EMPLOYMENT AGREEMENT
BETWEEN
DENTSPLY INTERNATIONAL INC.
AND
XXXXXX X. XXXXXX, XX.
THIS AGREEMENT is entered into as of October 11, 1996, by and between
DENTSPLY INTERNATIONAL INC., a Delaware corporation (the "Company") and
XXXXXX X. XXXXXX, XX. ("Employee").
WHEREAS, it is in the best interest of the Company and Employee that the terms
and conditions of Employee's services be formally set forth:
NOW, THEREFORE, in consideration of the mutual covenants and agreements of the
parties hereto, it is hereby agreed as follows:
1. Services
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1.1 The Company employs Employee and Employee accepts such employment and
agrees to serve as President and Chief Operating Officer, of the Company
and, if elected thereto, as an officer or director of any Affiliate, for
the term and on the conditions herein set forth. Employee shall be
responsible for the activities and duties presently associated with these
positions. Employee shall perform such other services not inconsistent with
his position as shall from time to time be assigned to him by the Board of
Directors or the Chief Executive Officer of the Company. Employee's
services shall be performed at a location suitable for the performance of
the Employee's assigned duties and should not present an unnecessary
hardship on the Employee.
1.2 Employee shall at all times devote his full business time and efforts
to the performance of his duties and to promote the best interests of the
Company and its Affiliates.
2. Period of Employment
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Employment shall continue from January 7, 1997 and terminate on the
happening of any of the following events:
2.1 Death. The date of death of Employee;
2.2 Termination by Employee Without Good Reason. The date specified in a
written notice of termination given to the Company by Employee not less
than 180 days in advance of such specified date, at which date the
Employee's obligation to perform services pursuant to this Agreement shall
cease.
2.3 Termination by Employee with Good Reason. Thirty (30)
days following the date of a written notice of termination
given to the Company by Employee within thirty (30) days
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after any one or more of the following events have occurred:
(a) failure by the Company to maintain the duties, status and
responsibilities of the Employee substantially consistent with those
of Employee's position as of the date of the Agreement, or
(b) a reduction by the Company in Employee's base salary as
in effect as of the date hereof plus all increases
therein subsequent thereto; other than any reduction
implemented as part of a formal austerity program
approved by the Board of Directors of the Company and
applicable to all continuing employees of the Company,
provided such reduction does not reduce Employee's
salary by a percentage greater than the average
reduction in the compensation of all employees who
continue as employees of the Company during such
austerity program; or
(c) the failure of the Company to maintain and to continue Employee's
participation in the Company's benefit plans as in effect from time to
time on a basis substantially equivalent to the participation and
benefits of Company employees similarly situated to the Employee; or
(d) any substantial and uncorrected breach of the Agreement
by the Company.
2.4 Termination by the Company. The date of a written notice of termination
given to Employee by the Company. The Employee's obligation to perform
services pursuant to this Agreement shall cease as of the date of such
notice.
3. Payments by the Company
-----------------------
3.1 During the Period of Employment, the Company shall pay to the Employee
for all services to be performed by Employee hereunder a salary of not less
than $325,000 per annum, or such larger amount as may from time to time be
fixed by the Board of Directors of the Company or, if applicable, by the
Executive Compensation Committee of the Company, payable in approximately
equal monthly installments on or about the twenty-fifth day of each month.
3.2 During the Period of Employment, Employee shall be entitled to
participate in all plans and other benefits made available by the Company
generally to its domestic executive employees, including (without
limitation) benefits under any pension, profit sharing, employee stock
ownership, stock option, bonus, performance stock appreciation right,
management incentive, vacation, disability, annuity or insurance plans or
programs. Any payments to be made to Employee under other provisions of
this Section 3 shall not be diminished by any payments made or to be made
to Employee or his designees pursuant to any such plan, nor shall any
payments to be made to Employee or his designees pursuant to
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any such plan be diminished by any payment made or to be made to Employee
under other provisions of this Section 3.
3.3 Upon termination of the Period of Employment for whatever reason,
Employee shall be entitled to receive the compensation accrued and unpaid
as of the date of his termination. If Employee at the time of termination
is eligible to participate in any Company incentive or bonus plan then in
effect, Employee shall be entitled to receive a pro-rata share of such
incentive or bonus award based upon the number of days he is employed
during the plan year up to the date of his termination. Such pro-rata
amount shall be calculated in the usual way and paid at the usual time.
