þ
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
¨
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
|
|
|
|
New York
|
|
13-1432060
|
(State or other jurisdiction of
incorporation or organization)
|
|
(I.R.S. Employer
Identification No.)
|
Large accelerated filer
|
|
þ
|
Accelerated filer
|
¨
|
|
|
|
|
|
Non-accelerated filer
|
|
¨
|
Smaller reporting company
|
¨
|
|
1
|
|
|
|
March 31, 2014
|
|
December 31, 2013
|
||||
ASSETS
|
|
|
|
|
||||
Current Assets:
|
|
|
|
|
||||
Cash and cash equivalents
|
|
$
|
268,584
|
|
|
$
|
405,505
|
|
Trade receivables (net of allowances of $10,703 and $10,493, respectively)
|
|
574,678
|
|
|
524,493
|
|
||
Inventories: Raw materials
|
|
250,614
|
|
|
252,457
|
|
||
Work in process
|
|
16,413
|
|
|
6,658
|
|
||
Finished goods
|
|
285,089
|
|
|
274,691
|
|
||
Total Inventories
|
|
552,116
|
|
|
533,806
|
|
||
Deferred income taxes
|
|
30,394
|
|
|
40,189
|
|
||
Prepaid expenses and other current assets
|
|
144,079
|
|
|
148,910
|
|
||
Total Current Assets
|
|
1,569,851
|
|
|
1,652,903
|
|
||
Property, plant and equipment, at cost
|
|
1,805,336
|
|
|
1,757,983
|
|
||
Accumulated depreciation
|
|
(1,109,102
|
)
|
|
(1,070,768
|
)
|
||
|
|
696,234
|
|
|
687,215
|
|
||
Goodwill
|
|
676,051
|
|
|
665,582
|
|
||
Other intangible assets, net
|
|
83,265
|
|
|
30,615
|
|
||
Deferred income taxes
|
|
154,875
|
|
|
154,437
|
|
||
Other assets
|
|
141,077
|
|
|
140,979
|
|
||
Total Assets
|
|
$
|
3,321,353
|
|
|
$
|
3,331,731
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
||||
Current Liabilities:
|
|
|
|
|
||||
Bank borrowings and overdrafts and current portion of long-term debt
|
|
$
|
2,291
|
|
|
$
|
149
|
|
Accounts payable
|
|
208,995
|
|
|
226,733
|
|
||
Accrued payroll and bonus
|
|
46,356
|
|
|
105,816
|
|
||
Dividends payable
|
|
31,676
|
|
|
31,740
|
|
||
Restructuring and other charges
|
|
2,116
|
|
|
2,116
|
|
||
Other current liabilities
|
|
193,107
|
|
|
193,812
|
|
||
Total Current Liabilities
|
|
484,541
|
|
|
560,366
|
|
||
Long-term debt
|
|
931,635
|
|
|
932,665
|
|
||
Deferred gains
|
|
40,610
|
|
|
41,339
|
|
||
Retirement liabilities
|
|
238,307
|
|
|
238,225
|
|
||
Other liabilities
|
|
105,322
|
|
|
92,085
|
|
||
Total Other Liabilities
|
|
1,315,874
|
|
|
1,304,314
|
|
||
Commitments and Contingencies (Note 12)
|
|
|
|
|
||||
Shareholders’ Equity:
|
|
|
|
|
||||
Common stock 12 1/2¢ par value; authorized 500,000,000 shares; issued 115,761,840 shares as of March 31, 2014 and December 31, 2013; and outstanding 81,221,844 and 81,384,246 shares as of March 31, 2014 and December 31, 2013
|
|
14,470
|
|
|
14,470
|
|
||
Capital in excess of par value
|
|
131,981
|
|
|
131,461
|
|
||
Retained earnings
|
|
3,150,688
|
|
|
3,075,657
|
|
||
Accumulated other comprehensive loss
|
|
(397,282
|
)
|
|
(392,711
|
)
|
||
Treasury stock, at cost - 34,539,996 shares as of March 31, 2014 and 34,377,594 shares as of December 31, 2013
|
|
(1,383,341
|
)
|
|
(1,365,805
|
)
|
||
Total Shareholders’ Equity
|
|
1,516,516
|
|
|
1,463,072
|
|
||
Noncontrolling interest
|
|
4,422
|
|
|
3,979
|
|
||
Total Shareholders’ Equity including noncontrolling interest
|
|
1,520,938
|
|
|
1,467,051
|
|
||
Total Liabilities and Shareholders’ Equity
|
|
$
|
3,321,353
|
|
|
$
|
3,331,731
|
|
|
2
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Net sales
|
|
$
|
770,224
|
|
|
$
|
727,836
|
|
Cost of goods sold
|
|
428,812
|
|
|
416,476
|
|
||
Research and development expenses
|
|
61,504
|
|
|
59,101
|
|
||
Selling and administrative expenses
|
|
123,733
|
|
|
114,653
|
|
||
Restructuring and other charges, net
|
|
122
|
|
|
—
|
|
||
Interest expense
|
|
11,677
|
|
|
11,152
|
|
||
Other expense (income), net
|
|
1,443
|
|
|
(1,069
|
)
|
||
Income before taxes
|
|
142,933
|
|
|
127,523
|
|
||
Taxes on income
|
|
36,226
|
|
|
36,826
|
|
||
Net income
|
|
106,707
|
|
|
90,697
|
|
||
Other comprehensive income (loss), after tax:
|
|
|
|
|
||||
Foreign currency translation adjustments
|
|
(9,396
|
)
|
|
226
|
|
||
Gains (losses) on derivatives qualifying as hedges
|
|
460
|
|
|
(128
|
)
|
||
Pension and postretirement net liability
|
|
4,365
|
|
|
5,132
|
|
||
Other comprehensive income (loss)
|
|
(4,571
|
)
|
|
5,230
|
|
||
Total comprehensive income
|
|
$
|
102,136
|
|
|
$
|
95,927
|
|
Net income per share - basic
|
|
$
|
1.31
|
|
|
$
|
1.11
|
|
Net income per share - diluted
|
|
$
|
1.30
|
|
|
$
|
1.10
|
|
Average number of shares outstanding - basic
|
|
81,053
|
|
|
81,291
|
|
||
Average number of shares outstanding - diluted
|
|
81,732
|
|
|
82,024
|
|
||
Dividends declared per share
|
|
$
|
0.39
|
|
|
$
|
0.34
|
|
|
3
|
|
|
|
Three Months Ended March 31,
|
||||||
|
|
2014
|
|
2013
|
||||
Cash flows from operating activities:
|
|
|
|
|
||||
Net income
|
|
$
|
106,707
|
|
|
$
|
90,697
|
|
Adjustments to reconcile to net cash provided by operating activities:
|
|
|
|
|
||||
Depreciation and amortization
|
|
22,830
|
|
|
19,405
|
|
||
Deferred income taxes
|
|
8,246
|
|
|
12,232
|
|
||
Gain on disposal of assets
|
|
(811
|
)
|
|
(1,085
|
)
|
||
Stock-based compensation
|
|
4,695
|
|
|
4,523
|
|
||
Changes in assets and liabilities, net of Aromor acquisition:
|
|
|
|
|
||||
Trade receivables
|
|
(41,569
|
)
|
|
(34,448
|
)
|
||
Inventories
|
|
(591
|
)
|
|
18,208
|
|
||
Accounts payable
|
|
(11,989
|
)
|
|
(29,339
|
)
|
||
Accruals for incentive compensation
|
|
(62,282
|
)
|
|
(43,178
|
)
|
||
Other current payables and accrued expenses
|
|
1,096
|
|
|
(6,766
|
)
|
||
Other assets
|
|
4,446
|
|
|
3,531
|
|
||
Other liabilities
|
|
4,215
|
|
|
(15,061
|
)
|
||
Net cash provided by operating activities
|
|
34,993
|
|
|
18,719
|
|
||
Cash flows from investing activities:
|
|
|
|
|
||||
Cash paid for acquisition, net of cash received (including $15 million of contingent consideration)
|
|
(102,400
|
)
|
|
—
|
|
||
Additions to property, plant and equipment
|
|
(33,836
|
)
|
|
(29,861
|
)
|
||
Proceeds from termination of life insurance contracts
|
|
12,308
|
|
|
793
|
|
||
Maturity of net investment hedges
|
|
(472
|
)
|
|
530
|
|
||
Proceeds from disposal of assets
|
|
2,042
|
|
|
204
|
|
||
Net cash used in investing activities
|
|
(122,358
|
)
|
|
(28,334
|
)
|
||
Cash flows from financing activities:
|
|
|
|
|
||||
Cash dividends paid to shareholders
|
|
(31,743
|
)
|
|
—
|
|
||
Net change in revolving credit facility borrowings and overdrafts
|
|
1,309
|
|
|
(352
|
)
|
||
Proceeds from issuance of stock under stock plans
|
|
913
|
|
|
1,970
|
|
||
Excess tax benefits on stock-based payments
|
|
315
|
|
|
744
|
|
||
Purchase of treasury stock
|
|
(20,122
|
)
|
|
(14,242
|
)
|
||
Net cash used in financing activities
|
|
(49,328
|
)
|
|
(11,880
|
)
|
||
Effect of exchange rate changes on cash and cash equivalents
|
|
(228
|
)
|
|
(2,881
|
)
|
||
Net change in cash and cash equivalents
|
|
(136,921
|
)
|
|
(24,376
|
)
|
||
Cash and cash equivalents at beginning of year
|
|
405,505
|
|
|
324,422
|
|
||
Cash and cash equivalents at end of period
|
|
$
|
268,584
|
|
|
$
|
300,046
|
|
Interest paid, net of amounts capitalized
|
|
$
|
20,033
|
|
|
$
|
22,167
|
|
Income taxes paid
|
|
$
|
18,681
|
|
|
$
|
21,317
|
|
|
4
|
|
|
Three Months Ended March 31,
|
||||
(SHARES IN THOUSANDS)
|
2014
|
|
2013
|
||
Basic
|
81,053
|
|
|
81,291
|
|
Assumed dilution under stock plans
|
679
|
|
|
733
|
|
Diluted
|
81,732
|
|
|
82,024
|
|
|
5
|
|
|
|
|
|
||||||||
(DOLLARS IN THOUSANDS)
|
Employee-Related Costs
|
|
Accelerated Depreciation
|
|
Total
|
||||||
December 31, 2013
|
$
|
2,116
|
|
|
$
|
—
|
|
|
$
|
2,116
|
|
Additional charges, net
|
122
|
|
|
2,250
|
|
|
2,372
|
|
|||
Non-cash charges
|
—
|
|
|
(2,250
|
)
|
|
(2,250
|
)
|
|||
Payments and other costs
|
(122
|
)
|
|
—
|
|
|
(122
|
)
|
|||
March 31, 2014
|
$
|
2,116
|
|
|
$
|
—
|
|
|
$
|
2,116
|
|
|
March 31,
|
|
December 31,
|
||||
(DOLLARS IN THOUSANDS)
|
2014
|
|
2013
|
||||
Gross carrying value
(1)
|
$
|
219,004
|
|
|
$
|
165,406
|
|
Accumulated amortization
|
(135,739
|
)
|
|
(134,791
|
)
|
||
Total
|
$
|
83,265
|
|
|
$
|
30,615
|
|
(1)
|
Includes patents, trademarks, technological know-how and other intellectual property, valued at acquisition.
