INTERNATIONAL FLAVORS &
FRAGRANCES INC.
DEFERRED COMPENSATION PLAN
As Amended and Restated December 9, 2008
1. Purpose . The purpose of this Deferred Compensation
Plan (the “Plan”) is to provide to members of a select
group of management or highly compensated employees of
International Flavors & Fragrances Inc. (the
“Company”) and its subsidiaries and/or its affiliates
who are selected for participation in the Plan, and non-employee
directors of the Company, a means to defer receipt of specified
portions of compensation and to have such deferred amounts treated
as if invested in specified investment vehicles, in order to
enhance the competitiveness of the Company’s executive
compensation program and, therefore, its ability to attract and
retain qualified key personnel necessary for the continued success
and progress of the Company, and to encourage such persons to
retain a significant equity stake in the Company.
2. Definitions. In addition to the terms defined in
Section 1 above, the following terms used in the Plan shall
have the meanings set forth below:
(a) “Administrator”
means the officer or committee of officers of the Company
designated by the Committee to administer the Plan. At
October 8, 2007, the Administrator shall be the
Company’s administrative committee, the current members of
which are the Executive Vice President, Global Business
Development; the Executive Vice President, Global Operations; the
Senior Vice President and Chief Financial Officer; the Senior Vice
President and General Counsel; and the Vice President, Human
Resources of the Company. The full Committee may perform any
function of the Administrator hereunder, in which case the term
“Administrator” shall refer to the
Committee.
(b) “Beneficiary”
means any family member or members, including by marriage or
adoption, any trust in which the Participant or any family member
or members have more than 50% of the beneficial interest, any
foundation in which the Participant or any family member or members
control the management of assets, and any other entity in which the
Participant or any family member or members own more than 50% of
the voting interests, in each case designated by the Participant in
his or her most recent written Beneficiary designation filed with
the Committee as entitled to exercise rights or receive benefits
under the Plan in connection with the Participant’s Deferral
Account (or any portion thereof), or if there is no surviving
designated Beneficiary, then the person, persons, trust or trusts
entitled by will or the laws of descent and distribution to
exercise rights or receive benefits under the Plan in connection
with the Participant’s Deferral Account on behalf or in lieu
of such non-surviving designated Beneficiary.
(c) “Board”
or “Board of Directors” means the Board of Directors of
the Company.
(d) “Cash
Deferral” means that portion of the assets of a
Participant’s Deferral Account which is attributable to
cash-based deferrals made by Participant and investment results
earned (or lost) thereon.
(e) “Code”
means the Internal Revenue Code of 1986, as amended. References to
any provision of the Code or regulation (including a proposed
regulation) thereunder shall include any successor provisions or
regulations and applicable Internal Revenue Service
guidance.
(f) “Committee”
means the Compensation Committee of the Board of Directors or such
other committee designated under Section 3(b), to which the
Board has delegated the authority to take action under the Plan.
The full Board may perform any function of the Committee hereunder,
in which case the term “Committee” shall refer to the
Board.
(g) “Deferral
Account” means the account or subaccount established and
maintained by the Company for specified deferrals by a Participant,
as described in Section 6. Deferral Accounts will be
maintained solely as bookkeeping entries by the Company to evidence
unfunded obligations of the Company.
(h) “Deferred
Stock” means a credit to the Participant’s Deferral
Account representing the right to receive one share of Stock for
each share of Deferred Stock so credited, together with rights to
dividend equivalents and other rights and limitations specified in
the Plan.
(i) “Disability”
means a disability entitling the Participant to long-term
disability benefits under the Company’s long-term disability
plan as in effect at the date of Participant’s termination of
employment. “409A Disability” has the meaning defined
in Section 13(b)(ii).
(j) “Exchange
Act” means the Securities Exchange Act of 1934, as amended.
References to any provision of the Exchange Act or rule thereunder
shall include any successor provisions or rules.
