Exhibit 10.2
SEPARATION
AGREEMENT
This SEPARATION AGREEMENT (the “Agreement”) is entered into as
of the date signed by the second party hereto between Douglas J.
Wetmore (the “Employee”), and International Flavors
& Fragrances Inc., a New York corporation (the
“Company”).
WITNESSETH
WHEREAS, the Employee is employed by Company as Senior
Vice President and Chief Financial Officer; and
WHEREAS, the Company and the Employee have agreed that
the Employee’s employment with the Company shall terminate on
August 31, 2008 (the “Separation Date”);
NOW, THEREFORE,
in consideration of the mutual
promises contained in this Agreement, the Employee and the Company
agree as follows:
1.
Termination of Employment Relationship; Resignation
Officerships and Directorships . On the Separation Date the Employee’s
employment with all members of the Company Group shall
terminate.
2. Consideration to the Employee
. The Company shall make the following payments
and provide the following additional benefits and consideration to
the Employee, subject to the Employee complying with Sections 3, 5,
6, 7, 8 and 9 hereof:
(a) Salary and
Benefits through the Separation Date . Through and including the Separation Date, the
Employee shall continue to be paid his current base salary of
$40,000.00 per month ($480,000 per year), and shall receive the
benefits set forth below.
(b) Incentive
Compensation . The
Employee shall be entitled to the same annual incentive
compensation award in respect of 2008 under the Company’s
Annual Incentive Plan (“AIP”), promulgated under the
Company’s Stock Award and Incentive Plan
(“SAIP”), that is paid to others with the same target
award and pre-established performance objectives as the Employee.
Payout of the 2008 AIP shall be prorated to reflect the time the
employee served in 2008 through to the separation date (i.e.
8/12ths of the annual award) and shall be paid to the
Employee in early 2009 at the same time as
incentive compensation awards under the AIP are paid to employees
of the Company generally. The Employee shall also be entitled to
receive the 88.9% of any award that is paid to others with the same
target award as the Employee in respect of Cycle VI (2006 –
2008) under the Company’s Long-Term Incentive Plan
(“LTIP”) under the SAIP, 55.6% of any award that is
paid to others with the same target award as the Employee in
respect of Cycle VII (2007 – 2009), and 22.2% of any award
that is paid to others with the same target award as the Employee
in respect of Cycle VIII (2008 – 2010) under the LTIP. Any
earned Cycle VI, Cycle VII and Cycle VIII awards under the LTIP
shall be paid to the Employee in early 2009, 2010, and 2011 at the
same times as awards under such cycles of the LTIP are paid to
other participants in such LTIP cycles. The Employee shall not be
entitled to any other incentive compensation, whether under the
AIP, LTIP or any other plans or programs, in respect of any other
year.
(c) Severance
Payments . The
Severance Period shall be September 1, 2008 through and including
August 31, 2010. The Employee shall receive semi-monthly severance
payments, except as set forth below, of $29,000, which is equal to
the sum of (i) his current semi-monthly base salary ($20,000) and
(ii) $9,000, which is an amount equal to one-twenty fourth of his
average 2005, 2006, and 2007 AIP. As a result, the Employee’s
Severance Payments over the 24-month period shall aggregate to
$1,392,000. Severance Payments shall be made semi-monthly at the
same times as compensation is paid to exempt United States
employees of the Company. Payments will commence at the beginning
of the 7 th month after the Employee’s separation
date (March 1, 2009) and the first payment due will be equal to
$348,000 (representing 6 months of severance payments at $58,000
per month). Thereafter, payments will be made
semi-monthly.
(d) Unused
Vacation . The
Employee has utilized all vacation entitlement in respect of 2008.
The Employee shall not be entitled to vacation pay in respect of
any other year.
(e) Equity
Compensation The
exercisability, lapsing and forfeiture of the Employee’s
purchased restricted stock, restricted stock units, and stock
settled appreciation rights shall be governed by the provisions of
various Equity Award Agreements between the Employee and the
Company except as otherwise provided in this Section 2(e). In
respect of the restricted stock units granted in December 2006 and
the equity
granted under the Equity Choice Program in 2006,
100% vesting will occur in the normal course as if the Employee had
remained an employee of the Company. With respect to equity granted
under the Equity Choice Program in 2007 and 2008, these units, to
the extent earned, will be pro-rated for time worked during the
particular equity cycle and will vest in accordance with the
agreements, that being May 2010 and May 2011 respectively.
Specifically, equity granted in 2007 will be pro-rated at 44.4% and
equity granted in 2008 will be pro-rated at 11.1%.