|
|
6
|
|
(DOLLARS IN THOUSANDS)
|
Rate
|
|
Maturities
|
|
March 31, 2014
|
|
December 31, 2013
|
|||||
Senior notes - 2007
|
6.40
|
%
|
|
2017-27
|
|
$
|
500,000
|
|
|
$
|
500,000
|
|
Senior notes - 2006
|
6.14
|
%
|
|
2016
|
|
125,000
|
|
|
125,000
|
|
||
Senior notes - 2013
|
3.20
|
%
|
|
2023
|
|
299,760
|
|
|
299,736
|
|
||
Bank overdrafts and other
|
|
|
|
|
2,557
|
|
|
984
|
|
|||
Deferred realized gains on interest rate swaps
|
|
|
|
|
6,609
|
|
|
7,094
|
|
|||
|
|
|
|
|
933,926
|
|
|
932,814
|
|
|||
Less: Current portion of long-term debt
|
|
|
|
|
(2,291
|
)
|
|
(149
|
)
|
|||
|
|
|
|
|
$
|
931,635
|
|
|
$
|
932,665
|
|
|
7
|
|
|
Three Months Ended March 31,
|
||||||
(DOLLARS IN THOUSANDS)
|
2014
|
|
2013
|
||||
Equity-based awards
|
$
|
4,695
|
|
|
$
|
4,523
|
|
Liability-based awards
|
1,245
|
|
|
1,451
|
|
||
Total stock-based compensation expense
|
5,940
|
|
|
5,974
|
|
||
Less: tax benefit
|
(1,726
|
)
|
|
(1,907
|
)
|
||
Total stock-based compensation expense, after tax
|
$
|
4,214
|
|
|
$
|
4,067
|
|
|
8
|
|
|
Three Months Ended March 31,
|
||||||
(DOLLARS IN THOUSANDS)
|
2014
|
|
2013
|
||||
Net sales:
|
|
|
|
||||
Flavors
|
$
|
366,505
|
|
|
$
|
356,361
|
|
Fragrances
|
403,719
|
|
|
371,475
|
|
||
Consolidated
|
$
|
770,224
|
|
|
$
|
727,836
|
|
Segment profit:
|
|
|
|
||||
Flavors
|
$
|
88,063
|
|
|
$
|
83,039
|
|
Fragrances
|
87,166
|
|
|
68,354
|
|
||
Global expenses
|
(16,435
|
)
|
|
(12,589
|
)
|
||
Restructuring and other charges, net
|
(122
|
)
|
|
—
|
|
||
Operational improvement initiative costs
(1)
|
(2,619
|
)
|
|
(1,198
|
)
|
||
Operating profit
|
156,053
|
|
|
137,606
|
|
||
Interest expense
|
(11,677
|
)
|
|
(11,152
|
)
|
||
Other (income) expense, net
|
(1,443
|
)
|
|
1,069
|
|
||
Income before taxes
|
$
|
142,933
|
|
|
$
|
127,523
|
|
(1)
|
Operational improvement initiative costs relate to the closing of a smaller facility in Europe and certain manufacturing activities in Asia, while transferring production to larger facilities in each respective region.
|
|
9
|
|
U.S. Plans
|
Three Months Ended March 31,
|
||||||
(DOLLARS IN THOUSANDS)
|
2014
|
|
2013
|
||||
Service cost for benefits earned
|
$
|
885
|
|
|
$
|
881
|
|
Interest cost on projected benefit obligation
|
6,232
|
|
|
5,741
|
|
||
Expected return on plan assets
|
(6,913
|
)
|
|
(6,557
|
)
|
||
Net amortization and deferrals
|
4,255
|
|
|
5,869
|
|
||
Net periodic benefit cost
|
4,459
|
|
|
5,934
|
|
||
Defined contribution and other retirement plans
|
2,112
|
|
|
1,870
|
|
||
Total expense
|
$
|
6,571
|
|
|
$
|
7,804
|
|
|
|
|
|
||||
Non-U.S. Plans
|
Three Months Ended March 31,
|
||||||
(DOLLARS IN THOUSANDS)
|
2014
|
|
2013
|
||||
Service cost for benefits earned
|
$
|
3,948
|
|
|
$
|
4,143
|
|
Interest cost on projected benefit obligation
|
8,412
|
|
|
7,874
|
|
||
Expected return on plan assets
|
(12,481
|
)
|
|
(12,099
|
)
|
||
Net amortization and deferrals
|
2,955
|
|
|
2,368
|
|
||
Loss due to settlements and special terminations
|
—
|
|
|
40
|
|
||
Net periodic benefit cost
|
2,834
|
|
|
2,326
|
|
||
Defined contribution and other retirement plans
|
1,177
|
|
|
1,291
|
|
||
Total expense
|
$
|
4,011
|
|
|
$
|
3,617
|
|
|
Three Months Ended March 31,
|
||||||
(DOLLARS IN THOUSANDS)
|
2014
|
|
2013
|
||||
Service cost for benefits earned
|
$
|
323
|
|
|
$
|
362
|
|
Interest cost on projected benefit obligation
|
1,238
|
|
|
1,168
|
|
||
Net amortization and deferrals
|
(978
|
)
|
|
(663
|
)
|
||
Total postretirement benefit expense
|
$
|
583
|
|
|
$
|
867
|
|
•
|
Level 1–Quoted prices for
identical
instruments in active markets.
|
•
|
Level 2–Quoted prices for
similar
instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets.
|
|
10
|
|
•
|
Level 3–Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable
.
|
|
March 31, 2014
|
|
December 31, 2013
|
||||||||||||
|
Carrying
Amount |
|
Fair
Value |
|
Carrying
Amount |
|
Fair
Value |
||||||||
(DOLLARS IN THOUSANDS)
|
|
|
|
|
|
|
|
||||||||
Cash and cash equivalents
(1)
|
$
|
268,584
|
|
|
$
|
268,584
|
|
|
$
|
405,505
|
|
|
$
|
405,505
|
|
Credit facilities and bank overdrafts
(2)
|
2,557
|
|
|
2,557
|
|
|
984
|
|
|
984
|
|
||||
Long-term debt:
(3)
|
|
|
|
|
|
|
|
||||||||
Senior notes - 2007
|
500,000
|
|
|
593,909
|
|
|
500,000
|
|
|
590,024
|
|
||||
Senior notes - 2006
|
125,000
|
|
|
137,469
|
|
|
125,000
|
|
|
139,146
|
|
||||
Senior notes - 2013
|
299,760
|
|
|
286,922
|
|
|
299,736
|
|
|
278,770
|
|
(1)
|
The carrying amount of cash and cash equivalents approximates fair value due to the short maturity of those instruments.
