EXHIBIT 99.1
DENTSPLY International Inc.
1998 Stock Option Plan
SECTION 1. PURPOSE
The purpose of the DENTSPLY International Inc. 1998 Stock Option Plan (the
"Plan") is to benefit DENTSPLY International Inc. ("DENTSPLY") and its
"Subsidiaries," as defined below (hereinafter referred to, either individually
or collectively, as the "Company") by recognizing the contributions made to the
Company by officers and other key employees, to provide such persons with an
additional incentive to devote themselves to the future success of the Company,
and to improve the ability of the Company to attract, retain and motivate such
persons. The Plan is also intended as an additional incentive to members of the
Board of Directors of DENTSPLY (the "Board") who are not employees of the
Company ("Outside Directors") to serve on the Board and to devote themselves to
the future success of the Company. "Subsidiaries," as used in the Plan, has the
definition set forth in Section 424 (f) of the Internal Revenue Code of 1986, as
amended (the "Code").
Stock options which constitute "incentive stock options" ("ISOs") within
the meaning of Section 422 of the Code, or stock options which do not constitute
ISOs ("NSOs") (ISOs and NSOs are collectively referred to as "Options") may be
granted under the Plan. The persons to whom Options are granted under the Plan
are hereinafter referred to as "Optionees."
SECTION 2. ELIGIBILITY
Outside Directors shall participate in the Plan only in accordance with the
provisions of Section 5. The Committee (as defined in Section 3) shall
initially, and from time to time thereafter, select those officers and other key
employees of the Company, including members of the Board who are also employees
("Employee Directors") (officers, other key employees and Employee Directors are
collectively referred to as "Key Employees") to participate in the Plan on the
basis of the importance of their services in the management, development and
operations of the Company.
SECTION 3. ADMINISTRATION
3.1 The Committee
The Plan shall be administered by the Stock Option Subcommittee (the
"Committee") of the Human Resources Committee of the Board. The Committee
shall be comprised of two (2) or more members of the Board. All members of
the Committee shall qualify as "Non-Employee Directors" as defined in Rule
16b-3 under the Securities Exchange Act of
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1934, as amended (the "1934 Act"), or any successor rule or regulation, and
"outside directors" as defined in Section 162(m) or any successor provision
of the Code and applicable Treasury regulations thereunder, if such
qualification is deemed necessary in order for the grant or the exercise of
Options under the Plan to qualify for any tax or other material benefit to
Optionees or the Company under applicable law.
3.2 Authority of the Committee
Subject to the express provisions of the Plan, the Committee shall
have sole discretion concerning all matters relating to the Plan and
Options granted hereunder. The Committee, in its sole discretion, shall
determine the Key Employees to whom, and the time or times at which,
Options will be granted, the number of shares to be subject to each Option,
the expiration date of each Option, the time or times within which the
Option may be exercised, the cancellation or termination of the Option and
the other terms and conditions of the grant of the Option. The terms and
conditions of the Options need not be the same with respect to each
Optionee or with respect to each Option.
The Committee may, subject to the provisions of the Plan, establish
such rules and regulations as it deems necessary or advisable for the
proper administration of the Plan, and may make determinations and may take
such other actions in connection with or in relation to the Plan as it
deems necessary or advisable. Each determination or other action made or
taken pursuant to the Plan, including interpretation of the Plan and the
specific terms and conditions of the Options granted hereunder by the
Committee, shall be final, binding and conclusive for all purposes and upon
all persons.
3.3 Option Agreement
Each Option shall be evidenced by a written agreement or grant
certificate specifying the type of Option granted, the Option exercise
price, the terms for payment of the exercise price, the expiration date of
the Option, the number of shares of Common Stock to be subject to such
Option and such other terms and conditions established by the Committee, in
its sole discretion, which are not inconsistent with the Plan.
