EMPLOYMENT AGREEMENT
BETWEEN
DENTSPLY INTERNATIONAL INC.
AND
RACHEL P. McKINNEY
THIS AGREEMENT is entered into as of December 25, 2005, by and between DENTSPLY
International Inc., a Delaware corporation (the "Company") and Rachel P.
McKinney, ("Employee").
WHEREAS, it is in the best interest of the Company and Employee that the terms
and conditions of Employee's services be formally set forth:
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto, it is hereby agreed as follows:
1.Services
1.1 The Company shall employ Employee and Employee accepts such
employment and agrees to serve as a Senior Vice President of the
Company, responsible for the Worldwide Human Resources function of
the Company, effective as of the above stated date stated below,
and, if elected thereto, as an officer or director of any
Affiliate, for the term and on the conditions herein set forth.
Employee shall be responsible for the activities and duties
presently associated with this position. Employee shall perform
such other services as shall from time to time be assigned to her
by the Board of Directors, the Chief Executive Officer, or the
President of the Company depending on the needs and demands of the
business and the availability of other personnel, provided that
such services shall generally be similar in level of position as
those described above. Employee's services shall be performed at a
location suitable for the performance of the Employee's assigned
duties.
1.2 Employee shall at all times devote her full business time and
efforts to the performance of her duties and to promote the best
interests of the Company and its Affiliates.
2. Period of Employment Employment as Senior Vice President hereunder
shall begin and continue from the above date, and terminate on the
happening of any of the following events:
2.1 Death The date of death of Employee;
2.2 Termination by Employee Without Good Reason The date specified in a
written notice of termination given to the Company by Employee not
less than 180 days in advance of such specified date, at which date
the Employee's obligation to perform services pursuant to this
Agreement shall cease.
2.3 Termination by Employee with Good Reason Thirty (30) days following
the date of a written notice of termination given to the Company by
Employee within thirty (30) days after any one or more of the
following events have occurred:
(a) failure by the Company to maintain the level of
responsibility and status of the Employee generally
similar to those of Employee's position as of the
date of this Agreement, or
(b) a reduction by the Company in Employee's base salary
as in effect as of the date hereof plus all increases
thereof subsequent thereto; other than any reduction
implemented as part of a formal austerity program
approved by the Board of Directors of the Company and
applicable to all continuing employees of the
Company, provided such reduction does not reduce
Employee's salary by a percentage greater than the
average reduction in the compensation of all
management level employees who continue as employees
of the Company during such austerity program; or
(c) the failure of the Company to maintain and to
continue Employee's participation in the Company's
benefit plans as in effect from time to time on a
basis substantially equivalent to the participation
and benefits of Company employees similarly situated
to the Employee; or
(d) any substantial and uncorrected breach of the
Agreement by the Company.
2.4 Termination by the Company Upon written notice of termination
given to Employee by the Company, the Employee's obligation to
perform services pursuant to this Agreement shall cease as of the
date of such notice.
3. Payments by the Company
3.1 During the Period of Employment, the Company shall pay to the
Employee for all services to be performed by Employee
hereunder a salary of not less than $267,000 per annum, or
such larger amount as may from time to time be fixed by the
Board of Directors of the Company or, if applicable, by the
Human Resources Committee of the Board (or its successor),
payable in accordance with the Company's normal pay schedule.
3.2 During the Period of Employment, Employee shall be entitled to
participate in all plans and other benefits made available by
the Company generally to its domestic executive employees,
including (without limitation) benefits under any pension,
profit sharing, employee stock ownership, stock option, bonus,
performance stock appreciation right, management incentive,
vacation, disability, annuity, or insurance plans or programs.
Any payments to be made to Employee under other provisions of
this Section 3 shall not be diminished by any payments made or
to be made to Employee or her designees pursuant to any such
plan, nor shall any payments to be made to Employee or her
designees pursuant to any such plan be diminished by any
payment made or to be made to Employee under other provisions
of this Section 3.
3.3 Upon termination of the Period of Employment for whatever
reason, Employee shall be entitled to receive the compensation
accrued and unpaid as of the date of her termination. If
Employee at the time of termination is eligible to participate
in any Company incentive or bonus plan then in effect,
Employee shall be entitled to receive a pro-rata share of such
incentive or bonus award based upon the number of days she is
employed during the plan year up to the date of her
termination. Such pro-rata amount shall be calculated in the
usual way and paid at the usual time.
3.4 If the Period of Employment terminates upon the death of
Employee, the Company shall continue payment of her then
current salary for a period of 12 months from the date of
death, together with her pro-rata share of any incentive or
bonus payments due for the period prior to her death, to
Employee's designated beneficiary or, if no beneficiary has
been effectively designated, then to Employee's estate.