3.4 If the Period of Employment terminates upon the death of Employee, the
Company shall continue payment of his then current salary for a period of
12 months from the date of death, together with his pro-rata share of any
incentive or bonus payments due for the period prior to his death, to
Employee's designated beneficiary or, if no beneficiary has been
effectively designated, then to Employee's estate.
3.5 If the Period of Employment is terminated by the Employee under Section
2.3, or by the Company under Section 2.4, the Company shall continue to pay
compensation and provide benefits to the employee as provided in this
Section 3.5 for a period (the "Termination Period") beginning on the date
of the termination notice and ending on the earlier of: (I) the second
annual anniversary of the date of such termination notice; or (ii) the date
on which the Employee would attain age 65, as follows:
(a) Compensation shall be paid to the Employee at the rate of salary being
paid to Employee under Section 3.1 immediately before the termination.
(b) Bonus and incentive compensation shall be paid to the Employee if
approved by the Board of Directors, in accordance with plans in which
the Employee participated at time of termination, using the same
formula and calculations as if termination had not occurred.
(c) Employee shall receive the benefits that would have
been accrued by the Employee during the Termination
Period under any pension, profit sharing, employee
stock ownership plan ("ESOP") or similar retirement
plan or plans of the Company or any Affiliate in which
the Employee participated immediately before the
termination (or, if not available, in lieu thereof be
compensated for such benefits), based on service the
Employee would have had during the Termination Period
and compensation (and, if applicable, bonus and
incentive compensation)as determined under Section (a)
(and, if applicable, Subsection (b) above); and
(d) Employee shall receive continued coverage during the
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Termination Period under all employee disability, annuity, insurance
or other employee welfare benefit plans, programs or arrangements of
the Company or any Affiliate in which Employee participated
immediately before the notice of termination, plus all improvements
subsequent thereto (or, if not available, in lieu thereof be
compensated for such coverage).
Except as provided in Section 3.6, payment of compensation under Subsection
3.5(a) above shall be made at the same time as payments of compensation
under Section 3.1, and payments of other benefits under Subsection 3.5(b)
and (c) shall be paid at the same time and to the same person as
compensation or benefits would have been paid under the plan, program or
arrangement to which they relate (after taking into account any election
made by the Employee with respect to payments under such plan, program or
arrangement).
3.6 If at any time after a Change of Control the Period of Employment is
terminated by the Employee with good reason under Section 2.3, or the
Company terminates or gives written notice of termination of the Period of
Employment to the Employee (whether or not in accordance with Section 2.4),
then in lieu of the periodic payment of the amounts specified in
Subsections 3.5(a), (b) and (c) (except as may be otherwise prohibited by
law or by said plans), the Company, at the written election of Employee,
shall pay to Employee within five (5) business days of such termination or
notice of termination the present value of the amounts specified in
Subsections 3.5(a), (b) and (c), discounted at the greatest rate of
interest then payable by the Commonwealth National Bank on any federally
insured savings account into which Employee could deposit such amount and
make immediate withdrawals therefrom without penalty, and shall provide for
the remainder of the Termination Period, if any, the benefit coverage
required by Subsection 3.5(d). Employee shall not be required to mitigate
damages payable under this Section 3.6.
3.7 In no event will the Company be obligated to continue Employee's
compensation and other benefits under the Agreement beyond Employee's
sixty-fifth (65th) birthday or if Employee's employment is terminated
because of gross negligence or significant willful misconduct (i.e.
conviction of misappropriation of corporate assets or heinous criminal
offense).
4. Non-Competition Agreement. During the Period of Employment
and for a period of five (5) years after the termination
thereof, Employee shall not, without the written consent of
the Company, directly or indirectly be employed or retained
by, or render any services for, or be financially interested
in, any firm or corporation engaged in any business which is
competitive with any business in which the Company or any of
its Affiliates may have been engaged during the Period of
Employment. The foregoing restriction shall not apply to
the purchase by Employee of not to exceed 5% of the
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outstanding shares of capital stock of any corporation whose securities are
listed on any national securities exchange.