(k) “409A
Deferral” means a Cash Deferral or Deferred Stock resulting
from a deferral of compensation within the meaning of Code
Section 409A in 2005 or later. For this purpose, if a deferral
of compensation was initiated before 2005 but either the
Participant’s legal right to receive the compensation arose
in 2005 or later or his or her risk of forfeiture with respect to
the compensation lapsed in 2005 or later, it will be considered a
409A Deferral. The foregoing notwithstanding, any deferral that
qualifies for the short-term deferral exception under Treasury
Regulation § 1.409A-1(b)(4) shall not be deemed to be a 409A
Deferral.
(l) “Grandfathered
Deferral” means a Cash Deferral or Deferred Stock that would
constitute a 409A Deferral except for the fact that the legal right
to the deferral and any vesting occurred before 2005.
(m) “Matching
Account” means the subaccount under a Participant’s
Deferral Account which reflects Matching Contributions under the
Plan and amounts of hypothetical income and appreciation and
depreciation in value of such subaccount.
(n) “Matching
Contributions” means contributions to a Participant’s
Matching Account made in accordance with Section 7.
(o) “Participant”
means any employee of the Company or any subsidiary or affiliate
who is designated by the Committee as eligible to participate and
who participates or makes an election to participate in the Plan,
or any non-employee director of the company who participates or
makes an election to participate in the Plan.
(p) “Prior
Plan Deferrals” means deferrals of annual incentive awards
payable under the International Flavors & Fragrances Inc.
Management Incentive Compensation Plan and the International
Flavors & Fragrances Inc. Special Executive Bonus Plan and
deferrals by non-employee directors of the Company under the
International Flavors & Fragrances Inc. Directors’
Deferred Compensation Plan.
(q) “Retirement”
means a Participant’s voluntary termination of employment
(i) at or after attaining age 62, (ii) at or after
attaining age 55 with at least ten years of service to the Company
and its subsidiaries and affiliates (including any service to
predecessor companies acquired by the Company or its subsidiaries
or affiliates) or (iii), in the case of a non-employee director of
the Company, any termination of service as a director.
(r) “Stock”
means the Company’s Common Stock or any other equity
securities of the Company designated by the
Administrator.
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(s) “Stock
Units” or “Units” means stock unit awards granted
under the Company’s 2000 Stock Award and Incentive Plan, 2000
Supplemental Stock Award Plan, or other Company plans.
(t) “Trust”
means any trust or trusts established by the Company as part of the
Plan; provided, however, that the assets of such trusts shall
remain subject to the claims of the general creditors of the
Company.
(u) “Trustee”
means the trustee of a Trust.
(v) “Trust
Agreement” means the agreement entered into between the
Company and the Trustee to carry out the purposes of the Plan, as
amended or restated from time to time.
(w) “Valuation
Date” means the close of business on the last business day of
each calendar quarter; provided, however, that in the case of
termination of employment for reasons other than Retirement, death,
or Disability, the Valuation Date means the close of business on
the last business day of the year in which employment terminates,
unless otherwise determined by the Administrator in the case of a
Grandfathered Deferral.
(a)
Authority . The Committee shall administer the Plan in
accordance with its terms, and shall have all powers necessary to
accomplish such purpose, including the power and authority to
construe and interpret the Plan, to define the terms used herein,
to prescribe, amend and rescind rules and regulations, agreements,
forms, and notices relating to the administration of the Plan, to
make all other determinations necessary or advisable for the
administration of the Plan, and to determine whether to terminate
participation of and accelerate distributions to Participants
(subject to Section 13, including Section 13(a)(iv)),
including Participants who engage in activities competitive with or
not in the best interests of the Company. The Administrator shall
share in these powers, to the extent provided herein and subject to
such limitations imposed by and oversight of the Committee. Any
actions of the Committee and Administrator with respect to the Plan
and determinations in all matters hereunder shall be conclusive and
binding for all purposes and upon all persons, including the
Company, Participants, employees, and non-employee directors (in
their individual capacities) and their respective successors in
interest (subject to the Board’s and Committee’s
reserved authority hereunder).
