Delaware
|
39-1434669
|
|
(State or other jurisdiction of
|
(I.R.S. Employer
|
|
incorporation or organization)
|
Identification No.)
|
|
221 West Philadelphia Street, York, PA
|
17405-0872
|
|
(Address of principal executive offices)
|
(Zip Code)
|
Page
|
||
PART I
|
FINANCIAL INFORMATION
|
|
Item 1
|
Financial Statements (unaudited)
|
|
Consolidated Statements of Operations
|
3
|
|
Consolidated Balance Sheets
|
4
|
|
Consolidated Statements of Cash Flows
|
5
|
|
Consolidated Statements of Changes in Equity
|
6
|
|
Notes to Unaudited Interim Consolidated Financial Statements
|
7
|
|
Item 2
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
28
|
Item 3
|
Quantitative and Qualitative Disclosures About Market Risk
|
38
|
Item 4
|
Controls and Procedures
|
38
|
PART II
|
OTHER INFORMATION
|
|
Item 1
|
Legal Proceedings
|
39
|
Item 1A
|
Risk Factors
|
39
|
Item 2
|
Unregistered Sales of Securities and Use of Proceeds
|
39
|
Item 4
|
Submission of Matters to a Vote of Security Holders
|
39
|
Item 6
|
Exhibits
|
40
|
Signatures
|
40
|
|
Three Months Ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
Net sales
|
$ | 570,503 | $ | 545,944 | ||||
Cost of products sold
|
270,519 | 263,906 | ||||||
Gross profit
|
299,984 | 282,038 | ||||||
Selling, general and administrative expenses
|
200,767 | 188,034 | ||||||
Restructuring and other costs
|
633 | 4,680 | ||||||
Operating income
|
98,584 | 89,324 | ||||||
Other income and expenses:
|
||||||||
Interest expense
|
6,343 | 5,720 | ||||||
Interest income
|
(1,828 | ) | (787 | ) | ||||
Other expense (income), net
|
70 | 945 | ||||||
Income before income taxes
|
93,999 | 83,446 | ||||||
Provision for income taxes
|
23,712 | 21,255 | ||||||
Equity in net loss of unconsolidated affilated company
|
(824 | ) | - | |||||
Net income
|
69,463 | 62,191 | ||||||
Less: Net income attributable to the noncontrolling interests
|
379 | 348 | ||||||
Net income attributable to DENTSPLY International
|
$ | 69,084 | $ | 61,843 | ||||
Earnings per common share:
|
||||||||
Basic
|
$ | 0.49 | $ | 0.42 | ||||
Diluted
|
$ | 0.48 | $ | 0.41 | ||||
Weighted average common shares outstanding:
|
||||||||
Basic
|
141,614 | 146,776 | ||||||
Diluted
|
144,044 | 149,294 |
March 31,
|
December 31,
|
|||||||
2011
|
2010
|
|||||||
Assets
|
||||||||
Current Assets:
|
||||||||
Cash and cash equivalents
|
$ | 575,264 | $ | 540,038 | ||||
Accounts and notes receivables-trade, net
|
385,357 | 344,796 | ||||||
Inventories, net
|
332,282 | 308,738 | ||||||
Prepaid expenses and other current assets
|
119,165 | 121,473 | ||||||
Total Current Assets
|
1,412,068 | 1,315,045 | ||||||
Property, plant and equipment, net
|
432,716 | 423,105 | ||||||
Identifiable intangible assets, net
|
79,468 | 78,743 | ||||||
Goodwill, net
|
1,350,780 | 1,303,055 | ||||||
Other noncurrent assets, net
|
162,017 | 138,003 | ||||||
Total Assets
|
$ | 3,437,049 | $ | 3,257,951 | ||||
Liabilities and Equity
|
||||||||
Current Liabilities:
|
||||||||
Accounts payable
|
$ | 111,943 | $ | 114,479 | ||||
Accrued liabilities
|
214,972 | 224,745 | ||||||
Income taxes payable
|
23,643 | 13,113 | ||||||
Notes payable and current portion of long-term debt
|
11,453 | 7,754 | ||||||
Total Current Liabilities
|
362,011 | 360,091 | ||||||
Long-term debt
|
652,290 | 604,015 | ||||||
Deferred income taxes
|
79,963 | 72,489 | ||||||
Other noncurrent liabilities
|
360,286 | 311,444 | ||||||
Total Liabilities
|
1,454,550 | 1,348,039 | ||||||
Commitments and contingencies
|
||||||||
Equity:
|
||||||||
Preferred stock, $.01 par value; .25 million shares authorized; no shares issued
|
- | - | ||||||
Common stock, $.01 par value; 200.0 million shares authorized; 162.8 million shares issued at March 31, 2011 and December 31, 2010
|
1,628 | 1,628 | ||||||
Capital in excess of par value
|
223,748 | 204,902 | ||||||
Retained earnings
|
2,382,336 | 2,320,350 | ||||||
Accumulated other comprehensive income
|
88,265 | 24,156 | ||||||
Treasury stock, at cost, 21.9 million shares at March 31, 2011 and 21.0 million shares at December 31, 2010
|
(750,639 | ) | (711,650 | ) | ||||
Total DENTSPLY International Equity
|
1,945,338 | 1,839,386 | ||||||
Noncontrolling interests
|
37,161 | 70,526 | ||||||
Total Equity
|
1,982,499 | 1,909,912 | ||||||
Total Liabilities and Equity
|
$ | 3,437,049 | $ | 3,257,951 |
Three Months Ended
|
||||||||
March 31,
|
||||||||
2011
|
2010
|
|||||||
Cash flows from operating activities:
|
||||||||
Net income
|
$ | 69,463 | $ | 62,191 | ||||
Adjustments to reconcile net income to net cash provided by operating activities:
|
||||||||
Depreciation
|
15,200 | 15,265 | ||||||
Amortization
|
2,379 | 2,524 | ||||||
Deferred income taxes
|
1,220 | (3,745 | ) | |||||
Share-based compensation expense
|
4,668 | 5,223 | ||||||
Restructuring and other costs - noncash
|
- | 363 | ||||||
Excess tax benefits from share-based compensation
|
(4,371 | ) | (1,898 | ) | ||||
Changes in operating assets and liabilities, net of acquisitions:
|
||||||||
Accounts and notes receivable-trade, net
|
(28,706 | ) | (15,530 | ) | ||||
Inventories, net
|
(14,727 | ) | (14,472 | ) | ||||
Prepaid expenses and other current assets
|
(5,745 | ) | (5,729 | ) | ||||
Accounts payable
|
5,569 | 9,195 | ||||||
Accrued liabilities
|
(15,861 | ) | (12,519 | ) | ||||
Income taxes payable
|
11,516 | (6,801 | ) | |||||
Other, net
|
3,401 | 2,477 | ||||||
Net cash provided by operating activities
|
44,006 | 36,544 | ||||||
Cash flows from investing activities:
|
||||||||
Capital expenditures
|
(11,774 | ) | (8,030 | ) | ||||
Cash paid for acquisitions of businesses, net of cash acquired
|
(21,127 | ) | (7,687 | ) | ||||
Expenditures for identifiable intangible assets
|
(254 | ) | (107 | ) | ||||
Proceeds from sale of property, plant and equipment, net
|
52 | 113 | ||||||
Net cash used in investing activities
|
(33,103 | ) | (15,711 | ) | ||||
Cash flows from financing activities:
|
||||||||
Net change in short-term borrowings
|
3,403 | (2,124 | ) | |||||
Cash paid for treasury stock
|
(73,679 | ) | (41,423 | ) | ||||
Cash dividends paid
|
(7,131 | ) | (7,409 | ) | ||||
Proceeds from long-term borrowings
|
51,100 | 311,834 | ||||||
Repayments of long-term borrowings
|
(1,951 | ) | (299,215 | ) | ||||
Proceeds from exercise of stock options
|
22,171 | 7,403 | ||||||
Excess tax benefits from share-based compensation
|
4,371 | 1,898 | ||||||
Net cash used in financing activities
|
(1,716 | ) | (29,036 | ) | ||||
Effect of exchange rate changes on cash and cash equivalents
|
26,039 | (37,128 | ) | |||||
Net increase(decrease) in cash and cash equivalents
|
35,226 | (45,331 | ) | |||||
Cash and cash equivalents at beginning of period
|
540,038 | 450,348 | ||||||
Cash and cash equivalents at end of period
|
$ | 575,264 | $ | 405,017 |
Accumulated
|
||||||||||||||||||||||||||||||||
Capital in
|
Other
|
Total DENTSPLY
|
||||||||||||||||||||||||||||||
Common
|
Excess of
|
Retained
|
Comprehensive
|
Treasury
|
International
|
Noncontrolling
|
Total
|
|||||||||||||||||||||||||
Stock
|
Par Value
|
Earnings
|
Income (Loss)
|
Stock
|
Equity
|
Interests
|
Equity
|
|||||||||||||||||||||||||
Balance at December 31, 2009
|
$ | 1,628 | $ | 195,495 | $ | 2,083,459 | $ | 83,542 | $ | (532,019 | ) | $ | 1,832,105 | $ | 74,853 | $ | 1,906,958 | |||||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | 61,843 | - | - | 61,843 | 348 | 62,191 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | (73,422 | ) | - | (73,422 | ) | (3,771 | ) | (77,193 | ) | ||||||||||||||||||||
Net loss on derivative financial instruments
|
- | - | - | 23,724 | - | 23,724 | - | 23,724 | ||||||||||||||||||||||||