5. Loyalty Commitments. During and after the Period of
Employment: (a) Employee shall not disclose any
confidential business information about the affairs of the
Company or any of its Affiliates; and (b) Employee shall
not, without the prior written consent of the Company,
induce or attempt to induce any employee or agency
representative of the Company or any Affiliate to leave the
employment or representation of the Company or such
Affiliate.
6. Separability of Provisions. The terms of this Agreement
shall be considered to be separable from each other, and in
the event any shall be found to be invalid, it shall not
affect the validity of the remaining terms.
7. Binding Effect. This Agreement shall be binding upon and
inure to the benefit of (a) the Company and its successors
and assigns, and (b) Employee, his personal representatives,
heirs and legatees.
8. Entire Agreement. This Agreement constitutes the entire agreement between
the parties and supersedes and revokes all prior oral or written
understandings between the parties relating to Employee's employment. The
Agreement may not be changed orally but only by a written document signed
by the party against whom enforcement of any waiver, change, modification,
extension or discharge is sought.
9. Definitions. The following terms herein shall (unless
otherwise expressly provided) have the following respective
meanings:
9.1 "Affiliate" when used with reference to the Company means any
corporations, joint ventures or other business enterprises directly or
indirectly controlling, controlled by, or under common control with the
Company. For purposes of this definition, "control" means ownership or
power to vote 50% or more of the voting stock, venture interests or other
comparable participation in such business enterprises.
9.2 "Period of Employment" means the period commencing on the date hereof
and terminating pursuant to Section 2.
9.3 "Beneficiary" means the person or persons designated in
writing by Employee to Company.
9.4 "Change of Control" means any event by which (i) an Acquiring Person
has become such, or (ii) Continuing Directors cease to comprise a majority
of the members of the Board of Directors of the Company or the applicable
Parent of the Company (a "Board"). For purposes of this definition:
(a) An "Acquiring Person" means any person or group (as
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defined in Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder as in
effect on the date of this Agreement (the "Exchange Act") who or
which, together with all affiliates and associates (as defined in Rule
12B-2 under the Exchange Act) becomes, by way of any transaction, the
beneficial owner of shares of the Company, or such Parent, having 20%
or more of the total number of votes that may be cause for the
election of directors of the Company or such Parent; and
(b) "Continuing Director" means any member of a Board,
while such person is a member of such Board who is not
an Acquiring Person, or an affiliate or associate of an
Acquiring Person or a representative of an Acquiring
Person or of any such affiliate or associate and who
(i) was a member of such Board prior to the date of
this Agreement, or (ii) subsequently becomes a member
of such Board and whose nomination for election or
election to such Board is recommended or approved by
resolution of a majority of the Continuing Directors or
who is included as a nominee in a proxy statement of
the Company or the applicable Parent distributed when a
majority of such Board consists of Continuing
Directors.
9.5 "Parent" means any Affiliate directly or indirectly controlling (within
the meaning of Section 9.1) the Company.
10. Notices. Where there is provision herein for the delivery of written notice
to either of the parties, such notice shall be deemed to have been
delivered for the purposes of this Agreement when delivered in person or
placed in a sealed, postpaid envelope addressed to such party and mailed by
registered mail, return receipt requested to:
Xxxxxx X. Xxxxxx, Xx. 0000 Xxxxxxx Xxxxx
Xxxxx Xxxxx Xxxxx, XX 00000
DENTSPLY International Inc. 000 Xxxx Xxxxxxx Xxxxxx
Xxxx, XX 00000
11. Arbitration. Any controversy arising from or related to the
Agreement shall be determined by arbitration in the City of
Philadelphia, Pennsylvania, in accordance with the rules of
the American Arbitration Association, and judgment upon any
such determination or award may be entered in any court
having jurisdiction. In the event of any arbitration
between Employee and Company related to the Agreement, if
employee shall be the successful party, Company will
indemnify and reimburse Employee against any reasonable
legal fees and expenses incurred in such arbitration.
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12. Applicable Law. The Agreement shall be governed by and
construed in accordance with the laws of the Commonwealth of
Pennsylvania.
IN WITNESS WHEREOF, the parties have executed the Agreement on the day and
year first above written.
Attest: DENTSPLY INTERNATIONAL INC.
By:
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Secretary President and Chief Executive Officer
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XXXXXX X. XXXXXX, XX
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