SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities Exchange Act of 1934
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement / / Confidential, for Use
of the Commission
Only (as permitted by
Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Under Rule 14a-12
DENTSPLY International Inc.
(Name of Registrant as Specified In Its Charter)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction
applies:
(2) Aggregate number of securities to which transaction
applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing
fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the form or schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement no.:
(3) Filing Party:
(4) Date Filed:
1
DENTSPLY LOGO DENTSPLY International
570 West College
Avenue
P.O. Box 872
York, PA
17405-0872
(717) 845-7511
Fax (717)854-2343
April 18, 2002
Dear DENTSPLY Stockholder:
You are cordially invited to attend the 2002 Annual Meeting of Stockholders
to be held on Wednesday, May 22, 2002, at 9:30 a.m., at the Company's
Employee Meeting Room in York, Pennsylvania.
The Annual Meeting will include voting on the matters described in the
accompanying Notice of Annual Meeting and Proxy Statement, a report on
Company operations and discussion.
Whether or not you plan to attend, you can ensure that your shares are
represented at the Annual Meeting by voting your proxy. You have two ways to
vote your proxy. You may vote by mail by promptly completing, signing, dating
and returning the enclosed proxy card in the envelope provided, or you may
vote by internet by following the instructions on the proxy card or going to
the internet at www.computershare.com/us/proxy. Your vote is important.
Please take a moment now to vote through one of the above methods.
Sincerely,
/s/ John C. Miles II
John C. Miles II
Chairman of the Board and
Chief Executive Officer
2
DENTSPLY INTERNATIONAL INC.
570 West College Avenue
York, Pennsylvania 17405-0872
---------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON WEDNESDAY, MAY 22, 2002
---------------
The Annual Meeting of Stockholders (the "Annual Meeting") of DENTSPLY
International Inc., a Delaware corporation (the "Company"), will be held on
Wednesday, May 22, 2002, at 9:30 a.m., local time, at the Company's Employee
Meeting Room, 570 West College Avenue, York, Pennsylvania, for the following
purposes:
1. To elect three Class I directors to serve for a term of three years
and until their respective successors are duly elected and qualified;
2. To ratify the appointment of PricewaterhouseCoopers LLP, independent
certified public accountants, to audit the books and accounts of the
Company for the year ending December 31, 2002;
3. To amend the Company's Certificate of Incorporation to increase the
number of authorized shares;
4. To approve the 2002 DENTSPLY International Inc. Stock Option Plan;
and
5. To transact such other business as may properly come before the
Annual Meeting and any and all adjournments and postponements thereof.
The Board of Directors has fixed the close of business on April 5, 2002 as
the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting and any adjournment or postponement thereof.
The enclosed proxy is solicited by the Board of Directors of the Company.
Reference is made to the accompanying Proxy Statement for further information
with respect to the business to be transacted at the Annual Meeting.
A complete list of the stockholders entitled to vote at the Annual Meeting
will be available during ordinary business hours for examination by any
stockholder, for any purpose germane to the Annual Meeting, for a period of
at least ten days prior to the Annual Meeting, at the Company's Employee
Meeting Room, 570 West College Avenue, York, Pennsylvania.
The Board of Directors urges you to vote your proxy either by mail or
through the internet. You are cordially invited to attend the Annual Meeting
in person. The voting of your proxy will not affect your right to revoke your
proxy or to vote in person if you do attend the Annual Meeting.
By order of the Board of Directors,
BRIAN M. ADDISON
Vice President, Secretary and
General Counsel
York, Pennsylvania
April 18, 2002
YOUR VOTE IS IMPORTANT, NO MATTER HOW MANY SHARES YOU
OWNED ON THE RECORD DATE.
PLEASE INDICATE YOUR VOTING INSTRUCTIONS ON THE ENCLOSED PROXY CARD, DATE AND
SIGN IT, AND RETURN IT IN THE ENVELOPE PROVIDED, WHICH IS ADDRESSED FOR YOUR
CONVENIENCE AND NEEDS NO POSTAGE IF MAILED IN THE UNITED STATES. OR, IF YOU
WISH, YOU MAY PROVIDE YOUR PROXY INSTRUCTION USING THE INTERNET BY FOLLOWING
THE INSTRUCTIONS ON THE ENCLOSED PROXY CARD. IN ORDER TO AVOID THE ADDITIONAL
EXPENSE TO THE COMPANY OF FURTHER SOLICITATION, WE ASK YOUR COOPERATION IN
VOTING YOUR PROXY PROMPTLY.
3
DENTSPLY INTERNATIONAL INC.
570 West College Avenue
York, Pennsylvania 17405-0872
---------------
PROXY STATEMENT
---------------
GENERAL INFORMATION
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of DENTSPLY International Inc., a Delaware
corporation ("DENTSPLY" or the "Company"), for use at the Company's 2002
Annual Meeting of Stockholders (together with any and all adjournments and
postponements thereof, the "Annual Meeting") to be held on Wednesday, May 22,
2002, at 9:30 a.m., local time, at the Company's Employee Meeting Room, 570
West College Avenue, York, Pennsylvania, for the purposes set forth in the
accompanying Notice of Annual Meeting of Stockholders. This Proxy Statement,
together with the foregoing Notice and the enclosed proxy card, are first
being sent to stockholders on or about April 18, 2002.
The Board of Directors has fixed the close of business on April 5, 2002 as
the record date for the determination of stockholders entitled to notice of
and to vote at the Annual Meeting. On the record date, there were xx,xxx,xxx
shares of Common Stock of the Company, par value $.01 per share ("Common
Stock"), outstanding and entitled to vote. Each share of Common Stock is
entitled to one vote per share on each matter properly brought before the
Annual Meeting. Shares can be voted at the Annual Meeting only if the
stockholder is present in person or is represented by proxy. The presence, in
person or by proxy, at the Annual Meeting of shares of Common Stock
representing at least a majority of the total number of shares of Common
Stock outstanding on the record date will constitute a quorum for purposes of
the Annual Meeting.
Whether or not you are able to attend the Annual Meeting, you are urged to
vote your proxy, either by mail or the internet, which is solicited by the
Company's Board of Directors and which will be voted as you direct. In the
absence of instructions, shares represented by properly provided proxies will
be voted as recommended by the Board of Directors.
Any proxy may be revoked at any time prior to its exercise by attending the
Annual Meeting and voting in person, by notifying the Secretary of the
Company of such revocation in writing or by delivering a duly executed proxy
bearing a later date, provided that such notice or proxy is actually received
by the Company prior to the taking of any vote at the Annual Meeting.
The cost of solicitation of proxies for use at the Annual Meeting will be
borne by the Company. Solicitations will be made primarily by mail, facsimile
or through the internet, and employees or agents of the Company may solicit
proxies personally or by telephone.
Brokers, banks and other nominee holders will be requested to obtain voting
instructions of beneficial owners of stock registered in their names. The
Company will reimburse these record holders for their reasonable
out-of-pocket expenses incurred in doing so. Shares represented by a duly
completed proxy submitted by a nominee holder on behalf of beneficial owners
will be counted for quorum purposes, and will be voted to the extent
instructed by the nominee holder on the proxy card or through the internet.
The rules applicable to a nominee holder may preclude it from voting the
shares that it holds on certain kinds of proposals unless it receives voting
instructions from the beneficial owners of the shares (sometimes referred to
as "broker non-votes").
4
ELECTION OF DIRECTORS
The Restated Certificate of Incorporation and the by-laws of the Company
provide that the number of directors (which is to be not less than three) is
to be determined from time to time by resolution of the Board of Directors.
The Board is currently comprised of twelve persons.
Pursuant to the Company's Restated Certificate of Incorporation, the
members of the Board of Directors are divided into three classes. Each class
is to consist, as nearly as may be possible, of one-third of the whole number
of members of the Board. The term of the Class I directors expires at the
Annual Meeting. The terms of the Class II and Class III directors will expire
at the 2003 and 2004 Annual Meetings of Stockholders, respectively. At each
Annual Meeting, the directors elected to succeed those whose terms expire are
of the same class as the directors they succeed and are elected for a term to
expire at the third Annual Meeting of Stockholders after their election and
until their successors are duly elected and qualified. A director elected to
fill a vacancy is elected to the same class as the director he succeeds, and
a director elected to fill a newly created directorship holds office until
the next election of the class to which such director is elected.
Three of the five incumbent Class I directors are nominees for election
this year for a three-year term expiring at the 2005 Annual Meeting of
Stockholders. Two of the five incumbent Class I directors, Douglas K. Chapman
and C. Frederick Fetterolf, will retire at the end of their current terms,
which expire at the Annual Meeting. In the election, the three persons who
receive the highest number of votes actually cast will be elected. The proxy
named in the proxy card and on the internet voting site intends to vote for
the election of the three Class I nominees listed below unless otherwise
instructed. If a holder does not wish his or her shares to be voted for a
particular nominee, the holder must identify the exception in the appropriate
space provided on the proxy card or on the internet site, in which event the
shares will be voted for the other listed nominees. If any nominee becomes
unable to serve, the proxy may vote for another person designated by the
Board of Directors or the Board may reduce the number of directors. The
Company has no reason to believe that any nominee will be unable to serve.
The Company's by-laws require that stockholders seeking to nominate persons
for election to the Board, or to propose other business to be brought before
an Annual Meeting of Stockholders, comply with certain procedures. See
"Stockholder Proposals for 2003 Proxy Statement".
Set forth below is certain information with regard to each of the nominees
for election as Class I directors and each continuing Class II and Class III
director.
Nominees for Election as Class I Directors
Name and Age Principal Occupation and Directorships
Dr. Michael C. Alfano Dr. Alfano has been the Dean and
Age 54 Professor of Periodontics and Biological
Sciences at the College of Dentistry,
New York University since 1998.
Beginning in 1982 until 1998 he held a
number of positions with Block Drug
Company, including Senior Vice President
for Research & Technology and President
of Block Professional Dental Products
Company. He served on the Board of
Directors of Block Drug Company, Inc.
from 1988 to 1998. He serves as a member
of or consultant to various public
health organizations, including the
Editorial Board of the American Journal
of Dentistry since 1987, and has served
on the Board of Overseers for the School
of Dental Medicine at the University of
Pennsylvania since 1992. In addition,
Dr. Alfano is a consultant to the Board
of Orapharma, Inc. and to the Consumer
Healthcare Product Association. He is a
Director and serves on the Executive
Committee of the Friends of the National
Institute for Dental and Craniofacial
Research. Dr. Alfano was appointed to
the Dentsply Board of Directors in
February, 2001.
