employees who were previously eligible to participate in
this Plan may continue to maintain account balances under this
Plan. An Eligible Employee shall participate in the Plan as
determined by the Board. A Participant who separates from service
with the Employer will cease participation hereunder.
3.2 Immediate Cash-Out of Ineligible Employee. This Supplemental
Executive Retirement Plan is intended to be an unfunded "top-hat"
plan, maintained primarily for the purpose of providing retirement
benefits for a select group of management or highly compensated
employees. If a Participant ceases to be an Eligible Employee, the
Participant's account balance shall continue to be deferred until
the earliest occurrence of an event specified in Section 5.
Notwithstanding the foregoing, if the continued deferral of any
Participant jeopardizes the "top-hat" status of the Plan, in the
Committee's sole discretion, one hundred percent (100%) of such
Participant's vested DENTSPLY Contribution Account shall be paid to
the Participant immediately.
ARTICLE IV
DENTSPLY CONTRIBUTIONS
4.1 Annual DENTSPLY Contributions. The following contributions shall be
made to the DENTSPLY Contribution Account for each Participant for
each Plan Year:
(i) A contribution equal to the percentage allocated under the DENTSPLY
International Employee Stock Ownership Plan for the same Plan
Year. For purposes of the allocation under this Section 4.1(i)
only Compensation in excess of the limitations on Compensation
imposed by Internal Revenue Code 401(a)(17) for a Plan Year
($160,000 in 1998) shall be taken into account.
(ii) A contribution equal to 11.7% of Compensation. For purposes of the
allocation under this Section 4.1(ii), total Compensation shall
be taken into account. The contribution provided by this
Section 4.1(ii) shall be reduced by the contribution provided
by the sum of Section 4.1(1)above, plus the contribution
provided to the Participant under the DENTSPLY International
Employee Stock Ownership Plan for the Plan Year.
4.2 Vesting of DENTSPLY Contributions. A Participant as of January 1,
1999 will become 100% vested in his DENTSPLY Contribution Account
upon the completion of three years of Credited Service. A
Participant who first becomes a Participant after January 1, 1999
shall be 100% vested in his DENTSPLY Contribution Account following
the Participant's completion of seven years of Credited Service. A
Participant who terminates employment prior to completing seven
years of Credited Service shall be partially vested in his DENTSPLY
Contribution Account, in accordance with the following schedule:
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Total Credited Vested
Service Percentage
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Less than 3 years 0%
3 years 20%
4 years 40%
5 years 60%
6 years 80%
7 years 100%
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Notwithstanding the above, a Participant shall become 100% vested
upon Disability or death while actively employed.
4.3 Foreign Participants. In calculating the contribution for foreign
Participants, any contribution shall be reduced by the value of
pension benefits or allocations made for such Participant by the
Company under other pension or retirement plans or benefit programs.
4.4 Forfeiture of Benefits. Notwithstanding anything herein contained
to the contrary, no payment of any retirement benefits hereunder
shall be made and all rights under this Plan shall be forfeited if
the Committee unanimously determines that any of the following
events occur:
(a) The Participant is terminated for gross or willful misconduct or
becomes employed with a competitor within two years of
termination of employment.
(b) The Participant has committed or participated in an act of fraud or
dishonesty against DENTSPLY; or
(c) The Participant has willfully and intentionally engaged in any
activity or conduct which is adverse to the best interests of
DENTSPLY and could result in a material loss to DENTSPLY or its
business.
ARTICLE V
DISTRIBUTIONS
5.1 Distribution Date. Distribution of a Participant's vested DENTSPLY
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Contribution Account, subject to the elections provided for in
Section 5.2, shall commence as of the Participant's termination of
employment for any reason.
5.2 Method of Payment.
a. Distributions under this Plan of an account which is based on the
interest election under Section 6.2 shall be paid in cash. A
distribution of a Participant's vested account balance invested
in DENTSPLY Common Stock shall be paid in such Common Stock.
b. The Participant may elect to have his or her benefit distributed in
annual installments for a period of up to five (5) years from
the date of the first distribution, which shall be no later
than one (1) year from the date of termination of employment.
This election shall be made by submitting a completed Election
of Payment Form to the Administrator. In the absence of a
timely election, distribution shall be made in the form of a
lump sum within thirty (30) days of the date of termination of
employment.