3.5 If the Period of Employment is terminated by the Employee
under Section 2.3, or by the Company under Section 2.4, the
Company shall continue to pay compensation and provide
benefits to the employee as provided in this Section 3.5 for a
period (the "Termination Period") beginning on the date of the
termination notice and ending on the earlier of: (i) the
second annual anniversary of the date of such termination
notice; or (ii) the date on which the Employee would attain
age 65, as follows:
(a) Compensation shall be paid to the Employee at the rate of
salary being paid to Employee under Section 3.1 immediately
before the termination;
(b) Bonus and incentive compensation shall be paid to the
Employee in accordance with plans approved by the Board of
Directors and similar to those in which the Employee
participated at time of termination, using the same formula
and calculations as if termination had not occurred. The
Employee shall not be entitled to receive any further grants
of stock options under any stock option or similar such plan
subsequent to the date of termination, but outstanding stock
options shall continue to vest during the Termination Period
in accordance with the applicable stock option plan;
(c) Employee shall receive the benefits that would have been
accrued by the Employee during the Termination Period from
participation by the Employee under any pension, profit
sharing, employee stock ownership plan ("KSOP") or similar
retirement plan or plans of the Company or any Affiliate in
which the Employee participated immediately before the
termination, in accordance with the terms of any such plan
(or, if not available, in lieu thereof be compensated for
such benefits), based on service the Employee would have had
during the Termination Period and compensation (and, if
applicable, bonus and incentive compensation) as determined
under Section (a) (and, if applicable, Subsection (b)
above);
(d) Employee shall receive continued coverage during the
Termination Period under all employee disability, annuity,
insurance, or other employee welfare benefit plans, programs
or arrangements of the Company or any Affiliate in which
Employee participated immediately before the notice of
termination, plus all improvements subsequent thereto (or,
if not available, in lieu thereof be compensated for such
coverage); and
(e) In the event of the death of Employee during the Termination
Period, the Company shall continue to make payments under
Subsection 3.5(a) for the period that is the lesser of the
remainder of the Termination Period or twelve (12) months,
and shall pay any bonuses due under Subsection 3.5(b) on a
pro-rata basis until the date of Employee's death, to
Employee's designated beneficiary or, if no beneficiary has
been effectively designated, then to Employee's estate.
Except as provided in Section 3.6, payment of compensation
under Subsection 3.5(a) above shall be made at the same time
as payments of compensation under Section 3.1, and payments of
other benefits under Subsections 3.5(b) and (c) shall be paid
at the same time and to the same person as compensation or
benefits would have been paid under the plan, program, or
arrangement to which they relate (after taking into account
any election made by the Employee with respect to payments
under such plan, program, or arrangement), and shall be
pro-rated for any partial year through the date of expiration
of the Termination Period.
3.6 If at any time after a Change of Control the Period of
Employment is terminated by the Employee under Section 2.3, or
the Company terminates or gives written notice of termination
of the Period of Employment to the Employee (regardless of
whether in accordance with Section 2.4), then in lieu of the
periodic payment of the amounts specified in Subsections
3.5(a), (b), and (c) (except as may be otherwise prohibited by
law or by said plans), the Company, at the written election of
Employee, shall pay to Employee within five (5) business days
of such termination or notice of termination the present value
of the amounts specified in Subsections 3.5(a), (b), and (c),
discounted at the greatest rate of interest then payable by
Mellon Bank (or its successor) on any federally insured savings
account into which Employee could deposit such amount and make
immediate withdrawals therefrom without penalty, and shall
provide for the remainder of the Termination Period, if any,
the benefit coverage required by Subsection 3.5(d). Employee
shall not be required to mitigate damages payable under this
Section 3.6.
3.7 In no event will the Company be obligated to continue
Employee's compensation and other benefits under Section 3.5 of
this Agreement beyond Employee's sixty-fifth (65th) birthday or
if Employee's employment is terminated because of gross
negligence or significant willful misconduct (e.g. conviction
of misappropriation of corporate assets or serious criminal
offense).
4. Non-Competition Agreement During the Period of Employment and for a period of
five (5) years after the termination thereof, Employee shall not, without the
written consent of the Company, directly or indirectly be employed or
retained by, or render any services for, or be financially interested in, any
firm or corporation engaged in any business which is competitive with any
business in which the Company or any of its Affiliates may have been engaged
during the Period of Employment. The foregoing restriction shall not apply to
the purchase by Employee of up to 5% of the outstanding shares of capital
stock of any corporation whose securities are listed on any national
securities exchange.