5
Name and Age Principal Occupation and Directorships
Burton C.Borgelt Mr. Borgelt has been retired since May
Age 69 1996. He was named Chief Executive
Officer of the Company on February 8,
1995 and served in that capacity until
December 31, 1995. Mr. Borgelt served as
Chairman of the Board of the Company
from the merger of Dentsply
International Inc. ("Old Dentsply") and
Gendex Corporation on June 11, 1993
("the Merger") until May 1996 and has
served as a director of the Company
since the Merger. Prior to the Merger,
Mr. Borgelt served as Chairman of the
Board and Chief Executive Officer of Old
Dentsply commencing in March 1989 and as
the Chief Executive Officer and a
director of Old Dentsply commencing in
February 1981. Mr. Borgelt also serves
as a director of Mellon Bank Corporation
and Mellon Bank N.A.
William F.Hecht Mr. Hecht has been the President of
Age 59 PPL Corp., a diversified utility and
energy services company, since 1991 and
in 1993 he also became its Chairman and
Chief Executive Officer. Mr. Hecht is a
member of the Board of Directors of the
Nuclear Energy Institute, is past
Chairman and a current board member of
the Utility Education Coalition, and
serves as a director of the National
Association of Manufacturers. Mr. Hecht
is also a Trustee of Lehigh University
and serves on the Board of Directors for
Lehigh Valley Hospital and Health
Network. He also serves on the board of
directors of RenaissanceRe Holdings
Ltd., a global provider of reinsurance
and insurance coverage whose principal
product is property catastrophe
insurance. Mr. Hecht was appointed to
the Dentsply Board of Directors in March
2001.
Nominees for Election as Class II Directors
Name and Age Principal Occupation and Directorships
Leslie A.Jones Mr. Jones served as Chairman of the
Age 62 Board of the Company from May 1996
to May 1998. From January 1991 to
January 1992, he was a Senior Vice
President and Special Assistant to the
President of Old Dentsply. Prior to that
time, Mr. Jones served as Old Dentsply's
Senior Vice President of North American
Operations. Mr. Jones has served as a
director of the Company since the Merger
and prior thereto served as a director
of Old Dentsply.
Betty Jane Scheihing Ms. Scheihing is a Senior Vice
Age 53 President, Office of the President
of Arrow Electronics, Inc. Ms. Scheihing
was appointed to the Office of the
President at Arrow Electronics in 1997.
She was named Senior Vice President,
Worldwide Operations in 1996. Prior to
that, she worked since 1967 at Arrow in
a number of operational and management
positions. She serves on the Boards of
the Billy Graham Evangelistic
Association and her alma mater, the
Philadelphia College of Bible. Ms.
Scheihing was appointed to the Dentsply
Board of Directors in August 2001.
Edgar H.Schollmaier Mr. Schollmaier held the position of
Age 68 President of Alcon Laboratories, Inc. of
Fort Worth, Texas, a wholly-owned
Subsidiary of Nestle S.A., from 1972 to
1997. He was Alcon's Chief Executive for
the last twenty years of that term. He
also serves as a director of Incara
Pharmaceuticals Corporation, and is a
trustee of Texas Christian University.
Mr. Schollmaier has served as a director
of the Company since June 1996.
6
Nominees for Election as Class III Directors
Name and Age Principal Occupation and Directorships
Michael J.Coleman Mr. Coleman is the President of Cape
Age 58 Publications and
publisher of FLORIDA TODAY, Melbourne,
Florida, and has been the President of
the South Regional Newspaper Group since
1991. From July 1986 to May 1991, Mr.
Coleman was the President and publisher
of the ROCKFORD REGISTER STAR. Mr.
Coleman is a member of the National
Newspaper Association and the American
Society of Newspaper Editors. Mr.
Coleman has served as a director of the
Company since the Merger and prior
thereto served as a director of Old
Dentsply
Paula H.Cholmondeley Ms. Cholmondeley has served as the Vice
Age 54 President and General Manager of
Specialty Products for Sappi Fine Paper,
a subsidiary of Sappi Limited since
April 2000 and prior to that from
January 1998 until April 2000, she was a
private consultant on Strategic Planning
and Mergers and Acquisitions. From 1992
until January 1998, Ms. Cholmondeley
held various management positions with
Owens Corning, including General Manager
of Residential Insulation. Ms.
Cholmondeley served in the White House
Fellows Organization as a Special
Assistant to the U.S. Trade
Representative for several countries in
the Far East from 1982 to 1983. She has
also held a Number of significant
positions with several companies
including several managerial positions
with Westinghouse Elevator Company, and
as Chief Financial Officer and Senior
Vice President for Blue Cross of Greater
Philadelphia. . She serves on the Board
of the Villanova Capital mutual fund,
and the Graduate Executive Board of the
Wharton School. Ms. Cholmondeley was
appointed to the Dentsply Board of
Directors in September 2001.
John C. Miles II Mr. Miles assumed responsibility as
Age 60 Chairman of the Board on May 20, 1998.
Prior to that he was named Chief
Executive Officer of the Company on
January 1, 1996 and Vice Chairman of the
Board on January 1, 1997. He was
President and Chief Operating Officer
and a director of the Company since the
Merger, and served as President and
Chief Operating Officer and a director
of Old Dentsply commencing January 1990.
Mr. Miles is currently serving as a
director of the National Foundation of
Dentistry for the Handicapped,
Respironics, Inc. and the American
Dental Trade Association.
W. Keith Smith Mr. Smith has been retired since
Age 67 December 31, 1998. He served as Vice
Chairman of Mellon Bank Corporation and
Mellon Bank N.A. from July 1987 until
December 31, 1998. He also has served as
Chairman and Chief Executive Officer of
The Boston Company and Boston Safe
Deposit & Trust Company since May 1993.
In addition, from August 1994 until
January 1995, he served as Chief
Operating Officer of The Dreyfus
Corporation, and subsequent to January
1995 he served as Chairman of the Board
of The Dreyfus Corporation as well as
Chairman of Buck Consultants, Inc. He
currently serves as a director of
Invesmart Inc., PPL Corporation, Baytree
Bancorp, Inc. and Baytree National Bank
and Trust Company. Mr. Smith has served
as a director of the Company since the
Merger and prior thereto served as a
director of Old Dentsply.
7
Votes Required
The Class I directors will be elected by a plurality of the votes of shares
present and entitled to vote. Accordingly, the three nominees for election as
directors who receive the highest number of votes actually cast will be
elected. Broker non-votes will be treated as shares that neither are capable
of being voted nor have been voted and, accordingly, will have no effect on
the outcome of the election of directors.
The Board of Directors unanimously recommends a vote FOR the nominees for
election as Class I directors.
Board of Directors and Committees
The Company's Board of Directors held seven meetings during 2001, three of
which were telephone meetings. The Board has an Executive Committee, an Audit
and Information Technology Committee, a Board Governance Committee and a
Human Resources Committee, which has a Stock Option Subcommittee. The current
composition and activities of the Committees are described below.
The Executive Committee provides guidance to the executive officers of the
Company between meetings of the Board. The members of the Executive Committee
are Messrs. Miles (Chairman), Borgelt, Chapman and Jones. The Executive
Committee held two meetings during 2001, both of which were telephone
meetings.
The Audit and Information Technology Committee (the "Audit Committee") is
responsible for nominating the Company's independent auditors for approval by
the Board; reviewing the scope, results and costs of the audit with the
Company's independent auditors; reviewing the financial statements of the
Company and the audit function to ensure compliance with requirements of
regulatory agencies and appropriate disclosure of necessary information to
the stockholders of the Company and reviewing and evaluating the information
technology activities of the Company. For further information on Audit
Committee activity, please refer to the section of this proxy entitled "Audit
Committee Disclosure". The members of the Audit Committee are Messrs.
Schollmaier (Chairman), Chapman, Hecht, and Jones and Ms. Cholmondeley. Ms.
Danaher served on the committee until her resignation from the Board in June
2001. Mr. Hecht joined the committee in May 2001 and Ms. Cholmondeley joined
the committee in September 2001. The Audit and Information Technology
Committee held three meetings during 2001.
The Board Governance Committee is responsible for identifying and
recommending individuals to serve on the Board, reviewing and recommending
Board policies and appraising the performance of the Board. The members of
this Committee are Messrs. Jones (Chairman), Miles and Smith. Dr. Dugoni
served on the committee until his retirement in May 2001. The Board
Governance Committee held three meetings during 2001, one of which was a
telephone meeting.
The Human Resources Committee is responsible for evaluating and
administering compensation levels for all officers of the Company. Its
current members are Messrs. Coleman (Chairman), Alfano, Borgelt, Fetterolf
and Smith, and Ms. Scheihing. Dr. Alfano joined the committee in May 2001
and Ms. Scheihing joined the committee in September 2001. The Human
Resources Committee met two times during 2001. The Stock Option Subcommittee
was created in 1998 and is responsible for administering the Company's 1998
Stock Option Plan. Its current members are Messrs. Coleman (Chairman),
Alfano, Fetterolf and Smith, and Ms. Scheihing. Ms. Scheihing joined this
subcommittee in September 2001.
No directors, except Ms. Danaher and Ms. Scheihing attended fewer than 75%
of the total number of meetings of the Board and the meetings of any
committee of the Board on which a director served during the period in which
the director served on the Board and such committee during year ended
December 31, 2001.
8
RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The Audit Committee recommended and the Board of Directors appointed
PricewaterhouseCoopers LLP ("PwC"), independent certified public accountants,
as auditors to audit the financial statements of the Company for the year
ending December 31, 2002.
In the event the appointment of PwC for 2002 is ratified, it is expected
that PwC will also audit the books and accounts of certain subsidiaries of
the Company at the close of their current fiscal years. A representative of
PwC will be present at the Annual Meeting and will have the opportunity to
make a statement, if such person desires to do so, and to respond to
appropriate questions.
The proposal to ratify the appointment of PwC will be approved by the
stockholders if it receives the affirmative vote of a majority of the shares
present in person or represented by proxy at the meeting and entitled to vote
on the proposal. If there is an abstention noted on the proxy materials on
this proposal, the abstention will have the effect of a vote against the
proposal even though the shares represented thereby will not be counted as
having been voted for or against the proposal. Broker non-votes will be
treated as shares not capable of being voted on the proposal and,
accordingly, will have no effect on the outcome of voting on the proposal.
The Board of Directors unanimously recommends a vote FOR ratification of
the selection of PwC as independent accountants.