5.3 Distributions on Death. In the event of a Participant's death
before his DENTSPLY Contribution Account has been distributed,
distribution shall be made to the Beneficiary selected by the
Participant within thirty (30) days after the date of death (or, if
later, after the proper Beneficiary has been identified). A
Participant may from time to time change his designated Beneficiary
without the consent of such Beneficiary by filing a new designation
in writing with the Administrator. If no Beneficiary designation is
in effect at the time of the Participant's death, or if the
designated Beneficiary is missing or has predeceased the
Participant, distribution shall be made to the Participant's
surviving spouse, or if none, to his surviving children per stirpes,
and if none, to his estate.
5.4 Distribution on Change of Control. In the event of a change in
control as defined in this Plan, each Participant will be given the
option to receive the value of his DENTSPLY Contribution Account in
a lump sum no later that sixty (60) days after the Change in
Control. An optional distribution received subject to this Section
5.4 must represent the entire DENTSPLY Contribution Account and will
be subject to a five percent (5%) penalty reduction.
5.5 Valuation of Distributions. All distributions under this Plan shall
be based upon the amount credited to a Participant's DENTSPLY
Contribution Account as of the last business day of the month
immediately preceding the date of the distribution. The amount of
installments payable to a Participant electing distribution through
installments shall be determined by dividing the amount credited to
the Participant's vested DENTSPLY Contribution Account by the
remaining number of installments, including the current installment,
to be paid. It is understood that administrative requirements may
lead to a delay between such valuation date and the date of
distribution, not to exceed thirty (30) days.
ARTICLE VI
ACCOUNTS
6.1 DENTSPLY Contribution Account. The Administrator shall establish
and maintain, or cause to be established and maintained, a separate
DENTSPLY Contribution Account for each participant. Each
Participant's account shall be credited with earnings, for
recordkeeping purposes only, as provided in Section 6.2. A
Participant's DENTSPLY Contribution Account shall be maintained
solely for the purposes of measuring the amounts to be paid under
this Supplemental Executive Retirement Plan. The Employer shall not
be required to fund or secure the Account in any way. The
Employer's obligation to Participants hereunder is purely
contractual.
6.2 Crediting of Earnings and Statement of Account.
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a) The Participant's DENTSPLY Contribution Account shall be credited
with Employer contribution credits and earnings annually or, as
applicable, upon a Distribution. The amount of earnings to be
credited each year shall be based on the investment selected by
the Participant. The Participant may choose from the following
investments with respect to contributions credited for each
Plan Year: (i) DENTSPLY Common Stock (any dividends will be
reinvested in the Participant's DENTSPLY Contribution Account),
or (ii) U.S. Government 30-year Treasury bonds as quoted in The
Wall Street Journal or any Government bond that replaces the
30-year bond and that has the longest duration up to 30 years
(average yield for the month of January used for each Plan
year). Each election must be 100% in either stock or
interest. Once an election is made to invest in the Company
common stock, that election with respect to such stock will be
tracked on the basis of the number of shares allocated to such
account and cannot be changed. With respect to future
allocations, an election may be made to select the interest
investment.
b) In order to make a new election, the Participant must submit an
Investment Election Form to the Administrator no later than 30
days prior to the beginning of each Plan Year specifying the
investment election for the following Plan Year, otherwise if
no timely submission of an investment election is made, the
immediately preceding election shall be followed. In the
absence of a prior election form, the Participant's account
shall be deemed to be invested in DENTSPLY Common Stock.
Investment exchanges of a Participant's existing DENTSPLY
Contribution Account shall not be permitted.
c) Earnings will be credited for whole years only, except of the year
of distribution for which earnings will be credited up to the
last business day of the month immediately preceding the date
of distribution. As soon as practicable after the end of each
Plan Year (and at such additional times as the Administrator
may determine), the Administrator shall furnish each
Participant with a statement of the balance credited to the
Participant's DENTSPLY Contribution Account. Upon a Change of
Control, as defined in 2.4, the method of crediting earnings
may not be modified or amended.
d) The determination of the Company common stock share price for
purposes of annual allocations shall be made as of December 31
for allocations to be made for that year. For accounts which
are based on investment in Company stock, dividends for a year
shall be allocated in the form of Company stock and shall be
based on the beginning of the year balance of shares in the
account and the dividends paid during the year for such
shares. Dividend allocations shall be made at the same time as
allocations of other contributions.