Pension liability adjustments
|
- | - | - | 763 | - | 763 | - | 763 | ||||||||||||||||||||||||
Comprehensive Income
|
12,908 | (3,423 | ) | 9,485 | ||||||||||||||||||||||||||||
Exercise of stock options
|
- | (4,372 | ) | - | - | 11,775 | 7,403 | - | 7,403 | |||||||||||||||||||||||
Tax benefit from stock options exercised
|
- | 1,898 | - | - | - | 1,898 | - | 1,898 | ||||||||||||||||||||||||
Share based compensation expense
|
- | 5,223 | - | - | - | 5,223 | - | 5,223 | ||||||||||||||||||||||||
Funding of Employee Stock Ownership Plan
|
- | 206 | - | - | 1,132 | 1,338 | - | 1,338 | ||||||||||||||||||||||||
Treasury shares purchased
|
- | - | - | - | (41,423 | ) | (41,423 | ) | - | (41,423 | ) | |||||||||||||||||||||
RSU distributions
|
- | (3,678 | ) | - | - | 2,730 | (948 | ) | - | (948 | ) | |||||||||||||||||||||
RSU dividends
|
- | 34 | (34 | ) | - | - | - | - | - | |||||||||||||||||||||||
Cash dividends ($0.05 per share)
|
- | - | (7,316 | ) | - | - | (7,316 | ) | - | (7,316 | ) | |||||||||||||||||||||
Balance at March 31, 2010
|
$ | 1,628 | $ | 194,806 | $ | 2,137,952 | $ | 34,607 | $ | (557,805 | ) | $ | 1,811,188 | $ | 71,430 | $ | 1,882,618 |
Accumulated
|
||||||||||||||||||||||||||||||||
Capital in
|
Other
|
Total DENTSPLY
|
||||||||||||||||||||||||||||||
Common
|
Excess of
|
Retained
|
Comprehensive
|
Treasury
|
International
|
Noncontrolling
|
Total
|
|||||||||||||||||||||||||
Stock
|
Par Value
|
Earnings
|
Income (Loss)
|
Stock
|
Equity
|
Interests
|
Equity
|
|||||||||||||||||||||||||
Balance at December 31, 2010
|
$ | 1,628 | $ | 204,902 | $ | 2,320,350 | $ | 24,156 | $ | (711,650 | ) | $ | 1,839,386 | $ | 70,526 | $ | 1,909,912 | |||||||||||||||
Comprehensive Income:
|
||||||||||||||||||||||||||||||||
Net income
|
- | - | 69,084 | - | - | 69,084 | 379 | 69,463 | ||||||||||||||||||||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||||||||||||||||||||||
Foreign currency translation adjustments
|
- | - | - | 87,452 | - | 87,452 | 3,264 | 90,716 | ||||||||||||||||||||||||
Net loss on derivative financial instruments
|
- | - | - | (27,012 | ) | - | (27,012 | ) | - | (27,012 | ) | |||||||||||||||||||||
Net unrealized holding gains on available-for-sale adjustments
|
- | - | - | 4,202 | - | 4,202 | - | 4,202 | ||||||||||||||||||||||||
Pension liability adjustments
|
- | - | - | (533 | ) | - | (533 | ) | - | (533 | ) | |||||||||||||||||||||
Comprehensive Income
|
133,193 | 3,643 | 136,836 | |||||||||||||||||||||||||||||
Acquistion of noncontrolling interest
|
- | 21,463 | - | - | - | 21,463 | (37,008 | ) | (15,545 | ) | ||||||||||||||||||||||
Exercise of stock options
|
- | (6,450 | ) | - | - | 28,622 | 22,172 | - | 22,172 | |||||||||||||||||||||||
Tax benefit from stock options exercised
|
- | 4,371 | - | - | - | 4,371 | - | 4,371 | ||||||||||||||||||||||||
Share based compensation expense
|
- | 4,668 | - | - | - | 4,668 | - | 4,668 | ||||||||||||||||||||||||
Funding of Employee Stock Ownership Plan
|
- | 379 | - | - | 2,595 | 2,974 | - | 2,974 | ||||||||||||||||||||||||
Treasury shares purchased
|
- | - | - | - | (73,679 | ) | (73,679 | ) | - | (73,679 | ) | |||||||||||||||||||||
RSU distributions
|
- | (5,630 | ) | - | - | 3,473 | (2,157 | ) | - | (2,157 | ) | |||||||||||||||||||||
RSU dividends
|
- | 45 | (45 | ) | - | - | - | - | - | |||||||||||||||||||||||
Cash dividends ($0.05 per share)
|
- | - | (7,053 | ) | - | - | (7,053 | ) | - | (7,053 | ) | |||||||||||||||||||||
Balance at March 31, 2011
|
$ | 1,628 | $ | 223,748 | $ | 2,382,336 | $ | 88,265 | $ | (750,639 | ) | $ | 1,945,338 | $ | 37,161 | $ | 1,982,499 |
Three Months Ended
|
||||||||
(in millions)
|
2011
|
2010
|
||||||
Stock option expense
|
$ | 2.3 | $ | 2.9 | ||||
RSU and PRSU expense
|
2.1 | 2.0 | ||||||
Total stock based compensation expense
|
$ | 4.4 | $ | 4.9 | ||||
Total related tax benefit
|
$ | 1.3 | $ | 1.4 |
Outstanding
|
Exercisable
|
|||||||||||||||||||||||
Weighted
|
Weighted
|
|||||||||||||||||||||||
Average
|
Aggregate
|
Average
|
Aggregate
|
|||||||||||||||||||||
Exercise
|
Intrinsic
|
Exercise
|
Intrinsic
|
|||||||||||||||||||||
(in thousands, except per share data)
|
Shares
|
Price
|
Value
|
Shares
|
Price
|
Value
|
||||||||||||||||||
December 31, 2010
|
10,636 | $ | 29.07 | $ | 66,722 | 8,815 | $ | 28.58 | $ | 61,450 | ||||||||||||||
Granted
|
1,371 | 36.61 | ||||||||||||||||||||||
Exercised
|
(947 | ) | 23.41 | |||||||||||||||||||||
Cancelled
|
(9 | ) | 45.15 | |||||||||||||||||||||
Forfeited
|
(39 | ) | 31.51 | |||||||||||||||||||||
March 31, 2011
|
11,012 | $ | 30.47 | $ | 80,526 | 7,877 | $ | 29.18 | $ | 70,191 |
Weighted Average
|
||||||||
Grant Date
|
||||||||
(in thousands, except per share data)
|
Shares
|
Fair Value
|
||||||
Unvested at December 31, 2010
|
744 | $ | 32.43 | |||||
Granted
|
338 | 36.61 | ||||||
Vested
|
(172 | ) | 41.13 | |||||
Forfeited
|
(12 | ) | 29.80 | |||||
Unvested at March 31, 2011
|
898 | $ | 32.37 |
Three Months Ended
|
||||||||
(in thousands)
|
2011
|
2010
|
||||||
Net income
|
$ | 69,463 | $ | 62,191 | ||||
Other comprehensive income:
|
||||||||
Foreign currency translation adjustments
|
90,716 | (77,193 | ) | |||||
Net (loss) gain on derivative financial instruments
|
(27,012 | ) | 23,724 | |||||
Net unrealized holding gains on available-for-sale securities
|
4,202 | - | ||||||
Amortization of unrecognized losses and prior year service pension cost
|
(533 | ) | 763 | |||||
Total other comprehensive income (loss)
|
67,373 | (52,706 | ) | |||||
Total comprehensive income
|
136,836 | 9,485 | ||||||
Comprehensive loss attributable to the noncontrolling interests
|
3,643 | (3,423 | ) | |||||
Comprehensive income attributable to DENTSPLY International
|
$ | 133,193 | $ | 12,908 |
March 31,
|
December 31,
|
|||||||
(in thousands)
|
2011
|
2010
|
||||||
Foreign currency translation adjustments
|
$ | 258,049 | $ | 170,597 | ||||
Net loss on derivative financial instruments
|
(153,660 | ) | (126,648 | ) | ||||
Net unrealized holding gains on available-for-sale securities
|
15,231 | 11,029 | ||||||
Pension liability adjustments
|
(31,355 | ) | (30,822 | ) | ||||
$ | 88,265 | $ | 24,156 |
Three Months Ended
|
||||||||
Basic Earnings Per Common Share Computation
|
||||||||
(in thousands, except per share amounts)
|
2011
|
2010
|
||||||
Net income attributable to DENTSPLY International
|
$ | 69,084 | $ | 61,843 | ||||
Common shares outstanding
|
141,614 | 146,776 | ||||||
Earnings per common share - basic
|
$ | 0.49 | $ | 0.42 | ||||
Diluted Earnings Per Common Share Computation
|
||||||||
(in thousands, except per share amounts)
|
||||||||
Net income attributable to DENTSPLY International
|
$ | 69,084 | $ | 61,843 | ||||
Common shares outstanding
|
141,614 | 146,776 | ||||||
Incremental shares from assumed exercise of dilutive options from stock-based compensation awards
|
2,430 | 2,518 | ||||||
Total shares
|
144,044 | 149,294 | ||||||
Earnings per common share - diluted
|
$ | 0.48 | $ | 0.41 |
(in thousands)
|
2011
|
2010
|
||||||
U.S., Germany and Certain Other European
|
||||||||
Regions Consumable Businesses
|
$ | 141,067 | $ | 134,974 | ||||
France, U.K., Italy and Certain Other European
|
||||||||
Countries, CIS, Middle East, Africa,
|
||||||||
Pacific Rim Businesses
|
124,689 | 110,285 | ||||||
Canada/Latin America/Endodontics/
|
||||||||
Orthodontics
|
166,859 | 156,620 | ||||||
Dental Laboratory Business/
|
||||||||
Implants/Non-Dental
|
138,931 | 145,110 | ||||||
All Other (a)
|
(1,043 | ) | (1,045 | ) | ||||
Total
|
$ | 570,503 | $ | 545,944 |
(in thousands)
|
2011
|
2010
|
||||||
U.S., Germany and Certain Other European