(b)
Service on Committee or as Administrator . Members of the
Committee shall be appointed by and remain in office at the will
of, and may be removed with or without cause by, the Board. Persons
serving as the Administrator shall be appointed by and remain in
office at the will of, and may be removed with or without cause by,
the Committee. Any member of the Committee or Administrator may
resign at any time. The Committee or Administrator may delegate
administrative and other functions under the Plan to officers or
employees of the Company and its subsidiaries, or other agents,
except as limited by the Plan. No member of the Committee or
Administrator shall be entitled to act on or decide any matter
relating solely to himself or herself or any of his or her rights
or benefits under the Plan. No bond or other security shall be
required in connection with the Plan of the Committee or the
Administrator or any member thereof in any jurisdiction.
(c)
Limitation of Liability . Each member of the Committee or
Administrator shall be entitled, in good faith, to rely or act upon
any report or other information furnished to him or her by any
officer or other employee of the Company or any subsidiary or
affiliate, the Company’s independent certified public
accountants, or any executive compensation consultant, legal
counsel, or other professional retained by the Company to assist in
the administration of the Plan. To the maximum extent permitted by
law, no member of the Committee or Administrator, nor any person to
whom duties have been delegated under the Plan, shall be liable to
any person for any
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action taken or
omitted in connection with the interpretation and administration of
the Plan, except for the willful misconduct or gross negligence of
such member or person.
4. Participation. The Committee shall determine those
employees of the Company and its subsidiaries and/or affiliates,
from among the executives who qualify as a select group of
management or highly compensated employees, who will be eligible to
participate in the Plan. Such persons shall be notified of such
eligibility by the Administrator. The Committee may limit
participation by otherwise eligible employees in its discretion,
including, for example, for a specified period following a
Participant’s withdrawal from a Deferral Account under
Section 8(f) or (g). In addition, each non-employee director of the
Company shall be eligible to participate in the Plan.
5. Deferrals . To the extent authorized by the
Committee and subject to Section 13, a Participant may elect
to defer compensation or awards which may be in the form of cash,
Stock, Stock-denominated awards or other property to be received
from the Company or a subsidiary or affiliate, including salary,
annual bonus awards, long-term awards, retainer fees and meeting
fees payable to a non-employee director, and compensation payable
under other plans and programs, employment agreements or other
arrangements, or otherwise, as may be provided under the terms of
such plans, programs and arrangements or as designated by the
Committee. Stock-denominated awards that the Committee may
authorize for deferral include (i) Stock Units and
(ii) shares issuable upon exercise of stock denominated SARs,
if such SARs are implemented as deferrals of compensation under
Code Section 409A rather than as stock rights exempt under
Treasury Regulation § 1.409A-1(b)(5). (All deferrals of shares
under the Plan are referred to as Deferred Stock, including awards
originally denominated “restricted stock units”). The
foregoing notwithstanding, an employee-Participant may defer, with
respect to a given year, receipt of only that portion of the
Participant’s salary, annual bonus award, long-term award,
equity awards and compensation payable under other plans and
programs, employment agreements or other arrangements that exceeds
the FICA maximum taxable wage base plus the amount necessary to
satisfy Medicare and all other payroll taxes (other than Federal,
state or local income tax withholding) imposed on the wages or
compensation of such Participant from the Company and its
subsidiaries and affiliates; this limitation shall not apply to
non-employee directors, however. In addition to such limitation,
and any terms and conditions of deferral set forth under plans,
programs or arrangements from which receipt of compensation or
awards is deferred, the Administrator may impose limitations on the
amounts permitted to be deferred and other terms and conditions on
deferrals under the Plan. Any such limitations, and other terms and
conditions of deferral, shall be specified in documents setting
forth terms and conditions of deferrals under the Plan, rules
relating to the Plan or election forms, other forms, or
instructions published by or at the direction of the Administrator.
