UNITED STATES
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
(Amendment No. )

Filed by the Registrant

x

Filed by a Party other than the Registrant

o

Check the appropriate box:

o

Preliminary Proxy Statement

o

Confidential, For Use of the Commission Only (as Permitted by Rule 14a-6(e)(2))

x

Definitive Proxy Statement

o

Definitive Additional Materials

o

Soliciting Material Pursuant to §240.14a-12

DENTSPLY INTERNATIONAL INC.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

x

No fee required.

o

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:

o

Fee paid previously with preliminary materials.

o

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:

  

 

 

April 8, 2010

Dear DENTSPLY Stockholder:

You are cordially invited to attend the 2010 Annual Meeting of Stockholders to be held on Tuesday, May 11, 2010, at 9:30 a.m., at the Company’s World Headquarters, 221 West Philadelphia Street, 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 three 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, you may vote by telephone by calling 1-800-690-6903 and following the instructions, or you may vote by internet by following the instructions on the proxy card or going to the internet at www.proxyvote.com and following the instructions on that site. Your vote is important. Please take a moment to vote through one of the above methods.

 

 

DENTSPLY INTERNATIONAL INC.
SUSQUEHANNA COMMERCE CENTER
221 WEST PHILADELPHIA STREET
YORK, PENNSYLVANIA 17405-0872

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON TUESDAY, MAY 11, 2010

The Annual Meeting of Stockholders (the “Annual Meeting”) of DENTSPLY International Inc. (the “Company”), a Delaware corporation, will be held on Tuesday, May 11, 2010, at 9:30 a.m., local time, at the Company’s World Headquarters, 221 West Philadelphia Street, in York, Pennsylvania, for the following purposes:

1.

To elect four Class III 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 registered public accounting firm, to audit financial statements of the Company for the year ending December 31, 2010;

3.

To approve the DENTSPLY International Inc. 2010 Equity Incentive Plan; and

4.

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 (the “Board”) fixed the close of business on March 15, 2010 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 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 office of the Company’s Secretary, Susquehanna Commerce Center, 221 West Philadelphia Street, York, Pennsylvania.

The Board of Directors urges you to vote your proxy by mail, by telephone 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.

York, Pennsylvania
April 8, 2010

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 TELEPHONE BY CALLING 1-800-690-6903, OR 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.

 

 

DENTSPLY INTERNATIONAL INC.
SUSQUEHANNA COMMERCE CENTER
221 WEST PHILADELPHIA STREET
YORK, PENNSYLVANIA 17405-0872

Table of Contents

 

 

DENTSPLY INTERNATIONAL INC.
SUSQUEHANNA COMMERCE CENTER
221 WEST PHILADELPHIA STREET
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 (the “Board”) of DENTSPLY International Inc. (“DENTSPLY” or the “Company”), a Delaware corporation, for use at the Company’s 2010 Annual Meeting of Stockholders (together with any and all adjournments and postponements thereof, the “Annual Meeting”) to be held on Tuesday, May 11, 2010, at 9:30 a.m., local time, at the Company’s World Headquarters, 221 West Philadelphia Street, in York, Pennsylvania, for the purposes set forth in the accompanying Notice of Annual Meeting of Stockholders (the “Notice”). This Proxy Statement, together with the foregoing Notice and the enclosed proxy card, are first being sent to stockholders on or about April 8, 2010.

The Board fixed the close of business on March 15, 2010 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 146,182,054 shares of Common Stock of the Company, par value $0.01 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, telephone or the internet, which is solicited by the Board 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.

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 and sought by the Board 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 for no additional consideration. The Company may specifically engage a firm to assist in the solicitation of proxies on behalf of the Board and would anticipate paying a reasonable fee for such services plus reasonable out-of-pocket expenses.

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”).

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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 the Board. The Board is currently comprised of eleven persons. Having reached the mandatory retirement age set forth in the Company’s Corporate Governance Guidelines, Mr. W. Keith Smith is not eligible for re-election and will be retiring from the Board as of the Annual Meeting of Stockholders on May 11, 2010.

Pursuant to the Company’s Restated Certificate of Incorporation, the members of the Board 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 III directors expires at the Annual Meeting. The terms of the Class I and Class II directors will expire at the 2011 and 2012 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/she 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 incumbent Class III directors, and one new director nominee selected to replace Mr. Smith, are nominees for election to the Board this year for a three year term expiring at the 2013 Annual Meeting of Stockholders. The Board adopted a new by-law effective as of March 1, 2010 under which nominees for director in an uncontested election are to be elected by a majority vote of the votes cast at the Annual Meeting (known as “majority voting”). This is a change from the prior procedure in which nominees were elected based on the nominees who received the highest number of votes cast (known as “plurality voting”). If any nominee who is a sitting director receives less than a majority of the votes cast, a previously tendered resignation by such director from the Board becomes effective, the acceptance or rejection of which resignation shall be determined by the Board, taking into consideration, to the extent determinable, the reasons the nominee did not receive a majority vote.

The proxy named in the proxy card and on the internet voting site intends to vote for the election of the four Class III 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 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 Proxy Statement and Nominations” in this Proxy Statement.

Set forth below is certain information with regard to each of the nominees for election as Class III directors and each continuing Class I and Class II director.

In addition to the attributes and skills identified for all directors as described in the Corporate Governance and Nominating Committee (“Governance Committee”) report on page 46 of this Proxy Statement, the Governance Committee also considered the qualifications of each director described below their biographical information.

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Nominees for Election as Class III Directors

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4

 

 

Directors Continuing as Class I Directors

5

 

 

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Directors Continuing as Class II Directors

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Votes Required

The Board adopted a new by-law effective as of March 1, 2010 under which nominees for director in an uncontested election are to be elected by a majority vote of the votes cast at the Annual Meeting (known as “majority voting”). This is a change from the prior procedure in which nominees were elected based on the nominees who received the highest number of votes cast (known as “plurality voting”). If any nominee who is a sitting director receives less than a majority of the votes cast, a previously tendered resignation by such director from the Board becomes effective, the acceptance or rejection of which resignation shall be determined by the Board, taking into consideration, to the extent determinable, the reasons the nominee did not receive a majority vote.

The Board of Directors unanimously recommends a vote FOR the nominees for
election as Class III directors.

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RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM

The Audit and Finance Committee (“Audit Committee”) appointed PricewaterhouseCoopers LLP (“PwC”), independent registered public accounting firm, to audit the financial statements of the Company and to audit the Company’s internal control over financial reporting for the year ending December 31, 2010.

In connection with the audit of the Company’s financial statements, it is expected that PwC will also audit the financial statements 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.

Following is a summary of the fees billed to the Company by PwC for professional services rendered during 2009 and 2008, and are categorized in accordance with the rules of the Securities Exchange Commission (“SEC”) on auditor independence as follows (in thousands):

(1)

The audit fees for the years ended December 31, 2009 and 2008, respectively, were for professional services rendered for each of the indicated fiscal years in connection with the audits of the Company’s annual Consolidated Financial Statements included in Form 10-K and review of quarterly Consolidated Financial Statements included in Form 10-Qs, or for services that are normally provided by the accountants in connection with statutory and regulatory filings or engagements. In addition, for the years ended December 31, 2009 and 2008, audit fees included professional services related to the audit of the Company’s internal control over financial reporting as required by the Sarbanes-Oxley Act of 2002.

(2)

The audit related fees for the years ended December 31, 2009 and 2008, respectively, were for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements. Such services include consultations on financial accounting and reporting standards and certain attestation services.

(3)

Tax fees for the years ended December 31, 2009 and 2008, respectively, were for tax compliance related to tax audits in each of the indicated fiscal years.

The Audit Committee reviewed summaries of the services provided by PwC and the related fees and determined that the provision of non-audit services is compatible with maintaining the independence of PwC.

The Audit Committee has adopted procedures for pre-approval of services provided by PwC. Under these procedures, all services to be provided by PwC must be pre-approved by the Audit Committee, or can be pre-approved by the Chairman of the Audit Committee subject to ratification by the Audit Committee at its next meeting. Management makes a presentation to the Audit Committee (or the Chairman of the Audit Committee, as applicable) describing the types of services to be performed and the projected budget for such services. Following this presentation, the Audit Committee advises management of the services that are approved and the projected level of expenditure for such services. All of the fees reported above were approved by the Audit Committee in accordance with their procedures.

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 card for this proposal, the abstention will have the effect of a vote against the proposal, as it is a share represented by proxy and entitled to vote. 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 Audit Committee and the Board of Directors recommend a vote FOR ratification of
the selection of PwC as independent registered public accounting firm for the Company.

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APPROVAL OF THE DENTSPLY INTERNATIONAL INC.
2010 EQUITY INCENTIVE PLAN

On March 24, 2010, the Board adopted the DENTSPLY International Inc. 2010 Equity Incentive Plan (the “2010 Plan”) and determined to submit the 2010 Plan for approval at the Annual Meeting. The 2010 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, and consultants and advisers to the Company, facilitating the efforts of the Company and its subsidiaries to obtain and retain employees and advisers of outstanding ability and providing an incentive to members of the Board who are not employees of the Company (“Outside Directors”) to serve on the Board and devote themselves to the future success of the Company. If the 2010 Plan is approved by the stockholders, it shall be deemed to have become effective as of March 24, 2010 and no further options will be granted under the 2002 Stock Option Plan.

The following summary of the material features of the 2010 Plan does not purport to be complete and is qualified in its entirety by reference to the complete text of the 2010 Equity Incentive Plan attached to the Proxy Statement as Appendix A. Incentive stock options (“ISOs”) meeting the requirements of Section 422 of the Code to Key Employees, or options which do not meet such requirements (“Nonqualified Options” or “NSOs”), are collectively referred to as “Options.” Options, Restricted Stock, Restricted Stock Units and Stock Appreciation Rights are collectively referred to as “Awards.”