AMENDMENT OF OUR CERTIFICATE OF INCORPORATION TO
INCREASE THE RESTATED NUMBER OF AUTHORIZED SHARES
On March __, 2002, our Board of Directors unanimously approved an
amendment to our Restated Certificate of Incorporation that would increase
the number of shares of Common Stock authorized for issuance from 100,000,000
shares to 200,000,000 shares. The Board also has directed that the proposed
amendment be submitted to the stockholders for approval at the Annual
Meeting
The proposed amendment would amend and restate Article 4A. of our
Restated Certificate of Incorporation to read as follows:
"4A. Number of Shares and Classes. The aggregate number of shares of
stock which the corporation shall have authority to issue is Two
Hundred Million Two Hundred Fifty Thousand (200,250,000) shares,
which shall be divided into two classes as follows:
(1) Two Hundred Million (200,000,000) shares of Common Stock, the
par value of each of which shares is One Cent ($0.01),
amounting in the aggregate to Two Million Dollars
($2,000,000); and
(2) Two Hundred Fifty Thousand (250,000) shares of Preferred
Stock, the par value of each of which shares is One Dollar
($1.00), amounting in the aggregate to Two Hundred Fifty
Thousand Dollars ($250,000)."
The purpose of the amendment is to provide additional shares of
authorized Common Stock. After the stock split effectuated January 31, 2002,
the Company has outstanding approximately seventy-eight million of its
currently authorized shares of Common Stock of one hundred million. Our
Board believes it desirable to increase the authorized number of shares of
Common Stock in order to provide us with adequate flexibility in corporate
planning and strategies. The availability of additional Common Stock for
issuance could be used for a number of purposes, including corporate
financing, future acquisitions, stock splits, stock options and other
stock-based compensation. Such additional authorized shares may be issued
for such purposes and for such consideration as the Board may determine
without further stockholder approval, unless such action is required by
applicable law or the rules of the NASDAQ stock market or any stock exchange
on which our securities may be listed.
9
The additional shares of Common Stock for which authorization is sought
would be part of the existing class of Common Stock, and, to the extent
issued, would have the same rights and privileges as the shares of Common
Stock presently outstanding. Ownership of shares of our Common Stock confers
no preemptive rights. Future issuances of additional shares of Common Stock
or securities convertible into Common Stock, whether pursuant to an
acquisition or other corporate transaction, would have the effect of diluting
the voting rights and could have the effect of diluting earnings per share
and book value per share of existing stockholders.
The increase in the authorized but unissued shares of Common Stock which
would result from adoption of the proposed amendment could have a potential
anti-takeover effect with respect to the Company, although our management is
not presenting the proposal for that reason and does not presently anticipate
using the increased authorized shares for such a purpose. The potential
anti-takeover effect of the proposed amendment arises because it would enable
the Company to issue additional shares of Common Stock up to the total
authorized number with the effect that the shareholdings and related voting
rights of then existing stockholders would be diluted to an extent
proportionate to the number of additional shares issued.
If this proposal is approved, we intend to promptly file an amendment to
our Restated Certificate of Incorporation with the Delaware Secretary of
State, upon which filing the proposed amendment will become effective.
Vote Required
Under applicable Delaware law, amendment of our Restated Certificate of
Incorporation requires the affirmative vote of a majority of the outstanding
shares of our Common Stock entitled to vote theron. Because they will not be
recorded as votes in favor of such amendment, abstentions and broker
non-votes will have the effect of votes against amendment of our Restated
Certificate of Incorporation.
The Board unanimously recommends a vote FOR amendment of the
Restated Certificate of Incorporation to increase the number of
shares of common stock authorized for issuance.
APPROVAL OF THE 2002 DENTSPLY INTERNATIONAL
STOCK OPTION PLAN
On March __, 2002, the Board adopted the DENTSPLY International Inc.
2002 Stock Option Plan (the "2002 Stock Option Plan") and determined to
submit the 2002 Stock Option Plan for approval at the Annual Meeting. The
2002 Stock Option Plan was adopted for the purpose of promoting the growth
and development of the Company by providing incentives to officers and other
key employees of the Company and its subsidiaries, facilitating the efforts
of the Company and its subsidiaries to obtain and retain employees of
outstanding ability and providing an incentive to members of the Board who
are not employees of the Company to serve on the Board and devote themselves
to the future success of the Company. If the 2002 Stock Option Plan is
approved by the stockholders, it shall be deemed to have become effective as
of March __, 2002 and no further options will be granted under the 1998 Stock
Option Plan.
The following summary of the material features of the 2002 Stock Option
Plan does not purport to be complete and is qualified in its entirety by
reference to the complete text of the 2002 Stock Option Plan attached to the
Proxy Statement as Appendix A.
10
General Provisions
Administration. The 2002 Stock Option Plan will be administered by the
Stock Option Subcommittee (the "Committee") of the Human Resources Committee
of the Board. The Committee will be comprised of two or more members of the
Board, each of whom qualifies as a "Non-Employee Director" as defined in Rule
16b-3 under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
or any successor rule or regulation, and an "outside director" as defined in
Section 162(m) or any successor provision of the Internal Revenue Code of
1986, as amended (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 2002 Stock Option Plan to qualify for any tax
or other material benefit to optionees ("Optionees") or the Company under
applicable law. Subject to the express provisions of the 2002 Stock Option
Plan, the Committee will have sole discretion concerning all matters relating
to the 2002 Stock Plan and options granted thereunder ("Options"), including,
without limitation, determining those employees to whom Options will be
granted, the number of shares subject to each Option and the vesting schedule
and expiration date of such Option.
Eligibility. The Committee will select those officers and other key
employees of the Company, including members of the Board who are also
employees ("Employee Directors"), to participate in the 2002 Stock Option
Plan on the basis of the importance of their services in the management,
development and operations of the Company. Officers, other key employees and
Employee Directors are collectively referred to as "Key Employees." Members
of the Board who are not employees of the Company ("Outside Directors") may
participate in the 2002 Stock Option Plan in accordance with the provisions
described below.
Shares Available. Options with respect to an aggregate of seven
million, (7,000,000) shares of Common Stock (which includes Options
authorized under the 1998 Stock Option Plan which have not been granted)
(plus any shares of Common Stock covered by any unexercised portion of
canceled or terminated stock options granted under the DENTSPLY International
Inc. 1993 and 1998 Stock Option Plans), may be granted under the 2002 Stock
Option Plan (the "Maximum Number"). The Maximum Number will be increased on
January 1 of each calendar year during the term of the 2002 Stock Option Plan
to equal seven percent (7%) of the outstanding shares of Common Stock on such
date, in the event that 7,000,000 shares is less than seven percent (7%) of
the outstanding shares of Common Stock on such date, prior to such increase.
The number of shares of Common Stock delivered by any Optionee or withheld by
the Company on behalf of any Optionee pursuant to the 2002 Stock Option Plan
will once again be available for issuance pursuant to the grant of Options
under the 2002 Stock Option Plan. Any shares of Common Stock reserved for
issuance upon exercise of Options which expire, terminate or are cancelled,
will once again be available for issuance pursuant to the grant of Options
under the 2002 Stock Option Plan.
Adjustments. The number of shares of Common Stock subject to the 2002
Stock Option Plan, the exercise price of such Options and the number of
shares available for Options subsequently granted under the 2002 Stock Option
Plan will be appropriately adjusted to reflect any stock dividend, stock
split or combination of shares. In the event of any merger, consolidation or
reorganization of the Company, there will be substituted on an equitable
basis for each share of Common Stock then subject to the 2002 Stock Option
Plan and for each share of Common Stock then subject to an Option granted
under the 2002 Stock Option 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 such transaction.
11
Grants of Options to Employees
Subject to the terms of the 2002 Stock Option Plan, the Committee may
from time to time grant Options which are incentive stock options ("ISOs")
meeting the requirements of Section 422 of the Code, or options which do not
meet such requirements ("Nonqualified Options" or "NSOs"), to Key Employees
of the Company; provided, however: (a) the exercise price per share of each
ISO will 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) will not exceed $100,000; and (c) 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 will not be 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 will expire and all rights to purchase
shares thereunder will cease no later than the fifth anniversary of the date
the ISO was granted. NSOs granted to Key Employees will be in such form and
subject to such restrictions and other terms and conditions as the Committee
may determine, provided, however, that, except as determined by the Committee
in its sole discretion with respect to a specific grant, the exercise price
per share of each NSO will not be less than the fair market value of a share
of Common Stock on the date the NSO is granted. Each Option will vest in
three equal annual installments commencing on the first anniversary of the
date of grant, provided, however, that the Committee, in its sole discretion,
will 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.
Grants to Outside Directors
All grants of Options to Outside Directors will be automatic and
non-discretionary. Each individual who becomes an Outside Director (other
than an Outside Director who was previously an Employee Director) will be
granted a NSO to purchase nine thousand (9,000) shares of Common Stock on the
date he or she becomes an Outside Director. Each individual who is an
Employee Director and who thereafter becomes an Outside Director will be
granted automatically a NSO to purchase nine thousand (9,000) shares of
Common Stock on the third anniversary of the date such Employee Director was
last granted an Option. Thereafter, each Outside Director who is re-elected
to the Board will be granted an additional NSO to purchase nine thousand
(9,000) shares of Common Stock on the third anniversary of the date such
Outside Director was last granted an Option. The exercise price of each NSO
granted to an Outside Director will be the fair market value of the Common
Stock subject to the Option on the date on which the Option is granted. Each
such NSO will vest in three equal annual installments commencing on the first
anniversary of the date of grant.
Effect of Termination of Employment
Except in the event of death, disability, retirement or a "Change in
Control" or as otherwise determined by the Committee, all rights to exercise
the vested portion of 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 in the 2002 Stock Option Plan) will terminate 90 days
following the date of termination of employment or service on the Board. Any
Option held by an Optionee whose employment with the Company is terminated
for "Cause" will terminate on the date of termination of employment. In the
event of the death or Disability (as defined in the 2002 Stock Option Plan)
of an Optionee during employment with the Company or service on the Board,
all Options held by the Optionee will become fully exercisable on such date
of death or Disability. Each of the Options held by such an Optionee will
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. Unless otherwise provided in the Plan or determined by the Committee,
vesting of Options ceases upon termination of employment.
If an Optionee who is a Key Employee, including an Employee Director,
retires at or after age 65 or at or after age 60 with a minimum of 15 years
of service with the Company, the Options held by such Optionee upon such
retirement will become fully exercisable as of the date of such retirement
and expire on the earlier of the fifth anniversary of the date of such
retirement or the date that they expire in accordance with their terms. If
the service of an Outside Director is terminated in accordance with the
Company's retirement policy for directors, all Options held by such director
shall become fully exercisable on the date of such retirement and expire on
the earlier of the fifth anniversary of the date of such retirement or the
date that they expire in accordance with their terms.