|
||||||||
Regions Consumable Businesses
|
$ | 141,067 | $ | 134,974 | ||||
France, U.K., Italy and Certain Other European
|
||||||||
Countries, CIS, Middle East, Africa,
|
||||||||
Pacific Rim Businesses
|
114,523 | 102,070 | ||||||
Canada/Latin America/Endodontics/
|
||||||||
Orthodontics
|
166,115 | 156,030 | ||||||
Dental Laboratory Business/
|
||||||||
Implants/Non-Dental
|
106,343 | 105,318 | ||||||
All Other (a)
|
(1,043 | ) | (1,045 | ) | ||||
Total excluding precious metal content
|
527,005 | 497,347 | ||||||
Precious mental content
|
43,498 | 48,597 | ||||||
Total including precious metal content
|
$ | 570,503 | $ | 545,944 |
(in thousands)
|
2011
|
2010
|
||||||
U.S., Germany and Certain Other European
|
||||||||
Regions Consumable Businesses
|
$ | 27,758 | $ | 26,217 | ||||
France, U.K., Italy and Certain Other European
|
||||||||
Countries, CIS, Middle East, Africa,
|
||||||||
Pacific Rim Businesses
|
4,469 | 3,619 | ||||||
Canada/Latin America/Endodontics/
|
||||||||
Orthodontics
|
31,474 | 25,320 | ||||||
Dental Laboratory Business/
|
||||||||
Implants/Non-Dental
|
27,787 | 26,680 | ||||||
All Other (a)
|
51,377 | 44,003 | ||||||
Eliminations
|
(142,865 | ) | (125,839 | ) | ||||
Total
|
$ | - | $ | - |
(in thousands)
|
2011
|
2010
|
||||||
U.S., Germany and Certain Other European
|
||||||||
Regions Consumable Businesses
|
$ | 46,345 | $ | 44,861 | ||||
France, U.K., Italy and Certain Other European
|
||||||||
Countries, CIS, Middle East, Africa,
|
||||||||
Pacific Rim Businesses
|
(569 | ) | (129 | ) | ||||
Canada/Latin America/Endodontics/
|
||||||||
Orthodontics
|
49,817 | 48,022 | ||||||
Dental Laboratory Business/
|
||||||||
Implants/Non-Dental
|
23,950 | 22,463 | ||||||
All Other (a)
|
(20,326 | ) | (21,213 | ) | ||||
Segment operating income
|
99,217 | 94,004 | ||||||
Reconciling Items:
|
||||||||
Restructuring and other costs
|
(633 | ) | (4,680 | ) | ||||
Interest expense
|
(6,343 | ) | (5,720 | ) | ||||
Interest income
|
1,828 | 787 | ||||||
Other expense (income), net
|
(70 | ) | (945 | ) | ||||
Income before income taxes
|
$ | 93,999 | $ | 83,446 |
March 31,
|
December 31,
|
|||||||
(in thousands)
|
2011
|
2010
|
||||||
U.S., Germany and Certain Other European
|
||||||||
Regions Consumable Businesses
|
$ | 611,306 | $ | 578,770 | ||||
France, U.K., Italy and Certain Other European
|
||||||||
Countries, CIS, Middle East, Africa,
|
||||||||
Pacific Rim Businesses
|
400,292 | 390,572 | ||||||
Canada/Latin America/Endodontics/
|
||||||||
Orthodontics
|
1,001,345 | 932,126 | ||||||
Dental Laboratory Business/
|
||||||||
Implants/Non-Dental
|
1,058,476 | 995,090 | ||||||
All Other (a)
|
365,630 | 361,393 | ||||||
Total
|
$ | 3,437,049 | $ | 3,257,951 |
March 31,
|
December 31,
|
|||||||
(in thousands)
|
2011
|
2010
|
||||||
Finished goods
|
$ | 204,340 | $ | 189,343 | ||||
Work-in-process
|
60,160 | 57,272 | ||||||
Raw materials and supplies
|
67,782 | 62,123 | ||||||
$ | 332,282 | $ | 308,738 |
Defined Benefit Plans
|
||||||||
(in thousands)
|
2011
|
2010
|
||||||
Service cost
|
$ | 2,434 | $ | 2,015 | ||||
Interest cost
|
2,187 | 2,143 | ||||||
Expected return on plan assets
|
(1,216 | ) | (1,152 | ) | ||||
Amortization of transition obligation
|
- | 31 | ||||||
Amortization of prior service cost
|
20 | 20 | ||||||
Amortization of net loss
|
383 | 241 | ||||||
Net periodic benefit cost
|
$ | 3,808 | $ | 3,298 |
Other Postretirement Plans
|
||||||||
(in thousands)
|
2011
|
2010
|
||||||
Service cost
|
$ | 16 | $ | 14 | ||||
Interest cost
|
138 | 153 | ||||||
Amortization of net loss
|
49 | 69 | ||||||
Net periodic benefit cost
|
$ | 203 | $ | 236 |
Other
|
||||||||
Pension
|
Postretirement
|
|||||||
(in thousands)
|
Benefits
|
Benefits
|
||||||
Actual at March 31, 2011
|
$ | 2,929 | $ | 12 | ||||
Projected for the remainder of the year
|
6,921 | 1,087 | ||||||
Total for year
|
$ | 9,850 | $ | 1,099 |
Severance
|
||||||||||||
2009 and
|
||||||||||||
(in thousands)
|
Prior Plans
|
2010 Plans
|
Total
|
|||||||||
Balance at December 31, 2010
|
$ | 2,878 | $ | 5,260 | $ | 8,138 | ||||||
Provisions and adjustments
|
- | (45 | ) | (45 | ) | |||||||
Amounts applied
|
(455 | ) | (925 | ) | (1,380 | ) | ||||||
Balance at March 31, 2011
|
$ | 2,423 | $ | 4,290 | $ | 6,713 |
Lease/Contract Terminations
|
||||||||||||
2009 and
|
||||||||||||
(in thousands)
|
Prior Plans
|
2010 Plans
|
Total
|
|||||||||
Balance at December 31, 2010
|
$ | 996 | - | $ | 996 | |||||||
Provisions and adjustments
|
- | (112 | ) | (112 | ) | |||||||
Amounts applied
|
- | 112 | 112 | |||||||||
Balance at March 31, 2011
|
$ | 996 | - | $ | 996 |
Other Restructuring Costs
|
||||||||||||
2009 and
|
||||||||||||
(in thousands)
|
Prior Plans
|
2010 Plans
|
Total
|
|||||||||
Balance at December 31, 2010
|
$ | 57 | $ | - | $ | 57 | ||||||
Provisions and adjustments
|
105 | 77 | 182 | |||||||||
Amounts applied
|
(105 | ) | (77 | ) | (182 | ) | ||||||
Balance at March 31, 2011
|
$ | 57 | $ | - | $ | 57 |
December 31,
|
Provisions and
|
Amounts
|
March 31,
|
|||||||||||||
(in thousands)
|
2010
|
Adjustments
|
Applied
|
2011
|
||||||||||||
United States, Germany and Certain
|
||||||||||||||||
Other European Regions
|
||||||||||||||||
Consumable Businesses
|
$ | 1,031 | $ | - | $ | - | $ | 1,031 | ||||||||
France, U.K., Italy and Certain
|
||||||||||||||||
Other European Countries, CIS, Middle
|
||||||||||||||||
East, Africa, Pacific Rim Businesses
|
193 | (45 | ) | (148 | ) | - | ||||||||||
Canada/Latin America/
|
||||||||||||||||
Endodontics/Orthodontics
|
400 | - | - | 400 | ||||||||||||
Dental Laboratory Business/
|
||||||||||||||||
Implants/Non-Dental
|
7,567 | 70 | (1,302 | ) | 6,335 | |||||||||||
$ | 9,191 | $ | 25 | $ | (1,450 | ) | $ | 7,766 |
Notional Amounts Maturing in the Year
|
Fair Value Net Asset (Liability)
|
|||||||||||
Foreign Exchange Forward Contracts
|
2011
|
2012
|
March 31, 2011
|
|||||||||
(in thousands)
|
||||||||||||
Forward sale, 10.7 million Australian dollars
|
$ | 9,732 | $ | 1,319 | $ | (536 | ) | |||||
Forward purchase, 6.0 million British pounds
|
(8,920 | ) | (795 | ) | (126 | ) | ||||||
Forward sale, 29.2 million Canadian dollars
|
26,640 | 3,514 | (1,248 | ) | ||||||||
Forward sale, 5.2 million Danish krone
|
990 | - | 9 | |||||||||
Forward sale, 2.0 million euros
|
2,907 | - | 1,022 | |||||||||
Forward sale, 1.1 billion Japanese yen
|
12,712 | - | 594 | |||||||||
Forward sale, 125.8 million Mexican pesos
|
10,571 | - | (109 | ) | ||||||||
Forward purchase, 2.0 million Norwegian krone
|
(369 | ) | - | (1 | ) | |||||||
Forward sale, 2.2 million Singapore dollars
|
1,785 | - | 10 | |||||||||
Forward sale, 6.1 billion South Korean won
|
5,524 | - | (29 | ) | ||||||||
Forward purchase, 12.0 million Swiss francs
|
(13,105 | ) | - | 93 | ||||||||
Forward purchase, 26.4 million Taiwanese dollars
|
(899 | ) | - | (26 | ) | |||||||
Total foreign exchange forward contracts
|
$ | 47,568 | $ | 4,038 | $ | (347 | ) |
Notional Amounts Maturing in the Year
|
Fair Value Net Asset (Liability)
|
|||||||||||||||||||||||
Interest Rate Swaps
|
2011
|
2012
|
2013
|
2014
|
2015 and Beyond
|
March 31, 2011
|
||||||||||||||||||
(in thousands)
|
||||||||||||||||||||||||
Euro
|
$ | 1,005 | $ | 1,340 | $ | 1,340 | $ | 1,025 | $ | 3,331 | $ | (686 | ) | |||||||||||
Japanese yen
|
- | 151,554 | - | - | - | (1,567 | ) | |||||||||||||||||
Swiss francs
|
- | 70,980 | - | - | - | (2,452 | ) | |||||||||||||||||
Total interest rate swaps
|
$ | 1,005 | $ | 223,874 | $ | 1,340 | $ | 1,025 | $ | 3,331 | $ | (4,705 | ) |
Notional Amounts Maturing in the Year
|
Fair Value Net
Asset (Liability)