General Provisions

Administration.  The 2010 Plan shall be administered by the Human Resources Committee (the “HR Committee”) of the Board. The HR Committee shall be comprised of two (2) or more members of the Board. All members of the HR 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, “independent directors” as defined in Section 4200(15) of the Marketplace Rules of The NASDAQ Stock Market (“NASDAQ”) and “outside directors” 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 Awards under the 2010 Plan to qualify for any tax or other material benefit to recipients of Awards under the Plan (“Grantees”) or the Company under applicable law.

Subject to the express provisions of the 2010 Plan, the HR Committee shall have sole discretion concerning all matters relating to the 2010 Plan and Awards granted hereunder. The HR Committee, in its sole discretion, shall determine the key employees, consultants and advisers to whom, and the time or times at which, Awards will be granted, the number of shares to be subject to each Award, the expiration date of each Award, the time or times within which an Option may be exercised or forfeiture restrictions lapse, the cancellation or termination of the Award and the other terms and conditions of the grant of the Award. The Governance Committee (also comprised of non-employee directors), which is responsible for Director Compensation, makes such determinations with respect to Outside Directors.

Eligibility.  The HR Committee will select those officers and other key employees of the Company, including members of the Board who are also employees (“Employee Directors”), and consultants and advisers, to participate in the 2010 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.” Outside Directors shall be eligible to participate in the 2010 Plan in the same manner as Key Employees and other participants in the Plan.

Shares Available.  Awards with respect to an aggregate of thirteen million (13,000,000) shares of Common Stock (plus any remaining shares of Common Stock authorized under the DENTSPLY International Inc. 2002 Equity Incentive Plan), may be granted under the 2010 Plan (the “Maximum Number”). The Maximum Number will be increased, if at all, on January 1 of each calendar year during the term of the 2010

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Plan by the excess of the amount by which seven percent (7%) of the outstanding shares of Common Stock on such date exceeds the thirteen million (13,000,000) shares authorized at the time of adoption of this Plan. Notwithstanding the foregoing, and subject to adjustment as described in the next paragraph, (i) Options with respect to no more than one million (1,000,000) shares of Common Stock may be granted as ISOs under the Plan, (ii) no more than two million five hundred thousand (2,500,000) shares may be awarded as Restricted Stock or Restricted Stock Units under the Plan, and (iii) in any calendar year no Key Employee shall be granted Options or Stock Appreciation Rights with respect to more than five hundred thousand (500,000) shares of Common Stock, or Restricted Stock and Restricted Stock Units in excess of 150,000 shares of Common Stock. Any shares of Common Stock reserved for issuance upon exercise of Options or Stock Appreciation Rights which expire, terminate or are cancelled, and any shares of Common Stock subject to any grant of Restricted Stock or Restricted Stock Units which are forfeited, will once again be available for issuance pursuant to the grant of Awards under the 2010 Plan. Options which are exercised shall not replenish the Common Stock available for future grants.

Adjustments.  The number of shares of Common Stock subject to the 2010 Plan, the exercise price of Options and the number of shares available for Awards granted under the 2010 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 2010 Plan and for each share of Common Stock then subject to an Award granted under the 2010 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.

Grants of Options

Subject to the terms of the 2010 Plan, the HR Committee (and the Governance Committee with respect to Outside Directors) may from time to time grant ISOs or NSOs, to Outside Directors, Key Employees, consultants and advisers 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 Outside Directors, Key Employees, consultants or advisers will be in such form and subject to such restrictions and other terms and conditions as the HR Committee may determine, provided, however, that, except as determined by the HR 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 generally expires ten years after the grant date and vests in three equal annual installments commencing on the first anniversary of the date of grant, except upon death, disability, or qualified retirement provided, however, that the HR 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 of Restricted Stock Units (RSUs)

The HR Committee (and the Governance Committee with respect to Outside Directors) may from time to time award shares of Common Stock to Key Employees, Outside Directors, consultants and advisers under an Award of Restricted Stock and/or Restricted Stock Units, upon such terms as the HR Committee deems applicable and subject to the terms of the 2010 Plan. The HR Committee may establish conditions under which restrictions on shares of Restricted Stock and/or Restricted Stock Units shall lapse over a period of time

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or according to such other criteria (including performance-based criteria which are intended to satisfy the qualified performance-based compensation exception from the tax deductibility limitations of Section 162(m) of the Code) as the HR Committee deems appropriate. Upon the lapse of restrictions with respect to any Restricted Stock Units, the value of such Restricted Stock Units shall be paid to the Grantee in shares of Common Stock. An amount equal to the dividends paid on shares of Common Stock during the restricted period shall be credited to the shares subject to Award of Restricted Stock Units and shall be paid to the Grantee if and when the restrictions with respect to such Restricted Stock Units lapse.

Effect of Termination of Employment

Except in the event of death, disability, retirement or a “Change in Control” or as otherwise determined by the HR Committee, all rights to exercise the vested portion of any Option held by a Key Employee, consultant or adviser whose employment and/or relationship with the Company or service on the Board is terminated for any reason other than “Cause” (as defined in the 2010 Plan) will terminate 90 days following the date of termination of employment, and/or the relationship with the Company or service on the Board. Any Option held by an Optionee whose employment or relationship with the Company is terminated for “Cause” will terminate on the date of termination of employment and/or the relationship. In the event of the death or Disability (as defined in the 2010 Plan) of a Key Employee during employment with the Company or service on the Board, all Options held by such 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 HR Committee, vesting of Options and Stock Appreciation Rights awards for Key Employees and consultants ceases upon termination of employment and/or the relationship. If a Grantee who has received an Award of Restricted Stock and/or Restricted Stock Units ceases to be employed by the Company or the relationship with the Company terminates during the Restricted Period, or if other specified conditions for vesting are not met, the Award of Restricted Stock and/or Restricted Stock Units shall terminate as to all shares covered by the Award as to which the restrictions have not lapsed.

If a Grantee 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. In the event of such retirement, all restrictions and conditions on all Restricted Stock and/or Restricted Stock Units held by such Key Employee shall lapse on the date of such retirement. If the service of an Outside Director is terminated in accordance with the Company’s mandatory retirement policy for directors, or an Outside Director retires from the Board after nine years of service as a Board member, 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, and all restrictions and conditions on all Restricted Stock and/or Restricted Stock Units held by such Outside Director shall lapse on the date of such retirement.

Exercise of Options

Except as otherwise provided in the 2010 Plan or in any Option agreement or grant certificate, the Grantee 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 HR 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) by such other medium of payment as the HR Committee, in its sole discretion will authorize, or (e) by any combination of (a), (b), (c), and (d).

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Tax 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 Grantee 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 2010 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, and all restrictions and conditions on all Restricted Stock and Restricted Stock Units granted to Key Employees or Outside Directors shall lapse upon the effective date of the Change of Control. The HR 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 HR Committee, equal to the value of such Options (as determined by the HR 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 HR Committee may prescribe.

Termination, Amendment and Term of the 2010 Plan

The Board or the HR Committee may terminate, suspend, or amend the 2010 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 2010 Plan to continue to satisfy the requirements of applicable tax or other laws. The terms of outstanding awards may not be amended, without stockholder approval, to reduce the exercise price of outstanding Options of Stock Appreciation Rights or cancel, exchange, substitute, buyout or surrender outstanding Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Options or Stock Appreciation Rights.

Awards previously granted may not be repriced by the Board or the HR Committee without approval of the stockholders. Except in connection with a corporate transaction involving the Company (including, without limitation, any stock dividend, stock split, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split-up, spin-off, combination, or exchange of shares), the terms of outstanding awards may not be amended to reduce the exercise price of outstanding Options of Stock Appreciation Rights or cancel, exchange, substitute, buyout or surrender outstanding Options or Stock Appreciation Rights with an exercise price that is less than the exercise price of the original Options or Stock Appreciation Rights without stockholder approval. No amendment or termination of the 2010 Plan will adversely affect any Award previously granted without the consent of the Grantee. Unless earlier terminated in accordance herewith, the 2010 Plan will terminate on March 24, 2020. Termination of the 2010 Plan will not affect Awards previously granted thereunder.

Certain Federal Income Tax Consequences

The following is a brief summary of the federal income tax consequences of awards under the 2010 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 a NSO will have no immediate tax consequences to the Company or the Grantee. Upon exercise of a NSO, Grantee 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.

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The award of an ISO will have no immediate tax consequences to the Company or the Grantee. 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 a Grantee 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 Grantee 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 a Grantee, the Company will be entitled to a deduction in the amount of compensation income realized by the Grantee.

Vote Required

The proposal to approve the 2010 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 2010 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 2010 Equity Incentive Plan.

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PRINCIPAL BENEFICIAL OWNERS OF SHARES

The following table sets forth certain information with respect to all persons or groups known by the Company to be the beneficial owners of more than 5% of its outstanding Common Stock as of March 15, 2010 (unless otherwise indicated).

Greater Than Five Percent Stockholders

(1)

The ownership of shares for Massachusetts Financial Services Company is based on information contained in the Amended Schedule 13G filed by Massachusetts Financial Services Company on February 3, 2010 for the period ended December 31, 2009.

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STOCK OWNERSHIP BY DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth information regarding the beneficial ownership of the Company’s Common Stock as of March 15, 2010 held by (i) the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”) and the other executive officers named in the Summary Compensation Table (the “Named Executive Officers” or “NEO”), (ii), each director and nominee for director and (iii) all directors and executive officers of the Company as a group (based on 146,182,054 shares of Common Stock outstanding as of such date).

*

Less than 1%

(1)

This number includes 5,000 shares held direct by Mr. Wise, 500 shares held by Mr. Wise’s spouse, 2,000 shares held in an IRA account, 2,140 shares held in a 401(k) account of Mr. Wise, 2,995 shares allocated to the Company Employee Stock Ownership Plan (“ESOP”) account of Mr. Wise, 780,421 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010 and 24,848 shares which could be acquired pursuant to the Supplemental Executive Retirement Plan (“SERP”) upon retirement or termination from the Company.