12
Exercise of Options
Except as otherwise provided in the 2002 Stock Option Plan or in any
Option agreement or grant certificate, the Optionee will 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 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, will authorize, or (e) by
any combination of (a), (b), (c), and (d).
Withholding Obligations
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.
Change in Control
Immediately upon a "Change in Control" (as defined in the 2002 Stock
Option Plan), all outstanding Options, whether or not otherwise exercisable
as of the date of such Change in Control, will become fully exercisable and
all restrictions thereon will terminate in order that Optionees may fully
realize the benefits thereunder. The Committee may determine in its
discretion (but shall not be obligated to do so) that any or all holders of
outstanding Options which are exercisable immediately prior to a Change of
Control (including those that become exercisable upon the Change in Control)
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 (as determined by the Committee in its discretion), with such
payment to take place as of the date of the Change in Control or such other
date as the Committee may prescribe.
Termination, Amendment and Term of the 2002 Stock Option Plan
The Board or the Committee may terminate, suspend, or amend the 2002
Stock Option Plan, in whole or in part, from time to time, without the
approval of the stockholders of the Company provided, however, that no
amendment will be effective until approved by the stockholders of the Company
if such stockholder approval is required in order for the 2002 Stock Option
Plan to continue to satisfy the requirements of applicable tax or other
laws. No amendment or termination of the 2002 Stock Option Plan will
adversely affect any Option theretofore granted without the consent of the
Optionee. Unless earlier terminated in accordance herewith, the 2002 Stock
Option Plan will terminate on March __, 2012. Termination of the 2002 Stock
Option Plan will not affect Options previously granted thereunder.
New 2002 Stock Option Plan Benefits
As described above, the Key Employees of the Company who receive Options
under the 2002 Stock Option Plan are to be determined by the Committee in its
discretion. Accordingly, it is not possible to predict the amounts that will
be received by or allocated to particular Key Employees or groups of Key
Employees nor to determine the amounts that would have been received or
allocated for 2001 if the 2002 Stock Option Plan had been in effect.
However, pursuant to the terms of the 2002 Stock Option Plan, each Outside
Director receives an automatic grant of a NSO to purchase 9,000 shares of
Common Stock on the date he or she becomes an Outside Director. Each
individual who is an Employee Director and who thereafter becomes an Outside
Director will be granted automatically a NSO to purchase 9,000 shares of
Common Stock on the third anniversary of the date such Employee Director was
last granted an Option. Thereafter, each Outside Director who is re-elected
to the Board will be granted an additional NSO to purchase 9,000 shares of
Common Stock on the third anniversary of the date such Outside Director was
last granted an Option. If the 2002 Stock Option Plan is approved, Outside
Directors will continue to receive grants of NSOs under the same guidelines
described above. No dollar value is assigned to the NSOs because their
exercise price will be the fair market value of the Company's Common Stock on
the date of grant.
13
Certain Federal Income Tax Consequences
The following is a brief summary of the federal income tax consequences
of awards under the 2002 Stock Option Plan based upon current federal income
tax laws. The summary is not intended to be comprehensive and, among other
things, does not describe state, local or foreign tax consequences.
The award of an ISO will have no immediate tax consequences to the
Company or the Optionee. However, in the year of exercise, the difference
between the fair market value of the shares at the time of exercise and the
exercise price of the Option is an item of tax preference subject to the
possible application of the alternative minimum tax. If an Optionee does not
dispose of shares received upon exercise of an ISO for at least two years
after the date of the ISO award and for at least one year from the date of
exercise (a "disqualifying disposition"), gain or loss on a subsequent sale
or exchange of the shares will be a capital gain or loss in the amount of the
difference between the amount realized on the sale or exchange and the
exercise price (or the recipient's other tax basis in the shares) at a tax
rate which will depend on the length of time the shares were held and other
factors. If there is a disqualifying disposition, the Optionee generally
will recognize compensation income equal to the lesser of (i) the excess of
the fair market value of the shares on the exercise date over the exercise
price, or (ii) the excess of the amount realized on disposition over the
exercise price. Any additional gain will be taxable as a capital gain, and
any loss will be treated as a capital loss. Upon any such disposition by an
Optionee, the Company will be entitled to a deduction in the amount of
compensation income realized by the Optionee.
The award of a NSO will have no immediate tax consequences to the
Company or the Optionee. Upon exercise of a NSO, an Optionee will recognize
ordinary income in an amount equal to the difference between the exercise
price of the NSO and the fair market value of the shares on the date of
exercise. The Company will be entitled to a corresponding tax deduction at
the time of exercise.
Vote Required
The proposal to approve the 2002 Stock Option Plan will be approved by
the stockholders if it receives the affirmative vote of a majority of the
shares present and entitled to vote on the proposal. If a proxy card is
specifically marked as abstaining from voting on the proposal to approve the
2002 Stock Option Plan, the abstention will have the effect of a vote against
the proposal, even though the shares represented thereby will not be counted
as having been voted against the proposal. Broker non-votes will be treated
as shares not capable of being voted on the proposal and, accordingly, will
have no effect on the outcome of voting on the proposal.
The Board unanimously recommends a vote FOR the proposal
to approve the 2002 Stock Option Plan
14
EXECUTIVE COMPENSATION
Summary Compensation
The following table sets forth the compensation earned by the Company's
chief executive officer and the four other highest-paid executive officers of
the Company whose salary and bonus for the year ended December 31, 2001 were
in excess of $100,000 (collectively, the "named executive officers") for each
of the last three fiscal years. All shares and per share amounts set forth
in this proxy reflect the stock split effectuated January 31, 2002.
SUMMARY COMPENSATION TABLE
Annual Compensation Long-Term Compensation
--------------------------------------- ----------------------------------------------------
---------------------- ----------
Awards Payouts
---------------------- ----------
Other Restricted
Annual Stock Options/ LTIP All Other
Name and Salary Bonus Compensation Award(s) SARs Payouts Compensation
Principal Position Year ($) ($) ($) ($) (#) ($) ($)
John C. Miles II 2001 650,000 639,600 - - 225,000 - 137,851 (1)
Chairman of the Board 2000 564,300 514,400 - - 215,550 - 99,762 (1)
and Chief Executive 1999 550,000 302,400 - - 213,750 - 91,789 (1)
Officer(2)
Gerald K. Kunkle 2001 427,800 336,700 - - 123,600 - 53,011 (1)
President and Chief 2000 357,400 260,700 - - 140,100 - 103,278 (1)
Operating Officer 1999 348,400 153,300 - - 96,150 - 43,218 (1)
Thomas L. Whiting 2001 290,500 220,100 - - 39,150 - 37,496 (1)
Senior Vice President 2000 254,500 189,600 - - 50,550 - 66,275 (1)
1999 224,500 133,200 - - 55,650 - 27,606 (1)
William R. Jellison 2001 263,000 189,700 - - 39,150 - 27,753 (1)
Senior Vice President 2000 230,000 153,700 - - 50,550 - 47,655 (1)
and Chief Financial 1999 210,000 84,700 - - 84,000 - 20,850 (1)
Officer
J. Henrik Roos 2001 255,000 172,700 - - 39,150 - 25,168 (1)
Senior Vice President 2000 226,000 135,000 - - 50,550 - 42,363 (1)
1999 198,452 65,000 - - 73,050 - 17,390 (1)
(1) Includes amounts contributed to The DENTSPLY International Inc. Employee
Stock Ownership Plan (the "Company ESOP") and allocations to the Company's
Supplemental Executive Retirement Plan ("SERP"). Under the Internal Revenue
Code of 1986, as amended (the "Internal Revenue Code"), the maximum amount
that can be contributed annually to the Company ESOP in respect of any
employee is generally an amount equal to the lesser of $30,000 or 25% of
such employee's covered compensation. Employee interests in the Company
ESOP and SERP are subject to vesting in accordance with the respective
plans.
(2) In May 1998, Mr. Miles assumed responsibility as Chairman of the Board.
15
The following table sets forth certain information with respect to grants
of options during the year ended December 31, 2001 and their potential
realizable values.
OPTION GRANTS IN LAST FISCAL YEAR
Individual Grants
- ----------------------------------------------------------------------------------------------------------------------------
% of Total
Options
Granted to Exercise Grant Date
Options Employees in Price Expiration Present
Name Granted (#) Fiscal Year ($/Share) Date Value ($)
John C. Miles II 225,000 14.01 31.167 12/12/2011 2,656,515 (1)
Gerald K. Kunkle 123,600 7.70 31.167 12/12/2011 1,459,312 (1)
Thomas L. Whiting 39,150 2.44 31.167 12/12/2011 462,234 (1)
William R. Jellison 39,150 2.44 31.167 12/12/2011 462,234 (1)
J. Henrik Roos 39,150 2.44 31.167 12/12/2011 462,234 (1)
The following table sets forth certain information with respect to the
exercise of options during the year ended December 31, 2000 and the value of
options held at that date.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
Number of Value of Unexercised
Unexercised Options Held in-the-Money Options at
Shares Acquired Value at Fiscal Year-End Fiscal Year-End ($) (2)
Name On Exercise (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
John C. Miles II - - 715,200 439,950 11,908,083 3,038,025
Gerald K. Kunkle - - 289,900 249,050 4,561,694 1,662,764
Thomas L. Whiting - - 202,000 91,400 3,450,459 714,681
William R. Jellison - - 97,600 100,850 1,421,418 855,329
J Henrik Roos - - 148,200 97,200 2,577,278 801,005
(1) Determined using the Black-Scholes option-pricing model with the
following assumptions: expected dividend yield 0.59%, risk-free interest
rate 5.07%, expected volatility 33%, and expected life 5.5 years.
(2) Represents the difference between the last reported sale price of the
Common Stock as reported on the NASDAQ National Market on December 31, 2001
($33.467) and the exercise price of the options, multiplied by the number
of shares of Common Stock issuable upon exercise of the options.
16
Employment Agreements
The Company is party to employment agreements with all of the named
executive officers. Each of these employment agreements provides that, upon
termination of such individual's employment with the Company as a result of
the employee's death, the Company is obligated to pay the employee's estate
the then current base compensation of the employee for a period of one year
following the date of the employee's death, together with the employee's pro
rata share of any incentive or bonus payments due for the period prior to the
employee's death. Each of the employment agreements also provides that, in
the event that the employee's employment is terminated by the Company (in
certain cases without "cause," as defined in the employment agreements) or by
the employee with "good reason" (as described in the employment agreements),
(i) the Company will be obligated to pay the employee for a period of two
years subsequent to termination of employment at the rate paid to the
employee during the prior 12 month period, and (ii) the employee will be
entitled to receive the benefits that would have been accrued by him during
the two year period following termination of employment under employee
benefit plans, programs or other arrangements of the Company or any of its
affiliates in which the employee participated before the termination of his
employment. In the event that such termination of employment is made by the
Company without cause or by the employee with good reason after a "change in
control" (as defined in the employment agreements), the employee may require
the Company to pay to the employee, within five days after the employee's
request for such payment, the present value of the amounts that would have
been payable to him under the employment agreement during the two year period
following such termination of employment.