|
(2)
|
The carrying amount of our credit facilities and bank overdrafts approximates fair value as the interest rate is reset frequently based on current market rates as well as the short maturity of those instruments.
|
(3)
|
The fair value of our long-term debt was calculated using discounted cash flows applying current interest rates and current credit spreads based on our own credit risk.
|
|
11
|
|
(DOLLARS IN THOUSANDS)
|
March 31, 2014
|
|
December 31, 2013
|
||||
Foreign currency contracts
|
$
|
234,300
|
|
|
$
|
255,500
|
|
Interest rate swaps
|
$
|
375,000
|
|
|
$
|
375,000
|
|
|
March 31, 2014
|
||||||||||
(DOLLARS IN THOUSANDS)
|
Fair Value of
Derivatives Designated as Hedging Instruments |
|
Fair Value of
Derivatives Not Designated as Hedging Instruments |
|
Total Fair
Value |
||||||
Derivative assets
(a)
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
746
|
|
|
$
|
1,943
|
|
|
$
|
2,689
|
|
Interest rate swaps
|
289
|
|
|
—
|
|
|
289
|
|
|||
|
$
|
1,035
|
|
|
$
|
1,943
|
|
|
$
|
2,978
|
|
Derivative liabilities
(b)
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
5,515
|
|
|
$
|
4,039
|
|
|
$
|
9,554
|
|
|
December 31, 2013
|
||||||||||
(DOLLARS IN THOUSANDS)
|
Fair Value of
Derivatives Designated as Hedging Instruments |
|
Fair Value of
Derivatives Not Designated as Hedging Instruments |
|
Total Fair
Value |
||||||
Derivative assets
(a)
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
580
|
|
|
$
|
8,896
|
|
|
$
|
9,476
|
|
Interest rate swaps
|
670
|
|
|
—
|
|
|
670
|
|
|||
|
$
|
1,250
|
|
|
$
|
8,896
|
|
|
$
|
10,146
|
|
Derivative liabilities
(b)
|
|
|
|
|
|
||||||
Foreign currency contracts
|
$
|
6,024
|
|
|
$
|
2,909
|
|
|
$
|
8,933
|
|
(a)
|
Derivative assets are recorded to Prepaid expenses and other current assets in the Consolidated Balance Sheet.
|
|
12
|
|
(b)
|
Derivative liabilities are recorded as Other current liabilities in the Consolidated Balance Sheet.
|
|
Amount of (Loss) Gain
Recognized in OCI on
Derivative (Effective
Portion)
|
|
Location of (Loss) Gain
Reclassified from AOCI into
Income (Effective Portion)
|
|
Amount of (Loss) Gain
Reclassified from
Accumulated OCI into
Income (Effective
Portion)
|
||||||||||||
|
Three Months Ended March 31,
|
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
2014
|
|
2013
|
|
|
|
2014
|
|
2013
|
||||||||
Derivatives in Cash Flow Hedging Relationships:
|
|
|
|
|
|
|
|
|
|
||||||||
Cross currency swap
(1)
|
$
|
—
|
|
|
$
|
118
|
|
|
Other expense (income), net
|
|
$
|
—
|
|
|
$
|
(215
|
)
|
Foreign currency contracts
|
391
|
|
|
1,022
|
|
|
Cost of goods sold
|
|
(753
|
)
|
|
1,713
|
|
||||
Interest rate swaps
(2)
|
69
|
|
|
(1,194
|
)
|
|
Interest expense
|
|
(69
|
)
|
|
—
|
|
||||
Derivatives in Net Investment Hedging Relationships:
|
|
|
|
|
|
|
|
|
|
||||||||
Foreign currency contracts
|
(375
|
)
|
|
1,985
|
|
|
N/A
|
|
—
|
|
|
—
|
|
||||
Total
|
$
|
85
|
|
|
$
|
1,931
|
|
|
|
|
$
|
(822
|
)
|
|
$
|
1,498
|
|
(1)
|
Ten year
swap executed in 2003.
|
(2)
|
Interest rate swaps were entered into as pre-issuance hedges for the
$300 million
bond offering.
|
|
13
|
|
|
Foreign
Currency
Translation
Adjustments
|
|
(Losses) Gains on
Derivatives
Qualifying as
Hedges
|
|
Pension and
Postretirement
Liability
Adjustment
|
|
Total
|
||||||||
(DOLLARS IN THOUSANDS)
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2013
|
$
|
(104,278
|
)
|
|
$
|
(4,012
|
)
|
|
$
|
(284,421
|
)
|
|
$
|
(392,711
|
)
|
OCI before reclassifications
|
(9,396
|
)
|
|
(361
|
)
|
|
—
|
|
|
(9,757
|
)
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
821
|
|
|
4,365
|
|
|
5,186
|
|
||||
Net current period other comprehensive income (loss)
|
(9,396
|
)
|
|
460
|
|
|
4,365
|
|
|
(4,571
|
)
|
||||
Accumulated other comprehensive (loss) income, net of tax, as of March 31, 2014
|
$
|
(113,674
|
)
|
|
$
|
(3,552
|
)
|
|
$
|
(280,056
|
)
|
|
$
|
(397,282
|
)
|
|
Foreign
Currency
Translation
Adjustments
|
|
(Losses) Gains on
Derivatives
Qualifying as
Hedges
|
|
Pension and
Postretirement
Liability
Adjustment
|
|
Total
|
||||||||
(DOLLARS IN THOUSANDS)
|
|
|
|
|
|
|
|
||||||||
Accumulated other comprehensive (loss) income, net of tax, as of December 31, 2012
|
$
|
(93,722
|
)
|
|
$
|
(218
|
)
|
|
$
|
(309,685
|
)
|
|
$
|
(403,625
|
)
|
OCI before reclassifications
|
226
|
|
|
1,370
|
|
|
—
|
|
|
1,596
|
|
||||
Amounts reclassified from AOCI
|
—
|
|
|
(1,498
|
)
|
|
5,132
|
|
|
3,634
|
|
||||
Net current period other comprehensive income (loss)
|
226
|
|
|
(128
|
)
|
|
5,132
|
|
|
5,230
|
|
||||
Accumulated other comprehensive (loss) income, net of tax, as of March 31, 2013
|
$
|
(93,496
|
)
|
|
$
|
(346
|
)
|
|
$
|
(304,553
|
)
|
|
$
|
(398,395
|
)
|
|
14
|
|
|
Three Months Ended March 31, 2014
|
|
Three Months Ended March 31, 2013
|
|
Affected Line Item in the
Consolidated Statement of Comprehensive Income |
||||
(DOLLARS IN THOUSANDS)
|
|
|
|
|
|
||||
(Losses) gains on derivatives qualifying as hedges
|
|
|
|
|
|
||||
Cross currency swap
|
$
|
—
|
|
|
$
|
(215
|
)
|
|
Other (income) expense, net
|
Foreign currency contracts
|
(1,038
|
)
|
|
2,363
|
|
|
Cost of goods sold
|
||
Interest rate swaps
|
(69
|
)
|
|
—
|
|
|
Interest expense
|
||
|
286
|
|
|
(650
|
)
|
|
Provision for income taxes
|
||
|
$
|
(821
|
)
|
|
$
|
1,498
|
|
|
Total, net of income taxes
|
(Losses) gains on pension and postretirement liability adjustments
|
|
|
|
|
|
||||
Settlements / Curtailments
|
$
|
—
|
|
|
$
|
(40
|
)
|
|
(a)
|
Prior service cost
|
1,111
|
|
|
1,098
|
|
|
(a)
|
||
Actuarial losses
|
(7,343
|
)
|
|
(8,672
|
)
|
|
(a)
|
||
|
1,867
|
|
|
2,482
|
|
|
Provision for income taxes
|
||
|
$
|
(4,365
|
)
|
|
$
|
(5,132
|
)
|
|
Total, net of income taxes
|
(a)
|
The amortization of prior service cost and actuarial loss is included in the computation of net periodic benefit cost. Refer to Note 13 of our 2013 Form 10-K for additional information regarding net periodic benefit cost.