(2)

This number includes 11,335 shares held direct by Mr. Jellison, 3,000 shares held by Mr. Jellison’s family trust, 10,584 shares allocated to the Company ESOP account of Mr. Jellison, 343,603 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010 and 22,473 shares which could be acquired pursuant to the SERP upon retirement or termination from the Company.

(3)

This number includes 11,218 shares held direct by Mr. Clark, 28,343 shares allocated to the Company ESOP account of Mr. Clark, 415,078 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010 and 17,355 shares which could be acquired pursuant to the SERP upon retirement or termination from the Company.

(4)

This number includes 2,891 shares held direct by Mr. Mosch, 20,423 shares allocated to the Company ESOP account of Mr. Mosch, 319,044 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010 and 12,894 shares which could be acquired pursuant to the SERP upon retirement or termination from the Company.

(5)

This number includes 4 shares held direct by Mr. Sterkenburg and 91,307 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010.

(6)

This number includes 8,324 shares held direct by Dr. Alfano and 20,858 shares, which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010.

(7)

This number includes 5,400 shares held direct by Mr. Brandt, 22,098 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010 and 398 shares which could be acquired pursuant to the Deferred Plan when Mr. Brandt ceases to be a Board member.

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(8)

This number includes 360 shares held direct by Ms. Cholmondeley, 40,894 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010 and 7,441 shares which could be acquired pursuant to the Deferred Plan when Ms. Cholmondeley ceases to be a Board member.

(9)

This number includes 6,000 shares held direct by Mr. Coleman, 12,600 shares held by Mr. Coleman’s spouse, 38,472 shares which could be acquired pursuant to exercise of options exercisable within 60 days of March 15, 2010 and 18,198 shares which could be acquired pursuant to the Deferred Plan when Mr. Coleman ceases to be a Board member.

(10)

This number includes 22,401 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010 and 5,163 shares which could be acquired pursuant to the Deferred Plan when Dr. Dixon ceases to be a Board member.

(11)

This number includes 50,191 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010 and 18,772 shares which could be acquired pursuant to the Deferred Plan when Mr. Hecht ceases to be a Board member.

(12)

This number includes 132,347 shares held direct by Mr. Jones, 46,000 shares held by Mr. Jones’ spouse, 38,472 shares which could be acquired pursuant to exercise of stock options exercisable within 60 days of March 15, 2010 and 15,973 shares which could be acquired pursuant to the Deferred Plan when Mr. Jones ceases to be a Board member.

(13)

This number includes 20,475 shares which could be acquired pursuant to exercise of stock options exercisable within 60 days of March 15, 2010 and 8,007 shares that could be acquired pursuant to the Deferred Plan when Mr. Lunger ceases to be a Board member.

(14)

This number includes 11,000 shares held direct by Mr. Miles and 21,939 shares which could be acquired pursuant to exercise of stock options exercisable within 60 days of March 15, 2010.

(15)

This number includes 64,552 shares held direct by Mr. Smith, 38,472 shares which could be acquired pursuant to exercise of stock options exercisable within 60 days of March 15, 2010 and 31,572 shares which could be acquired pursuant to the Deferred Plan when Mr. Smith ceases to be a Board member.

(16)

This number includes 293,404 shares held direct by all directors and executive officers, 62,100 shares held by or for the benefit of others, 2,000 shares held in an IRA, 2,140 shares held in a 401(k) account, 125,228 shares allocated to employees’ ESOP accounts, 2,791,325 shares which could be acquired pursuant to the exercise of options exercisable within 60 days of March 15, 2010, 105,524 shares which could be acquired pursuant to the Deferred Plan when directors cease to be Board members and 106,186 shares which could be acquired pursuant to the SERP upon retirement or termination of executive officers from the Company.

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 due dates, their initial ownership and any subsequent changes in ownership of the Company’s securities to the Securities and Exchange Commission. The required reporting period is two business days for most reports. 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 persons required to file reports, the Company believes that during fiscal year 2009, all such persons complied with all applicable filing requirements, except that, Form 4s were filed late for each Outside Director for a grant of Restricted Stock Units (“RSUs”) in May 2009.

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HUMAN RESOURCES COMMITTEE REPORT ON EXECUTIVE COMPENSATION

The HR Committee of the Board is comprised of four directors, all of whom are independent under the Listing Standards of The NASDAQ Stock Market, Inc. (the “Listing Standards”), and operates under a written charter (a copy of the HR Committee Charter is attached to this Proxy Statement as Appendix E). The following 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. The HR Committee has reviewed and discussed with management the Company’s Compensation Discussion and Analysis section of this Proxy Statement. Based on such review and discussions, the HR Committee has recommended to the Board that the Compensation Discussion and Analysis be included in this Proxy Statement. The Compensation Discussion and Analysis is incorporated by reference into the Company’s Form 10-K for the year ended December 31, 2009.

HUMAN RESOURCES COMMITTEE

COMPENSATION DISCUSSION AND ANALYSIS

Role of the Human Resources Committee

The HR Committee of the Board administers the Company’s executive compensation program. The role of the HR Committee with respect to executive compensation is to oversee DENTSPLY’s compensation plans and policies, administer its equity incentive plans (including reviewing and approving equity grants to executive officers) and annually review and approve all compensation decisions relating to executive officers, including those for the Chief Executive Officer and the other executive officers named in the Summary Compensation Table (the “Named Executive Officers” or “NEO”). The HR Committee reviews and approves, among other things, salary increases for the Company’s Named Executive Officers, the structure of the Company’s Annual Incentive Plan, including annual performance objectives for the Named Executive Officers; and the structure and actual grants of awards under the Company’s equity incentive programs. The HR Committee reviews and obtains approval by the Board of the compensation for the CEO.

The HR Committee is assisted in its work by the Company’s Corporate Human Resources Department. In addition, with respect to the compensation established for the Named Executive Officers for 2009, the HR Committee engaged an independent compensation consultant, Towers Watson, to advise on matters related to CEO and other executive compensation.

As part of the review of the CEO’s compensation, the HR Committee reviews and approves goals and objectives for the Company which are relevant to the compensation of the Company’s CEO, evaluates the CEO’s performance with respect to those goals and objectives and determines, either as a HR Committee or together with the Board, the CEO’s total compensation level based on such evaluation and the other information described in this report. The HR Committee also reviews and approves compensation and incentive arrangements (including performance-based arrangements and bonus awards under the Annual Incentive Plan) for the Company’s other Named Executive Officers (as well as such other employees of the Company as the HR Committee may determine from time to time to be necessary or desirable) and the grant of awards pursuant to the Company’s Equity Incentive Plan.

General Compensation Philosophy and Objectives

The HR Committee’s compensation philosophy is to provide a compensation package that is designed to satisfy the following principal objectives:

•

to both attract and retain executives and key contributors with the skills, capabilities and experience necessary for the Company to achieve its business objectives. This requires that the Company’s compensation programs be competitive with market compensation practices;

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•

to align the interests of management and employees with corporate performance and shareholder interests. This is accomplished by rewarding performance that is directly linked to achievement of the Company’s business plans, financial objectives and strategic goals, as well as increases in the Company’s stock price; and

•

to tie components of executives’ compensation to the Company’s performance by providing incentives and rewarding individual, team and collective performance, such as through the execution of actions that contribute to the achievement of the Company’s strategies and goals, including accomplishments within assigned functional areas and successfully managing their respective organizations.

The HR Committee believes that compensation paid to the Company’s executive officers should be competitive with the market, be aligned with the performance of the Company on both a short-term and long-term basis, take into consideration individual performance of the executive, and assist the Company in attracting and retaining key executives critical to the Company’s long-term success. The Company’s executive compensation program balances a level of fixed compensation with incentive compensation that varies with the performance of the Company and the individual executive. The Company’s base pay and benefit programs for executives are intended to provide basic economic security at a level that is competitive with the market for executive management for companies of similar size and scope. The annual and long-term incentive compensation programs reward performance measured against goals and standards established by the HR Committee, and are designed to encourage executives to increase shareowner value by focusing on growth in revenue and earnings, generation of cash flow and efficient deployment of capital, leading to increasing the Company’s stock price.

Other objectives of the total compensation program are to provide: the ability for executives to accumulate capital, predominantly in the form of equity in the Company, in order to align executive interests with those of the shareowners; a competitive level of retirement income; and, in the event of special circumstances, such as termination of employment in connection with a change in control of the Company, special severance protection to help ensure executive retention during the change in control process and to ensure executive focus on serving the Company and shareowner interests without the distraction of possible job and income loss.

In furtherance of the philosophy and objectives discussed above, the HR Committee has determined that the total compensation program for executive officers should consist of the following components:

•

Base Salaries

•

Annual Incentive awards based on achievement of annual objectives

•

Long-term incentive compensation

•

Retirement, Health & Welfare benefits

•

Certain post termination payments

Summary of Determination of Executive Compensation

The Company focuses on developing a total annual remuneration level for executives that is intended to be externally competitive and meet the Company’s compensation objectives. Salary ranges, annual bonus plan targets and equity compensation targets are developed using a “total remuneration” perspective.

Generally speaking, the Company designs its compensation programs such that there is a correlation between level of position and degree of risk. Based on that guiding principle, the Company’s more senior executives with the highest levels of responsibility and accountability have a higher percentage of their total potential remuneration at risk, i.e., incentive and equity compensation, than do employees with lower levels of responsibility and accountability. This means that a higher proportion of their total potential

19

 

 

compensation is based upon variable incentive pay and equity compensation, than is the case with the Company’s employees with lower levels of responsibility and accountability.