The Company has also entered into employment agreements with certain other
members of senior management having terms substantially similar to those
described above.
Compensation of Directors
Members of the Board of Directors who are not employees of the Company
("Outside Directors") receive an annual fee of $22,000 ($26,000 for Outside
Directors who are chairpersons of any committee of the Board) and an
additional fee of $1,000 for each Board and committee meeting attended. In
1993, each Outside Director at that time received a non-discretionary grant
of options to purchase 9,000 shares of Common Stock under the 1993 Stock
Option Plan. Additionally, any Outside Director elected since 1993 received a
non-discretionary grant of options at the time of their election to purchase
9,000 shares of Common Stock. Each Outside Director will automatically
receive an additional grant of 9,000 options on every third anniversary of
the date of the initial grant of options to such Outside Director. Directors
are reimbursed for travel and other expenses relating to attendance at Board
and Committee meetings.
Effective January 1, 1997, the Company established a new Directors'
Deferred Compensation Plan (the "Deferred Plan"), which replaced the plan
that was enacted during 1994. The Deferred Plan permits Outside Directors to
elect to defer receipt of directors fees or other compensation for their
services as directors. Outside Directors can elect to have their deferred
payments administered as a cash with interest account or a stock unit
account. Distributions to a Director under the Deferred Plan will not be
made to any Outside Director until the Outside Director ceases to be a Board
member.
Human Resources Committee Interlocks and Insider Participation
From December 18, 1997 to May 24, 2000, Mr. Borgelt, Mr. Coleman, Dr.
Dugoni and Mr. Fetterolf were members of the Human Resources Committee. On
May 24, 2000, Mr. Smith joined and Dr. Dugoni left the Human Resources
Committee. In May and September, 2001, Dr. Alfano and Ms. Scheihing,
respectively, joined the Human Resources Committee.
17
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial
ownership of the Company's Common Stock as of February 22, 2002 held by (i)
each person who is known by the Company to have been the beneficial owner of
more than five percent of the Company's Common Stock on such date, (ii) each
director and nominee for director, (iii) the Company's chief executive
officer and the other named executive officers, and (iv) all directors and
executive officers of the Company as a group (based on 77,924,485 shares of
Common Stock outstanding as of such date).
Shares Owned
Beneficially
Directors, Executive Officers ----------------------------------
and Five Percent Stockholders Number Percent
The DENTSPLY International Inc.
Employee Stock Ownership Plan Trust
c/o T. Rowe Price
P. O. Box 17349
Baltimore, MD 21297-1349 8,232,944 (1) 10.6
FMR Corp
82 Devonshire Street
Boston, MA 02109 7,113,491 (2) 9.1
Burton C. Borgelt 1,106,017 (3) 1.4
John C. Miles II 1,004,463 (4) 1.3
Gerald K. Kunkle 316,957 (5) *
Thomas L. Whiting 278,161 (6) *
William R. Jellison 108,266 (7) *
J. Henrik Roos 155,813 (8) *
Dr. Michael C. Alfano 3,000 (9) *
Douglas K. Chapman 38,979 (10) *
Paula H. Cholmondeley - *
Michael J. Coleman 33,300 (11) *
C. Frederick Fetterolf 21,000 (12) *
William F. Hecht - *
Leslie A. Jones 139,029 (13) *
Betty Jane Scheihing 1,500 *
Edgar H. Schollmaier 32,250 (14) *
W. Keith Smith 42,855 (13) *
All directors and executive officers as a group (19 persons) 3,584,636 (15) 4.6
* Less than 1%
(1) Participants in the Company ESOP have the right to direct the trustee of
the Company ESOP as to the voting of shares allocated to such
participants' accounts on all matters submitted to a vote of the
stockholders of the Company, including the election of directors.
Unallocated shares and shares as to which no directions are received by
the trustee of the Company ESOP are voted as directed by the Company ESOP
Committee, which consists of certain employees of the Company. As of
February 22, 2002, 7,502,975 of the shares held by the trust holding the
assets of the Company ESOP were allocated to participant accounts and
729,969 shares remained unallocated. Each Company ESOP participant who is
fully vested is entitled to receive a distribution of all of the shares
of common stock allocated to his or her account as soon as practicable
after such participant's employment with the Company terminates. In
general, except for certain participants who are age 55 or older and have
been participants in the Company ESOP for at least 10 years, participants
are not entitled to sell shares allocated to their accounts until their
employment has terminated and the shares allocated to such participants'
accounts are distributed to them.
18
(2) Based on information contained in the Schedule 13G filed by FMR Corp. on
February 14, 2002
(3) Includes 104,087 shares owned by a trust of which Mr. Borgelt is a
co-trustee with shared investment and voting power, 32,049 shares held by
Mr. Borgelt's grandchildren, 169,922 shares held in Mr. Borgelt's
individual retirement account and 171,000 shares which could be acquired
pursuant to the exercise of options exercisable within 60 days of
February 22, 2002.
(4) Includes 74,718 shares allocated to the Company ESOP account of Mr.
Miles and 715,200 shares which could be acquired pursuant to the exercise
of options exercisable within 60 days of February 22, 2002.
(5) Includes 4,557 shares allocated to the Company ESOP account of Mr.
Kunkle, 7,500 shares held in Mr. Kunkle's' individual retirement account
and 289,900 shares which could be acquired pursuant to the exercise of
options exercisable within 60 days of February 22, 2002.
(6) Includes 44,774 shares allocated to the Company ESOP account of Mr.
Whiting and 202,000 shares which could be acquired pursuant to exercise
of options exercisable within 60 days of February 22, 2002.
(7) Includes 1,500 shares owned by a trust of which Mr. Jellison is a
co-trustee with shared investment and voting power, 3,166 shares
allocated to the Company ESOP account of Mr. Jellison and 97,600 shares
which could be acquired pursuant to the exercise of options exercisable
within 60 days of February 22, 2002.
(8) Includes 6,399 shares allocated to the Company ESOP account of Mr. Roos
and 1,214 shares held in Mr. Roos' 401(k) account, and 148,200 shares
which could be acquired pursuant to exercise of options exercisable
within 60 days of February 22, 2002.
(9) Includes 3,000 shares which could be acquired pursuant to the exercise
of options exercisable within 60 days of February 22, 2002.
(10) Includes 14,979 shares owned by a trust of which Mr. Chapman is a
co-trustee with shared investment and voting power and 24,000 shares
which could be acquired pursuant to exercise of options exercisable
within 60 days of February 22, 2002.
(11) Includes 6,300 shares held by Mr. Coleman's spouse and 24,000 shares which
could be acquired pursuant to exercise of options exercisable within 60
days of February 22, 2002.
(12) Includes 18,000 shares which could be acquired pursuant to exercise of
options exercisable within 60 days of February 22, 2002.
(13) Includes 24,000 shares which could be acquired pursuant to exercise of
stock options exercisable within 60 days of February 22, 2002.
(14) Includes 15,000 shares which could be acquired pursuant to the exercise of
options exercisable within 60 days of February 22, 2002.
(15) Includes 191,083 shares held by or for the benefit of others, 177,422
shares held in individual retirement accounts, 1,214 shares held in a
401(k) account, 139,943 shares allocated to employees' ESOP accounts and
2,018,950 shares which could be acquired pursuant to the exercise of
warrants and options exercisable within 60 days of February 22, 2002.
The Board of Directors established stock ownership guidelines effective
March 2, 1999, to encourage accumulation and retention of Common Stock by
executives of the Company, including the named executive officers. The
guidelines are stated as a multiple of annual base salary as follows: three
times annual base salary for the chief executive officer; two times annual
base salary for the chief operating officer; one times annual base salary for
senior vice presidents; .75 times base salary for vice presidents and other
officers; and .50 times base salary for general managers. The recommended
time period for reaching the guidelines is five years. Common Stock allocated
to officers in their Company ESOP account and individual retirement plans
will be included but stock options will not be counted in determining
ownership levels.
19
HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Human Resources Committee is pleased to present its report on executive
compensation. This report describes the components of the Company's executive
officer compensation programs and the basis on which compensation
determinations are made with respect to the executive officers of the Company.
Compensation Philosophy
It is the philosophy of the Company that a significant portion of executive
compensation be directly linked to the Company's success in meeting profit,
growth and corporate performance goals, as well as increases in stockholder
value. The Human Resources Committee utilizes the following objectives as
guidelines for compensation decisions:
-- Provide a competitive total compensation package that enables the Company
to attract and retain key personnel.
-- Provide a broad-based compensation package that recognizes the
contributions of all management personnel.
-- Provide variable compensation opportunities, primarily on an annual
basis, that are directly linked to corporate performance goals.
-- Provide long-term compensation opportunities, through stock options, that
align executive compensation with value received by stockholders.
Section 162(m) of the Internal Revenue Code disallows a Federal income tax
deduction to publicly held companies for compensation paid to the chief
executive officer and the other named executive officers, to the extent that
compensation exceeds $1 million for such officer in any fiscal year. This
limitation does not apply to compensation that is "performance based" in
accordance with certain specific requirements. The Company's 1998 stock
option plan has been structured so that options granted under the plan
qualify as "performance based compensation" and are exempt from the
limitations on deduction. Compensation paid to the Company's chief executive
officer for 2001 that was not "performance-based compensation" in accordance
with Section 162(m) exceeded the $1 million limit. The Committee believes
that the chief executive officer and the other named executive officers are
being appropriately compensated in a manner that relates to performance and
is in the long-term interests of the stockholders. The Committee is not
taking action at this time to limit the Company's discretion to pay
"non-performance based compensation" to the chief executive officer and the
other named executive officers.
Compensation Program Components
The Human Resources Committee periodically reviews the Company's
compensation programs to ensure that pay levels and incentive opportunities
are competitive and reflect the performance of the Company. In November
2000, the Committee retained Towers Perrin to study and report on the
Company's executive compensation practices and to do competitive evaluations
of the total compensation for twelve of the Company's corporate officer and
executive positions. The Human Resources Committee reviewed the findings of
these studies and made its recommendations to the Board of Directors of the
Company at meetings held in December 2000. The compensation program for
executive officers is comprised of the following components: base salary,
annual incentive compensation and stock options. Each of these components is
summarized below.