|
|
15
|
|
|
16
|
|
|
17
|
|
|
18
|
|
|
19
|
|
|
Three Months Ended March 31,
|
|
|
|||||||
(DOLLARS IN THOUSANDS
EXCEPT PER SHARE AMOUNTS)
|
2014
|
|
2013
|
|
Change
|
|||||
Net sales
|
$
|
770,224
|
|
|
$
|
727,836
|
|
|
6
|
%
|
Cost of goods sold
|
428,812
|
|
|
416,476
|
|
|
3
|
%
|
||
Gross profit
|
341,412
|
|
|
311,360
|
|
|
|
|||
Research and development (R&D) expenses
|
61,504
|
|
|
59,101
|
|
|
4
|
%
|
||
Selling and administrative (S&A) expenses
|
123,733
|
|
|
114,653
|
|
|
8
|
%
|
||
Restructuring and other charges, net
|
122
|
|
|
—
|
|
|
100
|
%
|
||
Operating profit
|
156,053
|
|
|
137,606
|
|
|
|
|||
Interest expense
|
11,677
|
|
|
11,152
|
|
|
5
|
%
|
||
Other expense (income), net
|
1,443
|
|
|
(1,069
|
)
|
|
(235
|
)%
|
||
Income before taxes
|
142,933
|
|
|
127,523
|
|
|
|
|||
Taxes on income
|
36,226
|
|
|
36,826
|
|
|
(2
|
)%
|
||
Net income
|
$
|
106,707
|
|
|
$
|
90,697
|
|
|
18
|
%
|
Diluted EPS
|
$
|
1.30
|
|
|
$
|
1.10
|
|
|
18
|
%
|
Gross margin
|
44.3
|
%
|
|
42.8
|
%
|
|
150.0
|
|
||
R&D as a percentage of sales
|
8.0
|
%
|
|
8.1
|
%
|
|
(10.0
|
)
|
||
S&A as a percentage of sales
|
16.1
|
%
|
|
15.8
|
%
|
|
30.0
|
|
||
Operating margin
|
20.3
|
%
|
|
18.9
|
%
|
|
140.0
|
|
||
Adjusted operating margin
(1)
|
20.6
|
%
|
|
19.1
|
%
|
|
150.0
|
|
||
Effective tax rate
|
25.3
|
%
|
|
28.9
|
%
|
|
(360.0
|
)
|
||
Segment net sales
|
|
|
|
|
|
|||||
Flavors
|
$
|
366,505
|
|
|
$
|
356,361
|
|
|
3
|
%
|
Fragrances
|
403,719
|
|
|
371,475
|
|
|
9
|
%
|
||
Consolidated
|
$
|
770,224
|
|
|
$
|
727,836
|
|
|
|
(1)
|
Adjusted operating margin excludes the Restructuring and other charges, net and operational improvement initiative costs of $2.6 million for the
three
months ended
March 31, 2014
and $1.2 million of operational improvement initiative costs for the three months ended March 31, 2013.
|
|
20
|
|
|
|
% Change in Sales-First Quarter 2014 vs. First Quarter 2013
|
||||||||||||||||
|
|
Fine Fragrances
|
|
Consumer Fragrances
|
|
Ingredients
|
|
Total Frag.
|
|
Flavors
|
|
Total
|
||||||
NOAM
|
Reported
|
29
|
%
|
|
6
|
%
|
|
-1
|
%
|
|
8
|
%
|
|
-4
|
%
|
|
2
|
%
|
EAME
|
Reported
|
22
|
%
|
|
0
|
%
|
|
46
|
%
|
|
15
|
%
|
|
5
|
%
|
|
10
|
%
|
|
Local Currency
(1)
|
19
|
%
|
|
-2
|
%
|
|
43
|
%
|
|
12
|
%
|
|
4
|
%
|
|
9
|
%
|
LA
|
Reported
|
-19
|
%
|
|
-1
|
%
|
|
-6
|
%
|
|
-6
|
%
|
|
19
|
%
|
|
1
|
%
|
|
Local Currency
(1)
|
-16
|
%
|
|
0
|
%
|
|
-6
|
%
|
|
-5
|
%
|
|
23
|
%
|
|
3
|
%
|
GA
|
Reported
|
-4
|
%
|
|
12
|
%
|
|
37
|
%
|
|
14
|
%
|
|
2
|
%
|
|
6
|
%
|
|
Local Currency
(1)
|
-4
|
%
|
|
13
|
%
|
|
43
|
%
|
|
16
|
%
|
|
8
|
%
|
|
11
|
%
|
Total
|
Reported
|
11
|
%
|
|
4
|
%
|
|
22
|
%
|
|
9
|
%
|
|
3
|
%
|
|
6
|
%
|
|
Local Currency
(1)
|
10
|
%
|
|
4
|
%
|
|
22
|
%
|
|
8
|
%
|
|
5
|
%
|
|
7
|
%
|
(1)
|
Local currency sales growth is calculated by translating prior year sales at the exchange rates for the corresponding
2014
period.
|
•
|
NOAM Flavors sales decreased
4%
as a result of low single-digit gains in Beverage that were more than offset by double-digit declines in Sweet and single-digit declines in Savory and Dairy. NOAM Fragrance sales increased
8%
in the
first
quarter of
2014
, principally due to high double-digit gains in Fine Fragrances and Home Care, which were only partially offset by declines in Fabric Care and Fragrance Ingredients.
|
•
|
EAME Flavors LC sales growth of
4%
was led by high single-digit growth in Beverage and Dairy and mid single-digit growth in Savory. EAME Fragrance LC sales increased
12%
overall, driven mainly by high double-digit growth in Fine Fragrances and Fragrance Ingredients, which were partially offset by declines in the Home Care and Personal Wash categories.
|
•
|
LA Flavors LC sales were up
23%
as new wins drove high double-digit gains in Beverages and high single-digit gains in Savory, which were partially offset by mid single-digit declines in Sweet. LA Fragrances LC sales decreased
5%
overall, principally related to double-digit gains within the Personal Wash and Hair Care categories, which were more than offset by double-digit declines in Fine Fragrances and declines within Home Care and Fragrance Ingredients.
|
•
|
GA Flavors had
8%
LC sales growth from high single-digit growth in all categories, driven by new win performance. GA Fragrances LC sales growth of
16%
was driven by double-digit growth in Fabric Care and Fragrance Ingredients as well as high single-digit growth in the Hair Care and Toiletries categories.
|
|
21
|
|
|
Three Months Ended March 31,
|
||||||
(DOLLARS IN THOUSANDS)
|
2014
|
|
2013
|
||||
Segment profit:
|
|
|
|
||||
Flavors
|
$
|
88,063
|
|
|
$
|
83,039
|
|
Fragrances
|
87,166
|
|
|
68,354
|
|
||
Global
|
(16,435
|
)
|
|
(12,589
|
)
|
||
Restructuring and other charges, net
|
(122
|
)
|
|
—
|
|
||
Operational improvement initiative costs
|
(2,619
|
)
|
|
(1,198
|
)
|
||
Operating profit
|
$
|
156,053
|
|
|
$
|
137,606
|
|
Profit margin
|
|
|
|
||||
Flavors
|
24.0
|
%
|
|
23.3
|
%
|
||
Fragrances
|
21.6
|
%
|
|
18.4
|
%
|
||
Consolidated
|
20.3
|
%
|
|
18.9
|
%
|
|
22
|
|
|
23
|
|
|
24
|
|
(1)
|
Adjusted EBITDA and Net Debt, which are non-GAAP measures used for these covenants, are calculated in accordance with the definition in the debt agreements. In this context, these measures are used solely to provide information on the extent to which we are in compliance with debt covenants and may not be comparable to adjusted EBITDA and Net Debt used by other companies. Reconciliations of adjusted EBITDA to net income and net debt to total debt are as follows:
|
|
Twelve Months Ended March 31,
|
||||||
(DOLLARS IN MILLIONS)
|
2014
|
|
2013
|
||||
Net income
|
$
|
369.5
|
|
|
$
|
263.7
|
|
Interest expense
|
47.3
|
|
|
42.2
|
|
||
Income taxes
|
131.1
|
|
|
196.8
|
|
||
Depreciation and amortization
|
86.6
|
|
|
77.1
|
|
||
Specified items
(1)
|
2.3
|
|
|
—
|
|
||
Non-cash items
(2)
|
6.6
|
|
|
17.3
|
|
||
Adjusted EBITDA
|
$
|
643.4
|
|
|
$
|
597.1
|
|
(1)
|
Specified items for the 12 months ended
March 31, 2014
of $2.3 million consist of restructuring charges.
|
(2)
|
Non-cash items, defined as part of Adjusted EBITDA in the terms of the Company’s credit facility agreement dated November 9, 2011, represent all other adjustments to reconcile net income to net cash provided by operations as presented on the Statement of Cash Flows, including gain on disposal of assets, stock-based compensation and pension settlement/curtailment.