In establishing the Company’s current executive compensation policies, compensation programs and awards, the HR Committee reviewed, for purposes of market comparison, the levels of current compensation at companies of similar revenue size as the Company, using compensation surveys provided by Towers Watson. In its evaluation process, the HR Committee tries to identify companies of similar size and complexity to be included by Towers Watson in its survey, but because the HR Committee has found it difficult to identify a database which includes companies of similar revenue size with the level of complexity of DENTSPLY, the HR Committee generally relies on revenue size as the principal comparator. In November 2008, competitive data was developed by Towers Watson, using a Towers Watson database of compensation surveys. The database used by Towers Watson in 2008 was comprised of seventy-three comparator companies generating annual revenues of $1.0 billion to $3.0 billion (the “Peer Group”) and included the companies set forth in Appendix B to this proxy statement. This data from the Peer Group is considered by the HR Committee and compared with the compensation of the Company’s executive officers in evaluating the amount and proportions of base pay, annual incentive pay and long-term compensation, as well as the targeted total compensation value. In reviewing executive officers’ compensation, the HR Committee also considers recommendations from the CEO regarding total compensation for other executive officers. The Towers Watson report provides to the HR Committee historical and prospective total compensation components for each executive officer as compared to the Peer Group. Base pay and annual incentives are targeted to a range around the 50th percentile, and long-term incentives are targeted to a range around the 75th percentile of the Peer Group, subject to individual performance and experience factors of each executive officer. The HR Committee also reviewed compensation information provided by Towers Watson derived from a review of proxies by Towers Watson of twenty-two companies believed to be similar to the Company. This data was reviewed as an additional reference point for comparison and to validate the general survey data. As a general matter, the proxy comparison reflected higher total compensation levels than the Peer Group. The HR Committee elected to more closely align the compensation of the Company’s executives to the Peer Group. The HR Committee does not consider the overall wealth accumulation of executives in establishing the current level of compensation, except to the extent the prior year’s compensation is considered in the comparative analysis described above.

Determination of Annual Base Salaries

In establishing base salaries of the Company’s executives, the HR Committee strives to reflect the external market value of a particular role as well as the experiences and qualifications that an individual brings to the role. The primary purpose of the base salaries is to pay a fair, market competitive rate in order to attract and retain key executives. Base salary adjustments are generally made annually and have in the past been awarded based on individual performance, level of responsibilities, competitive data from the Peer Group, employee retention efforts, the Company’s overall guidelines and annual salary budget guidelines. Base salaries are targeted to a range around the 50th percentile of the base pay paid by the Peer Group for a comparable role, in order to ensure that the Company is able to compete in the market for outstanding employees without unduly emphasizing fixed compensation.

The starting point for the HR Committee in establishing base salaries and annual incentive awards is to review the total annual cash compensation of the executive officers with the total annual cash compensation for comparable positions in the Peer Group. In determining the total annual cash compensation of the executive officer, the HR Committee establishes a comparative base salary and what the annual incentive awards would be at the 100% target achievement level, relative to comparable positions reflected in the Peer Group. Once the HR Committee establishes the appropriate range for base salaries, the HR Committee adjusts the base salary of the individual executive officer based on consideration of several factors, including individual performance, Company performance, the experience level of the executive, the nature and breadth of the executive’s responsibilities, and the desire to minimize the risk of losing the services of the

20

 

 

executive to another company. Total direct compensation in relation to other executives, as well as prior year individual performance and performance of the business lines for which the executive is responsible, are also taken into consideration in determining any adjustment. The base salaries of the executive officers were reviewed in December 2008 in connection with the review of total compensation. The HR Committee concluded it was appropriate and applied the same philosophy and approach to executive compensation in 2009 as described above, subject to certain adjustments due to the current economic conditions. At the recommendation of management, the HR Committee froze the salaries of all senior executives of the Company for 2009 at 2008 levels. At its meeting in December 2008, the HR Committee approved base salaries for the Named Executive Officers for 2009 as follows:

Bret W. Wise, Chairman of the Board and Chief Executive Officer — $815,000

William R. Jellison, Senior Vice President and Chief Financial Officer — $393,000

Christopher T. Clark, President and Chief Operating Officer — $500,000

James G. Mosch, Executive Vice President — $359,000

Albert J. Sterkenburg, Senior Vice President — $380,200¹

Determination of Annual Incentive Awards

As discussed above in the section on General Compensation Philosophy and Objectives, the HR Committee believes it is important to have a portion of the executive’s total annual cash compensation tied to the annual performance of the Company and its executives. It is intended that this component of the total compensation of executives be competitive with the market, but also reward executives for good performance and reduce the targeted compensation opportunity for performance that fails to meet the objectives established by the HR Committee. The HR Committee believes this helps to align the compensation and objectives of the executives with the Company and its shareholders. Target annual incentive awards are determined as a percentage of each executive’s base salary. The HR Committee determines the general performance measures and other terms and conditions of awards for executives covered under the Company’s annual incentive program, and the weight attributable to each performance goal for the Named Executive Officers. For executives below the level of the Named Executive Officers, the CEO and other executives establish the performance objectives and weighting based on direction provided in the Annual Incentive Plan.

The HR Committee annually reviews and establishes targets for annual bonus payouts to be applicable for the performance year. These targets are generally established in the fourth quarter of the year preceding or at the beginning of the performance year. In establishing the target payouts, the HR Committee evaluates the compensation levels in the Peer Group. The HR Committee establishes performance targets for the executive officers, which if achieved at the 100% level, would result in annual bonuses that, in combination with base salary, are competitive in the 50th percentile range with the total annual compensation of comparable positions in the Peer Group. If the Company exceeds the targets established by the HR Committee, the executives will be rewarded with higher annual bonuses and if the Company falls below the targets, the executive’s bonuses will be reduced below the 100% target level. The general principle in setting targets and measuring performance is that management is responsible and accountable for the financial results of the Company. The annual incentive plan provides that the HR Committee may adjust the financial results, generally based on United States (“U.S.”) Generally Accepted Accounting Principles (“GAAP”) consistently applied, to address unique or significant events, such as the impact of merger and acquisition activity, charges related to settlement of litigation, unbudgeted restructuring expenses or gains, interest carrying costs related to unbudgeted share repurchases, changes in accounting principles and the impact of

1

Mr. Sterkenburg is located in Germany and his compensation is paid in Euro. His compensation has been converted to U.S. dollars on the basis of the average exchange rate for 2009.

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significant or non-recurring unbudgeted one-time gains or losses, that were not considered in the targets set for the year, are not reflective of current operations, or benefit future periods.

As noted earlier, the HR Committee believes that employees in higher level positions should have a higher proportion of their total compensation delivered through pay-for-performance cash incentives; as a result, their total annual compensation will be more significantly correlated, both upward and downward, to the Company’s performance. The variability of the cash compensation of the Company’s executives is closely linked to annual financial results of the Company, delivering lower-than-market total cash compensation when financial performance is below targets set by the HR Committee and higher total cash compensation when the results are above such targets. Consistent with this principle, for 2009, the bonus targets for the Named Executive Officers ranged from 55% to 100% of base salary depending on the executive’s position, as set forth below.

Bret W. Wise, Chairman of the Board and Chief Executive Officer — 100%

William R. Jellison, Senior Vice President and Chief Financial Officer — 55%

Christopher T. Clark, President and Chief Operating Officer — 75%

James G. Mosch, Executive Vice President — 65%

Albert J. Sterkenburg, Senior Vice President — 55%

As noted above, the actual annual incentive awards are based on an executive’s performance against objectives established by the HR Committee. Generally, the HR Committee expects awards, in the aggregate, to range from 90% to 110% of target. Awards may range from no award being earned to 200% of target, although attainment at the maximum award level would be a significant accomplishment by management. Awards, for the positions of the Named Executive Officers over the last several years have ranged from 28.9% to 145.5% of target. The key performance measures for the Named Executive Officers are targets for the Company’s net income and internal sales growth, which are tied to the annual budget which is approved by the Board. In the case of operating executives who have responsibility for certain businesses, in addition to the targets for the Company’s income and sales growth, a portion of their annual target is comprised of the operating income and internal sales growth of those businesses. A minimum level of achievement of net income must be met in order for any incentive award to be paid. The HR Committee establishes objectives for net income and internal sales growth which it believes is challenging but fair and consistent with the executive compensation objectives described above. If the objectives are met, it is believed that the Company will produce better than market results for the industry which should translate into greater shareholder returns. The targets for 2009 at 100% for the Named Executive Officers, other than Messrs. Mosch and Sterkenburg, who have direct operating business responsibility, were internal sales growth of 2.5% and corporate net income of $284.3 million. 60% of Mr. Mosch’s objectives and 50% of Mr. Sterkenburg’s objectives were based on the same objectives as the other Named Executive Officers and the remaining amount of their target incentives were based on the sales growth and income from operations of the businesses for which they had responsibility. The components of Mr. Mosch’s and Mr. Sterkenburg’s annual incentive compensation related to operating activities is not material and the Company believes it would be competitively harmful to disclose the operating business objectives as that would enable competitors to identify what the financial targets and business strategies are for certain specific operating businesses. In general, the targets for the operating segments are set based on the projected budgets for the operating businesses and are meant to be challenging and which, if met, would result in the operating business outperforming its competition in the market.

At its February 2010 meeting, the HR Committee reviewed the performance of the Company and its executives with respect to objectives to determine whether the Named Executive Officers had met or exceeded the 2009 performance goals. Annual cash incentive awards are determined by multiplying the results for each performance objective (i.e. the percentage of that target award payable based on

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performance) by the target award opportunity for each Named Executive Officer as described above, and then multiplied by the base salary as of December 31, 2009, the end of the performance period.

As described above, the target net income used for annual incentive objective purposes is corporate reported net income, net of specific items consistent with the annual incentive compensation plan. The primary items that were excluded from reported net income for 2009 were unbudgeted restructuring expenses, the impact of unbudgeted inventory step-up in costs from acquisitions and the gain on the sale of a closed facility.