Base Salary. In December 2000, the Committee reviewed and approved the base
salaries of John C. Miles II, Gerald K. Kunkle, Thomas L. Whiting, William R.
Jellison and J. Henrik Roos, in light of the information supplied by Towers
Perrin in November 2000 concerning industry practices and the recommendations
made by them with respect to the Company's compensation policies. Based on
the above information, effective in 2001, the Committee set Mr. Miles' and
Mr. Kunkle's base salaries at $650,000 and $427,800, respectively. The base
salaries of Messrs. Whiting, Jellison and Roos were set by the Committee at
$290,500, $263,000 and $255,000, respectively.
20
Among the factors that the Human Resources Committee considered in setting
base salaries for executive officers were its interpretation of the Towers
Perrin report regarding salary levels of executive officers of other
manufacturing companies of similar size, and a subjective evaluation of the
Company's performance. While the Committee believes that it will be
appropriate to attempt to maintain base salaries in line with perceived
industry averages for comparable companies, the amount of any particular
salary increase will also depend upon the individual's job performance. In
addition to the Towers Perrin report, the chief executive officer's
recommendations were taken into account in setting the base salaries of
executive officers other than the chief executive officer.
Annual Incentive Compensation. Annual bonuses represent payments for the
achievement of short-term objectives and recognize both the overall
performance of the Company and individual performance in a given year. In
December 2000, the Human Resources Committee approved a bonus program for
senior executives in 2001.
Under this bonus program, during 2001, certain target award opportunities
were established for the Company's chief executive officer ("CEO"), president
and chief operating officer ("COO"), senior vice presidents and other
management employees. For the CEO, COO and the chief financial officer
("CFO"), the target consisted of: (i) the budgeted level of corporate net
income; and (ii) the budgeted level of corporate sales. For the senior vice
presidents other than the CFO, the targets consisted of: (i) the budgeted
level of corporate net income; (ii) the budgeted operating income level of
the business group applicable to each such senior vice president; and (iii)
the budgeted level of corporate sales. For Mr. Miles and Mr. Kunkle, the
bonus award for 100% of targeted performance was set at 75% and 60%,
respectively, of their base salaries, while for Messrs. Whiting, Jellison and
Roos, the bonus awards for 100% of targeted performance were set at 55% of
their respective base salaries. Messrs. Miles, Kunkle, Whiting, Jellison and
Roos received bonus awards for 2001 of 98.4%, 78.7%, 75.8%, 72.1%, and 67.7%,
respectively, of their base salaries.
The named executive officers also participate in the DENTSPLY International
Inc. Supplemental Executive Retirement Plan ("SERP"). The SERP is an unfunded
"top-hat" plan for the purposes of providing additional retirement benefits
for highly compensated employees of the Company to make the Company's
executive retirement benefits more competitive and to make up for
contributions that would otherwise have been made for such executives under
the terms of the Company's ESOP plan if it were not for the limitations
imposed by the Internal Revenue Code.
HUMAN RESOURCES COMMITTEE
MICHAEL J. COLEMAN BURTON C. BORGELT C. FREDERICK FETTEROLF
W. KEITH SMITH MICHAEL C. ALFANO BETTY JANE SCHEIHING
Stock Options
The Company's 1998 stock option plan is intended to motivate key employees
to put forth maximum efforts toward the continued growth, profitability and
success of the Company by providing incentives through the ownership and
performance of the Company's Common Stock. The plan is designed to provide
benefits to key management only to the extent that stockholders enjoy
increases in value.
In 2001, 565,950 stock options were granted to the Company's executive
officers under the 1998 stock option plan. The Stock Option Subcommittee of
the Human Resources Committee considered the respective stock and option
holdings of the executive officers of the Company in comparison with stock
and option holdings of top executives of companies of similar size and growth
records, based upon the information set forth in the Towers Perrin report,
and made option awards during 2001 that were consistent with the compensation
philosophy of the Human Resources Committee, as described above, and that
were intended to keep its executive officers' holdings competitive with
industry averages for comparable companies.
In determining the number of stock options to be granted to Mr. Miles in
2001, the subcommittee compared Mr. Miles' base salary, bonus and past stock
option grants to the compensation practices of corporations with revenues of
$500 million to $1 billion in Towers Perrin's Executive Compensation Data
Base. The grant made to Mr. Miles placed a greater emphasis on the long term
portion of his total direct compensation (base salary, annual bonus and the
Black Scholes value of DENTSPLY option grants) while still positioning his
total direct compensation between the 50th and 75th percentiles of
competitive practice.
STOCK OPTION SUBCOMMITTEE
MICHAEL J. COLEMAN C. FREDERICK FETTEROLF W. KEITH SMITH
MICHAEL C. ALFANO BETTY JANE SCHEIHING
21
AUDIT COMMITTEE DISCLOSURE
Audit Committee Report
The Audit Committee consists of five directors, all of whom are independent
as defined by NASDAQ's independent director and audit committee listing
standards. The Audit Committee operates under a written charter adopted by
the Board of Directors. This charter is reviewed annually by the Committee
and the board and amended as determined appropriate. A copy of this charter
is included in Appendix B.
The Audit Committee reviews the Company's financial reporting process on
behalf of the Board. In addition, the Committee recommends to the Board,
subject to stockholder ratification, the selection of the Company's
independent public accountants.
Management is responsible for the Company's internal controls and the
financial reporting process. The independent public accountants are
responsible for performing an independent audit of the Company's financial
statements in accordance with generally accepted auditing standards and to
issue a report thereon. The Committee's responsibility is to oversee these
processes.
In this context, the Committee has met and held discussions with management
and PricewaterhouseCoopers LLP ("PwC"), the Company's independent public
accountants. Management represented to the Committee that the Company's
financial statements were prepared in accordance with generally accepted
accounting principles, and the Committee has reviewed and discussed the
audited financial statements with management and PwC. The Committee discussed
with PwC the matters required to be discussed by Statement on Auditing
Standards No. 61 (Communication with Audit Committees).
In addition, the Committee has discussed with PwC the auditor's
independence from the Company and its management and has received the written
disclosures and the letter from PwC required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees), as it has
been modified or supplemented.
The Committee discussed with PwC the overall scope and plans for their
audits. The Committee meets with PwC, with and without management present, to
discuss the results of their examinations, the evaluations of the Company's
internal controls, and the overall quality of the Company's financial
reporting.
Based upon the Committee's discussions with management and PwC and the
Committee's review of the representations of management and the report of PwC
to the Committee, the Committee recommended that the Board include the
audited financial statements in the Company's Annual Report on Form 10-K for
the year ended December 31, 2001 filed with the Securities and Exchange
Commission.
AUDIT AND INFORMATION TECHNOLOGY COMMITTEE
DOUGLAS K. CHAPMAN PAULA H. CHOLMONDELEY WILLIAM F. HECHT
LESLIE A. JONES EDGAR H. SCHOLLMAIER
Fees Paid to Auditors
The following table sets forth the fees the Company incurred for services
performed by PwC for the year ended December 31, 2001.
Audit fees $ 975,000
Financial information system design
and implementation fees -
All other fees 1,632,000 (1)
$2,607,000
(1) Includes fees of $1,190,000 for acquisition related audit and review
procedures and tax planning.
22
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following graph shows the cumulative total stockholder return on the
Company's Common Stock over the last five fiscal years as compared to the
returns of the NASDAQ Total Return Index and the Standard & Poor's Health
Care Composite Index. The graph assumes that $100 was invested on December
31, 1996 in the Company's Common Stock and in the NASDAQ Total Return Index
and the Standard & Poor's Health Care Composite Index and assumes
reinvestment of dividends.
YEAR ENDED DECEMBER 31, 1996 1997 1998 1999 2000 2001
DENTSPLY International Inc. 100.0 129.4 110.1 102.0 170.2 219.7
S&P Health Care Composite Index 100.0 143.7 207.3 190.2 258.5 227.0
Nasdaq Total Return Index 100.0 122.5 172.7 320.9 193.0 153.2
23
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under federal securities laws, the Company's directors, certain officers,
and persons holding more than 10% of the Common Stock of the Company are
required to report, within specified monthly and annual due dates, their
initial ownership and any subsequent changes in ownership of the Company's
securities to the Securities and Exchange Commission. The Company is required
to describe in this proxy statement whether it has knowledge that any person
required to file such report may have failed to do so in a timely manner.
Based upon reports furnished to the Company and written representations and
information provided to the Company by the persons, the Company believes that
during fiscal 2001, all such persons complied with all applicable filing
requirements, except that Mr. Borgelt filed late one report with respect to
the sale by a family trust of 2,200 shares of Common Stock on November 20,
2001.
STOCKHOLDER PROPOSALS FOR 2003 PROXY STATEMENT
Stockholder proposals that are intended to be presented at the Company's
Annual Meeting of Stockholders to be held in 2003 must be received by the
Company no later than December 20, 2002, and must otherwise comply with Rule
14a-8, in order to be included in the proxy statement and proxy relating to
that meeting.
The Company's by-laws provide that advance notice of stockholder-proposed
business to be brought before an Annual Meeting of Stockholders must be given
to the secretary of the Company not less than 60 days in advance of the date
of the mailing of materials regarding the prior year's Annual Meeting, which
mailing date is identified on the Chairman's letter at the front of this
proxy statement. To propose business for an Annual Meeting, a stockholder
must specify in writing the business desired to be brought before the Annual
Meeting and the reasons for conducting such business at the Annual Meeting,
the proposing stockholder's name and address, the class and number of shares
beneficially owned by the stockholder, and any material interest of the
stockholder in such business. In order to be brought before the 2003 Annual
Meeting, stockholders must notify the Company in writing, in accordance with
the procedures set forth above, of any stockholder-proposed business no later
than February 17, 2003.
The Company's by-laws also provide that a stockholder may request that
persons be nominated for election as directors by submitting such request,
together with the written consent of the persons proposed to be nominated, to
the secretary of the Company not less than 60 days prior to the date of the
Annual Meeting. To be in proper form, the nominating stockholder must set
forth in writing, as to each proposed nominee, the nominee's age, business
address, residence address, principal occupation or employment, number of
shares of Common Stock of the Company beneficially owned by such person and
such other information related to such person as is required to be disclosed
by applicable law, and, as to the stockholder submitting the request, such
stockholder's name and address as they appear on the Company's books and the
number of shares of Common Stock of the Company owned beneficially by such
person.
FORM 10-K
STOCKHOLDERS MAY OBTAIN A COPY (WITHOUT EXHIBITS) OF THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2001 AS FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION WITHOUT CHARGE BY WRITING TO: DIRECTOR OF
INVESTOR RELATIONS, DENTSPLY INTERNATIONAL INC., 570 WEST COLLEGE AVENUE,
YORK, PENNSYLVANIA 17405-0872.