|
|||||||||||
Commodity Contracts
|
2011
|
2012
|
March 31, 2011
|
|||||||||
(in thousands)
|
||||||||||||
Platinum swap - U.S. dollar
|
$ | (720 | ) | $ | (119 | ) | $ | 26 | ||||
Total commodity contracts
|
$ | (720 | ) | $ | (119 | ) | $ | 26 |
Notional Amounts Maturing in the Year
|
Fair Value Net Asset (Liability)
|
|||||||||||||||
Cross Currency Basis Swaps
|
2011
|
2012
|
2013
|
March 31, 2011
|
||||||||||||
(in thousands)
|
||||||||||||||||
Swiss franc 592.5 million @ 1.17 pay CHF 3 mth. LIBOR receive USD 3 mth. LIBOR
|
$ | 87,797 | $ | 61,807 | $ | 497,406 | $ | (139,987 | ) | |||||||
Euro 358.0 million @ $1.22 pay EUR 3 mth. EURIBOR receive USD 3 mth. LIBOR
|
- | - | 508,092 | (71,796 | ) | |||||||||||
Total cross currency basis swaps
|
$ | 87,797 | $ | 61,807 | $ | 1,005,498 | $ | (211,783 | ) |
March 31, 2011
|
||||||||||||||||
Prepaid
|
||||||||||||||||
(in thousands)
|
Expenses
|
Other
|
Other
|
|||||||||||||
and Other
|
Noncurrent
|
Accrued
|
Noncurrent
|
|||||||||||||
Designated as Hedges
|
Current Assets
|
Assets, Net
|
Liabilities
|
Liabilities
|
||||||||||||
Foreign exchange forward contracts
|
$ | 1,175 | $ | 1 | $ | 1,617 | $ | 168 | ||||||||
Commodity contracts
|
26 | - | - | - | ||||||||||||
Interest rate swaps
|
- | - | 4,019 | - | ||||||||||||
Cross currency basis swaps
|
- | - | 23,283 | 188,500 | ||||||||||||
Total
|
$ | 1,201 | $ | 1 | $ | 28,919 | $ | 188,668 | ||||||||
Not Designated as Hedges
|
||||||||||||||||
Foreign exchange forward contracts
|
$ | 623 | $ | - | $ | 361 | $ | - | ||||||||
Interest rate swaps
|
- | - | 95 | 591 | ||||||||||||
Total
|
$ | 623 | $ | - | $ | 456 | $ | 591 |
December 31, 2010
|
||||||||||||||||
Prepaid
|
||||||||||||||||
(in thousands)
|
Expenses
|
Other
|
Other
|
|||||||||||||
and Other
|
Noncurrent
|
Accrued
|
Noncurrent
|
|||||||||||||
Designated as Hedges
|
Current Assets
|
Assets, Net
|
Liabilities
|
Liabilities
|
||||||||||||
Foreign exchange forward contracts
|
$ | 2,455 | $ | 21 | $ | 1,139 | $ | 135 | ||||||||
Commodity contracts
|
88 | - | - | - | ||||||||||||
Interest rate swaps
|
- | - | 4,213 | 871 | ||||||||||||
Cross currency basis swaps
|
- | - | 21,516 | 147,589 | ||||||||||||
Total
|
$ | 2,543 | $ | 21 | $ | 26,868 | $ | 148,595 | ||||||||
Not Designated as Hedges
|
||||||||||||||||
Foreign exchange forward contracts
|
$ | 821 | $ | - | $ | 600 | $ | - | ||||||||
Interest rate swaps
|
- | - | 104 | 556 | ||||||||||||
Total
|
$ | 821 | $ | - | $ | 704 | $ | 556 |
Derivatives in Cash Flow Hedging
|
Effective Portion
|
||||||||
Gain (Loss)
|
Classification
|
Reclassified from
|
|||||||
(in thousands)
|
in AOCI
|
of Gains (Losses)
|
AOCI into Income
|
||||||
Interest rate contracts
|
$ | (281 | ) |
Interest expense
|
$ | (1,251 | ) | ||
Foreign exchange forward contracts
|
(932 | ) |
Cost of products sold
|
467 | |||||
Foreign exchange forward contracts
|
(266 | ) |
SG&A expenses
|
105 | |||||
Commodity contracts
|
27 |
Cost of products sold
|
105 | ||||||
Total
|
$ | (1,452 | ) | $ | (574 | ) |
Derivatives in Cash Flow Hedging
|
Ineffective portion
|
|||||
Classification
|
Recognized
|
|||||
(in thousands)
|
of Gains (Losses)
|
in Income
|
||||
Interest rate contracts
|
Other expense, net
|
$ | 102 | |||
Foreign exchange forward contracts
|
Interest expense
|
(227 | ) | |||
Foreign exchange forward contracts
|
Interest expense
|
11 | ||||
Commodity contracts
|
Interest expense
|
(3 | ) | |||
Total
|
$ | (117 | ) |
Derivatives in Cash Flow Hedging
|
Effective Portion
|
||||||||
Gain (Loss)
|
Classification
|
Reclassified from
|
|||||||
(in thousands)
|
in AOCI
|
of Gains (Losses)
|
AOCI into Income
|
||||||
Interest rate swaps
|
$ | (577 | ) |
Interest expense
|
$ | (2,164 | ) | ||
Foreign exchange forward contracts
|
(521 | ) |
Cost of products sold
|
73 | |||||
Foreign exchange forward contracts
|
17 |
SG&A expenses
|
94 | ||||||
Commodity contracts
|
123 |
Cost of products sold
|
258 | ||||||
Total
|
$ | (958 | ) | $ | (1,739 | ) |
Derivatives in Cash Flow Hedging
|
Ineffective portion
|
||||
Classification
|
Recognized
|
||||
(in thousands)
|
of Gains (Losses)
|
in Income
|
|||
Interest rate swaps
|
Other expense, net
|
$ | 297 | ||
Foreign exchange forward contracts
|
Interest expense
|
(89 | ) | ||
Foreign exchange forward contracts
|
Interest expense
|
(3 | ) | ||
Commodity contracts
|
Interest expense
|
(7 | ) | ||
Total
|
$ | 198 |
Three Months Ended March 31, 2011
|
|||||||||
Derivatives in Net Investment Hedging
|
Gain (Loss)
|
||||||||
Gain (Loss)
|
Classification
|
Recognized
|
|||||||
(in thousands)
|
in AOCI
|
of Gains (Losses)
|
in Income
|
||||||
Cross currency interest rate swaps
|
$ | (12,948 | ) |
Interest income
|
$ | 199 | |||
Interest expense
|
(25 | ) | |||||||
Cross currency interest rate swaps
|
(29,732 | ) |
Interest expense
|
(957 | ) | ||||
Total
|
$ | (42,680 | ) | $ | (783 | ) |
Three Months Ended March 31, 2010
|
|||||||||
Derivatives in Net Investment Hedging
|
Gain (Loss)
|
||||||||
Gain (Loss)
|
Classification
|
Recognized
|
|||||||
(in thousands)
|
in AOCI
|
of Gains (Losses)
|
in Income
|
||||||
Cross currency interest rate swaps
|
$ | 9,210 |
Interest income
|
$ | 47 | ||||
Interest expense
|
(58 | ) | |||||||
Cross currency interest rate swaps
|
28,758 |
Interest expense
|
(657 | ) | |||||
Total
|
$ | 37,968 | $ | (668 | ) |
Classification
|
Three Months Ended
|
|||||
(in thousands)
|
of Gains (Losses)
|
March 31, 2011
|
||||
Foreign exchange forward contracts
|
Other expense, net
|
$ | 1,704 | |||
Interest rate swaps
|
Interest expense
|
(55 | ) | |||
Total
|
$ | 1,649 |
Classification
|
Three Months Ended
|
|||||
(in thousands)
|
of Gains (Losses)
|
March 31, 2010
|
||||
Foreign exchange forward contracts
|
Other expense, net
|
$ | (2,276 | ) | ||
Interest rate swaps
|
Interest expense
|
(148 | ) | |||
Total
|
$ | (2,424 | ) |
Three Months Ended
|
||||||||
March 31,
|
||||||||
(in thousands, net of tax)
|
2011
|
2010
|
||||||
Beginning balance
|
$ | (1,468 | ) | $ | (4,799 | ) | ||
Changes in fair value of derivatives
|
(1,036 | ) | (661 | ) | ||||
Reclassifications to earnings from equity
|
229 | 1,073 | ||||||
Total activity
|
(807 | ) | 412 | |||||
Ending balance
|
$ | (2,275 | ) | $ | (4,387 | ) |
Three Months Ended
|
||||||||
March 31,
|
||||||||
(in thousands, net of tax)
|
2011
|
2010
|
||||||
Beginning balance
|
$ | 45,417 | $ | 111,115 | ||||
Foreign currency translation adjustment
|
86,438 | (74,319 | ) | |||||
Changes in fair value of:
|
||||||||
Foreign currency debt
|
1,014 | 898 | ||||||
Derivative hedge instruments
|
(26,205 | ) | 23,312 | |||||
Total activity
|
61,247 | (50,109 | ) | |||||
Ending balance
|
$ | 106,664 | $ | 61,006 |
March 31, 2011
|
||||||||||||||||
(in thousands)
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets
|
||||||||||||||||
Money market funds
|
$ | 392,459 | $ | 392,459 | $ | - | $ | - | ||||||||
Commodity forward purchase contracts
|
26 | - | 26 | - | ||||||||||||
Foreign exchange forward contracts
|
1,799 | - | 1,799 | - | ||||||||||||
Corporate convertible bonds
|
75,170 | - | - | 75,170 | ||||||||||||
Total assets
|
$ | 469,454 | $ | 392,459 | $ | 1,825 | $ | 75,170 | ||||||||
Liabilities
|
||||||||||||||||
Interest rate swaps
|
$ | 4,705 | $ | - | $ | 4,705 | $ | - | ||||||||
Cross currency interest rate swaps
|
211,783 | - | 211,783 | - | ||||||||||||
Foreign exchange forward contracts
|
2,146 | - | 2,146 | - | ||||||||||||
Total liabilities
|
$ | 218,634 | $ | - | $ | 218,634 | $ | - |
December 31, 2010
|
||||||||||||||||
(in thousands)
|
Total
|
Level 1
|
Level 2
|
Level 3
|
||||||||||||
Assets