5. Loyalty Commitments During and after the Period of Employment: (a) Employee
shall not disclose any confidential business information about the affairs of
the Company or any of its Affiliates; and (b) Employee shall not, without the
prior written consent of the Company, induce or attempt to induce any
employee or agency representative of the Company or any Affiliate to leave
the employment or representation of the Company or such Affiliate.
6. Separability of Provisions The terms of this Agreement shall be considered to
be separable from each other, and in the event any shall be found to be
invalid, it shall not affect the validity of the remaining terms.
7. Binding Effect This Agreement shall be binding upon and inure to the benefit
of (a) the Company and its successors and assigns, and (b) Employee, her
personal representatives, heirs, and legatees.
8. Entire Agreement This Agreement constitutes the entire agreement between the
parties and supersedes and revokes all prior oral or written understandings
between the parties relating to Employee's employment. The Agreement may not
be changed orally but only by a written document signed by the party against
whom enforcement of any waiver, change, modification, extension, or discharge
is sought.
9. Definitions The following terms herein shall (unless otherwise expressly
provided) have the following respective meanings:
9.1 "Affiliate" when used with reference to the Company means any
corporations, joint ventures, or other business enterprises
directly or indirectly controlling, controlled by, or under common
control with the Company. For purposes of this definition,
"control" means ownership or power to vote 50% or more of the
voting stock, venture interests, or other comparable participation
in such business enterprises.
9.2 "Period of Employment" means the period commencing on the date
hereof and terminating pursuant to Section 2.
9.3 "Beneficiary" means the person or persons designated in writing by
Employee to Company.
9.4 "Change of Control" means any event by which (i) an Acquiring Person
has become such, or (ii) Continuing Directors cease to comprise a
majority of the members of the Board of Directors of the Company or
the applicable Parent of the Company (a "Board"). For purposes of
this definition:
(a) An "Acquiring Person" means any person or group (as
defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, as amended, and the rules and
regulations promulgated thereunder as in effect on
the date of this Agreement (the "Exchange Act") who
or which, together with all affiliates and associates
(as defined in Rule 12B-2 under the Exchange Act)
becomes, by way of any transaction, the beneficial
owner of shares of the Company, or such Parent,
having 20% or more of (i) the then outstanding shares
of Common Stock of the Company, or such Parent, or
(ii) the voting power of the then outstanding voting
securities of the Company, or such Parent, entitled
to vote generally in the election of directors of the
Company or such Parent; and
(b) "Continuing Director" means any member of the Board
of the Company (or a successor thereof), while such
person is a member of such Board who is not an
Acquiring Person, or an affiliate or associate of an
Acquiring Person or a representative of an Acquiring
Person or of any such affiliate or associate and who
(i) was a member of such Board prior to the date of
this Agreement, or (ii) subsequently becomes a member
of such Board and whose nomination for election or
election to such Board is recommended or approved by
a majority of the Continuing Directors or who is
included as a nominee in a proxy statement of the
Company or the applicable Parent distributed when a
majority of such Board consists of Continuing
Directors.
9.5 "Parent" means any Affiliate directly or indirectly controlling (within the
meaning of Section 9.1) the Company.
10. Notices Where there is provision herein for the delivery of written notice
to either of the parties, such notice shall be deemed to have been
delivered for the purposes of this Agreement when delivered in person or
placed in a sealed, postpaid envelope addressed to such party and mailed by
registered mail, return receipt requested to the address set forth below
for the Company and the most recent address as may be on the Company
records for the Employee:
For Company: DENTSPLY International Inc.
221 West Philadelphia Street
York, PA 17404
Attention: Secretary
11. Arbitration Any controversy arising from or related to this Agreement
shall be determined by arbitration in the City of Philadelphia,
Pennsylvania, in accordance with the rules of the American Arbitration
Association, and judgment upon any such determination or award may be
entered in any court having jurisdiction. In the event of any
arbitration between Employee and Company related to the Agreement, if
employee shall be the successful party, Company will indemnify and
reimburse Employee against any reasonable legal fees and expenses
incurred in such arbitration.
12. Applicable Law The Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, the parties have executed the Agreement on the day and year
first above written.
Attest: DENTSPLY INTERNATIONAL INC.
/s/ Brian M. Addison By: /s/ Bret W. Wise
Brian M. Addison Bret W. Wise
Vice President, Secretary and President & COO
General Counsel
/s/ Rachel P. McKinney
Rachel P. McKinney
Senior Vice President,
Global Human Resources