|
|
March 31,
|
||||||
(DOLLARS IN MILLIONS)
|
2014
|
|
2013
|
||||
Total debt
|
$
|
933.9
|
|
|
$
|
1,016.0
|
|
Adjustments:
|
|
|
|
||||
Deferred gain on interest rate swaps
|
(6.6
|
)
|
|
(8.6
|
)
|
||
Cash and cash equivalents
|
(268.6
|
)
|
|
(300.0
|
)
|
||
Net debt
|
$
|
658.7
|
|
|
$
|
707.4
|
|
|
25
|
|
•
|
the economic climate for the Company’s industry and demand for the Company’s products;
|
•
|
the ability of the Company to successfully implement its strategic plan and achieve the estimated savings;
|
•
|
fluctuations in the price, quality and availability of raw materials;
|
•
|
the Company's ability to realize the anticipated benefits of the Aromor acquisition on a timely basis, or at all;
|
•
|
decline in consumer confidence and spending;
|
•
|
changes in consumer preferences;
|
•
|
the Company’s ability to predict the short and long-term effects of global economic conditions;
|
•
|
movements in interest rates;
|
•
|
the Company’s ability to implement its business strategy, including the achievement of anticipated cost savings, profitability, realization of price increases and growth targets;
|
•
|
the Company’s ability to successfully develop new and competitive products and enter and expand its sales in new and other emerging markets;
|
•
|
the effects of any unanticipated costs and construction or start-up delays in the expansion of any of the Company’s facilities;
|
•
|
the impact of currency fluctuations or devaluations in the Company’s principal foreign markets;
|
•
|
any adverse impact on the availability, effectiveness and cost of the Company’s hedging and risk management strategies;
|
•
|
uncertainties regarding the outcome of, or funding requirements, related to litigation or settlement of pending litigation, uncertain tax positions or other contingencies;
|
•
|
the impact of possible pension funding obligations and increased pension expense, particularly as a result of changes in asset returns or discount rates, on the Company’s cash flow and results of operations;
|
•
|
the Company’s ability to implement its Fragrance Ingredients Rationalization plan, including the achievement of anticipated cost savings;
|
•
|
the effect of legal and regulatory proceedings, as well as restrictions imposed on the Company, its operations or its representatives by U.S. and foreign governments;
|
•
|
adverse changes in federal, state, local and foreign tax legislation or adverse results of tax audits, assessments, or disputes;
|
•
|
the direct and indirect costs and other financial impact that may result from any business disruptions due to political instability, armed hostilities, incidents of terrorism, natural disasters, or the responses to or repercussion from any of these or similar events or conditions;
|
•
|
the Company’s ability to quickly and effectively implement its disaster recovery and crisis management plans; and
|
•
|
adverse changes due to accounting rules or regulations.
|
|
26
|
|
Item 1.
|
Legal Proceedings
|
|
27
|
|
Item 2.
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
28
|
|
Period
|
Total Number of
Shares
Repurchased
(1)
|
|
Average
Price Paid
per Share
|
|
Total Number of
Shares Purchased as
Part of Publicly
Announced Program
|
|
Approximate Dollar Value
of Shares That May Yet
be Purchased Under the
Program
|
||||||
January 1 - 31, 2014
|
71,241
|
|
|
$
|
85.93
|
|
|
71,241
|
|
|
$
|
192,015,256
|
|
February 1 - 28, 2014
|
81,992
|
|
|
86.91
|
|
|
81,992
|
|
|
184,889,424
|
|
||
March 1 - 31, 2014
|
73,624
|
|
|
93.38
|
|
|
73,624
|
|
|
178,014,213
|
|
||
Total
|
226,857
|
|
|
$
|
88.70
|
|
|
226,857
|
|
|
$
|
178,014,213
|
|
(1)
|
Shares were repurchased pursuant to the repurchase program announced in December 2012, with repurchases beginning in the first quarter of 2013. Repurchases under the program are limited to $250 million in total repurchase price, and the expiration d
ate is December 31, 2016.
Authorization of the repurchase program may be modified, suspended, or discontinued at any time.
|
Item 6.
|
Exhibits
|
10.1
|
|
Form of Restricted Stock Units Agreement under International Flavors & Fragrances Inc. 2010 Stock Award and Incentive Plan
|
10.2
|
|
Form of Equity Choice Program Award Agreement under International Flavors & Fragrances Inc. 2010 Stock Award and Incentive Plan
|
10.3
|
|
Restricted Stock Units Award Agreement, dated as of March 6, 2014, between International Flavors and Fragrances Inc. and Hernan Vaisman
|
31.1
|
|
Certification of Douglas D. Tough pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Kevin C. Berryman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
|
Certification of Douglas D. Tough and Kevin C. Berryman pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002.
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extensions Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
29
|
|
Dated:
|
|
May 6, 2014
|
By:
|
|
/s/ Douglas D. Tough
|
|
|
|
|
|
Douglas D. Tough
|
|
|
|
|
|
Chairman of the Board and Chief Executive Officer
|
|
|
|
|
|
|
Dated:
|
|
May 6, 2014
|
By:
|
|
/s/ Kevin C. Berryman
|
|
|
|
|
|
Kevin C. Berryman
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
30
|
|
Number
|
|
Description
|
10.1
|
|
Form of Restricted Stock Units Agreement under International Flavors & Fragrances Inc. 2010 Stock Award and Incentive Plan
|
10.2
|
|
Form of Equity Choice Program Award Agreement under International Flavors & Fragrances Inc. 2010 Stock Award and Incentive Plan
|
10.3
|
|
Restricted Stock Units Award Agreement, dated as of March 6, 2014, between International Flavors and Fragrances Inc. and Hernan Vaisman
|
31.1
|
|
Certification of Douglas D. Tough pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Kevin C. Berryman pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32
|
|
Certification of Douglas D. Tough and Kevin C. Berryman pursuant to 18 U.S.C. Section 1350 as adopted pursuant to the Sarbanes-Oxley Act of 2002.
|
101.INS
|
|
XBRL Instance Document
|
101.SCH
|
|
XBRL Taxonomy Extensions Schema
|
101.CAL
|
|
XBRL Taxonomy Extension Calculation Linkbase
|
101.DEF
|
|
XBRL Taxonomy Extension Definition Linkbase
|
101.LAB
|
|
XBRL Taxonomy Extension Label Linkbase
|
101.PRE
|
|
XBRL Taxonomy Extension Presentation Linkbase
|
|
31
|
|
RSU Award Information
|
|||||
Grant Date
|
Award Value on Grant Date ($US)
|
Number of RSUs Granted
|
Closing Share Price on Grant Date ($US)
|
Vesting Date
|
Settlement of Award
|
[DATE]
|
[$___]
|
[__________]
|
[$__.__]
|
[Date]
|
Awards are settled within [60 days] of Vesting by delivery of [one Share of Company Common Stock] [Cash equal to the Fair Market Value of one Share of Company Common Stock on the Vesting Date]] for each RSU being settled
|
1.
|
Amount of RSU Award
. As of the Grant Date, the Participant shall be eligible to receive an RSU Award in the number of RSUs specified on the first page of the RSU Award Agreement. The RSU Award provides Participant with a contractual right to receive [one share of Stock][cash equal to the Fair Market Value of one share of Stock as of the Vesting Date] for each RSU being settled upon vesting.
|
2.
|
Eligibility for Award
. A Participant’s eligibility for an RSU Award shall be at the discretion of the Committee as authorized in Section 5 of the Plan. The grant of an RSU Award is a one-time benefit and does not create any contractual or other right to receive any future RSU Award.
|
3.
|
Vesting and Account.
The RSU Award vests on the date set forth on the first page of the RSU Award Agreement if not previously forfeited, and is 0% vested before expiration of this period Prior to vesting, the Company or its designated agent shall maintain a bookkeeping account reflecting the number of RSUs credited to a Participant’s account.
|
4.
|
Settlement of the Award.
Upon vesting, the RSU Award will be settled by delivery of [one share of Stock][cash equal to the Fair Market Value (as defined in the Plan) of one share of Stock] as of the Vesting Date, for each RSU being settled. Such settlement shall occur promptly on or following the vesting of each RSU.
|
5.
|
Voting Rights and Dividends.
RSUs do not provide voting or dividend rights until fully vested and no dividends or dividend equivalents will be paid or credited on any unvested RSUs.
|
6.
|
Termination of Employment or Leave of Absence
. A Participant’s rights under the RSU Award following termination of employment or leave of absence shall be determined in accordance with the following provisions:
|
a.
|
Termination Not for Cause or Early Retirement
. If the Participant is involuntarily terminated not for Cause or voluntarily terminates for Early Retirement, a pro-rata portion of all outstanding unvested RSUs shall remain outstanding and will become vested at the Applicable Vesting Date as though Participant had not had a termination of employment under this subsection 6(a). The pro-rata portion
|
b.
|
Resignation or Termination With Cause
. If a Participant resigns, or is terminated by the Company for Cause, then all outstanding unvested RSUs will be immediately forfeited.
|
c.
|
Normal Retirement or Disability
. If a Participant terminates employment due to Normal Retirement or Disability, then all outstanding unvested RSUs will remain outstanding and will become vested at the Applicable Vesting Date as though the Participant had not had a termination of employment under this subsection 6(c). Upon vesting, such RSUs will be settled promptly, provided that if vesting occurs at an Applicable Vesting Date earlier than the Award vesting date, settlement will occur within fourteen (14) days after the Award vesting date.
|
d.
|
Death
. If a Participant terminates employment due to death, then all outstanding unvested RSUs will become immediately vested.
|
e.
|
Leave of Absence
. If a Participant is not in active employment for any portion of the vesting period as a result of a paid or unpaid leave of absence, the terms of any unvested RSU may be adjusted, subject to local legal requirements and applicable Company policies that govern leaves of absence.
|
7.
|
Change in Control
. In the event the Company undergoes a “Change in Control” as defined in Section 9 of the Plan, RSU Awards shall be treated as provided for in Section 9 of the Plan.
|
8.