The HR Committee was cognizant of the current economic situation and considered whether that should effect the determination of annual incentive awards for 2009. Despite the difficult economic condition in 2009, the HR Committee concluded that as the 2009 objectives were established at the beginning of 2009 and the awards are based on actual results for 2009, it was appropriate for the awards to be made in accordance with the annual incentive plan and the results achieved in 2009. Based on this, the Named Executive Officers were paid bonuses at the percent of target as set forth below:

Bret W. Wise, Chairman of the Board and Chief Executive Officer — 57.7%

William R. Jellison, Senior Vice President and Chief Financial Officer — 57.7%

Christopher T. Clark, President and Chief Operating Officer — 57.7%

James G. Mosch, Executive Vice President — 56.6%

Albert J. Sterkenburg, Senior Vice President — 28.9%

Long-Term Incentive Compensation

The third principal component in total compensation for the Company’s executives is the award of stock options and restricted stock units (“RSUs”) under the Company’s Equity Incentive Plan.

The HR Committee believes that long-term incentive compensation serves an essential purpose in attracting and retaining senior executives and providing them long-term incentives to maximize shareholder value. We also believe that long-term incentive awards align the interests of the executive officers with those of our shareowners. Long-term incentive awards for executive officers generally are made annually, as part of the “total remuneration” approach to executive compensation, under the shareholder-approved Amended and Restated DENTSPLY Equity Incentive Plan. The long-term incentive program is designed to reward mid- and long-term performance and is currently comprised of two components:

•

Stock option awards designed to reward stock price growth; and

•

RSU awards based on performance on operational, financial and strategic goals, as well as stock price growth.

A stock option becomes valuable only if the Company’s stock price increases above the option exercise price and the holder of the option remains employed for the period required for the option to vest. This provides an incentive for an option holder to remain employed by the Company and to maximize shareholder value. The HR Committee believes that equity-based compensation ensures that the Company’s executive officers have a continuing stake in the long-term success of the Company and is most closely aligned with the interest of shareholders. For this reason, the HR Committee has placed more weight on the long-term equity incentive portion of the total compensation of executives, targeting the equity incentive compensation at a range around the 75th percentile of the Peer Group.

Stock options are generally granted at the Board meeting in December of each year as well as to newly hired executives at the HR Committee meeting which follows the executive’s employment date. Stock options are granted at the closing price on the day of the grant and accordingly, will have value only if the market price of the Company’s common stock increases after the grant date. As a result, stock option awards are designed to reward executives for increases in the Company’s stock price. Stock option grants become

23

 

 

exercisable over three years -one-third at the end of each year following grant - and are exercisable for ten years from the grant date, subject to earlier expiration in the event of termination of employment or retirement. Under the terms of the Company’s Equity Incentive Plan, RSUs and unvested stock options are forfeited if the executive voluntarily leaves prior to a qualified retirement.

The HR Committee believes that the use of RSUs as part of the Company’s equity compensation program is consistent with current market practices, provides a greater opportunity for executives to build share ownership in the Company, provides an incentive for executives to remain with the Company and provides an equity vehicle that allows DENTSPLY to attract, motivate and retain the employee talent considered critical for achieving the Company’s goals. RSUs are generally granted in February, after the prior year’s financial results are known. Currently, RSUs vest after three (3) years, and the accomplishment of certain performance requirements for certain executive officers.

Determination of Stock Option and RSU Grants

Guidelines for the size and type of awards are developed based upon, among other factors, shares available for grant under the Equity Incentive Plan, the executive’s position in the Company, his or her contributions to the Company’s objectives and total compensation, as compared to the Peer Group. Larger equity awards are made to more senior executives so that a larger portion of their total potential compensation will be variable and will increase upon shareholder value creation. In determining the size of equity incentive grants to executive officers, the HR Committee targets a range around the 75th percentile of the Peer Group for persons holding comparable positions. The HR Committee then takes into consideration the Company’s performance against its business and financial objectives and its strategic plan, and individual performance, as well as the allocation of overall share usage attributed to executive officers. With respect to the number of RSUs granted, the HR Committee focuses, in particular, on the performance of the Company over the prior three years, primarily based on performance of executives relative to objectives under the Annual Incentive Plan. Once the RSU grant target for each executive is established it may be adjusted up or down based on performance of the Company against the objectives under the Annual Incentive Plan for the prior three years, and the Company’s progress toward strategic objectives.

With respect to long-term incentive compensation, which for the Company is equity compensation, the HR Committee reviewed the competitive market data presented by Towers Watson. As the market data presented by Towers Watson is gathered earlier in the year, Towers Watson projected that for 2009 the equity grants would likely be lower, so the HR Committee reduced the expected values of the equity compensation for executive officers based on the Peer Group survey data by twenty-five percent (25%). For stock option grants in December 2008, which were reviewed by the HR Committee as part of the evaluation of the 2009 total compensation of executive officers, and grants of RSUs in February 2009, 70% of the expected value target established by the HR Committee was converted to an estimated number of stock options, and the remaining 30% of value was converted to RSUs. The split between stock options and RSUs was based both on comparisons to the market and the overall risk/reward tradeoff. With respect to the RSUs, the HR Committee considered the performance of the Company against the annual objectives for the past three years and progress by the Company against strategic objectives. Based on this review, the HR Committee determined that RSU grants in February 2009 should be made at 116.6% of targeted levels. In this determination, the HR Committee evaluated the results in 2006 – 2008 against both established earnings and sales targets and strategic objectives.

While equity awards under the Equity Incentive Plan generally involve no immediate cash cost, the Company does recognize expense for such awards.

Equity Grant Practices

The HR Committee reviewed the Company’s practices for equity incentive grants. The grant date utilized for annual and other grants is always on the date the HR Committee or the Board approves the grants, which is generally at their December meeting for options and the February meeting for RSUs. Stock

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options are granted with an exercise price equal to the closing price on the day of the grant and with RSUs the recipient is granted a right to a specified number of shares.

Post-Termination Arrangements

Termination of Employment

The Company has entered 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 for the period prior to the employee’s death in the year of such death. Each of the employment agreements also provides that, in the event that the employee’s employment is terminated by the Company other than in a change of control of the Company (as defined in the agreements) without cause, or by the employee with good reason, (i) the Company will be obligated to pay the employee, for a period of two years subsequent to termination of employment, all compensation at the base salary rate immediately preceding the termination, and (ii) the employee will be entitled to receive the benefits that they would have accrued during the two year period following termination under employee benefit plans, programs or other arrangements of the Company or any of its affiliates in which the employee participated before their termination.

The amounts that each Named Executive Officer would receive in the event of a termination described above is set forth in the Potential Payment Upon Termination or Change in Control tables on pages 41 to 43.

Termination following Change-in-Control

The HR Committee believes executive officers, including all the Named Executive Officers, who are terminated or elect to resign for “good reason” (as defined in the employment agreements) in connection with a change in control (as defined in the employment agreements) of the Company should be provided separation benefits. These benefits are intended to ensure that executives focus on serving the Company and shareholder interests during a change in control transaction or activity without the distraction of possible job and income loss.

The Company’s change-in-control benefits are consistent with the practices of companies with whom DENTSPLY competes for talent, and are intended to assist in retaining executives and recruiting new executives to the Company. As of the close of a transaction that results in a change in control of DENTSPLY, all outstanding equity grants awarded as part of the Company’s equity incentive compensation program become available to executives, that is, restrictions on all outstanding restricted stock units lapse and all non-exercisable stock options become exercisable. In the event that a termination of employment is made by the Company without cause or by the employee with good reason within a period of two (2) years after a change in control of the Company, the Company is required to pay to the Named Executive Officers, within five days after the employee’s termination (subject to the requirements of Section 409A(a)(2)(B) of the Internal Revenue Code), the benefits described in the Potential Payment Upon Termination or Change in Control tables on pages 41 to 43

Retirement and Other Benefits

The Company also maintains standard benefits that are consistent with those offered by other major corporations and are generally available to all of the Company’s full time employees (subject to meeting basic eligibility requirements). The description below is focused on the plans and benefits provided to U.S. employees and applies to the Named Executive Officers, except Mr. Sterkenburg, who is based in Germany. Mr. Sterkenburg participates in similar benefits plans and programs, including a German pension program which is partially funded by the Company, which are provided to employees of the Company’s German subsidiary. The German pension program is a defined contribution plan.

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DENTSPLY offers retirement benefits to its U.S. employees through tax-qualified plans, including an employee and employer-funded 401(k) Savings Plan and a discretionary company-funded Employee Stock Ownership Plan (“ESOP”). The HR Committee allows for the participation of the executive officers in these plans, and the terms governing the retirement benefits under these plans for the executive officers are the same as those available for other eligible employees in the U.S. Similarly situated employees, including DENTSPLY’s executive officers, may have materially different account balances because of a combination of factors: the number of years that the person has participated in the plan; the amount of money contributed, and the investments chosen by the participant with regard to those plans providing for participant investment direction. These plans do not involve any guaranteed minimum returns or above-market returns as the investment returns are dependent upon actual investment results. Employees direct their own investments in the 401(k) Savings Plan. The ESOP is a defined contribution plan designed to allow employees, including executive officers, to accumulate retirement accounts through ownership of Company stock, and to allow DENTSPLY to make contributions or allocations to those funds.

DENTSPLY’s healthcare, insurance, and other welfare and employee-benefit programs are the same for all eligible employees, including the U.S. based Named Executive Officers. DENTSPLY shares the cost of health and welfare benefits with its employees, a cost that is dependent on the level of benefits coverage that each employee elects. The Company also provides other benefits such as medical, dental and life insurance to each U.S. based Named Executive Officer, in a similar fashion to those provided to all other U.S. based DENTSPLY employees.

The Company maintains a very limited number of benefit programs that are only available to the U.S. based Named Executive Officers and other senior employees qualifying for eligibility based on salary grade level. Such benefits include a Supplemental Executive Retirement Plan (“SERP”) and the DENTSPLY Supplemental Savings Plan (“DSSP”). The purpose of the SERP is to provide additional retirement benefits for a limited group of management employees, including the Named Executive Officers, whom the Board concluded were not receiving competitive retirement benefits. The HR Committee annually approves participants in the SERP. Contributions equal to 11.7% of total annual compensation (base salary and any annual incentive awards), reduced by Company contributions to the ESOP and 401(k) plans, are allocated to the participant’s accounts. No actual benefits are put aside for participants in the SERP and the participants are general creditors of the Company for payment of the benefits upon retirement or termination from the Company. Participants can elect to have these benefits administered as savings with interest or stock unit accounts, with stock units being distributed in the form of common stock at the time of distribution. Upon retirement or termination for any reason, participants in the SERP are paid the benefits in their account based on an earlier distribution election.