|
||||||||||||||||
Money market funds
|
$ | 380,593 | $ | 380,593 | $ | - | $ | - | ||||||||
Commodity forward purchase contracts
|
88 | - | 88 | - | ||||||||||||
Foreign exchange forward contracts
|
3,297 | - | 3,297 | - | ||||||||||||
Corporate convertible bonds
|
66,024 | - | - | 66,024 | ||||||||||||
Total assets
|
$ | 450,002 | $ | 380,593 | $ | 3,385 | $ | 66,024 | ||||||||
Liabilities
|
||||||||||||||||
Interest rate swaps
|
$ | 5,744 | $ | - | $ | 5,744 | $ | - | ||||||||
Cross currency interest rate swaps
|
169,105 | - | 169,105 | - | ||||||||||||
Foreign exchange forward contracts
|
1,874 | - | 1,874 | - | ||||||||||||
Total liabilities
|
$ | 176,723 | $ | - | $ | 176,723 | $ | - |
(in thousands)
|
||||
Level 3
|
||||
Balance at December 31, 2010
|
$ | 66,024 | ||
Purchases, gross
|
- | |||
Sales, gross
|
- | |||
Unrealized gains (losses):
|
||||
Reported in AOCI - corporate convertible bonds
|
9,146 | |||
Balance at March 31, 2011
|
$ | 75,170 |
Three Months Ended
|
||||||||||||||||
March 31,
|
||||||||||||||||
(in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
||||||||||||
|
||||||||||||||||
Net sales
|
$ | 570.5 | $ | 545.9 | $ | 24.6 | 4.5 | % | ||||||||
Less: precious metal content of sales
|
43.5 | 48.6 | (5.1 | ) | (10.5 | )% | ||||||||||
Net sales, excluding precious metal content
|
$ | 527.0 | $ | 497.3 | $ | 29.7 | 6.0 | % |
Three Months Ended March 31, 2011
|
||||||||||||||||
United States
|
Europe
|
All Other Regions
|
Worldwide
|
|||||||||||||
Internal sales growth
|
1.1 | % | 4.1 | % | 8.4 | % | 3.8 | % | ||||||||
Acquisition sales growth
|
- | 0.9 | % | 1.9 | % | 0.8 | % | |||||||||
Constant currency sales growth
|
1.1 | % | 5.0 | % | 10.3 | % | 4.6 | % |
Three Months Ended
|
||||||||||||||||
March 31,
|
||||||||||||||||
(in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
||||||||||||
Gross profit
|
$ | 300.0 | $ | 282.0 | $ | 18.0 | 6.4 | % | ||||||||
Gross profit as a percentage of net sales, including precious metal content
|
52.6 | % | 51.7 | % | ||||||||||||
Gross profit as a percentage of net sales, excluding precious metal content
|
56.9 | % | 56.7 | % |
Three Months Ended
|
||||||||||||||||
March 31,
|
||||||||||||||||
(in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
||||||||||||
Selling, general and administrative expenses (“SG&A”)
|
$ | 200.8 | $ | 188.0 | $ | 12.7 | 6.8 | % | ||||||||
Restructuring and other costs
|
$ | 0.6 | $ | 4.7 | $ | (4.1 | ) |
NM
|
||||||||
SG&A as a percentage of net sales, including precious metal content
|
35.2 | % | 34.4 | % | ||||||||||||
SG&A as a percentage of net sales, excluding precious metal content
|
38.1 | % | 37.8 | % |
Three Months Ended
|
||||||||||||
March 31,
|
||||||||||||
(in millions)
|
2011
|
2010
|
Change
|
|||||||||
Net interest expense
|
$ | 4.5 | $ | 4.9 | $ | (0.4 | ) | |||||
Other expense (income), net
|
0.1 | 0.9 | (0.8 | ) | ||||||||
Net interest and other expense
|
$ | 4.6 | $ | 5.8 | $ | (1.2 | ) |
Three Months Ended
|
||||||||||||
March 31,
|
||||||||||||
(in millions, except per share data)
|
2011
|
2010
|
$ Change
|
|||||||||
Effective income tax rates
|
25.2 | % | 25.5 | % | ||||||||
Equity in net loss of unconsolidated affiliated company
|
$ | (0.8 | ) | $ | - | $ | (0.8 | ) | ||||
Net income attributable to noncontrolling interests
|
$ | 0.4 | $ | 0.3 | $ | 0.1 | ||||||
Net income attributable to DENTSPLY International
|
$ | 69.1 | $ | 61.8 | $ | 7.3 | ||||||
Earnings per common share - diluted
|
$ | 0.48 | $ | 0.41 |
Three Months Ended
|
||||||||
March 31, 2011
|
||||||||
Income
|
Per Diluted
|
|||||||
(in thousands)
|
(Expense)
|
Common Share
|
||||||
Net income attributable to DENTSPLY International
|
$ | 69,084 | $ | 0.48 | ||||
Loss on mark-to-market adjustments at an unconsolidated affilated company
|
921 | 0.01 | ||||||
Acquisition related activities, net of tax and noncontrolling interests
|
245 | - | ||||||
Income tax related adjustments
|
196 | - | ||||||
Restructuring and other costs, net of tax and noncontrolling interests
|
114 | - | ||||||
Adjusted non-US GAAP earnings
|
$ | 70,560 | $ | 0.49 |
Three Months Ended
|
||||||||
March 31, 2010
|
||||||||
Income
|
Per Diluted
|
|||||||
(in thousands)
|
(Expense)
|
Common Share
|
||||||
Net income attributable to DENTSPLY International
|
$ | 61,843 | $ | 0.41 | ||||
Restructuring and other costs, net of tax and noncontrolling interests
|
2,791 | 0.02 | ||||||
Acquisition related activities, net of tax and noncontrolling interests
|
387 | - | ||||||
Income tax related adjustments
|
437 | - | ||||||
Rounding
|
- | 0.01 | ||||||
Adjusted non-US GAAP earnings
|
$ | 65,458 | $ | 0.44 |
Three Months Ended
|
||||||||||||||||
March 31,
|
||||||||||||||||
(in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
||||||||||||
U.S., Germany and Certain Other European Regions Consumable Businesses
|
$ | 141.1 | $ | 135.0 | $ | 6.1 | 4.5 | % | ||||||||
France, U.K., Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses
|
$ | 114.5 | $ | 102.1 | $ | 12.4 | 12.1 | % | ||||||||
Canada/Latin America/Endodontics/Orthodontics
|
$ | 166.1 | $ | 156.0 | $ | 10.1 | 6.5 | % | ||||||||
Dental Laboratory Business/Implants/Non-Dental
|
$ | 106.3 | $ | 105.3 | $ | 1.0 | 0.9 | % |
Three Months Ended
|
||||||||||||||||
March 31,
|
||||||||||||||||
(in millions)
|
2011
|
2010
|
$ Change
|
% Change
|
||||||||||||
U.S., Germany and Certain Other European Regions Consumable Businesses
|
$ | 46.3 | $ | 44.9 | $ | 1.4 | 3.1 | % | ||||||||
France, U.K., Italy and Certain Other European Countries, CIS, Middle East, Africa, Pacific Rim Businesses
|
$ | (0.6 | ) | $ | (0.1 | ) | $ | (0.5 | ) | N/M | ||||||
Canada/Latin America/Endodontics/Orthodontics
|
$ | 49.8 | $ | 48.0 | $ | 1.8 | 3.7 | % | ||||||||
Dental Laboratory Business/Implants/Non-Dental
|
$ | 24.0 | $ | 22.5 | $ | 1.5 | 6.7 | % |
(in thousands, except per share amounts)
|
Number of
|
|||||||||||||||
Shares that
|
||||||||||||||||
May be Purchased
|
||||||||||||||||
Total Number
|
Average Price
|
Total Cost
|
Under the Share
|
|||||||||||||
of Shares
|
Paid Per
|
of Shares
|
Repurchase
|
|||||||||||||
Period
|
Purchased
|
Share
|
Purchased
|
Program
|
||||||||||||
January 1-31, 2011
|
- | $ | - | $ | - | 13,103.0 | ||||||||||
February 1-28, 2011
|
620.0 | 36.31 | 22,510.2 | 12,877.3 | ||||||||||||
March 1-31, 2011
|
1,409.5 | 36.30 | 51,168.6 | 12,093.1 | ||||||||||||
2,029.5 | $ | 36.30 | $ | 73,678.8 |
Exhibit Number
|
Description
|
|
10.16
|
Incentive Compensation Plan Amended and Restated
|
|
10.20
|
2010 Equity Incentive Plan Amended and Restated
|
|
10.21
|
Employment Agreement entered February 2011 between the Company and Deborah M. Rasin
|
|
30
|
Section 302 Certification Statements.
|
|
32
|
Section 906 Certification Statement.
|
|
101.INS
|
XBRL Instance Document
|
|
101.SCH
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB
|
XBRL Extension Labels Linkbase Document
|
|
101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
/s/
|
Bret W. Wise
|
April 28, 2011
|
|
Bret W. Wise
|
Date
|
||
Chairman of the Board and
|
|||
Chief Executive Officer
|
/s/
|
William R. Jellison
|
April 28, 2011
|
|
William R. Jellison
|
Date
|
||
Senior Vice President and
|
|||
Chief Financial Officer
|
I.
|
PURPOSE
|
|
To provide greater incentive for key employees to continually exert their best efforts on behalf of the Company by rewarding them for achieving predetermined operating objectives.
|
|
To attract and retain in the employ of the Company outstanding results oriented individuals.
|
|
To align the interests of such employees with those of the Company's stockholders.