|
Clawback and Recoupment Provisions
. Notwithstanding anything herein to the contrary, if a Participant is designated by the Company as grade level 7 or above for any portion of the vesting period, any RSU Award made or payable shall be subject to the clawback, recoupment and forfeiture provisions of Section 10 of the Plan and Section 7 of the ESP, if applicable. By acknowledging the RSU Award Agreement, the Participant acknowledges that any and all RSU Awards previously granted to the Participant under Section 6 or Section 7 of the Plan prior to the Grant Date, and any other cash or Stock provided to the Participant prior to or following the Grant Date under the RSU Award or otherwise under the Plan, are subject to the provisions of Section 10 of the Plan and Section 7 of the ESP, if applicable.
|
9.
|
Limits on Transfers of Awards
. Except as provided by the Committee, no RSU Award and no right under any RSU Award, shall be assignable, alienable, saleable,
|
10.
|
Administration
.
|
a.
|
Administration
. The Board has delegated administrative authority to the Committee and the RSU Award shall be administered by the Committee or a subset of the Committee that satisfies the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder (the “Code”) with respect to any incentive compensation subject to Code Section 162(m).
|
b.
|
Powers and Duties
. The Committee shall have sole discretion and authority to make any and all determinations necessary or advisable for administration of an RSU Award and may adopt, amend or revoke any rule or regulation established for the proper administration of an RSU Award. The Committee shall have the ability to modify the RSU Award provisions, to the extent necessary, or delegate such authority, to accommodate any changes in law or regulations in jurisdictions in which Participants will receive RSU Awards. The Committee will oversee RSU Award calculations. All interpretations, decisions, or determinations made by the Committee pursuant to an RSU Award shall be final and conclusive.
|
11.
|
Amendment; Termination of the RSU Award.
The Committee has the right to revise, modify, or terminate an RSU Award in whole or in part at any time or for any reason, and the right to modify any RSU Award amount in accordance with Section 11(e) of the Plan.
|
12.
|
Tax Liability and Withholding
. The Participant shall be responsible for any tax liability that may arise as a result of the payments contemplated by an RSU Award or these RSU Terms and Conditions in accordance with Section 11(d) of the Plan. The Participant acknowledges the Company is authorized to withhold
taxes due, or potentially payable in connection with any payment of an RSU Award in accordance with Section 11(d) of the Plan. Further, the Participant agrees to any deduction or setoff by the Company as provided under Section 11(f) of the Plan.
|
13.
|
Compliance with Code Section 409A
. Section 11(j) of the Plan is hereby incorporated by reference.
|
14.
|
Severability; Survival of Terms
. Should any provision of an RSU Award or these RSU Terms and Conditions be held by a court of competent jurisdiction to be unenforceable, such holding shall not affect the validity of the remainder of the RSU Award or these RSU Terms and Conditions. These RSU Terms and Conditions shall apply to and bind the Participant and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors.
|
15.
|
Entire Agreement; Dispute Resolution
. These RSU Terms and Conditions and all addendums hereto, the RSU Award Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof.
|
16.
|
Non U.S. Residents
. Rights and restrictions for Participants residing in foreign countries may differ and shall be based on applicable foreign law and will be governed by Section 11(K) of the Plan.
|
17.
|
Electronic Delivery
. The Company may, in its sole discretion, deliver any documents related to an RSU Award by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
|
18.
|
Governing Law
. These RSU Terms and Conditions and the RSU Award Agreement shall be governed by and construed according to the laws of the State of New York and the United States without regard to principles of conflict of law.
|
19.
|
Consent for Data Transfer
. By accepting this RSU Award Agreement, the Participant voluntarily acknowledges and consents to the collection, use processing and transfer of personal data as described herein, including for the purpose of managing and administering the Plan, certain personal information, including name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, and details of all options or any other entitlement to Shares or other equity of the Company awarded, canceled, purchased, vested, unvested or outstanding in Participant’s favor (“Data”). The Company and/or its affiliates will transfer Data among themselves as necessary for the purpose of implementation, administration and management of the Plan and may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. Participant authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares or equity on Participant’s behalf to a broker or other third party with whom Participant may elect to deposit any shares Stock acquired pursuant to the Plan. Participant may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect Participant’s ability to participate in the Plan.
|
20.
|
Addendum.
Notwithstanding any provision in these RSU Terms and Conditions to the contrary, the RSUs shall be subject to any special terms and conditions for Participant’s country of residence (and country of employment, if different) set forth
|
21.
|
Private Placement.
The grant of RSUs is not intended to be a public offering of securities in Participant’s country of residence (and country of employment, if different). The Company has not submitted any registration statement, prospectus or other filings with the local securities authorities (unless otherwise required under local law), and the grant of the RSUs is not subject to the supervision of the local securities authorities.
|
22.
|
Notices
. Any notice required or permitted to be given under this RSU Award Agreement or the RSU Terms and Conditions shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:
|
Total Award Amount
|
Vesting
|
Fair Market Value* of IFF Common Stock on Grant Date
|
[$]
|
[DATE]
|
[$]
|
Award Value
($US)
|
Award Type
|
Percentage of Award
|
Equity Award Amount
|
[$]
|
PRS*
|
[ _%]
|
[# of Matched Shares/RSUs]
PRS is assigned an adjustment factor of 120%
|
[$]
|
SSAR*
|
[ _%]
|
[ __ SSARs]
Number of SSARs granted is based on 4.5 times the elected SSAR award value divided by the Fair Market Value* of IFF Common Stock on the Grant Date.
|
[$]
|
RSU*
|
[ _%]
|
[ __ RSUs]
|
1.
|
Amount of ECP Award
. As of the Grant Date, the Participant shall be eligible to receive an ECP Award in the forms and amounts set forth on the first page of the ECP Award Agreement.
|
2.
|
Eligibility for Award
. A Participant’s eligibility for an ECP Award shall be at the discretion of the Committee. Eligibility for an ECP Award in one period does not guarantee eligibility for an ECP Award in a later period.
|
3.
|
Vesting of Award.
The ECP Award vests on the date set forth on the first page of the ESP Award Agreement if not previously forfeited, and is 0% vested before expiration of this period.
|
4.
|
ECP Award Allocations
. Participants may elect to allocate their total ECP Award between three types of ECP Award grants in 5% increments: (i) Purchase Restricted Stock (“
PRS
”), (ii) Stock-Settled Appreciation Rights (“
SSARs
”), and (iii) Restricted Stock Units (“
RSUs
”). If a Participant does not elect an ECP Award type within the time period specified by the Committee, 100% of the ECP Award will be allocated to SSARs by default or such other default selection specified by the Committee.
|
5.
|
Purchase Restricted Stock (“PRS”)
. PRS are restricted Shares (or RSUs for non-U.S. Participants) granted under Section 6 of the Plan. As used herein, the term “
PRS
” shall mean Shares or RSUs representing PRS, as applicable. There is a 20% adjustment upward of the ECP Award value for any allocation of the ESP Award elected in PRS (By way of example, if a Participant elects to receive $100 of his or her ECP in PRS, the Participant will be required to fund, and will receive matching PRS from the Company, valued at $120). If a Participant chooses PRS, then he or she must deliver funds (or Shares with an equivalent value) equal to the dollar amount of the ECP Award that he or she is electing to receive in PRS (including the 20% adjustment described above). Upon receipt of the funds or Shares by the Company, the Participant shall receive (a) PRS in the form of Shares calculated based on the Fair Market Value of a Share on the Grant Date (“
Purchased PRS
”) and (b) a match of PRS in the form of Shares or RSUs, as determined by the Company based on the location of the Participant (the “
Matched PRS
”). Cash shall be paid to Participant in lieu of any fractional shares.
|
(1)
|
Evidence of PRS Awards.
Purchased PRS and Matched PRS shall be issued and registered in the name of the Participant and evidence of ownership of the Purchased PRS and Matched PRS shall be retained by the Company in a restricted account maintained by the Company’s designated agent.
|
(2)
|
Voting Rights.
The Participant shall be entitled to vote PRS (including Matched PRS that are in the form of Shares, but not Matched PRS that are in the form of RSUs) on any matter submitted to a vote of holders of Shares, and shall have all other rights of a shareholder of the Company except as expressly limited by the ECP Award Agreement or the Plan.
|
(3)
|
Dividends and Distributions.
Purchased PRS and Matched PRS in the form of Shares earn dividends (or dividend equivalents in the case of RSUs) and are entitled to distributions during the vesting period if and to the extent that the Participant is the record owner of such PRS on any record date for such a dividend or distribution and Participant has not forfeited the Matched PRS on or before the payment date for such dividend or distribution.
|
(a)
|
In the event of a cash dividend or cash distribution on Shares, such dividend or distribution shall be paid in cash to Participant at the time of payment to shareholders generally and shall be non-forfeitable.
|
(b)
|
In the event of any non-cash dividend or distribution in the form of property other than Shares, such property shall be distributed in respect of Purchased PRS, but the Company (or its designated agent) shall retain in its custody the property so distributed in respect of Matched PRS, which property will become vested if and to the same extent the underlying Matched PRS becomes vested and, to the greatest extent practicable, shall be subject to all other terms and conditions applied to the underlying Matched PRS, including in the event of any dividends or distributions paid in respect of such property; provided, however, that any dividend or distribution of rights that expire before the vesting date will be unrestricted and exercisable by Participant in accordance with their terms.
|
(c)
|
In the event of a dividend or distribution in the form of Shares or a stock split of Shares, the Shares so issued or delivered will be deemed to be additional Purchased PRS or Matched PRS, as the case may be, and in the case of Matched PRS will become vested if and to the same extent as the underlying Matched PRS. If the PRS are in the form of Shares, the dividends and distributions will be made in Shares; if the PRS are in the form of RSUs the dividends and distributions will be made in the form of RSUs.
|
(4)
|
Restrictions on PRS
The PRS shall be subject to the following restrictions during the vesting period:
|
(a)
|
Purchased PRS.