The Committee may permit awards and other amounts to be treated as
deferrals under the Plan, including deferrals that may be mandatory
as determined by the Committee in its sole discretion or under the
terms of another plan or arrangement of the Company, for
administrative convenience or otherwise to serve the purposes of
the Plan and such other plan or arrangement.
(a)
Elections. Once an election form, properly completed, is
received by the Company, the elections of the Participant shall be
irrevocable; provided, however, that the Administrator may in its
discretion determine that elections are revocable until the
deadline specified for the filing of such election; provided
further, that the Administrator may, in its discretion, permit a
Participant to elect a further deferral of amounts credited to a
Deferral Account by filing a later election form; and provided,
further, that, unless otherwise approved by the Administrator for
Grandfathered Deferrals only (any such approval must be consistent
with policies of the Administrator established prior to
October 4, 2004), any election to further defer amounts
credited to a Deferral Account must be made at least one year prior
to the date such amounts would otherwise be payable, except as
permitted under Section 13(a)(ii) and subject to
Section 5(b).
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(b) Date
of Election . A Participant’s election to defer
compensation or awards hereunder must be received by the
Administrator prior to the date specified by or at the direction of
the Administrator. Under no circumstances may a Participant defer
compensation or awards to which the Participant has attained, at
the time of deferral, a legally enforceable right to current
receipt of such compensation or awards.
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(i)
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Initial Deferral Elections. In the
case of 409A Deferrals not settled in 2007 or earlier, any initial
election to defer compensation (including the election as to the
type and amount of compensation to be deferred and the time and
manner of settlement of the deferral) must be made (and shall be
irrevocable) no later than December 31 of the year before the
Participant’s services are performed which will result in the
earning of the compensation, except as follows:
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•
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Initial deferral elections with
respect to compensation that, absent the election, constitutes a
short-term deferral may be made in accordance with Treasury
Regulation § 1.409A-2(a)(4) and (b);
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•
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Initial deferral elections with
respect to compensation that remains subject to a requirement that
the Participant provide services for at least 12 months (a
“forfeitable right” under Treasury Regulation §
1.409A-2(a)(5)) may be made on or before the 30
th
day after the
Participant obtains the legally binding right to the compensation,
provided that the election is made at least 12 months before
the earliest date at which the forfeiture condition could lapse and
otherwise in compliance with Treasury Regulation §
1.409A-2(a)(5);
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•
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Initial deferral elections by a
Participant in his or her first year of eligibility may be made
within 30 days after the date the Participant becomes eligible
to participate in the Plan, with respect to compensation paid for
services to be performed after the election and in compliance with
Treasury Regulation § 1.409A-2(a)((7);
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•
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Initial deferral elections by a
Participant with respect to performance-based compensation (as
defined under Treasury Regulation § 1.409A-1(e)) may be made
on or before the date that is six months before the end of the
performance period, provided that (i) the Participant was
employed continuously from either the beginning of the performance
period or the later date on which the performance goal was
established, (ii) the election to defer is made before such
compensation has become readily ascertainable (i.e., substantially
certain to be paid), (iii) the performance period is at least
12 months in length and the performance goal was established no
later than 90 days after the commencement of the service period to
which the performance goal relates, (iv) the performance-based
compensation is not payable in the absence of performance except
due to death, disability, a 409A Change in Control or as otherwise
permitted under Treasury Regulation § 1.409A-1(e), and
(v) this initial deferral election must in any event comply
with Treasury Regulation § 1.409A-2(a)(8);
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•
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Initial deferral elections resulting
in Matching Contributions under Section 7 may be made in
compliance with Treasury Regulation §
1.409A-2(a)(9);
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•
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Initial deferral elections may be
made to the fullest permitted under other applicable provisions of
Treasury Regulation § 1.409A-2(a); and
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•
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Initial deferral elections in 2007
and earlier may be made to the fullest extent authorized under
transition rules and other applicable guidance under Code
Section 409A.
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(ii)
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Further Deferral Elections.