Effective January 1, 2008, the Company adopted the DSSP. This is a deferred compensation plan that allows management employees of the Company, including the U.S. based Named Executive Officers, to defer a portion of their base salary and annual incentive bonus for payment at a future time, as elected by the participant. Deferred amounts are not funded by the Company but are a general obligation of the Company to administer and pay as set forth in the DSSP. The Plan is administered by T. Rowe Price, the Administrator of the Company’s retirement plans, and participants have the right to elect investment options for the deferred funds (other than a salary deferral by Named Executive Officers to Company Stock), which are tracked by the Administrator.

Stock Ownership Guidelines

Because the HR Committee believes in further linking the interests of management and the shareholders, the Company maintains stock ownership guidelines for its executives. The guidelines specify the number of shares that DENTSPLY’s executive management should accumulate and hold within six (6) years of the date of appointment to the executive position. “Stock ownership” is defined to include stock owned by the officer directly, stock owned indirectly through the Company’s retirement Plans, including SERP and DSSP, and stock awarded pursuant to the equity incentive program, other than stock options.

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Under the current guideline established by the HR Committee, executives are required to own Company common stock equal in value to a multiple of their base salary, as set forth below:

All Named Executive Officers in their current positions for at least six (6) years were in compliance with the Stock Ownership Guidelines as of the end of 2009.

Tax Deductibility of Executive Compensation

Section 162(m) of the Internal Revenue Code of 1986, as amended (the “Tax Code”), places a limit of $1,000,000 on the amount of compensation that the Company may deduct in any one year with respect to the Named Executive Officers. There is an exception to the $1,000,000 limitation for performance-based compensation meeting certain requirements. Stock option incentive awards generally are performance-based compensation meeting those requirements, and, as such, are believed to be fully deductible. The HR Committee generally seeks ways to limit the impact of Section 162(m); however, the HR Committee believes that the tax deduction limitation should not compromise our ability to establish and implement incentive programs that support the compensation objectives discussed above. Accordingly, achieving these objectives and maintaining required flexibility in this regard may result in compensation that is not deductible for federal income tax purposes. To maintain flexibility in compensating executive officers in a manner designed to promote varying corporate goals, the HR Committee has not adopted a policy requiring all compensation to be deductible. The HR Committee has established a performance goal for the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer for the vesting of their RSUs granted in 2009, requiring the Company to be profitable over the three year vesting period, consistent with the performance based requirements established by 162(m).

Compensation Risk

The HR Committee, in conjunction with management, has reviewed the incentive compensation plans and programs of the Company relative to risk to the Company and has concluded it is not reasonably likely that such plans would have a material adverse effect on the Company. In addition, the HR Committee believes that the structure and administration of the executive compensation program does not encourage management to take excessive risk.

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EXECUTIVE COMPENSATION TABLES

Summary Compensation

The following table sets forth the compensation earned by the Named Executive Officers for the fiscal year ended December 31, 2009. The Named Executive Officers are the Company’s CEO or Principal Executive Officer, CFO or Principal Financial Officer, and three other most highly compensated executive officers.

Summary Compensation Table
For Fiscal Year End December 31, 2009

(1)

Principal positions are the positions held during 2009.

(2)

Mr. Wise’s title changed to Chairman of the Board and Chief Executive Officer effective January 1, 2009. He was named Chairman of the Board, Chief Executive Officer and President of the Company effective January 1, 2007. Mr. Wise was appointed President and Chief Operating Officer effective January 1, 2006.

(3)

Mr. Jellison was reappointed Senior Vice President and Chief Financial Officer effective January 10, 2005. He served as a Senior Vice President in charge of an operating unit from October 13, 2002 to January 9, 2005. Mr. Jellison served as Senior Vice President and Chief Financial Officer from April 20, 1998 to October 12, 2002.

(4)

Mr. Clark was named President and Chief Operating Officer effective January 1, 2009. He was named Executive Vice President and Chief Operating Officer of the Company effective January 1, 2007. Mr. Clark was appointed Senior Vice President effective November 1, 2002.

(5)

Mr. Mosch was named Executive Vice President effective January 1, 2009. He was appointed Senior Vice President effective November 1, 2002.

(6)

Mr. Sterkenburg was appointed Senior Vice President effective January 1, 2009. Mr. Sterkenburg is located in Germany and is paid in Euro. His salary, non-equity incentive plan compensation and all other compensation amounts have been converted from Euros to USD using the average USD rate for 2009. Mr. Sterkenburg’s was not a NEO in 2007 or 2008.

(7)

Includes amounts deferred by the Named Executive Officer under the DENTSPLY Supplemental Savings Plan. For salary amounts deferred in fiscal year 2009, refer to the “Executive Contributions” column of the Non-Qualified Deferred Compensation table.

(8)

Represents the grant date full fair value of compensation costs of RSUs granted for financial statement reporting purposes. Information regarding the calculation of these amounts for the fiscal year ended December 31, 2009 is included in Note 11, Equity, to the Company’s Consolidated Financial Statements on Form 10-K.

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(9)

Represents the grant date full fair value of compensation costs of stock options granted during the respective year for financial statement reporting purposes, using the Black-Scholes option pricing model. Assumptions used in the calculation of these amounts are included in Note 11, Equity, to the Company’s Consolidated Financial Statements on Form 10-K.

(10)

Amounts shown represent the Company’s Annual Incentive Plan awards for services provided in 2009, 2008 and 2007 that were paid in cash or deferred under the DSSP in 2010, 2009 and 2008, respectively. As of December 31, 2009, there were no earnings on outstanding non-equity incentive plan awards.

(11)

Amounts shown are described in the All Other Compensation table that follows.

Refer to the Compensation Discussion and Analysis section for a complete description of the components of compensation, along with a description of the material terms and conditions of each component.

For the Named Executive Officers, salary compensation as a percentage of total compensation are as follows: Mr. Wise — 19.6%, Mr. Jellison — 33.6%, Mr. Clark — 25.3%, Mr. Mosch — 31.7% and Mr. Sterkenburg — 38.9%

Grants of Plan-Based Awards

The following table reflects the terms of compensation plan-based awards granted to Named Executive Officers in 2009:

2009 Grants of Plan-Based Awards

(1)

Amounts shown represent threshold, target and maximum amounts for the 2009 Annual Incentive Plan. The HR Committee established the targets on December 8, 2008. Target amounts would be achieved if budgeted net income and internal sales growth were achieved. For instance, Mr. Wise’s target was 100% of his salary ($815,000) if the Company achieved budgeted net income and internal sales growth was between 1.5% and 3.5% in 2009. The minimum non-equity incentive compensation of 0% is earned if the Company’s net income is below 90% of budgeted net income. Maximum amounts represent the

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greatest amounts that could be earned under the Annual Incentive Plan. Mr. Wise’s maximum was his base salary ($815,000) multiplied by his target incentive compensation percentage (100%) multiplied by 200%. Payments or deferrals made under the Annual Incentive Plan for 2009 are shown in the “Non-Equity Incentive Plan Compensation” column of the 2009 Summary Compensation Table. Refer to the Compensation Discussion and Analysis for a description of the criteria for payment of Non-equity Incentive Plan Compensation.

(2)

Mr. Wise’s incentive compensation target was calculated at 100% of his base salary.

(3)

Mr. Jellison’s incentive compensation target was calculated at 55% of his base salary.

(4)

Mr. Clark’s incentive compensation target was calculated at 75% of his base salary.

(5)

Mr. Mosch’s incentive compensation target was calculated at 65% of his base salary.

(6)

Mr. Sterkenburg’s incentive compensation target was calculated at 55% of his base salary.

(7)

These RSUs are credited with dividend equivalents and upon vesting are included in the stock distributed to recipients.

(8)

The RSUs granted to Mr. Wise, Mr. Jellison and Mr. Clark are subject to a service condition and performance requirements.

(9)

Amounts shown are the number of stock options granted to the officers in 2009. Refer to the Compensation Discussion and Analysis for a description of the terms of and criteria for making these awards.

(10)

Price reflects the closing price of DENTSPLY International Common Stock on the date the Board approved the grant. The grant date of stock and option awards is always the date the Board approves the grants. Stock options are granted with an exercise price equal to the closing price on the day of the grant.

(11)

The assumptions used in calculating the fair values of stock options and RSUs at the grant date are included in Note 11, Equity, to the Company’s Consolidated Financial Statements on Form 10-K.

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Outstanding Equity Awards at Year End

The following table reflects the number and terms of stock option awards and stock awards outstanding as of December 31, 2009 for the Named Executive Officers:

Outstanding Equity Awards at Fiscal Year End

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(1)

Options granted become exercisable over a period of three years after the date of grant at the rate of one-third per year, except that they become immediately exercisable upon death, disability or qualified retirement. Options generally expire ten years after the date of grant under these plans. The non-exercisable stock options with the following expiration dates will vest as indicated below:

(2)

The Company’s stock options are granted at the Board meeting in December of each year to employees already in the equity incentive program, and to newly hired executive officers at the HR Committee meeting following the executive officer’s employment date. The exercise price reflects the closing price of DENTSPLY International Common Stock on the date the Board approved the grant.

(3)

Stock options generally expire ten years after the grant date.

(4)

Restricted stock unit grants are cliff vested. Restrictions lapse and the units convert to shares of stock three years after the date of grant, except that they become immediately vested upon death, disability or qualified retirement. Restricted stock units have no expiration date. With respect to Mr. Wise, Mr. Jellison and Mr. Clark, vesting of restricted stock units is contingent upon the continued profitability of the Company. The restricted stock units with the following grant dates will vest as indicated below:

(5)

The market value represents the number of restricted stock units granted multiplied by December 31, 2009 stock closing market price of $35.17.