SECTION 4. SHARES OF COMMON STOCK SUBJECT TO PLAN
4.1 Subject to adjustment as provided in Sections 4.1 and 4.2, Options
with respect to an aggregate of four million three hundred thousand
(4,300,000) shares of common stock, par value $.01 per share of DENTSPLY
(the "Common Stock") (plus any shares of Common Stock covered by any
unexercised portion of canceled or terminated stock options granted under
the DENTSPLY International Inc. 1993 Stock Option Plan), may be granted
under the Plan (the "Maximum
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Number"). The Maximum Number shall be increased on January 1 of each
calendar year during the term of the Plan (as set forth in Section 13) to
equal seven percent (7%) of the outstanding shares of Common Stock on such
date, in the event that 4,300,000 shares is less than seven percent (7%) of
the outstanding shares of Common Stock on such date, prior to such
increase. Notwithstanding the foregoing, and subject to adjustment as
provided in Section 4.2, (I) Options with respect to no more than four
million (4,000,000) shares of Common Stock may be granted as ISOs under the
Plan, and (ii) no Key Employee shall be granted Options with respect to
more than one hundred fifty thousand (150,000) shares of Common Stock in
any calendar year. The number of shares of Common Stock delivered by any
Optionee or withheld by the Company on behalf of any Optionee pursuant to
Section 8.2 or 8.3 shall once again be available for issuance pursuant to
the grant of Options under the Plan. Any shares of Common Stock reserved
for issuance upon exercise of Options which expire, terminate or are
cancelled, shall once again be available for issuance pursuant to the grant
of Options under the Plan.
4.2 The number of shares of Common Stock subject to the Plan and to
Options granted under the Plan shall be adjusted as follows: (a) in the
event that the number of outstanding shares of Common Stock is changed by
any stock dividend, stock split or combination of shares, the number of
shares subject to the Plan and to Options previously granted thereunder
shall be proportionately adjusted, (b) in the event of any merger,
consolidation or reorganization of the Company with any other corporation
or corporations, there shall be substituted on an equitable basis as
determined by the Board of Directors, in its sole discretion, for each
share of Common Stock then subject to the Plan and for each share of Common
Stock then subject to an Option granted under the Plan, the number and kind
of shares of stock, other securities, cash or other property to which the
holders of Common Stock of the Company are entitled pursuant to the
transaction, and (c) in the event of any other changes in the
capitalization of the Company, the Committee, in its sole discretion, shall
provide for an equitable adjustment in the number of shares of Common Stock
then subject to the Plan and to each share of Common Stock then subject to
an Option granted under the Plan. In the event of any such adjustment, the
exercise price per share shall be proportionately adjusted.
SECTION 5. GRANT OF OPTIONS TO OUTSIDE DIRECTORS
5.1 Grants
All grants of Options to Outside Directors shall be automatic and
non-discretionary. Each individual who becomes an Outside Director (other
than an Outside Director who was previously an Employee Director) shall be
granted a NSO to purchase six thousand (6,000) shares of Common Stock
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on the date he or she becomes an Outside Director. Each individual who is
an Employee Director and who thereafter becomes an Outside Director shall
be granted automatically a NSO to purchase six thousand (6,000) shares of
Common Stock on the third anniversary of the date such Employee Director
was last granted an Option. Thereafter, each Outside Director who holds
NSOs granted under this Section 5 and is re-elected to the Board shall be
granted an additional NSO to purchase six thousand (6,000) shares of Common
Stock on the third anniversary of the date such Outside Director was last
granted an Option.
5.2 Exercise Price and Period
The exercise price of each NSO granted to an Outside Director shall be
the "Fair Market Value," on the date on which the Option is granted, of the
Common Stock subject to the Option. "Fair Market Value" shall mean the
closing sales price of the Common Stock on The Nasdaq National Market, or
other national securities exchange which is the principal securities market
on which the Common Stock is traded (as reported in The Wall Street
Journal, Eastern Edition). Each such NSO shall become exercisable with
respect to one-third of the total number of shares of Common Stock subject
to the Option on the first anniversary following the date of its grant, and
with respect to an additional one-third of the total number of shares of
Common Stock subject to the Option, on each anniversary thereafter during
the succeeding two years. Each NSO shall expire on the date ten years after
the date of grant.
SECTION 6. GRANTS OF OPTIONS TO EMPLOYEES
6.1 Grant
Subject to the terms of the Plan, the Committee may from time to time
grant Options, which may be ISOs or NSOs, to Key Employees of the Company.
Each such grant shall specify whether the Options so granted are ISOs or
NSOs, provided, however, that if, notwithstanding its designation as an
ISO, all or any portion of an Option does not qualify under the Code as an
ISO, the portion which does not so qualify shall be treated for all
purposes as a NSO.
6.3 Expiration
Except to the extent otherwise provided in or pursuant to Section 7,
each Option shall expire, and all rights to purchase shares of Common Stock
shall expire, on the tenth anniversary of the date on which the Option was
granted.