Elections to further defer The foregoing notwithstanding, for 409A
Deferrals not settled in 2007 or earlier, any further deferral
election made in 2008 or later shall be subject to the
following:
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•
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The
further deferral election will not take effect until at least 12
months after the date on which the election is made;
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•
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If
the election relates to a distribution event other than a 409A
Disability, death, or Unforeseeable Emergency, the payment with
respect to which such election is made must be deferred for a
period of not less than five years from the date such payment would
otherwise have been paid (or in the case of a life annuity or
installment payments treated as a single payment, five years from
the date the first amount was scheduled to be paid);
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•
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The
requirement that the further deferral election be made at least 12
months before such 409A Deferrals would be first payable may not be
waived by the Administrator, and shall apply to a payment at a
specified time or pursuant to a fixed schedule (and in the case of
a life annuity or installment payments treated as a single payment,
12 months before the date that the first amount was scheduled
to be paid);
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•
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The
further deferral election shall be irrevocable when filed with the
Company; and
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•
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The
further deferral election otherwise shall comply with the
applicable requirements of Treasury Regulation §
1.409A-2(b).
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6. Deferral Accounts. Deferral Accounts shall be
subject to the provisions of this Section 6. With respect to 409A
Deferrals not settled in 2007 or earlier, the provisions of this
Section 6 are subject to Section 13, and for such 409A
Deferrals and Grandfathered Deferrals the provisions of this
Section 6 are subject to Section 13(e), which generally
precludes any action (including in the discretion of the
Administrator) relating to the timing or amount of deferred
compensation and earnings to be credited thereon that would provide
a rate of return exceeding that of a predetermined actual
investment, as specified under Treasury Regulation §
1.409A-1(o).
(a)
Establishment; Crediting of Amounts Deferred . One or more
Deferral Accounts will be established for each Participant, as
determined by the Administrator. The amount of compensation or
awards deferred with respect to each Deferral Account will be
credited to such Account as of the date on which such amounts would
have been paid to the Participant but for the Participant’s
election to defer receipt hereunder, unless otherwise determined by
the Administrator. With respect to any fractional shares of Stock
or Stock-denominated awards, the Administrator shall determine
whether to credit the Deferral Account with a fraction of a share,
to pay cash in lieu of the fractional share or carry forward such
cash amount under the Plan, round to the nearest whole share, round
to the next whole share, or round down to eliminate the fractional
share or otherwise make provision for the fractional share. Amounts
of hypothetical income and appreciation and depreciation in value
of such account will be credited and debited to, or otherwise
reflected in, such Account from time to time. Unless otherwise
determined by the Administrator (including under
Section 6(e)), Cash Deferrals shall be deemed invested in a
hypothetical investment as of the date of deferral.
(b)
Investment Vehicles .
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(i)
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Subject to the provisions of this
Section 6(b) and Sections 6(d) and 9, Cash Deferral amounts shall
be deemed to be invested, at the Participant’s direction, in
one or more investment vehicles as may be specified from time to
time by the Committee; provided, however, that the Administrator
may expressly reserve the right to approve or disapprove any
investment direction given by a Participant. The Committee may, but
is not required to, permit Cash Deferrals to be deemed invested in
Deferred Stock, subject to Section 11. The Committee may
change or discontinue any hypothetical investment vehicle available
under the Plan in its discretion (subject to Section 13(e));
provided, however, that each affected Participant shall be given
the opportunity, without limiting or otherwise impairing any other
right of such Participant regarding changes in investment
directions, to
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redirect the allocation of his or
her Cash Deferral amount deemed invested in the discontinued
investment vehicle among the other hypothetical investment
vehicles, including any replacement vehicle.
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(ii)
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Amounts credited as Deferred Stock
to a Participant’s Deferral Account (whether or not as a
result of a Cash Deferral) may not be reallocated or deemed
reinvested in any other investment vehicle, but shall remain as
Deferred Stock until such time as the Deferral Account is settled
in accordance with Section 8.