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All Other Compensation

(1)

Represents the allocations to each of the U.S. Named Executive Officers’ DENTSPLY Employee Stock Ownership Plan balances for the year ended December 31, 2009. Pursuant to the terms of the ESOP Plan, non-vested ESOP shares forfeited by terminated employees and dividends earned on the forfeited shares are redistributed to the current ESOP participants, thus reducing the Company’s contribution requirement. The ESOP is a non-contributory defined contribution plan.

(2)

Represents the non-elective cash contributions by the Company into a 401(k) savings plan for each of the U.S. Named Executive Officers.

(3)

Represents Company credits for the 2009 Plan year to the DENTSPLY International U.S. Supplemental Executive Retirement Plan, a non-contributory retirement plan for a select group of management and/or highly compensated employees. Additional information is provided in the Non-Qualified Deferred Compensation section.

(4)

Represents Company credits for the 2009 Plan year to the DENTSPLY International German pension program, which is a defined contribution plan. Additional information is provided in the Retirement and Other Benefits section.

(5)

Represents annual cost of company car for business and personal use.

Option Exercises and Stock Vested

The following table sets forth certain information with respect to the exercise of options and stock awards vested during the year ended December 31, 2009 and the value of options held at that date for the Named Executive Officers.

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Non-Qualified Deferred Compensation

Supplemental Executive Retirement Plan

Effective January 1, 1999 and amended December 10, 2002 and January 1, 2009, the Board adopted a Supplemental Executive Retirement Plan. The purpose of the SERP is to provide additional retirement benefits for a limited group of management employees, including the U.S. based Named Executive Officers, whom the Board concluded were not receiving competitive retirement benefits. Contributions equal to 11.7% of compensation reduced by ESOP contributions are allocated to the participants’ accounts. No actual benefits are put aside for participants and the participants are general creditors of the Company for payment of the benefits upon retirement or termination from the Company. Participants can elect to have these benefits administered as savings with interest or stock unit accounts, with stock units being distributed in the form of Company Common Stock at the time of distribution.

The SERP provides for the possible delay in the distribution of benefits as necessary to comply with applicable administrative or legal requirements. Subject to such provisions, benefits are distributed as set forth below. Upon retirement or termination for any reason, participants in the SERP are paid the benefits in their account based on an earlier election to have their accounts distributed immediately or in annual installments for up to five (5) years.

In the event of a participant’s death before his or her account has been distributed, distribution shall be made to the beneficiary selected by the participant within thirty (30) days after the date of death (or, if later, after the proper beneficiary has been identified).

In the event of a Change in Control as defined in this SERP, participants will be given the option to receive the value of their accounts in lump sums no later than sixty (60) days after the Change in Control. Optional distributions received subject to a change in control must represent the entire Supplemental Executive Retirement Accounts and will be subject to five percent (5%) penalty reductions.

All distributions under this SERP shall be based upon the amount credited to a participant’s account as of the last business day of the month immediately preceding the date of the distribution. The amount of installments payable to a participant electing distribution through installments shall be determined by dividing the aggregate balance of the participant’s vested account by the remaining number of installments, including the current installment to be paid.

The following table sets forth contributions, earnings and year-end balances for 2009, with respect to non-qualified deferred compensation plans for the Named Executive Officers.

DENTSPLY Supplemental Savings Plan

Effective January 1, 2008, the Board adopted the DENTSPLY Supplemental Savings Plan. The purpose of the DSSP is to provide select members of the management of the Company, including all of the U.S. based Named Executive Officers, an opportunity to defer up to 50% of their base salary and 100% of their earned bonuses. Deferred amounts are general obligations of the Company and participant’s accounts are unfunded. Participants are able to elect to have their deferred compensation (other than individual salary deferrals by Named Executive Officers to Company Stock) tracked relative to investment options that mirror the investment options under the Company’s 401(k), including Company stock.

Participation is restricted to a select group of management employees, as determined annually by the Company. The Company maintains a listing of the eligible employees. Participation in the DSSP is voluntary and participants must elect to enroll each year they are eligible to participate.

DSSP payments are made in accordance with participant or employer election, at a specified time, termination for any reason, an unforeseeable emergency, disability or death. Retirement does not apply for purposes of this DSSP. All payments will be distributed in the form of cash at the time of distribution.

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All distributions under this DSSP shall be based upon the amount credited to a participant’s account as of the last business day of the month immediately preceding the date of the distribution. The amount of installments payable to a participant electing distribution through installments shall be determined by dividing the aggregate balance of the participant’s account by the remaining number of installments, including the current installment to be paid. It is understood that administrative or legal requirements may lead to a delay between such valuation date and the date of distribution.

The following table sets forth contributions, earnings and year-end balances for 2009, with respect to non-qualified deferred compensation plans for the Named Executive Officers.

Non-Qualified Deferred Compensation

(1)

Participants in the DSSP can elect to contribute a portion of their salary and/or bonus into this plan. Amount represents an elected contribution to the DSSP accounts in 2009. It is included in the “Salary” and/or “Non-Equity Incentive Plan Compensation” columns in the Summary Compensation Table. The SERP is fully funded by the Company; therefore, participants cannot contribute funds to the SERP.

(2)

Amounts represent unfunded credits allocated to participants’ accounts in 2009. They are reported on the participants’ plan summary statements for the period ending December 31, 2009 and included in the “All Other Compensation” column in the Summary Compensation Table.

(3)

Participants in the SERP can elect to have these benefits administered as savings with interest or stock unit accounts, with stock units being distributed in the form of Common Stock at the time of distribution. The amounts represent unfunded interest, depreciation, appreciation, and/or dividend credits allocated to participants’ accounts in 2009. Earnings are calculated using market rates. For this reason, these amounts are not reported in the “All Other Compensation” column in the Summary Compensation Table. Earnings are not reported to the Internal Revenue Service until withdrawn.

(4)

Deferred amounts are general obligations of the Company and participant’s accounts are unfunded. Participants are able to elect to have their deferred compensation tracked relative to investment options that mirror the investment options under the Company’s 401(k), including Company stock. All payments will be distributed in the form of cash at the time of distribution. The amounts represent unfunded interest, depreciation, appreciation, and/or dividend credits allocated to participants’ accounts in 2009. Earnings are calculated using market rates. For this reason, these amounts are not reported in the “All Other Compensation” column in the Summary Compensation Table.

(5)

The aggregate balance represents each participant’s vested balance at the end of 2009.

(6)

Mr. Sterkenburg is not eligible for the SERP or DDSP since he is not a United States employee.

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The table below discloses potential distributions of the SERP for the Named Executive Officers if they are terminated as of December 31, 2009:

(1)

Mr. Wise’s SERP account balance was $873,899 as of December 31, 2009. Mr. Wise would be entitled to additional contributions to the plan for the years 2010 and 2011, if he terminated his employment with the Company for cause or was terminated by the Company. Mr. Wise would be entitled to additional contributions to the plan for the years 2010, 2011 and 2012, if there was a change in control of the Company. Estimated contributions for 2010, 2011 and 2012 are based on Mr. Wise’s base salary and bonus compensation multiplied by 11.7% (combined award for ESOP and SERP) less the ESOP portion ($245,000 maximum salary multiplied by 6%). Mr. Wise has elected to receive his SERP account distribution in a lump sum payment.

(2)

Mr. Jellison’s SERP account balance was $790,366 as of December 31, 2009. Mr. Jellison would be entitled to additional contributions to the plan for the years 2010 and 2011, if he terminated his employment with the Company for cause or was terminated by the Company. Mr. Jellison would be entitled to additional contributions to the plan for the years 2010, 2011 and 2012, if there was a change in control of the Company. Estimated contributions for 2010, 2011 and 2012 are based on Mr. Jellison’s base salary and bonus compensation multiplied by 11.7% (combined award for ESOP and SERP) less the ESOP portion ($245,000 maximum salary multiplied by 6%). Mr. Jellison has elected to receive his SERP account distribution in annual installments over five years.

(3)

Mr. Clark’s SERP account balance was $610,359 as of December 31, 2009. Mr. Clark would be entitled to additional contributions to the plan for the years 2010 and 2011, if he terminated his employment with the Company for cause or was terminated by the Company. Mr. Clark would be entitled to additional contributions to the plan for the years 2010, 2011 and 2012, if there was a change in control of the Company. Estimated contributions for 2010, 2011 and 2012 are based on Mr. Clark’s base salary and bonus compensation multiplied by 11.7% (combined award for ESOP and SERP) less the ESOP portion ($245,000 maximum salary multiplied by 6%). Mr. Clark has elected to receive his SERP account distribution in a lump sum payment.

(4)

Mr. Mosch’s SERP account balance was $453,495 as of December 31, 2009. Mr. Mosch would be entitled to additional contributions to the plan for the years 2010 and 2011, if he terminated his employment with the Company for cause, was terminated by the Company or there was a change in control of the Company. Estimated contributions for 2010, 2011 and 2012 are based on Mr. Mosch’s base salary and bonus compensation multiplied by 11.7% (combined award for ESOP and SERP) less the ESOP portion ($245,000 maximum salary multiplied by 6%). Mr. Mosch has elected to receive his SERP account distribution in a lump sum payment.

(5)

Mr. Sterkenburg is not eligible for SERP since he is not a United States employee.