The Participant shall have the right to withdraw, transfer, sell, assign, pledge or encumber (subject to Section 11(b) of the Plan) any or all of the Purchased PRS at any time, by written notice addressed to the Company; provided that such withdrawal,
|
(b)
|
Matched PRS
. Matched PRS are subject to the risk of forfeiture and other restrictions specified in the ECP Award Agreement and these ECP Terms and Conditions. Participant shall have no right to withdraw or otherwise receive delivery of Matched PRS until such time as the Matched PRS have become vested. Until such time as the Matched PRS become vested, Participant may not transfer Matched PRS or any rights thereunder to any third party other than by will or the applicable laws of descent and distribution, except for transfers to a Beneficiary upon the death of Participant or otherwise if and to the extent permitted by the Company and subject to the conditions under Section 11(b) of the Plan. Participant agrees to execute and deliver to the Company one or more stock powers, in such form as may be specified by the Company, authorizing the transfer of the Matched Shares to the Company, upon the request of the Company.
|
6.
|
Stock-Settled Appreciation Rights (“SSARs”)
. SSARs are an award granted under Section 6 of the Plan, under which Participants receive a contractual right to receive the value in Shares of the appreciation in the Company’s Share price from the SSAR Grant Date to the date the SSAR is exercised by the Participant.
|
(a)
|
Number of SSARS Granted
. The total number of SSARs granted by the Company to a Participant is set forth on the first page of the ECP Award Agreement and is based on 4.5 times the Participant’s SSARs award value divided by the Fair Market Value of a Share on the Grant Date. By way of example:
|
(b)
|
Evidence of SSAR Awards
. Prior to vesting, the Company (or its designated agent) shall maintain a bookkeeping account reflecting the number of SSARs granted as part of an ECP Award, and credited to a Participant’s account.
|
(c)
|
Exercise and Payment of Awards
. A Participant may exercise vested SSARs by delivering written notice to the Company stating the number of Shares as to which SSARS are being exercised and the name in which Participant wishes the Shares to be issued. SSARs may only be exercised on a date that the Fair Market Value of a Share exceeds the Base Price (as defined below) and only if the SSARs are otherwise exercisable at such date. Upon exercise of SSARs, a Participant shall be entitled to receive payment in Shares, calculated as follows:
|
(d)
|
Exercise Period
. SSARs are exercisable for a seven (7) year period, as measured from the Grant Date or such earlier date as such SSAR may terminate as described herein. If, on the date the SSARs expire or terminate, the Fair Market Value of a Share exceeds the Base Price and the SSARs are otherwise exercisable, the SSARs shall be automatically exercised.
|
(e)
|
Dividend and Voting Rights
. SSARS do not earn dividends and are not entitled to any voting rights.
|
B.
|
Restricted Stock Units (“RSUs”)
. RSUs are an Award granted under Section 6 of the Plan, under which Participants receive a contractual right to receive unrestricted Shares upon vesting.
|
(a)
|
Number of RSUs granted
. The total number of RSUs granted by the Company to a Participant is set forth on the first page of the ECP Award Agreement and is based on the Fair Market Value of a Share on the Grant Date.
|
(b)
|
Evidence of RSU Award.
Prior to vesting, the Company or its designated agent shall maintain a bookkeeping account reflecting the number of RSUs granted as part of an ECP Award, and credited to a Participant’s account.
|
(c)
|
Settlement of RSUs
. Upon vesting, the RSUs will be settled by delivery of one share of Company Common Stock for each RSU being settled. Such settlement shall occur promptly on or following the vesting of each RSU.
|
(d)
|
Dividends/Dividend Equivalents and Voting Rights
.
RSUs do not provide voting or dividend rights until fully vested and no dividends will be paid or credited on any RSUs.
|
7.
|
Termination of Employment
. The following provisions will govern the treatment of a Participant’s ECP Award in the event of a termination of employment.
|
A.
|
Termination for Cause or Resignation.
If a Participant terminates employment for Cause (as defined in the Plan) or voluntarily terminates (other than a Normal Retirement or Early Retirement), then:
|
(1)
|
All outstanding unvested
PRS Matched Shares
will be immediately forfeited;
|
(2)
|
All outstanding unvested
SSARs
will be immediately forfeited and all vested SSARs (i) will cease to be exercisable and will terminate three (3) months after termination of employment with the Company (or an affiliate of the Company) due to a voluntary termination by the Participant (but in no event after the expiration date of the award grant) and (ii) all outstanding vested SSARs will cease to be exercisable and will immediately terminate in the case of a termination for Cause by the Company; and,
|
(3)
|
All outstanding unvested
RSUs
will be immediately forfeited.
|
B.
|
Termination due to Disability or Normal Retirement
. If a Participant terminates employment due to Disability or Normal Retirement, then:
|
(1)
|
All outstanding unvested
Matched Shares
will remain outstanding and will become vested at the Award vesting date as though the Participant had not had a termination of employment under this subsection 4.B.;
|
(2)
|
All outstanding unvested
SSARs
will remain outstanding and will become exercisable at the Award vesting date as though the Participant had not had a termination of employment under this subsection 4.B.; and,
|
(3)
|
All outstanding unvested
RSUs
will remain outstanding and will become vested at the Applicable Vesting Date as though the Participant had not had a termination of employment under this subsection 4.B. Upon vesting, such RSUs will be settled promptly, provided that if vesting occurs at an Applicable Vesting Date earlier than the Award vesting date, settlement will occur within fourteen (14) days after the Award vesting date. “
Applicable Vesting Date
” means March 1 of the calendar year following the calendar year in which the Participant terminates due to Disability or Normal Retirement or, if earlier, the Award vesting date.
|
C.
|
Termination Not for Cause or Early Retirement.
If a Participant involuntarily terminates employment not for Cause, or voluntarily terminates due to Early Retirement (as defined in the Plan), then:
|
(1)
|
A pro rata portion of all outstanding unvested
Matched Shares
will remain outstanding and will become vested at the Award vesting date as though the Participant had not had a termination of employment under this Section 4.C.;
|
(2)
|
A pro rata portion of all outstanding unvested
SSARs
will remain outstanding and will become exercisable at the Award vesting date as though the Participant had not had a termination of employment under this subsection 4.C. SSARs that were vested at the time of the Participant’s termination of employment and those that become vested thereafter will remain outstanding and exercisable until the expiration date of the Award grant, at which date the SSARs will cease to be exercisable and will terminate; and
|
(3)
|
A pro rata portion of all outstanding unvested
RSUs
will remain outstanding and will become vested at the Applicable Vesting Date as though the Participant had not had such a termination of employment under this Section 4.C. Such outstanding RSUs will be promptly settled, provided that if vesting occurs at an Applicable Vesting Date earlier than the Award vesting date, settlement will occur within fourteen (14) days after the Award vesting date.
|
(4)
|
For purposes of subsections C. (1) through C. (3) above, the pro rata portion will be determined by multiplying the number of unvested Matched Shares, SSARs or RSUs, as the case may be, by a fraction with the numerator of which is
(x)
the number of days from the Grant Date to the date of the Participant’s termination of employment and
(y)
the denominator of which is 1,066. A Participant’s PRS, SSARs or RSUs, as the case may be, that had not vested before such termination of employment under this subsection 4.C. and which are not included in the pro rata portion subject to continued vesting will be immediately forfeited.
|
D.
|
Termination due to Death
. If a Participant terminates employment due to death, then:
|
(1)
|
All outstanding unvested
Matched Shares
will become immediately vested;
|
(2)
|
All outstanding unvested
SSARs
will become immediately vested and exercisable, and all vested SSARs will remain outstanding and exercisable until the expiration date of the grant, at which date the SSARs will cease to be exercisable and will terminate; and
|
(3)
|
All outstanding unvested
RSUs
will become immediately vested and settled.
|
8.
|
Change in Control
. In the event the Company undergoes a “Change in Control” as defined in Section 9 of the Plan, ECP Awards shall be treated as provided in Section 9 of the Plan.
|
9.