OTHER MATTERS
The Board of Directors knows of no matters which are to be brought before
the Annual Meeting other than those set forth in the accompanying Notice of
Annual Meeting of Stockholders. If any other matters properly come before the
Annual Meeting, the person named in the enclosed proxy card, or his duly
appointed substitute acting at the Annual Meeting, will be authorized to vote
or otherwise act thereon in accordance with his judgment on such matters.
24
APPENDIX A
DENTSPLY International Inc.
2002 Stock Option Plan
SECTION 1 PURPOSE
The purpose of the DENTSPLY International Inc. 2002 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" within the
meaning of Section 422 of the Code ("ISOs"), or stock options which do not
constitute ISOs ("NSOs") may be granted under the Plan. ISOs and NSOs are
collectively referred to as "Options." 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") to participate in the Plan on the basis of
the importance of their services in the management, development and
operations of the Company. Officers, other key employees and Employee
Directors are collectively referred to as "Key Employees."
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 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.
25
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 THE PLAN
4.1 Subject to adjustment as provided in Sections 4.1 and 4.2, Options with
respect to an aggregate of seven million (7,000,0000) shares of common
stock, par value $.01 per share of DENTSPLY (the "Common Stock") (which
includes the number of shares authorized for grant under the 1998 Plan
and not granted) (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 or 1998
Stock Option Plan), may be granted under the Plan (the "Maximum
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 seven million (7,000,000) 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 five hundred thousand
(500,000) 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.
26
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 nine thousand (9,000) shares of
Common Stock 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 nine
thousand (9,000) 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
nine thousand (9,000) shares of Common Stock on the third anniversary of
the date such Outside Director was last granted an Option.
5.2 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.
5.3 Exercise Price
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. For purposes of the Plan,
"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).
5.4 Vesting
Each such NSO shall become exercisable ("vest") 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.
27
SECTION 6 GRANTS OF OPTIONS TO EMPLOYEES
6.1 Grants
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.
6.2 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.
6.3 Vesting
Except to the extent otherwise provided in or pursuant to Section
7, 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 to Key
Employees under the Plan.
6.4 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.
6.5 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
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.
28
SECTION 7 EFFECT OF TERMINATION OF EMPLOYMENT
7.1 Termination Generally
Except as provided in Section 7.2, 7.3 or 11, or as determined by
the Committee, in its sole discretion, all rights to exercise the vested
portion of 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. All rights to exercise
the vested portion of 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. Unless otherwise provided in
the Plan or determined by the Committee, vesting of Options ceases
immediately upon termination of employment, and any portion of an Option
that has not vested on or before the date of such termination is
forfeited on such date.
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. In the event the employment of a Key Employee with
the Company shall be terminated by reason of "Normal Retirement" or "Early
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 fifth anniversary of the date of the Employee retirement, or (ii) the
date that such Option expires in accordance with its terms. For the
purposes hereof, "Normal Retirement" shall mean retirement of a Key
Employee at or after age 65 and "Early Retirement" shall mean retirement
of a Key Employee at or after age 60 with a minimum of 15 years of service
with the Company. In the event the employment of a Key Employee with the
Company shall be terminated by reason of a retirement that is not an
Normal Retirement or Early Retirement, the Committee may, in its sole
discretion, determine the vesting, exercisability and exercise periods
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 ("Outside Director Retirement"), all Options held by
such Outside Director shall become fully exercisable on the date of such
Outside Director Retirement. Each of the Options held by such an Outside
Director shall expire on the earlier of (i) the date that such Option
expires in accordance with its terms or (ii) the five year anniversary
date of such Outside Director Retirement.
29
(c) Key Employees Who Are Employee Directors. Section 7.3(a) shall be
applicable to Options held by any Key Employee who is an Employee Director
at the time that such Key Employee's employment with the Company
terminates by reason of Employee Retirement. If such Key Employee
continues to serve on the Board as of the date of such Key Employee's
Employee Retirement, then Section 7.3(b) shall be applicable to Options
granted after such date.
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, 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 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 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.
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.
30
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 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 accelerate and become fully exercisable
and all restrictions thereon shall terminate in order that Optionees may
fully realize the benefits thereunder. The Committee may determine in
its discretion (but shall not be obligated to do so) that any or all
holders of outstanding Options 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 (as determined by the Committee in its
discretion), 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 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; or
(c) Consummation by the Company of a reorganization, merger or
consolidation (a "Business Combination"), in each case, with respect to
which all or substantially all of the individuals and entities who were
the respective beneficial owners of the Outstanding Common Stock and
Voting Securities immediately prior to such Business Combination do not,
following such Business Combination, beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding 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
31
(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, 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 March 22, 2002. Unless earlier
terminated in accordance herewith, the Plan shall terminate on March 22,
2012. 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.
32
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
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.
SECTION 20 MODIFICATION FOR GRANTS OUTSIDE THE U.S.
The Board may, without amending the Plan, determine the terms and
conditions applicable to grants of Options to participants who are foreign
nationals or employed outside the United States in a manner otherwise
inconsistent with the Plan if the Board deems such terms and conditions
necessary in order to recognize differences in local law or regulations, tax
policies or customs.
33
APPENDIX B
DENTSPLY International, Inc.
Audit & Information Technology Committee
Charter
I. PURPOSE
The primary function of the Audit & Information Technology Committee
("Committee") is to assist the Board of Directors ("Board") in fulfilling its
oversight responsibilities related to corporate accounting, financial
reporting practices, quality and integrity of financial reports as well as
legal compliance, business ethics and review of information technology
matters. It shall be the policy of the Committee to maintain free and open
communication between the Board, the independent auditors, the internal
auditors and the management of the company.
II. ORGANIZATION
1. Members -- The Committee shall be composed of directors who are
independent of the management of the Company and are free of any
relationship that, in the opinion of the Board, would interfere with their
exercise of independent judgement as a committee member. Committee members
shall be nominated by the Board, and the Committee shall be composed of not
less than three independent Directors who are financially literate.
2. Meetings -- The Committee should meet on a regular basis and special
meetings should be called as circumstances require. The Committee shall meet
privately from time to time with representatives of the Company's
independent public accountants, the internal auditor and management. Written
minutes should be kept for all meetings.
III. FUNCTIONS
1. Independent Accountants -- Recommend to the Board annually, the firm to
be employed by the Company as its independent accountants. Instruct the
independent accountants that they are ultimately responsible to the Board
and the Committee. Receive from the independent accountants a formal written
statement delineating all relationships between the independent accountants
and the Company, confirming their objectivity and independence, including in
regard to scope of services.
2. Audit Plans & Results -- Review the plans, scope, fees and results for
the annual audit and the internal audits with the independent auditors and
the internal auditors. Inquire of management and the independent auditor if
any significant financial reporting issues arose during the current audit
and, if so, how they were resolved. Discuss any significant issues, if any,
raised by the independent auditors in their Letter of Recommendations to
Management regarding internal control weaknesses and process improvements.
Also review the extent of any services and fees outside the audit area
performed for the Company by its independent accountants.
3. Accounting Principles and Disclosures -- Review significant developments
in accounting rules and recommended changes in the Company's methods of
accounting or financial statements. The Committee also shall review with the
independent accountants the quality and acceptability of the application of
the Company's accounting principles to the Company's financial reporting,
including any significant proposed changes in accounting principles and
financial statements.
4. Internal Accounting Controls -- Consult with the independent accountants
regarding the adequacy of internal accounting controls. Inquire as to the
adequacy of the Company's accounting, financial, and auditing personnel
resources. As appropriate, consultation with the independent accountants
regarding internal controls should be conducted out of management's presence.
5. Internal Control Systems -- Review with management and internal auditors
the Company's internal control systems intended to ensure the reliability of
financial reporting and compliance with applicable codes of conduct, laws,
and regulations. Reports on internal audit projects with management
responses shall be available for Committee review. Special presentations may
be requested of Company personnel responsible for such areas as legal, human
resources, information technology, environmental, risk management, tax
compliance and others as considered appropriate.
34
6. Information Technology -- Review information technology plans with
respect to corporate goals, industry trends, and competitive advantages.
Review and assess the security of computer systems and applications and
contingency plans for computer system breakdowns, particularly with respect
to the processing of financial information.
In carrying out its responsibilities, the Committee believes that its
policies and procedures should remain flexible in order that it can best
react to changing conditions and environment and to assure to the directors
and shareholders that the corporate accounting and reporting practices of the
Company are in accordance with all requirements and are of the highest
quality.
35
PROXY
DENTSPLY INTERNATIONAL INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
ANNUAL MEETING OF STOCKHOLDERS
MAY 22, 2002
The undersigned stockholder of DENTSPLY International Inc. (the
"Company") hereby appoints Brian M. Addison as the attorney and proxy of the
undersigned, with full power of substitution, to vote all shares of Common
Stock, par value $.01 per share, of the Company which the undersigned would
be entitled to vote if personally present at the Annual Meeting of
Stockholders of the Company, to be held at the Company's Employee Meeting
Room, 570 West College Avenue, York, Pennsylvania, on Wednesday, May 22,
2002, commencing at 9:30 a.m., local time, and at any adjournment or
postponement thereof, as follows:
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
36
DENTSPLY INTERNATIONAL INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Election of Class I Directors: Nominees: 01-Michael C. Alfano, 02-
Burton C. Borgelt and 03-William F. Hecht. Instruction: TO WITHHOLD
AUTHORITY to vote for any individual nominee, mark the oval "For All Except"
and write that nominee's name in the space provided:
All All For All Except
/ / / / / / -------------------
Nominee Exception(s)
2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP,
independent certified accountants, to audit the books and accounts of the
Company for the year ending December 31, 2002
For Against Abstain
/ / / / / /
3. Proposal to amend the Company's Certificate of Incorporation to
increase the number of authorized shares.
For Against Abstain
/ / / / / /
4. Proposal to approve the 2002 DENTSPLY International Inc. Stock Option
Plan.
For Against Abstain
/ / / / / /
In his discretion, the proxy holder is authorized to vote upon such other
matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THE SHARES OF COMMON STOCK REPRESENTED HEREBY
WILL BE VOTED "FOR" THE ELECTION AS CLASS I DIRECTORS OF ALL THE NOMINEES
LISTED, AND "FOR" PROPOSALS 2, 3 AND 4.