6.4 Exercise Period
Except to the extent otherwise provided in or pursuant to Section 7,
or in the proviso to this sentence, Options shall become exercisable
pursuant to the following schedule: with respect to one-third of the total
number of shares of
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Common Stock subject to Option on the first anniversary following the date
of its grant, and with respect to an additional one-third of the total
number of shares of Common Stock subject to the Option, on each anniversary
thereafter during the succeeding two years; provided, however, that the
Committee, in its sole discretion, shall have the authority to shorten or
lengthen the exercise period with respect to any or all Options, or any
part thereof, granted to Key Employees under the Plan, either in the
applicable option agreement or grant certificate, or at any other time
during the term of such Options.
6.5 Required Terms and Conditions of ISOs
Each ISO granted to a Key Employee shall be in such form and subject
to such restrictions and other terms and conditions as the Committee may
determine, in its sole discretion, at the time of grant, subject to the
general provisions of the Plan, the applicable Option agreement or grant
certificate, and the following specific rules:
(a) Except as provided in Section 6.5(c), the exercise price per
share of each ISO shall be the Fair Market Value of a share of Common
Stock on the date such ISO is granted.
(b) The aggregate Fair Market Value (determined with respect to
each ISO at the time such Option is granted) of the shares of Common
Stock with respect to which ISOs are exercisable for the first time by
an Optionee during any calendar year (under all incentive stock option
plans of the Company) shall not exceed $100,000.
(c) Notwithstanding anything herein to the contrary, if an ISO is
granted to an individual who owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of
stock of the Company, (i) the exercise price of each ISO shall be not
less than one hundred ten percent (110%) of the Fair Market Value of a
share of Common Stock on the date the ISO is granted, and (ii) the ISO
shall expire and all rights to purchase shares thereunder shall cease
no later than the fifth anniversary of the date the ISO was granted.
6.6 Required Terms and Conditions of NSOs
Each NSO granted to Key Employees shall be in such form and subject to
such restrictions and other terms and conditions as the Committee may
determine, in its sole discretion, at the time of grant, subject to the
provisions of the Plan, the applicable Option agreement or grant
certificate, and the following specific rule: the exercise price per share
of each NSO shall be not less than the Fair Market Value of a share of
Common Stock on the date the NSO is granted.
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SECTION 7. EFFECT OF TERMINATION OF EMPLOYMENT
7.1 Termination Generally
Except as provided in Section 7.2, 7.3 or 11, or by the Committee, in
its sole discretion, any Option held by an Optionee whose employment with
the Company or service on the Board is terminated for any reason other than
"Cause," as defined below, shall terminate ninety (90) days following the
date of termination of employment or service on the Board. The transfer of
employment from the Company to a Subsidiary, or from a Subsidiary to the
Company, or from a Subsidiary to another Subsidiary, shall not constitute a
termination of employment for purposes of the Plan. Options granted under
the Plan shall not be affected by any change of duties in connection with
the employment of the Optionee or by a leave of absence authorized by the
Company. Any Option held by an Optionee whose employment with the Company
is terminated for "Cause" shall terminate on the date of termination of
employment. For the purposes hereof, "Cause" shall mean a finding by the
Committee that the Optionee has engaged in conduct that is fraudulent,
disloyal, criminal or injurious to the Company, including, without
limitation, acts of dishonesty, embezzlement, theft, felonious conduct or
unauthorized disclosure of trade secrets or confidential information of the
Company.
7.2 Death and Disability
In the event of the death or Disability (as defined below) of an
Optionee during employment with the Company or service on the Board, all
Options held by the Optionee shall become fully exercisable on such date of
death or Disability. Each of the Options held by such an Optionee shall
expire on the earlier of (a) the first anniversary of the date of death or
Disability and (b) the date that such Option expires in accordance with its
terms. For purposes of this Section 7.2, "Disability" shall mean the
inability of an individual to engage in any substantial gainful activity by
reason of any medically determinable physical or mental impairment which is
expected to result in death or which has lasted or can be expected to last
for a continuous period of not less than twelve (12) months. The Committee,
in its sole discretion, shall determine the existence and date of any
Disability.
7.3 Retirement
(a) Key Employees (other than Key Employees who are
Employee-Directors). In the event the employment of a Key Employee
with the Company (other than a Key Employee who is an Employee
Director) shall be terminated by reason of "Employee Retirement," as
defined below, all Options held by such Key Employee shall become
fully exercisable on the date of such Employee Retirement. Each of the
Options held by such a Key Employee shall expire on the earlier of (i)
the first anniversary of the date of the Employee
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Retirement, or (ii) the date that such Option expires in accordance
with its terms. For the purposes hereof, "Employee Retirement" shall
mean retirement of a Key Employee at or after age 65. In the event the
employment of a Key Employee with the Company shall be terminated by
reason of a retirement that is not an Employee Retirement, the
Committee may, in its sole discretion, determine that the
exercisability and exercise periods set forth in this Section 7.3(a)
shall be applicable to Options held by such Key Employee.