ARTICLE VII
FUNDING AND PARTICIPANT'S INTEREST
7.1 Supplemental Executive Retirement Plan Unfunded. This Supplemental
Executive Retirement Plan shall be unfunded and no trust shall be
created by or for the Plan. The crediting to each Participant's
DENTSPLY Contribution Account, as the case may be, shall be made
through recordkeeping entries. No actual funds shall be set aside;
provided, however, that nothing herein shall prevent the Employer
from establishing one or more grantor trusts from which benefits due
under this Supplemental Executive Retirement Plan may be paid in
certain instances. The Employer shall pay all distributions from
its general assets and a Participant (or his or her Beneficiary)
shall have rights of a general, unsecured creditor against the
Employer for any distributions due hereunder. The Supplemental
Executive Retirement Plan constitutes a mere promise by the Employer
to make benefit payments in the future.
7.2 Participant's Interest in Plan. A Participant has an interest only
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in the cash value of the amount credited to his account. A
Participant has no rights or interests in any specific funds,
DENTSPLY stock or other securities.
ARTICLE VIII
ADMINISTRATION AND INTERPRETATION
8.1 Administration. The Committee shall be in charge of the overall
Operation and administration of this Supplemental Executive
Retirement Plan. The Committee has, to the extent appropriate and
in addition to the powers described elsewhere in this Plan, full
discretionary authority to construe and interpret the terms and
provisions of the Plan; to adopt, alter, and repeal administrative
rules, guidelines and practices governing the Plan; to perform all
acts, including the delegation of its administrative
responsibilities to advisors or other persons who may or may not be
employees of the Employer; and to rely upon the information or
opinions of legal counsel or experts selected to render advise with
respect to the Plan, as it shall deem advisable, with respect to the
administration of the Plan.
8.2 Interpretation. The Committee may take any action, correct any
defect, supply any omission or reconcile any inconsistency in the
Supplemental Executive Retirement Plan, or in any election
hereunder, in the manner and to the extent it shall deem necessary
to carry the Supplemental Executive Retirement Plan into effect or
to carry out the Employer's purposes in adopting the Plan. Any
decision, interpretation or other action made or taken in good faith
by or at the direction of the Employer or the Committee arising out
of or in connection with the Supplemental Executive Retirement Plan,
shall be within the absolute discretion of each of them, and shall
be final, binding, and conclusive on the Employer, and all
Participants and Beneficiaries and their respective heirs,
executors, administrators, successors, and assigns. The Committee's
determinations hereunder need not be uniform, and may be made
selectively among Eligible Employees, whether or not they are
similarly situated.
8.3 Records and Reports. The Administrator shall keep a record of
proceedings and actions and shall maintain or cause to be maintained
all such books of account, records, and other data as shall be
necessary for the proper administration of the Plan. Such records
shall contain all relevant data pertaining to individual
Participants and their rights under this plan. The Committee shall
have the duty to carry into effect all rights or benefits provided
hereunder to the extent assets of the Employer are properly
available.
8.4 Payment of Expenses.
(a) Claims: The Employer shall bear all expenses incurred by the
Committee or the Administrator in administrating this plan. If
a claim or dispute arises concerning the Committee or the
rights of a Participant or Beneficiary to amounts contributed
under this Plan, regardless of the party by whom such claim or
dispute is initiated, each party shall bear their own costs and
expenses in asserting or defending against such claim, except
that, if a Participant is the prevailing party in such matter,
the Employer shall, upon presentation of appropriate vouchers,
pay all costs and expenses of the participant, including
reasonable attorney's fees, court costs, and ordinary and
necessary out-of-pocket costs of attorneys, billed to and
payable by the Participant or by anyone claiming under or
through the Participant (such person being hereinafter referred
to as the "Participant's Claimant"), in connection with the
bringing, prosecuting, defending, litigating, negotiating, or
setting of such claim or dispute.
(b) In the case of any claim or dispute initiated by a Participant or
the Participant's Claimant, such claim shall be made, or notice
of such dispute given, with specific reference to the
provisions of this Plan, to the Administrator within two (2)
years (three (3) years in the event of a Change of Control)
after the occurrences of the event giving rise to such claim or
dispute.
8.5 Indemnification for Liability. The Employer shall indemnify the
Committee and the Administrator and the employees of the Employer to
whom the Administrator delegates duties under this Plan, against any
and all claims, losses, damages, expenses and liabilities arising
from their responsibilities in connection with this Plan, unless the
same is determined to be due to gross negligence or willful
misconduct.