|
|
To create a management team effort within the various Profit Centers and operating units of the Company.
|
II.
|
ADMINISTRATION
|
|
The Plan will be administered by, and any question of interpretation under the Plan determined by, the Human Resources Committee ("Human Resources Committee") of the Dentsply International Inc. Board of Directors (the "Board"). The Board or the Human Resources Committee may appoint an Incentive Compensation Plan Committee ("ICP Committee") consisting of management employees to assist in the administration of the Plan.
|
III.
|
AWARDS
|
|
Awards will be determined by the Human Resources Committee, based on criteria determined by such Committee and described in Section VIII hereof, for each applicable year (a "Bonus Year"). Cash payments will be made to participants immediately after the close of corporate books for the applicable Bonus Year but in no case later than March 1st of the year succeeding the applicable Bonus Year. Payments will be rounded up or down to the nearest $100 equivalent.
|
IV.
|
PARTICIPANT ELIGIBILITY
|
A.
|
Profit Centers
|
1.
|
General Managers
|
2.
|
Individuals who normally report directly to the General Manager.
|
|
3.
|
Individuals' work assignment must have a direct bearing on the profit-ability of the Profit Center.
|
|
4.
|
Individual must be recommended for participation by both the General Manager of the Profit Center and the Corporate Officer responsible for the Profit Center and approved by the ICP Committee.
|
B.
|
Corporate Staff
|
|
1.
|
Individuals whose work assignment must have direct bearing on the profitability of the corporation.
|
2.
|
Officers
|
3.
|
Individuals who normally report directly to a Corporate Officer.
|
|
4.
|
Individual must be recommended for participation by the responsible Corporate Officer and the President and approved by the ICP Committee.
|
V.
|
ENROLLMENT
|
|
The Board will designate the officers who will be participants. General Managers will send their recommendations for participation to the Corporate Officer responsible for the Profit Center or Corporate Staff Department.
|
|
Corporate Officers will send recommendations to the ICP Committee and Corporate Human Resources Office who will be charged with monitoring participants in conjunction with the ICP Committee.
|
VI.
|
VESTING OF BONUS RIGHTS
|
|
A.
|
Those participants who leave the employ of the Company before the end of the Bonus Year for any reason other than qualified normal or early retirement or a bona fide physical or mental disability (as determined by the Human Resources Committee) will receive no bonus payment for the Bonus Year.
|
|
B.
|
Those participants who die or who take normal or early retirement or resign due to a bona fide disability (as determined by the Human Resources Committee) before the end of the Bonus Year will receive a bonus award based upon the pro-rata base pay received while actually working during the Bonus Year.
|
VII.
|
PARTICIPANT ADDITIONS OR DELETIONS
|
|
Profit Center General Managers or Corporate Officers may remove participants from the Plan at any time during the Bonus Year by following the same procedure outlined in Enrollment. Any participants who are removed from the Plan during a Bonus Year shall have no right to receive payments under the Plan for any portion of such Bonus Year.
|
|
Participants may be added during the Bonus Year if they are a direct replacement for someone already enrolled in the Plan or, if they are hired to fill a new position eligible for the Plan, and will be in the qualifying position for at least six months. In this instance the new person will only receive his or her bonus award based on the pro-rata base pay received while enrolled in the Plan.
|
VIII.
|
PLAN CRITERIA
|
|
The Plan centers on each Profit Center's performance as measured against the relevant budget, submitted by Profit Center Management and approved by Corporate Management. For corporate level employees, bonuses will be based on corporate performance measured against the corporate budget.
|
|
The actual operating results will be adjusted for major sales or dispositions of assets not in the ordinary course of business and changes in the business or segments of the business which are directed to be carried out by Corporate Management to the extent they were not included in the target. In addition, the Human Resources Committee has approved certain principals for measuring earnings related to restructurings, impairments, stock repurchases, legal settlements, acquisitions, the effects of non-cash gains or losses resulting from the application of the provisions of SFAS No. 157, and other unbudgeted items.
|
|
Base salary is defined as the total of 12 times year-end actual monthly salary received during the Bonus Year or a base salary established by the ICP Committee. It does not include any other compensation that might be received.
|
|
Separate bonus calculations will be made for Officers, General Managers, Key Employees and Corporate Staff.
|
IX.
|
HUMAN RESOURCE COMMITTEE
|
|
The Human Resource Committee may adjust the mathematical calculation of the ICP bonus in their sole discretion by + 2.5% (+ 15% in terms of payout), based on their evaluation of business performance.
|
X.
|
AMENDMENTS TO THE PLAN
|
|
The Board has the right to modify or repeal this Plan entirely at its discretion. However, any bonus payments that have been earned in accordance with, but not yet paid under, this Plan cannot be canceled without consent of the participant.
|
SECTION 1
|
PURPOSE
|
SECTION 2
|
ELIGIBILITY
|
SECTION 3
|
ADMINISTRATION
|
3.1
|
The Committee
|
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 Awards granted hereunder. The Committee, in its sole discretion, shall determine the Key Employees, consultants and advisors to whom, and the time or times at which, Awards will be granted, the number of shares to be subject to each Award, the expiration date of each Award, the time or times within which the Option may be exercised or forfeiture restrictions lapse, the cancellation or termination of the Award and the other terms and conditions of the grant of the Award. The terms and conditions of Awards need not be the same with respect to each Optionee and/or Grantee or with respect to each Award. The Governance Committee, which is responsible for Director compensation, makes such determinations with respect to Outside Directors.
|
|
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 Award granted hereunder by the Committee, shall be final, binding and conclusive for all purposes and upon all persons.
|
|
Each Award shall be evidenced by a written agreement or grant certificate specifying the type of Award granted, the number of shares of Common Stock ("Common Stock") to be subject to such Award and, as applicable, the vesting schedule, the exercise or grant price, the terms for payment of the exercise price, the expiration date of the Option, the restrictions imposed upon the Restricted Stock and/or Restricted Stock Units 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 THE PLAN
|
SECTION 5
|
GRANTS OF OPTIONS TO EMPLOYEES, OUTSIDE DIRECTORS, CONSULTANTS AND ADVISERS
|
5.1
|
Grants
|
|
Subject to the terms of the Plan, the Committee (the Governance Committee with respect to Outside Directors) may from time to time grant Options which are ISOs to Key Employees and Options which are NSOs to Outside Directors, Key Employees, consultants and advisers 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.
|
5.2
|
Expiration
|
|
Except to the extent otherwise provided in or pursuant to Sections 10 and 11, 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.
|
5.3
|
Vesting
|
|
Except to the extent otherwise provided in or pursuant to Sections 10 and 11, or in the proviso to this sentence, Options shall vest pursuant to the following schedule: with respect to one-third of the total number of shares of 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 vesting schedule with respect to any or all Options, or any part thereof, granted under the Plan.
|
5.4
|
Required Terms and Conditions of ISOs
|
|
ISOs may be granted to Key Employees. 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:
|
5.5
|
Required Terms and Conditions of NSOs
|
|
Each NSO granted to Outside Directors, Key Employees, consultants and advisers 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 rule: except as otherwise determined by the Committee in its sole discretion with respect to a specific grant, 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.
|
SECTION 6
|
EXERCISE OF OPTIONS
|
6.1
|
Notices
|
|
A person entitled to exercise an Option may do so by delivery of a written notice to that effect, in a form specified by the Committee, 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 6.2. All notices, documents or requests provided for herein shall be delivered to the Secretary of the Company.
|
6.2
|
Exercise Price
|
|
Except as otherwise provided in the Plan or in any Option agreement or grant certificate, the Optionee shall pay the exercise price of the number of shares of Common Stock with respect to which the Option is being exercised 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 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.
|
SECTION 7
|
STOCK APPRECIATION RIGHTS
|
7.1
|
General Requirements.
|
7.2
|
Expiration.
|
7.3
|
Payment.
|
7.4
|
Exercise.
|
SECTION 8
|
TRANSFERABILITY OF OPTIONS AND STOCK APPRECIATION RIGHTS
|
|
Unless otherwise determined by the Committee, no Option or Stock Appreciation Right 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 9
|
RESTRICTED STOCK AND RESTRICTED STOCK UNITS
|
9.1
|
General Requirements.
|
9.2
|
Number of Shares.
|
9.3
|
Restrictions on Transfer and Legend on Stock Certificate.
|
9.4
|
Right to Dividends.
|
9.5
|
Lapse of Restrictions.
|
9.6
|
Performance-Based Criteria
|
SECTION 10
|
EFFECT OF TERMINATION OF EMPLOYMENT
|
10.1
|
Termination Generally
|
10.2
|
Death and Disability
|
|
In the event of the death or Disability (as defined below) of an Optionee or Grantee during employment or such Optionee's or Grantee relationship with the Company or service on the Board, (a) all Options held by the Optionee and all Stock Appreciation Right Awards held by the Grantee shall become fully exercisable on such date of death or Disability and (b) all restrictions and conditions on all Restricted Stock and/or Restricted Stock Units held by the Grantee shall lapse on such date of death or Disability. Each of the Options held by such an Optionee and each of the Stock Appreciation Right Awards held by such a Grantee shall expire on the earlier of (i) the first anniversary of the date of death or Disability and (ii) the date that such Option or Stock Appreciation Right Award expires in accordance with its terms, provided that, in any event, NSOs granted under this Plan shall not expire earlier than one year from the date of death or disability. For purposes of this Section 11.2, "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.
|
10.3
|
Retirement
|
SECTION 11
|
CHANGE IN CONTROL
|
11.1
|
Effect of Change in Control
|
|
Notwithstanding any of the provisions of the Plan or any written agreement or grant certificate evidencing Awards granted hereunder, immediately upon a "Change in Control" (as defined in Section 11.2), all outstanding Options and Stock Appreciation Rights granted to Key Employees or Outside Directors, whether or not otherwise exercisable as of the date of such Change in Control, shall accelerate and become fully exercisable and all restrictions thereon shall terminate in order that Optionees and Grantees may fully realize the benefits thereunder, and all restrictions and conditions on all Restricted Stock and Restricted Stock Units granted to Key Employees or Outside Directors shall lapse upon the effective date of the Change of Control. The Committee may determine in its discretion (but shall not be obligated to do so) that any or all holders of outstanding Options and Stock Appreciation Right Awards which are exercisable immediately prior to a Change of Control (including those that become exercisable under this Section 11.1) will be required to surrender them in exchange for a payment, in cash or Common Stock as determined by the Committee, equal to the value of such Options and Stock Appreciation Right Awards, with such payment to take place as of the date of the Change in Control or such other date as the Committee may prescribe.