(b) Outside Directors. In the event the service on the Board of
an Outside Director shall be terminated by reason of the retirement of
such Outside Director in accordance with the Company's retirement
policy for members of the Board, any Options granted to such Outside
Director shall continue to vest and remain exercisable pursuant to
Section 5, in the same manner and to the same extent as if such
Outside Director had continued his or her service on the Board during
such period.
(c) Key Employees Who Are Employee Directors. Section 7.3(b)
shall be applicable to Options held by any Key Employee who is an
Employee Director in the event the employment of such Key Employee
with the Company shall be terminated by reason of Employee Retirement,
so long as the service of such Key Employee on the Board continues
after such Employee Retirement. Section 7.3(a) shall be applicable to
Options held by any Key Employee who is an Employee Director in the
event the employment of such Key Employee with the Company shall be
terminated by reason of Employee Retirement, if such Key Employee
ceases to serve on the Board as of the date of such Key Employee's
Employee Retirement.
SECTION 8. EXERCISE OF OPTIONS
8.1 Notices
A person entitled to exercise an Option may do so by delivery of a
written notice to that effect specifying the number of shares of Common
Stock with respect to which the Option is being exercised and any other
information or documents the Committee may prescribe. The notice shall be
accompanied by payment as described in Section 8.2. All notices, documents
or requests provided for herein shall be delivered to the Secretary of the
Company.
8.2 Exercise Price
Except as otherwise provided in the Plan or in any Option agreement or
grant certificate, the Optionee shall pay the full exercise price of each
Option upon the date of exercise of such Option (a) in cash, (b) pursuant
to a cashless exercise arrangement with a broker on such terms as
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the Committee may determine, (c) by delivering shares of Common Stock held
by the Optionee for at least six (6) months and having an aggregate Fair
Market Value on the date of exercise equal to the Option exercise price,
(d) in the case of a Key Employee, by such other medium of payment as the
Committee, in its sole discretion, shall authorize, or (e) by any
combination of (a), (b), (c), and (d). The Company shall issue, in the name
of the Optionee, stock certificates representing the total number of shares
of Common Stock issuable pursuant to the exercise of any Option as soon as
reasonably practicable after such exercise, provided that any shares of
Common Stock purchased by an Optionee through a broker pursuant to clause
(b) above shall be delivered to such broker in accordance with applicable
law.
8.3 Taxes Generally
At the time of the exercise of any Option, as a condition of the
exercise of such Option, the Company may withhold or require the Optionee
to pay the Company an amount equal to the amount of the tax the Company may
be required to withhold to obtain a deduction or otherwise to comply with
applicable law.
8.4 Payment of Taxes
The Optionee, with the approval of the Committee, may satisfy the
obligation set forth in Section 8.3, in whole or in part, on the date of
exercise by (a) directing the Company to withhold such number of shares of
Common Stock otherwise issuable upon exercise of such Option having an
aggregate Fair Market Value on the date of exercise equal to the amount of
tax required to be withheld, or (b) delivering shares of Common Stock of
the Company having an aggregate Fair Market Value equal to the amount
required to be withheld. The Committee may, in its sole discretion, require
payment by the Optionee in cash of any such withholding obligation and may
disapprove any election or delivery or may suspend or terminate the right
to make elections or deliveries under this Section 8.4.
SECTION 9. TRANSFERABILITY OF OPTIONS
Unless otherwise determined by the Committee, no Option granted pursuant to
the Plan shall be transferable otherwise than by will or by the laws of descent
and distribution or pursuant to a qualified domestic relations order as defined
by the Code.
SECTION 10. RIGHTS AS STOCKHOLDER
An Optionee (or a transferee of an Optionee pursuant to
Section 9) shall have no rights as a stockholder with respect to
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any Common Stock covered by an Option or receivable upon the exercise of an
Option until the Optionee or transferee shall have become the holder of record
of such Common Stock, and no adjustments shall be made for dividends in cash or
other property or other distributions or rights in respect to such Common Stock
for which the applicable record date is prior to the date on which the Optionee
shall have become the holder of record of the shares of Common Stock purchased
pursuant to exercise of the Option.