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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 for the period prior to the employee’s death in the year of such death. Each of the employment agreements also provides that, in the event that the employee’s employment is terminated by the Company without “cause” (as defined in the employment agreements), or by the employee with “good reason” (as described in the employment agreements), the Company shall pay compensation and provide benefits 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. During this period, (i) the Company will be obligated to pay the employee at the rate of salary being paid immediately before the termination, (ii) the employee will be entitled to receive bonus and incentive compensation in accordance with plans approved by the Board, (iii) the employee shall not be entitled to receive any further grants of stock options or equity incentives under any stock option or similar such plan subsequent to the date of termination notice, but equity grants shall continue to be exercisable, (iv) the employee will be entitled to receive the benefits that would have been accrued by him from participation under any pension, profit sharing, ESOP or similar retirement plan or plans of the Company or any affiliate, and (v) the employee shall receive continued coverage during the Termination Period under all employee disability, annuity, insurance, or other employee welfare benefit plans, programs or arrangements of the Company or any affiliate, provided that such coverage shall terminate for any such benefit on the earlier of the following events: (i) the covered person becomes eligible for similar type coverage under another employer’s group plans; (ii) the covered person becomes eligible for Medicare health benefits; or (iii) the covered person fails to pay the premium for such coverage by the due date thereof. In the event of death of employee during the Termination Period, the Company shall continue to make payments for a period that is the lesser of the remainder of the Termination Period or twelve (12) months, and shall pay any bonuses due on a pro-rata basis until the date of the employee’s death, to the employee’s designated beneficiary or, if no beneficiary has been effectively designated, then to the employee’s estate. Mr. Sterkenburg, who is based in Germany, would not receive identical benefits to those described above but would receive similar benefits under plans provided to German employees.

The employment agreements include a non-competition commitment and a commitment against disclosure of Company confidential information and non-solicitation of Company employees.

The Company has also entered into employment agreements with certain other members of senior management having terms similar to those described above.

Potential Payments upon Termination or Change in Control

The tables below represent the amount of compensation to each of the Named Executive Officers of the Company in the event of termination from the Company under different circumstances. The amount due to each officer upon retirement, resignation, termination by the employee with cause, termination by the company without cause, termination following a change in control and in the event of the death of the Named Executive Officer is provided. The amounts assume that the date of termination was December 31, 2009 and include actual amounts earned through that time and estimates of amounts which would have been paid as of such date. The stock price of DENTSPLY International was assumed to remain at $35.17 per share, the closing price on December 31, 2009. Actual amounts to be paid may differ and can only be determined in the event of and at the time of the executive officers’ terminations from the Company.

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Payments Made Upon Termination

The Named Executive Officer would be entitled to receive amounts earned during his employment, regardless of the reason for his separation from the Company. Those amounts include:

(1)

pro rata share of non-equity incentive compensation would be paid in February of the year following the year in which earned;

(2)

vested stock options could be exercised within 90 days of termination;

(3)

lump sum distributions would be made for amounts accrued and vested through the Company’s ESOP and 401(k) Plan;

(4)

distributions would be made based upon prior election for amounts accrued and vested through the Company’s SERP; and

(5)

lump sum distributions would be made for unused vacation pay.

Payments Made Upon Retirement

In addition to the items listed above, the Named Executive Officer would be entitled to the following:

(1)

all outstanding stock options and RSUs would vest as of the date of a qualified retirement (age 65, or age 60 with fifteen years of service), and the options expire the earlier of 5 years from that date or the original expiration date.

Payments Made Upon Termination for Cause by the Executive Officer, or Termination by the Company without Cause

If a Named Executive Officer separates from the Company with cause, or if the Company terminates the executive officer without cause, the Named Executive Officer would be entitled for the Termination Period, to the following:

(1)

full rate of salary immediately preceding the date of notice of termination, the first six months to be paid in a lump sum at the end of such six month period, and thereafter to be paid bi-weekly;

(2)

non-equity incentive compensation in accordance with the Annual Incentive Plan and based on the rate of salary immediately preceding the date of notice of termination, paid in February in the year following the year in which earned;

(3)

the employee shall not be entitled to receive any further grants of stock options or equity incentives under any stock option or similar such plan subsequent to the date of termination notice, but equity grants shall continue to be exercisable;

(4)

benefits that would have been accrued by him from participation under any pension, profit sharing, Employee Stock Ownership or similar retirement plan or plans of the Company or any affiliate;

(5)

the employee shall receive continued coverage during the Termination Period under all employee disability, annuity, insurance, or other employee welfare benefit plans, programs or arrangements of the Company or any affiliate, provided that such coverage shall terminate for any such benefit on the earlier of the following events:

a.

the employee becomes eligible for similar type coverage under another employer’s group plans;

b.

the employee becomes eligible for Medicare health benefits; or

c.

the employee fails to pay the premium for such coverage by the due date thereof.

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Payments Made Upon Termination of Employment by the Executive Officer For Cause or the Company Terminates or Gives Written Notice of Termination to the Employee within Two (2) Years after a Change in Control

If, within two (2) years after a Change in Control the Named Executive Officer terminates employment for cause, or the Company terminates or gives written notice of termination of employment to the Named Executive Officer (regardless of whether with or without cause), the Company shall pay the following amounts to the Named Executive Officer in a single lump sum cash payment within five (5) business days of such termination (provided, that any amount that would be payable to the Named Executive Officer during the six (6) month period beginning on his date of termination and which would not otherwise be exempt from the application of Section 409A(a)(2)(B) of the Code shall be withheld and paid instead on the six (6) month anniversary of the date of termination.

(1)

An amount equal to three (3) times the executive officer’s current annual salary for Mr. Wise, Mr. Jellison, Mr. Clark, and Mr. Mosch (with his promotion to Executive Vice President in 2009, the multiple for Mr. Mosch for salary and annual incentive award was increased from two (2) times to three (3) times on April 29, 2009), and an amount equal to two (2) times the executive officer’s current annual salary for Mr. Sterkenburg;

(2)

An amount equal to three (3) times the executive officer’s annual incentive award for Mr. Wise, Mr. Jellison, Mr. Clark, and Mr. Mosch and an amount equal to two (2) times the executive officer’s annual incentive award for Mr. Sterkenburg, for the year in which the termination occurs based on the target achievement of 100%; and

(3)

An amount equal to the benefits that would have been accrued by the Named Executive Officer for the three (3) year period from the date of termination for Mr. Wise, Mr. Jellison, Mr. Clark, and Mr. Mosch, and for the two (2) year period from the date of termination for Mr. Sterkenburg, from participation by the employee under any pension, profit sharing, ESOP, SERP or similar retirement plan or plans of the Company or any affiliate in which the employee participated immediately before the termination, in accordance with the terms of any such plan (or, if not available, in lieu thereof be compensated for such benefits), based on service and compensation the Employee would have had during such period.

(4)

Continued coverage for a two (2) year period from the date of termination under all employee disability, annuity, insurance, or other employee welfare benefit plans, programs or arrangements of the Company or any affiliate in which the Named Executive Officer participated immediately before the notice of termination, plus all improvements subsequent thereto (or, if not available or if required in order to comply with Code Section 409A, in lieu thereof be compensated in monthly cash payments for the premium-equivalent amount of such coverage and then be permitted to purchase such coverage, if available, by paying 100% of the premium cost for such coverage on an after-tax basis).

Certain Adjustments in Payments to Executive Officers

(1)

In the event that it shall be determined that any payment or distribution by the Company to or for the benefit of the executive officer as described above, whether paid or payable or distributed or distributable pursuant to the terms of the employment agreement or otherwise (a “Payment”), would constitute an “excess parachute payment” within the meaning of Section 280G of the Code, the Company shall pay the executive officer an additional amount (the “Gross-Up Payment”) such that the net amount retained by the executive officer after deduction of any excise tax imposed under section 4999 of the Code, and any federal, state and local income tax, employment tax, excise tax and other tax imposed upon the Gross-Up Payment, shall be equal to the Payment.

(2)

If the net after-tax benefit to the executive officer of receiving the Gross-Up Payment does not exceed the Safe Harbor Amount (as defined below) by more than 10% (as compared to the net after-tax

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benefit to the executive officer resulting from elimination of the Gross-Up Payment and reduction of the Payments to the Safe Harbor Amount), then (i) the Company shall not pay the executive officer the Gross-Up Payment, and (ii) the provisions of paragraph (3) below shall apply. The term “Safe Harbor Amount” means the maximum dollar amount of parachute payments that may be paid to the Participate under section 280G of the Code without imposition of an excise tax under section 4999 of the Code.

(3)

If the Company is not required to pay the Employee a Gross-Up Payment as a result of the provisions of Paragraph (2) above, the Company will apply a limitation on the Payment amount as follows: The aggregate present value of the benefits paid to the executive officer (the “Separation Benefits”) shall be reduced (but not below zero) to the Reduced Amount. The “Reduced Amount” shall be an amount expressed in present value which maximizes the aggregate present value of such Separation Benefits without causing any Payment to be subject to the limitation of deduction under section 280G of the Code.

Payments Due Upon Death

If a Named Executive Officer separates from the Company due to death, the Named Executive Officer’s beneficiaries would be entitled to the following:

(1)

salary at the rate immediately preceding the date of death for a period of one year from the date of death;

(2)

pro-rata share of non-equity incentive compensation based on the rate of salary immediately preceding the date of death, paid in February of the year following the year in which earned;

(3)

all outstanding stock options would vest as of the date of death and would be exercisable until the earlier of the stated expiration date of the option, or one (1) year from the date of death; and

(4)

contributions would be made to the Employee Stock Ownership, 401(k) and Supplemental Executive Retirement Plans for the year of the death and lump sum distributions would be made to the beneficiaries.

The following tables contain estimated potential payments that may be due to a NEO should termination or change in control occur. Although the calculations are intended to provide reasonable estimates of potential payments, they are based on assumptions and may not represent the actual amount a NEO would receive if a change occurred. The payments listed represent the incremental amounts due to the NEO that exceed what the NEO would have received without the termination, change in control or death. Not included in these tables are the following payments to which the NEOs are already entitled and have been reported in previous sections of this proxy:

•

amounts already earned under the Non-Equity Incentive Compensation Plan

•

the exercise of outstanding vested options (reported in the Outstanding Equity Awards at Fiscal Year End table)

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Bret W. Wise

William R. Jellison

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Christopher T. Clark

James G. Mosch