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(iii)
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Subject to Sections 11 and
13(e), the Committee may provide for crediting of additional
Deferred Stock as a premium or inducement to Participants to elect
deferrals that will be credited as Deferred Stock; provided,
however, that the crediting of any such additional Deferred Stock
on deferrals by non-employee directors shall be subject to approval
of the Board. Such additional Deferred Stock shall not exceed 40%
of the number of shares of Deferred Stock resulting from the
Participant’s deferral. Such additional Deferred Stock shall
be subject to such vesting and forfeiture conditions as the
Committee may specify.
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(c)
Dividend Equivalents and Adjustments . Deferred Stock
credited to a Participant’s Deferral Account will be credited
with Dividend Equivalents and subject to adjustment as provided in
this Section 6(c), except as limited by the Committee and in
any event such crediting will not apply to any amount that remains
subject to a substantial risk of forfeiture unless explicitly
authorized by the Committee:
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(i)
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Cash Dividends. If the Company
declares and pays a cash dividend on Stock, then a number of
additional shares of Deferred Stock shall be credited to a
Participant’s Deferral Account as of the payment date for
such dividend equal to (A) the number of shares of Deferred Stock
credited to the Deferral Account as of the record date for such
dividend, multiplied by (B) the amount of cash actually paid
as a dividend on each share at such payment date, divided by
(C) the fair market value of a share of Stock at such payment
date. The Administrator shall determine how amounts that would be
credited or settled as fractional shares shall be treated under the
Plan in accordance with Section 6(a) hereof.
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(ii)
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Non-Stock Dividends. If the Company
declares and pays a dividend on Stock in the form of property other
than shares of Stock, then a number of additional shares of
Deferred Stock shall be credited to a Participant’s Deferral
Account as of the payment date for such dividend equal to
(A) the number of shares of Deferred Stock credited to the
Deferral Account as of the record date for such dividend,
multiplied by (B) the fair market value of any property other
than shares actually paid as a dividend on each share at such
payment date, divided by (C) the fair market value of a share
of Stock on the day after such payment date. The Administrator
shall determine how amounts that would be credited or settled as
fractional shares shall be treated under the Plan in accordance
with Section 6(a) hereof.
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(iii)
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Stock Dividends and Splits. If the
Company declares and pays a dividend on Stock in the form of
additional shares of Stock, or there occurs a forward split of
Stock, then a number of additional shares of Deferred Stock shall
be credited to Participant’s Deferral Account as of the
payment date for such dividend or forward Stock split equal to
(A) the number of shares of Deferred Stock credited to the
Deferral Account as of the record date for such dividend or split,
multiplied by (B) the number of additional shares actually paid as
a dividend or issued in such split in respect of each share of
Stock. The Administrator shall determine how amounts that would be
credited or settled as fractional shares shall be treated under the
Plan in accordance with Section 6(a) hereof.
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(iv)
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Modifications to Dividend
Equivalents Policy. Other provisions of this Section 6(c)
notwithstanding, the Administrator may modify the manner of payment
or crediting of Dividend Equivalents hereunder, in order to
coordinate the value of Deferral Accounts with any trust holding
shares established under Section 6(e), for administrative
convenience, or for any other reason.
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(v)
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Adjustments. The number of shares of
Deferred Stock credited to the Participant’s Account may be
adjusted by the Committee in order to prevent dilution or
enlargement of Participants’ rights with respect to Deferred
Stock, in the event of any unusual corporate transaction or event
which affects the value of Common Stock, provided that any such
adjustment shall be made taking into account any crediting of
Deferred Stock to the Participant under other provisions of this
Section 6(c) in connection with such transaction or
event.
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(d)
Allocation and Reallocation of Hypothetical Investments . A
Participant may allocate the Cash Deferral portion of his or her
Deferral Account to one or more of the hypothetical investment
vehicles authorized under the Plan. Subject to
Section 6(b)(ii) and any rules established by the
Administrator, a Participant may reallocate such Cash Deferrals as
of the Valuation Date or other date specified by the
Administrat
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