8.6 Claims Procedure. If a claim for benefits or for participation
under this Plan is denied in whole or in part, a Participant will
receive written notification. The notification will include
specific reasons for the denial, specific reference to pertinent
provisions of this Plan, a description of any additional material or
information necessary to process the claim and why such material or
information is necessary, and an explanation of the claims review
procedure.
8.7 Review Procedure. Within ninety (90) days after the claim is
denied, a participant (or his duly authorized representative) may
file a written request with the Administrator for a review of his
denied claim. The Participant may review pertinent documents that
were used in processing his claim, submit pertinent documents, and
address issues and comments in writing to the Administrator. The
Administrator will notify the Participant of the Committee's final
decision in writing. In such response, the Administrator will
explain the reason for the decision, with specific references to
pertinent Supplemental Executive Retirement Plan provisions on which
that decision was based.
ARTICLE IX
AMENDMENT AND TERMINATION
9.1 Amendment and termination. The Committee shall have the right, at
any time to amend or terminate this Supplemental Executive
Retirement Plan in whole or in part or to discontinue contributions,
provided that such amendment or termination shall not adversely
affect any Participant or Beneficiary under the Supplemental
Executive Retirement Plan on the basis of amounts allocated to the
Participant's DENTSPLY Contribution Account. If the Supplemental
Executive Retirement Plan is discontinued with respect to future
contributions, Participants' vested DENTSPLY Contribution Accounts
shall be distributed in accordance with the provisions of Section
5.1, unless the Committee designates that distributions shall be
made on an earlier date. If the Committee designates such earlier
date, each Participant shall receive distribution of his vested
DENTSPLY Contribution Account, as specified by the Committee. If
the Supplemental Executive Retirement Plan is completely terminated
by the Committee, each Participant shall receive distribution of his
vested DENTSPLY Contribution Account in one lump sum payment of cash
or in kind as of the date of the Supplement Executive Retirement
Plan termination, or in accordance with the Plan.
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1 Right of Employer to Take Employment Actions. The adoption and
maintenance of this Supplemental Executive Retirement Plan shall not
be deemed to constitute an employment contract between the Employer
an any Eligible Employee, not to be a consideration for, nor an
inducement or condition of, the employment of any person. Nothing
herein contained, or any action taken hereunder, shall be deemed to
give any Eligible Employee the right to be retained in the employ of
the Employer or to interfere with the right of the Employer to
discharge any Eligible Employee at any time, nor shall it be deemed
to give to the Employer the right to require the Eligible Employee
to remain in its employ, nor shall it interfere with the Eligible
Employee's right to terminate his or her employment at any time.
Nothing in this Plan shall prevent the Employer from amending,
modifying, or terminating any other benefit plan.
10.2 Alienation of Assignment of Benefits. A Participant's rights and
interest under the Supplemental Executive Retirement Plan shall not
be assigned or transferred except as otherwise provided herein, and
the Participant's rights to benefit payment under the Supplemental
Executive Retirement Plan shall not be subject to alienation, pledge
or garnishment by or on behalf of creditors (including heirs,
beneficiaries, or dependents) of the Participant or of the
Beneficiary. Notwithstanding the preceding, the Administrator may
direct distributions in accordance with the Plan to an alternate
payee pursuant to a Qualified Domestic Relations Order (QDRO), as
defined in Section 414(p) of the Internal Revenue Code of 1986, as
amended, prior to any distribution date described in Article V.
10.3 Right to Withhold. To the extent required by law in effect at the
time of distribution is made from the Supplemental Executive
Retirement Plan, the Employer of its agents shall have the right to
withhold or deduct from any distributions or payments any taxes
required to be withheld by federal, state or local governments.
10.4 Construction. All legal questions pertaining the Supplemental
Executive Retirement Plan shall be determined in accordance with the
laws of the State of Pennsylvania, to the extent such laws are not
superseded by the Employee Retirement Income Security Act of 1974,
as amended, or any other federal law.
10.5 Headings. The headings of the Articles and Sections of this
Supplemental Executive Retirement Plan are for reference only. In
the event of a conflict between a heading and the contents of an
Article or Section, the contents of the Article or Section shall
control.
10.6 Number and Gender. Whenever any words used herein are in the
singular form, they shall be construed as though they were also used
in the plural form in all cases where they would apply, and
references to the male gender shall be construed as applicable to
the female gender where applicable, and vice versa.