(f) Pension and Other
Benefits . The
Employee is no longer covered by the Company’s Pension Plan,
including its Supplemental Pension Plan. He shall remain vested in
the benefits that he has accrued under the Pension Plan, the
Company’s Retirement Income Fund Plan (including the
Company’s Supplemental Retirement Income Plan) and the
Company’s Deferred Compensation Plan, subject to any
forfeitures or other requirements of such plans. For the shorter of
the Severance Period or until the Employee becomes eligible to
participate in medical, dental and/or life insurance plans upon his
commencement of new “Employment,” as hereinafter
defined (the “Supplemental Benefits Period”), the
Employee and his eligible dependents shall continue to participate
in the Company’s medical and dental plans and to be covered
under the Company’s group life insurance plan (including the
Executive Death Benefit Plan), under the same terms and conditions,
and at the same contribution levels, as are applicable to active
employees of the Company. For the purpose of this Agreement,
“Employment” shall mean the Employee’s
substantially full-time participation for monetary compensation as
an officer, employee, partner, principal or individual proprietor
in any entity or business. At the expiration of the Supplemental
Benefits Period the Employee shall be able to continue coverage
under the Company’s medical plan in accordance with the
Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”) for up to eighteen (18) months after the
expiration of the Supplemental Benefits Period by so requesting
this option from the Company and paying the applicable monthly
premiums.
(g) Company Car
. On the Separation Date,
the Employee shall have the choice of either purchasing the
automobile currently being provided to the Employee by the Company,
or returning it to the Company. Whether purchase or return, such
transaction shall be conducted in accordance with Company policy
and instructions.
(h) Financial
Planning/Advice . Until the expiration of the Severance Period,
the Company shall reimburse the Employee up to a maximum of $20,000
for financial, tax and estate planning advice. Reimbursement
requests must include appropriate receipts from an appropriate
advisor and shall be sent to the Company’s Senior Vice
President, Human Resources.
(i) Outplacement
. The Company shall
arrange for the Employee to have the outplacement services of a
firm selected by the Company and shall pay all fees associated
therewith. The Company agrees to cause such outplacement services
to be continued until the earlier of the expiration of the
Severance Period or the date on which the Employee accepts
Employment. Alternatively, the Employee may select an outplacement
service provider of his choosing and the Company will reimburse
such fees for outplacement services up to a maximum amount of
$40,000. Reimbursement requests shall be handled as
above.
(j) Legal Fees
. The Company shall
reimburse the Employee up to a maximum of $3,000 for legal fees
incurred in negotiation and preparation of this
Agreement.
(k) Funding of
Benefits Under this Agreement . The Company’s
obligations under this section 2 shall be added to those covered by
the RABBI Trust evidenced by the trust Agreement dated October 4,
2000 between IFF and First Union National Bank, as Trustee (or any
successor RABBI Trust) and to the extent that any Company
obligations are funded under the RABBI Trust, the Company’s
obligations under this Agreement should so be funded.
3. Noncompetition; Nonsolicitation
. During the Severance Period, the Employee agrees
that he shall not solicit, induce, or attempt to influence any
individual who is an employee of the Company Group to terminate his
or her employment relationship with the Company Group, or to become
employed by him or his affiliates or any person by which he is
employed, or interfere in any other way with the employment, or
other relationship, of the Company Group and any employee thereof.
The Employee also agrees that he, acting alone or with others,
directly or indirectly, shall not, during the Severance Period,
either as employee, employer, consultant, advisor, or director, or
as an owner, investor, partner, or shareholder unless the
Employee’s interest is insubstantial, engage in or become
associated with a “Competitive Activity”. For this
purpose, the term “Competitive Activity” means any
business or other endeavor
that engages in a line of business in any
geographic location that is substantially the same as either (1)
any line of operating business which the Company or subsidiary
engages in, conducts, or, to the knowledge of the Employee, has
definitive plans to engage in or conduct, or (2) any operating
business that has been engaged in or conducted by the Company or a
subsidiary and as to which, to the knowledge of the Employee, the
Company or subsidiary has covenanted in writing, in connection with
the disposition of such business, not to compete therewith. The
Compensation Committee of the Board of Directors shall, in the
reasonable exercise of its discretion, determine which lines of
business the Company and its subsidiaries conduct on any particular
date and which third parties may reasonably be deemed to be in
competition with the Company and its subsidiaries.
4.
Entire Consideration . The Employee understands and agrees that the
payments and benefits provided for in this Agreement (a) are being
provided to him pursuant to the Company’s Executive
Separation Policy (“ESP”) and he ag