Dated: ________________________________, 2002
-----------------------------------------------------
Signature of Stockholder
-----------------------------------------------------
Signature of Stockholder
NOTE: Please sign this proxy exactly as name(s) appear on your stock
certificate. When signing as attorney-in-fact, executor, administrator,
trustee or guardian, please add your title as such, and if signer is a
corporation, please sign with full corporate name by a duly authorized
officer or officers and affix the corporate seal. Where stock is issued in
the name of two (2) or more persons, all such persons should sign.
IMPORTANT: PLEASE SIGN, DATE AND RETURN PROMPTLY.
o FOLD AND DETACH HERE o
37
CONTROL NUMBER
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM
PROMPTLY USING THE ENCLOSED ENVELOPE.
OR
TO VOTE BY INTERNET, FOLLOW THE INSTRUCTIONS BELOW:
o Go to the following website: www.computershare.com/us/proxy
o Enter the information requested on the computer screen, including your
six digit Control Number located above
o Follow instructions on the screen
IF YOU VOTE BY INTERNET, DO NOT MAIL THIS PROXY CARD
38
[LOGO]
DENTSPLY INTERNATIONAL INC.
570 West College Avenue
P.O. Box 872
York, PA 17405-0872
(717) 845-7511
Fax (717) 849-4753
April 18, 2002
Dear DENTSPLY ESOP Participant:
AS A PARTICIPANT IN THE DENTSPLY EMPLOYEE STOCK OWNERSHIP PLAN, YOU HAVE THE
RIGHT TO DIRECT THE ESOP TRUSTEE TO VOTE THE SHARES OF DENTSPLY COMMON STOCK
ALLOCATED TO YOUR ESOP ACCOUNT.
Enclosed for your information are: a proxy statement providing background
for the proposals to be acted upon at DENTSPLY's 2002 Annual Meeting of
Stockholders, and the Annual Report for DENTSPLY for the year ending
December 31, 2001. Please read the proxy statement carefully, and decide how
you want the trustee to vote the shares of stock that are allocated to your
ESOP account. Then, fill in the enclosed voting instruction card to direct
the ESOP trustee, T. Rowe Price Retirement Plan Services, Inc., how to vote
the shares in your ESOP account.
YOUR VOTE IS IMPORTANT.
The ESOP trustee will vote your shares as you direct. Any shares for which
the ESOP trustee receives no voting instructions, and any unallocated
shares, will be voted by the ESOP trustee as instructed by the DENTSPLY ESOP
Committee.
YOUR VOTE IS CONFIDENTIAL.
Your voting instructions will be kept confidential by the ESOP trustee.
Voting tabulations that identify individual ESOP participants will not be
disclosed to DENTSPLY.
MAKE YOUR VOTE COUNT.
Please review the proxy statement, then vote by mail or through the internet
by following the instructions on the proxy card. Proxy votes must be
received no later than May 20, 2002.
Very truly yours,
/s/ JOHN C. MILES II
John C. Miles II
Chairman of the Board and
Chief Executive Officer
39
VOTING INSTRUCTIONS
DENTSPLY INTERNATIONAL INC.
ANNUAL MEETING OF STOCKHOLDERS, MAY 22, 2002
To T. Rowe Price Retirement Plan Services, Inc., Trustee:
As a participant in the DENTSPLY International Inc. Employee Stock
Ownership Plan (the "ESOP"), I hereby instruct you to vote the shares of
Common Stock, par value $.01 per share ("Common Stock"), of DENTSPLY
International Inc. (the "Company") allocated to my ESOP account (a) in
accordance with the
following direction and (b) to grant a proxy to the proxy nominated by the
Company's Board of Directors authorizing him to vote in his discretion upon
such other matters as may properly come before the meeting.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
40
DENTSPLY INTERNATIONAL INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
1. Election of Class I Directors: Nominees: 01-Michael C. Alfano, 02-
Burton C. Borgelt and 03-William F. Hecht. Instruction: TO WITHHOLD
AUTHORITY to vote for any individual nominee, mark the oval "For All Except"
and write that nominee's name in the space provided:
All All For All Except
/ / / / / / -------------------
Nominee Exception(s)
2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP,
independent certified accountants, to audit the books and accounts of the
Company for the year ending December 31, 2002
For Against Abstain
/ / / / / /
3. Proposal to amend the Company's Certificate of Incorporation to
increase the number of authorized shares.
For Against Abstain
/ / / / / /
4. Proposal to approve the 2002 DENTSPLY International Inc. Stock Option
Plan.
For Against Abstain
/ / / / / /
In his discretion, the proxy holder is authorized to vote upon such other
matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THE SHARES OF COMMON STOCK REPRESENTED HEREBY
WILL BE VOTED "FOR" THE ELECTION AS CLASS I DIRECTORS OF ALL THE NOMINEES
LISTED, AND "FOR" PROPOSALS 2, 3 AND 4.
Dated: ________________________________, 2002
- -----------------------------------------------------
Signature of Stockholder
- -----------------------------------------------------
Signature of Stockholder
NOTE: Please sign this proxy exactly as name(s) appear on your stock
certificate. When signing as attorney-in-fact, executor, administrator,
trustee or guardian, please add your title as such, and if signer is a
corporation, please sign with full corporate name by a duly authorized
officer or officers and affix the corporate seal. Where stock is issued in
the name of two (2) or more persons, all such persons should sign.
IMPORTANT: PLEASE SIGN, DATE AND RETURN PROMPTLY.
o FOLD AND DETACH HERE o
41
CONTROL NUMBER
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM
PROMPTLY USING THE ENCLOSED ENVELOPE.
OR
TO VOTE BY INTERNET, FOLLOW THE INSTRUCTIONS BELOW:
o Go to the following website: www.computershare.com/us/proxy
o Enter the information requested on the computer screen, including your
six digit Control Number located above
o Follow instructions on the screen
IF YOU VOTE BY INTERNET, DO NOT MAIL THIS PROXY CARD
42
[LOGO]
DENTSPLY INTERNATIONAL INC.
570 West College Avenue
P.O. Box 872
York, PA 17405-0872
(717) 845-7511
Fax (717) 849-4753
April 18, 2002
Dear DENTSPLY 401(k) Participant:
AS A PARTICIPANT IN THE DENTSPLY 401(K) SAVINGS PLAN, YOU HAVE THE RIGHT TO
DIRECT THE 401(K) TRUSTEE TO VOTE THE SHARES OF DENTSPLY COMMON STOCK HELD
IN YOUR 401(K) ACCOUNT.
Enclosed for your information are: a proxy statement providing background
for the proposals to be acted upon at DENTSPLY's 2002 Annual Meeting of
Stockholders, and the Annual Report for DENTSPLY for the year ending
December 31, 2001. Please read the proxy statement carefully, and decide how
you want the trustee to vote the shares of stock that are allocated to your
401(k) account. Then, fill in the enclosed voting instruction card to direct
the 401(k) trustee, T. Rowe Price Retirement Plan Services, Inc., how to
vote the shares in your 401(k) account.
YOUR VOTE IS IMPORTANT.
The 401(k) trustee will vote your shares as you direct. Any shares for which
the 401(k) trustee receives no voting instructions will be voted by the
401(k) trustee as instructed by the DENTSPLY 401(k) Committee.
YOUR VOTE IS CONFIDENTIAL.
Your voting instructions will be kept confidential by the 401(k) trustee.
Voting tabulations that identify individual 401(k) participants will not be
disclosed to DENTSPLY.
MAKE YOUR VOTE COUNT.
Please review the proxy statement, then vote by mail or through the internet
by following the instructions on the proxy card. Proxy votes must be
received no later than May 20, 2002.
Very truly yours,
/s/ JOHN C. MILES II
John C. Miles II
Chairman of the Board and
Chief Executive Officer
43
VOTING INSTRUCTIONS
DENTSPLY INTERNATIONAL INC.
ANNUAL MEETING OF STOCKHOLDERS, MAY 22, 2002
To T. Rowe Price Retirement Plan Services, Inc., Trustee:
As a participant in the DENTSPLY International Inc. 401(k) Savings
Plan (the "401(k)"), I hereby instruct you to vote the shares of Common
Stock, par value $.01 per share ("Common Stock"), of DENTSPLY International
Inc. (the "Company") allocated to my 401(k) account (a) in accordance with
the following direction and (b) to grant a proxy to the proxy nominated by
the Company's Board of Directors authorizing him to vote in his discretion
upon such other matters as may properly come before the meeting.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
44
DENTSPLY INTERNATIONAL INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY. / /
1. Election of Class I Directors: Nominees: 01-Michael C. Alfano, 02-
Burton C. Borgelt and 03-William F. Hecht. Instruction: TO WITHHOLD
AUTHORITY to vote for any individual nominee, mark the oval "For All Except"
and write that nominee's name in the space provided:
All All For All Except
/ / / / / / -------------------
Nominee Exception(s)
2. Proposal to ratify the appointment of PricewaterhouseCoopers LLP,
independent certified accountants, to audit the books and accounts of the
Company for the year ending December 31, 2002
For Against Abstain
/ / / / / /
3. Proposal to amend the Company's Certificate of Incorporation to
increase the number of authorized shares.
For Against Abstain
/ / / / / /
4. Proposal to approve the 2002 DENTSPLY International Inc. Stock Option
Plan.
For Against Abstain
/ / / / / /
In his discretion, the proxy holder is authorized to vote upon such other
matters as may properly come before the meeting.
UNLESS OTHERWISE SPECIFIED, THE SHARES OF COMMON STOCK REPRESENTED HEREBY
WILL BE VOTED "FOR" THE ELECTION AS CLASS I DIRECTORS OF ALL THE NOMINEES
LISTED, AND "FOR" PROPOSALS 2, 3 AND 4.
Dated: ________________________________, 2002
- -----------------------------------------------------
Signature of Stockholder
- -----------------------------------------------------
Signature of Stockholder
NOTE: Please sign this proxy exactly as name(s) appear on your stock
certificate. When signing as attorney-in-fact, executor, administrator,
trustee or guardian, please add your title as such, and if signer is a
corporation, please sign with full corporate name by a duly authorized
officer or officers and affix the corporate seal. Where stock is issued in
the name of two (2) or more persons, all such persons should sign.
IMPORTANT: PLEASE SIGN, DATE AND RETURN PROMPTLY.
o FOLD AND DETACH HERE o
45
CONTROL NUMBER
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM
PROMPTLY USING THE ENCLOSED ENVELOPE.
OR
TO VOTE BY INTERNET, FOLLOW THE INSTRUCTIONS BELOW:
o Go to the following website: www.computershare.com/us/proxy
o Enter the information requested on the computer screen, including your
six digit Control Number located above
o Follow instructions on the screen
IF YOU VOTE BY INTERNET, DO NOT MAIL THIS PROXY CARD
46