SECTION 11. CHANGE IN CONTROL
11.1 Effect of Change in Control
Notwithstanding any of the provisions of the Plan or any Option
agreement or grant certificate evidencing Options granted hereunder,
immediately upon a "Change in Control" (as defined in Section 11.2), all
outstanding Options, whether or not otherwise exercisable as of the date of
such Change in Control, shall become fully exercisable and all restrictions
thereon shall terminate in order that Optionees may fully realize the
benefits thereunder.
11.2 Definition of Change in Control
The term "Change in Control" shall mean the occurrence, at any time
during the term of an Option granted under the Plan, of any of the
following events:
(a) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) 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 30% 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 voting 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, 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
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(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 shares of common stock and the combined voting power of
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.
SECTION 12. POSTPONEMENT OF EXERCISE
The Committee may postpone any exercise of an Option for such time as the
Committee in its sole discretion may deem necessary in order to permit the
Company to comply with any applicable laws or rules, regulations or other
requirements of the Securities and Exchange Commission or any securities
exchange or quotation system upon which the Common Stock is then listed or
quoted. Any such postponement shall not extend the term of an Option and neither
the Company nor its directors, officers, employees or agents shall have any
obligation or liability to an Optionee, or to his or her successor or to any
other person.
SECTION 13. TERMINATION, AMENDMENT AND TERM OF PLAN
13.1 The Board or the Committee may terminate, suspend, or amend the Plan,
in whole or in part, from time to time, without the approval of the stockholders
of the Company provided,
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however, that no Plan amendment shall be effective until approved by the
stockholders of the Company if such stockholder approval is required in order
for the Plan to continue to satisfy the requirements of Rule 16b-3 under the
1934 Act or applicable tax or other laws.
13.2 The Committee may correct any defect or supply any omission or
reconcile any inconsistency in the Plan or in any Option granted hereunder in
the manner and to the extent it shall deem desirable, in its sole discretion, to
effectuate the Plan. No amendment or termination of the Plan shall adversely
affect any Option theretofore granted without the consent of the Optionee,
except that the Committee may amend the Plan in a manner that does affect
Options theretofore granted upon a finding by the Committee that such amendment
is in the best interests of holders of outstanding Options affected thereby.
13.3 The Plan has been adopted and authorized by the Board of Directors for
submission to the stockholders of the Company for their approval. If the Plan is
approved by the stockholders of the Company, it shall be deemed to have become
effective as of May 20, 1998. Unless earlier terminated in accordance
herewith, the Plan shall terminate on February 28, 2008. Termination of the Plan
shall not affect Options previously granted under the Plan.
SECTION 14. GOVERNING LAW
The Plan shall be governed and interpreted in accordance with the laws of
the State of Delaware, without regard to any conflict of law provisions which
would result in the application of the laws of any other jurisdiction.
SECTION 15. NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT
No person shall have any claim of right to be granted an Option under the
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any employee of the Company any right to be retained in the employ of the
Company or as giving any member of the Board any right to continue to serve in
such capacity.
SECTION 16. AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES
Income recognized by an Optionee pursuant to the provisions of the Plan
shall not be included in the determination of benefits under any employee
pension benefit plan (as such term is defined in Section 3(2) of the Employee
Retirement Income Security Act of 1974) or group insurance or other benefit
plans applicable to the Optionee which are maintained by the Company, except as
may be provided under the terms of such plans or determined by resolution of the
Committee.
SECTION 17. NO STRICT CONSTRUCTION
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No rule of strict construction shall be implied against the Company, the
Committee, or any other person in the interpretation of any of the terms of the
Plan, any Option granted under the Plan or any rule or procedure established by
the Board.
SECTION 18. CAPTIONS
All Section headings used in the Plan are for convenience only, do not
constitute a part of the Plan, and shall not be deemed to limit, characterize or
affect in any way any provisions of the Plan, and all provisions of the Plan
shall be construed as if no captions have been used in the Plan.
SECTION 19. SEVERABILITY
Whenever possible, each provision in the Plan and every Option at any time
granted under the Plan shall be interpreted in such manner as to be effective
and valid under applicable law, but if any provision of the Plan or any Option
at any time granted under the Plan shall be held to be prohibited by or invalid
under applicable law, then such provision shall be deemed amended to accomplish
the objectives of the provision as originally written to the fullest extent
permitted by law, and all other provisions of the Plan and every other Option at
any time granted under the Plan shall remain in full force and effect.
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