|
11.2
|
Definition of Change in Control
|
|
The term "Change in Control" shall mean the occurrence, at any time during the term of an Award granted under the Plan, of any of the following events:
|
|
(i)
|
failure by the Company to maintain the duties, status, and responsibilities of the Key Employee substantially consistent with those prior to the Business Combination, or
|
|
(ii)
|
a reduction by the Company in the Key Employee’s base salary as in effect as of the date prior to the Business Combination, or
|
|
(iii)
|
the failure of the Company to maintain and to continue the Key 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.
|
SECTION 12
|
RIGHTS AS STOCKHOLDER
|
SECTION 13
|
POSTPONEMENT OF EXERCISE
|
SECTION 14
|
TAXES
|
14.1
|
Taxes Generally
|
|
The Company shall have the right to withhold from any Award, from any payment due or transfer made under any Award or under the Plan or from any compensation or other amount owing to a participant the amount (in cash, shares or other property) of any applicable withholding or other taxes in respect of an Award, its exercise, or any payment or transfer under an Award or under the Plan and to take such other action as may be necessary in the opinion of the Committee to satisfy all obligations for the payment of such taxes. Notwithstanding the above, the Company shall automatically withhold any such taxes, as applicable, in the form of shares of stock or any payment under an Award, for and upon the vesting of any Restricted Stock or Restricted Stock Units Award. Notwithstanding the above, the Company shall automatically withhold any such taxes, as applicable, in the form of shares of stock or any payment under an Award, for and upon the vesting of any Restricted Stock or Restricted Stock Units Award.
|
14.2
|
Payment of Taxes
|
|
A participant, with the approval of the Committee, may satisfy the obligation set forth in Section 14.1, in whole or in part, by (a) directing the Company to withhold such number of shares of Common Stock otherwise issuable upon exercise or vesting of an Award (as the case may be) 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 on any date. The Committee may, in its sole discretion, require payment by the participant 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 14.2.
|
SECTION 15
|
TERMINATION, AMENDMENT AND TERM OF PLAN
|
SECTION 16
|
GOVERNING LAW
|
SECTION 17
|
NO RIGHT TO AWARD; NO RIGHT TO EMPLOYMENT
|
SECTION 18
|
AWARDS NOT INCLUDABLE FOR BENEFIT PURPOSES
|
SECTION 19
|
NO STRICT CONSTRUCTION
|
SECTION 20
|
CAPTIONS
|
SECTION 21
|
SEVERABILITY
|
SECTION 22
|
MODIFICATION FOR GRANTS OUTSIDE THE U.S.
|
1.
|
Services
|
|
1.1
|
The Company shall continue to employ Employee and Employee agrees to continue to serve as Vice President, Secretary and General Counsel, of the Company, responsible for the business activities and operations assigned by the Chief Executive Officer and/or the Board of Directors effective as of (the first date of employment), 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 his position. Employee shall perform such other services as shall from time to time be assigned to him 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 and responsibility as those set forth in this Agreement. 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 his full business time and efforts to the performance of his duties and to promote the best interests of the Company and its Affiliates.
|
2.
|
Period of Employment. Employment as Vice President, Secretary and General Counsel shall continue under this Agreement from (the first date of employment), 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 to the effect that any one or more of the following events (“Change Event”) has occurred and the Company has failed within such thirty (30) day period to restore the Employee to the position he was in prior to the Change Event (provided, that such written notice of termination must have been given by Employee within ninety (90) days of the Change Event):
|
|
(a)
|
failure by the Company to maintain the level of responsibility and status of the Employee similar in all material respects to those of Employee's position as of the date of the 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 which is insignificant or is implemented as part of a formal austerity program approved by the Board of Directors of the Company and applicable to all continuing domestic executive 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 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 all material respects 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 domestic executive employees; or
|
|
(d)
|
any material 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.
|
|
3.1
|
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 $350,000 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 his designees pursuant to any such plan, nor shall any payments to be made to Employee or his 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 his 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 he is employed during the plan year up to the date of his 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 his then current salary for a period of 12 months from the date of death, together with his pro-rata share of any incentive or bonus payments due for the period prior to his death, to Employee's designated beneficiary or, if no beneficiary has been effectively designated, then to Employee's estate.
|
|
3.5
|
Except as provided in Section 6, 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 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, in accordance with the Company’s normal pay schedule;
|
|
(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, at the same time and 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 or equity incentives under any stock option or similar such plan subsequent to the date of termination notice, but equity incentive grants shall continue to be exercisable during the Termination Period in accordance with the equity incentive plan, as if termination had not occurred until the end of the Termination Period;
|
|
(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 ("ESOP") 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), provided that, such coverage shall terminate for any such benefit on the earlier of the following events: (i) the covered person becomes eligible for similar type coverage under another employer’s group plans (in which event the Company shall only be required to provide compensation to Employee sufficient for Employee to acquire benefits similar to those provided by the Company); (ii) the covered person becomes eligible for Medicare health benefits; or (iii) the covered person fails to pay the premium for such coverage by the due date thereof (including any grace period provided under the Plan or applicable law); 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.
|
|
3.6
|
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 three (3) 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, or any customer of the Company or an Affiliate to terminate its customer relationship with the Company or an Affiliate.
|
6.
|
Change of Control Provisions.
|
|
6.1
|
"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 (the "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 (the “Exchange Act”), and the rules and regulations promulgated thereunder as in effect on the date of this Agreement 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 having 30% or more of (i) the then outstanding shares of Common Stock of the Company, or (ii) the voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors of the Company; and
|
|
(b)
|
"Continuing Director" means any member of the 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 the Board prior to the date of this Agreement, or (ii) subsequently becomes a member of the Board and whose nomination for election or election to the Board is recommended or approved by resolution of a majority of the Continuing Directors or who is included as a nominee in a proxy statement of the Company distributed when a majority of the Board consists of Continuing Directors.
|
|
6.2
|
If, within two (2) years 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) any of the other provisions of Section 3.5 (except as may be otherwise prohibited by law or by said plans), the Company shall pay the following amounts to Employee in a single lump sum cash payment within five (5) business days of such termination (provided, that any amount that would be payable to the Employee during the six-month period beginning on his date of termination and which would not otherwise be exempt from the application of Section 409A(a)(2)(B) of the Code shall be withheld and paid instead on the six (6) month anniversary of the date of termination. For purposes of Section 409A of the Code, each individual payment required to be made under this Section 3.6 shall be treated as a separate payment from all other such payments) :
|
|
(a)
|
An amount equal to three (3) times the Employee’s current annual salary;
|
|
(b)
|
An amount equal to three (3) times the Employee’s Annual Incentive bonus for the year in which the termination occurs based on the target of 100% achievement; and
|
|
(c)
|
An amount equal to the benefits that would have been accrued by the Employee for the three (3) year period from the date of termination (“Continuation Period”) from participation by the Employee under any pension, profit sharing, employee stock ownership plan (“ESOP”) Supplemental Executive Retirement Plan (“SERP”) 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 such three (3) year period and compensation (and, if applicable, Annual Incentive bonus) as determined under Section (a) and (b) above;
|
|
(d)
|
In addition, Employee shall receive continued coverage for the two (2) year period from the date of termination 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 or if required in order to comply with Code Section 409A, in lieu thereof be compensated in monthly cash payments for the premium-equivalent amount of such coverage and then be permitted to purchase such coverage, if available, by paying 100% of the premium cost for such coverage on an after-tax basis).
|
|
6.3.
|
Certain Adjustments in Payments.
|
|
(a)
|
The provisions of this Section 6.3 shall apply notwithstanding anything in this Agreement to the contrary. Subject to subsection (b) below, in the event that it shall be determined that any payment or distribution by the Company to or for the benefit of the Employee, whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, the Company shall pay the Employee an additional amount (the “Gross-Up Payment”) such that the net amount retained by the Employee after deduction of any excise tax imposed under section 4999 of the Code, and any federal, state and local income tax, employment tax, excise tax and other tax imposed upon the Gross-Up Payment, shall be equal to the Payment.
|
|
(b)
|
Notwithstanding subsection (a), and notwithstanding any other provisions of this Agreement to the contrary, if the net after-tax benefit to the Employee of receiving the Gross-Up Payment does not exceed the Safe Harbor Amount (as defined below) by more than 10% (as compared to the net after-tax benefit to the Employee resulting from elimination of the Gross-Up Payment and reduction of the Payments to the Safe Harbor Amount), then (i) the Company shall not pay the Employee the Gross-Up Payment, and (ii) the provisions of subsection (c) below shall apply. The term “Safe Harbor Amount” means the maximum dollar amount of parachute payments that may be paid to the Participate under section 280G of the Code without imposition of an excise tax under section 4999 of the Code.
|
|
(c)
|
The provisions of this subsection (c) shall apply only if the Company is not required to pay the Employee a Gross-Up Payment as a result of subsection (b) above. If the Company is not required to pay the Employee a Gross-Up Payment as a result of the provisions of subsection (b), the Company will apply a limitation on the Payment amount as follows: The aggregate present value of the benefits under Sections 3.5 or 6.2 (the “Separation Benefits”) of this Agreement shall be reduced (but not below zero) to the Reduced Amount. The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of such Separation Benefits without causing any Payment to be subject to the limitation of deduction under section 280G of the Code. For purposes of this Section 6.3, “present value” shall be determined in accordance with section 280G(d)(4) of the Code.
|
|
(d)
|
All determinations to be made under this Section 6.3 shall be made by the independent public accounting firm used by the Company immediately prior to the Change of Control (“Accounting Firm”), which Accounting Firm shall provide its determinations and any supporting calculations to the Company and the Employee within ten days of the Employee’s Date of Termination. If any Gross-Up Payment is required to be made, the Company shall make the Gross-Up Payment within ten days after receiving the Accounting Firm’s calculations. Any such determination by the Accounting Firm shall be binding upon the Company and the Employee. All of the fees and expenses of the Accounting Firm in performing the determinations referred to in this Section 6.3 shall be borne solely by the Company.
|
7.
|
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.
|
8.
|
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, his personal representatives, heirs, and legatees.
|
9.
|
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.
|
10.
|
Definitions. The following terms herein shall (unless otherwise expressly provided) have the following respective meanings:
|
|
10.1
|
"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.
|
|
10.2
|
"Period of Employment" means the period commencing on the effective date hereof and terminating pursuant to Section 2.
|
|
10.3
|
"Beneficiary" means the person or persons designated in writing by Employee to Company.
|
11.
|
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 Employee:
|
Deborah M. Rasin
High Trees
Hook Heath Road
Woking
Surrey
GU22 0QF
UK
|
For Company:
|
DENTSPLY International Inc.
221 West Philadelphia Street
York, PA 17404
Attention: Chairman and Chief Executive Officer
|
12.
|
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.
|
13.
|
Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.
|
14.
|
Compliance with Code Section 409A. The payment provisions of this Agreement are intended to comply with, or to be exempt from, Section 409(a)(2) of the Code. The Company may make any changes to this Agreement it determines in its sole discretion are necessary to comply with the provisions of the Code Section 409A and any regulations or any other guidance issued thereunder without the consent of Employee, so long as such changes do not materially reduce the value of any of the economic benefits provided under this Agreement to the Employee.
|
Attest: | DENTSPLY INTERNATIONAL INC. | |||
|
By:
|
|||
DEBORAH M. RASIN
|
|
1.
|
I have reviewed this Form 10-Q of DENTSPLY International Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
/s/
|
Bret W. Wise
|
|
Bret W. Wise
|
||
Chairman of the Board and
|
||
Chief Executive Officer
|
|
1.
|
I have reviewed this Form 10-Q of DENTSPLY International Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing equivalent functions):
|
/s/
|
William R. Jellison
|
|
William R. Jellison
|
||
Senior Vice President and
|
||
Chief Financial Officer
|
|
(1)
|
The Report fully complies with the requirements of Sections 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company as of the date of the Report.
|
/s/
|
Bret W. Wise
|
|
Bret W. Wise
|
||
Chairman of the Board and
|
||
Chief Executive Officer
|
/s/
|
William R. Jellison
|
|
William R. Jellison
|
||
Senior Vice President and
|
||
Chief Financial Officer
|
DS6&_,V`5HH5#S$>T1,&^G&^-(Y(!=T*^$U-8OM6;H##G'3@
M.-,FH]8-BPK4J$RO,6%T:Z8&[`I8S[)RSHV2Q7;&%,"U,EOD$`N>_NZ">_#I
M]5M$BH-?TZ+QN6/81NGIR;HIR^Q,<2);K9N<&)MDHEL1,]/*9P.4@/
M('9DIIR8"AUY..T0VRS#;:9GXWHL*\6]V?/2^:EG!Q2>L;Y;@F4IC^"KM$_?
M`SA7S?H+AFI+!D-+;O@":2J@MJ@49N)3@UE86Q@S66WA+:3,-H8`A_YL5BY-
MDZU.UA9=!9OQ24.'/LWI2;Y$_8U+"%F"5XR3U?#%AVCCV9T22]NLT5?5@L,9
M88Q<"\#=W`RTM`"HALY<&.('QFV<&J6`7.3E-3SLBI47Q&M_7@(:!)E6A5Z6
M@FY6P'1=E9AUC!_:FE2]!QS''JW^"%^[GDP=-Z2]I\C 1>^:[]I-G<7SF(D,=
MHG=JGQNA9.!"*TIP+ @U6%GE,+
M:F!T&]O*$G.!MA:!T'^L)X0/*`/3XZ`*Q$0QX`(8*"#O*HNX1,7"0,$F#TD<
MQ[<9>>.C^_S$?BAHQ;`G%*O5;?QO51B?BWB`UPGH>]`?'(8[@OVW]%S1@\YR
M;0J(0L1M`(T8]COO@Y]'J0'"#78MOO@ME,^@0@3P.!9[-\+W]=A[X`C5]Q;(
M<\#784^+OT*(# X\2<\H\TP_AORH$UN!V.ZBUXN6O5HY'?JVPQK1<:LV
MG=['5`R5L.`]@< J4UJ.(:D1UD5$=WT-E[")>4H`OLP(K8MX=135[
MO9!3U^*;>@>%Z>"U)ILOV-F#2[$"M[A&E"!*$"6(D@/J:W4A@]A&;"-*$"6(
M$D3)P?K(5\33_3S)D!2E"37X/E&5^BP4O (KV!E[H6FC7[4=F;#?Q`PJ/
M4ZW7T,LK/A#2U8-TM]=&0".@RP-HHU%%`P_/[J9G=XU>HEO2.76IA2=W*#W6
M#._L:)U6D2T\//%`;"^8>5-K&RV$-D*[?-`^,K1&Z[3`V,9SO2V-OF2'S`OJ
MBB.]OWS/96COH>!8=F7;0V,/@5U"8!\CK!'6Y8-U%8(1\(QOC3.^Q!4N"WT/
MS_50;BP]U]-Z>K<"L@.A73EHHZ6'L"XAK`U-;U0AF!J/]E;F8IP8J=7DPQT=.C/IXB">/.%RD!@FZ4UW6O`KBVYC6'1_]M0K>T'UZ+@=L-PA8
M.;5,ZP>P$`<9WE\9UD\5H\"@'63X(,-O1H:M4UG]$>QPJ:?V\NS&^*2(VOF.
MS:I#E?S%GI8SH!&?SMZ=3_C2/(ZP?<74@X*$$X(R`4`\OOF<8:AO&"'`B&8
M$)P?!&\V^;9\E?9I;8XJ/?/A;!B$4-5!F3<:>5(DW#Z;U\7P#VS3B)0YI=:*
M5KN)58F#55J7UU?G8/(7\I>$_M*ND[^0OV1.J;WY2ZW2.$T\79]1CWG%M.=4
MSV:!]OC/+UW'WQ/?3AG\DBTS$*9`?.8&8<\3J8A3:R^U;*3,ON)3O=*L-[87
MGE9`+7WSJ>0RY#(;:M.LU-M;S.CD,N0R>7>95N6D5M@L$ZN&CRQ5S=SG'=-J
M$5\.O8*5<`!=8+Z<+WBH[!$RM2ONF'*I*]10^A&C7[(Q659&]O1J5EHFN8KZ
M_B-1Z.05D'O/=X0-PD8.L4$4.D2AL_4B/_=U!E'H$-J+@W:BT"&P%P;L1*%3
MF'F:C`BZPN-2ID7VAT2$&<(,888P0U0\1,63)OCN;/"0.0J(=KM5@/A`""[`
M^ZY$/;!WV=(%9`K%*40P&\
([72
M'R/15GM0<@CS%"NU$4AO+[H/M)J*=XG>+C5`"FYL(15'RDH9'[8$>LJ1?E*(
MZP%OR9-J9<+5:C4B1E;S4-O(?IH12?"`74(>*"QI3,&-GR-8B.P@S`0T5J`!4\Y
;Z(4S=8P%\V+M6>@ICY
MDE@P$V9YX:,C,B&RUFZ.N-%DWDU4=>M:MYNZ5/9;8;4*=]GR4HA_B'^VFTZG
MKC4:.TQHSA?_S&C]CP$VH)[Z/*.W-E#324.8U8%IGWP0`^!>4?@**'R[Q$3D
MOU8K8`4XH047@^_/?"%#)Y#,Z[$SSQ]B"4'!^H);?X7<#X0O-7@=_'LL1ZF?
MPK$'MLL#[`&N.IYZKF"6+0/??@SQ6_:3^Z+OA5(`;@(&@^%/PF*/K\SE`V%5
M*_&CY,DJHR/^]/O'4!X_<3[\;1S:K%Y_W;L>I:'>^%[/#KYY4GX%@,5IJO+>
MPQ;E:*+#K*Q[\1)\P?7X7*TP]OOHF7U\]OR?L(`3R,1A2`(^^%;T_CH3G/-Q<&'I=;Q\?'QN&
MH1__0]?UYL/=_?E#5W^HZ?!5O6X\Z$N",OR:%RR:&&5M/SK%G)
M4R5H4^'<-,[J3)E<4K@3VI\./#^P_ZLV?:L5K\=0^9K>DZO4+WJV\`S,11OZ
MMN>S5\%])H7_;)N"#?'T%6\S/1ELJ'K3A8%G4W91W;6UY-X^G.5F/?7F7%:C
MS%>[S\0[Q#L[J*22/N(PJZQS$#>=3(EE)0C!AL``+984G\6BG7*R%$C:'5S:
MM=I:O5U:@4=L1&RT(X.[IK7UPE4[WN$I>1$2/#,V4-HBS`'%LZ?Q"-^$[\+B
MFTZ:=^.M)OFI&SJH)&?*)6>,>DOKU"GBF*HDM^NY6%G>]QP'`X[M
MN#\X-06G8Y;#'[/4M5:##BN)BXB+MCJLK&N-6N'8B,XJ<\#T9/AGF>+94WB$
M;\)W8?&]$\=V68_#HA4,GO-9X^C9>:\5)P*O^A>[1%_552D\U`.<.DH>TL0V
MZO5M"N102U9BH)(S4$WKZIVR\L\=WV=BP((TJST/?=I^PXYA@?X7UPF5H6,RW#TV"^=[DF;#6S'B9[@6E._
M&2?ZZ"