|
Clawback and Recoupment Provisions
. Notwithstanding anything herein to the contrary, any ECP Award paid or payable in connection with the ECP shall be subject to the clawback, recoupment and forfeiture provisions of Section 10 of the Plan and Section 7 of the ESP. By acknowledging the ECP Award Agreement, the Participant acknowledges that any and all ECP Awards previously granted to the Participant under Section 6 or Section 7 of the Plan prior to the Grant Date, and any other cash or Shares provided to the Participant prior to or following the Grant Date under the ECP or otherwise under the Plan, are subject to the provisions of Section 10 of the Plan and Section 7 of the ESP.
|
10.
|
Limits on Transfers of Awards
. Except as provided by the Committee, no ECP Award and no right under any ECP Award, shall be assignable, alienable, saleable,
|
11.
|
Administration.
|
A.
|
Administration
. The Board has delegated administrative authority to the Committee and the ECP shall be administered by the Committee or a subset of the Committee that satisfies the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder (the “Code”) with respect to any incentive compensation subject to Code Section 162(m).
|
B.
|
Powers and Duties
. The Committee shall have sole discretion and authority to make any and all determinations necessary or advisable for administration of the ECP and may adopt, amend or revoke any rule or regulation established for the proper administration of the ECP. The Committee shall have the ability to modify the ECP provisions, to the extent necessary, or delegate such authority, to accommodate any changes in law or regulations in jurisdictions in which Participants will receive ECP Awards. The Committee will oversee ECP Award calculations. All interpretations, decisions, or determinations made by the Committee pursuant to the ECP shall be final and conclusive.
|
12.
|
Amendment; Termination of the ECP.
The Committee has the right to revise, modify, or terminate the ECP in whole or in part at any time or for any reason, and the right to modify any ECP Award amount in accordance with Section 11(e) of the Plan.
|
13.
|
Tax Liability and Withholding
. The Participant shall be responsible for any tax liability that may arise as a result of the payments contemplated by an ECP Award or these ECP Terms and Conditions in accordance with Section 11(d) of the Plan. The Participant acknowledges the Company is authorized to withhold taxes due, or potentially payable in connection with any ECP Award Payment in accordance with Section 11(d) of the Plan. Further, the Participant agrees to any deduction or setoff by the Company as provided under Section 11(f) of the Plan.
|
14.
|
Compliance with Code Section 409A
. Section 11(j) of the Plan is hereby incorporated by reference.
|
15.
|
Severability; Survival of Terms
. Should any provision of an ECP Award or these ECP Terms and Conditions be held by a court of competent jurisdiction to be unenforceable, such holding shall not affect the validity of the remainder of the ECP Award or these ECP Terms and Conditions. These ECP Terms and Conditions shall apply to and bind the Participant and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors.
|
16.
|
Dispute Resolution
. These ECP Terms and Conditions, the ECP Award Agreement and the Plan constitute the entire agreement of the parties with respect to the subject
|
17.
|
Non U.S. Residents
. Rights and restrictions for Participants residing in foreign countries may differ and shall be based on applicable foreign law and will be governed by Section 11(k) of the Plan.
|
18.
|
Electronic Delivery
. The Company may, in its sole discretion, deliver any documents related to this ECP Award or ECP Award Agreement by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, to agree to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
|
19.
|
Governing Law
. This ECP Award Agreement and the ECP Terms and Conditions shall be governed by and construed according to the laws of the State of New York and of the United States without regard to principles of conflict of law.
|
20.
|
Consent for Data Transfer
. By accepting this ECP Agreement, the Participant voluntarily acknowledges and consents to the collection, use processing and transfer of personal data as described herein, including for the purpose of managing and administering the Plan, certain personal information, including name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any Shares or directorships held in the Company, and details of all options or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or outstanding in Participant’s favor (“
Data
”). The Company and/or its affiliates will transfer Data among themselves as necessary for the purpose of implementation, administration and management of the Plan and may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. Participant authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares or other equity of the Company on Participant’s behalf to a broker or other third party with whom Participant may elect to deposit any Shares or equity acquired pursuant to the Plan. Participant may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect Participant’s ability to participate in the Plan.
|
21.
|
Addendum.
Notwithstanding any provision in these ECP Terms and Conditions to the contrary, the PSRs, SSARs and RSUs shall be subject to any special terms and conditions for Participant’s country of residence (and country of employment, if different) set forth in an addendum to these ECP Terms and Conditions (an “
Addendum
”). Further, if Participant transfers Participant’s residence and/or
|
22.
|
Private Placement.
The grant of PSRs, SSARs and RSUs is not intended to be a public offering of securities in Participant’s country of residence (and country of employment, if different). The Company has not submitted any registration statement, prospectus or other filings with the local securities authorities (unless otherwise required under local law), and the grant of the PSRs, SSARs and RSUs is not subject to the supervision of the local securities authorities.
|
23.
|
Notices
. Any notice required or permitted to be given under these ECP Terms and Conditions or the ECP Award Agreement shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:
|
|
|
RSU Award Information
|
|||
Grant Date
|
Award Value on Grant Date ($US)
|
Number of RSUs Granted
|
Closing Share Price on Grant Date ($US)
|
Vesting Date
|
Settlement of Award
|
March 6, 2014
|
$325,000
|
3,413
|
$95.23
|
March 6, 2015
|
Awards are settled by delivery of one Share of Company Common Stock for each RSU being settled
|
1.
|
Amount of RSU Award
. As of the Grant Date, the Participant shall be eligible to receive an RSU Award in the number of RSUs specified on the first page of the RSU Award Agreement. The RSU Award provides Participant with a contractual right to receive one share of Stock for each RSU being settled upon vesting.
|
2.
|
Eligibility for Award
. The Participant’s eligibility for an RSU Award shall be at the discretion of the Committee as authorized in Section 5 of the Plan. The grant of the RSU Award is a one-time benefit and does not create any contractual or other right to receive any future RSU Award.
|
3.
|
Vesting and Account.
The RSU Award vests on the date set forth on the first page of the RSU Award Agreement if not previously forfeited, and is 0% vested before expiration of this period Prior to vesting, the Company or its designated agent shall maintain a bookkeeping account reflecting the number of RSUs credited to the Participant’s account.
|
4.
|
Settlement of the Award.
Upon vesting, the RSU Award will be settled by delivery of one share of Stock as of the Vesting Date, for each RSU being settled. Such settlement shall occur promptly on or following the vesting of each RSU.
|
5.
|
Voting Rights and Dividends.
RSUs do not provide voting or dividend rights until fully vested and no dividends or dividend equivalents will be paid or credited on any unvested RSUs.
|
6.
|
Termination of Employment or Leave of Absence
. A Participant’s rights under the RSU Award following termination of employment or leave of absence shall be determined in accordance with the following provisions:
|
a.
|
Termination Not for Cause
. If the Participant is involuntarily terminated not for Cause, a pro-rata portion of all outstanding unvested RSUs shall remain outstanding and will become vested at the Applicable Vesting Date as though Participant had not had a termination of employment under this subsection 6(a). The pro-rata portion shall be determined by multiplying the number of unvested RSUs by a fraction, the numerator of which is (x) the number of days from the Grant Date to the Participant’s termination of employment and (y) the
|
b.
|
Resignation or Termination With Cause
. If a Participant resigns, or is terminated by the Company for Cause, then all outstanding unvested RSUs will be immediately forfeited.
|
c.
|
Early or Normal Retirement or Disability
. If a Participant terminates employment due to Early Retirement, Normal Retirement or Disability, then all outstanding unvested RSUs will remain outstanding and will become vested at the Applicable Vesting Date as though the Participant had not had a termination of employment under this subsection 6(c). Upon vesting, such RSUs will be settled promptly, provided that if vesting occurs at an Applicable Vesting Date earlier than the Award vesting date, settlement will occur within fourteen (14) days after the Award vesting date.
|
d.
|
Death
. If a Participant terminates employment due to death, then all outstanding unvested RSUs will become immediately vested.
|
7.
|
Clawback and Recoupment Provisions
. The RSU Award shall be subject to the clawback, recoupment and forfeiture provisions of Section 10 of the Plan and Section 7 of the ESP. By acknowledging the RSU Award Agreement, the Participant acknowledges that any and all RSU Awards previously granted to the Participant under Section 6 or Section 7 of the Plan prior to the Grant Date, and any other cash or Stock provided to the Participant prior to or following the Grant Date under the RSU Award or otherwise under the Plan, are subject to the provisions of Section 10 of the Plan and Section 7 of the ESP.
|
8.
|
Limits on Transfers of Awards
. Except as provided by the Committee, the RSU Award and any right under the RSU Award, shall not be assignable, alienable, saleable, or transferable by the Participant other than by will or by the laws of descent and distribution in accordance with Section 11(b) of the Plan.
|
9.
|
Administration
.
|
a.
|
Administration
. The Board has delegated administrative authority to the Committee and the RSU Award shall be administered by the Committee or a subset of the Committee that satisfies the requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended, and regulations promulgated thereunder (the “Code”) with respect to any incentive compensation subject to Code Section 162(m).
|
b.
|
Powers and Duties
. The Committee shall have sole discretion and authority to make any and all determinations necessary or advisable for administration of the RSU Award and may adopt, amend or revoke any rule or regulation established for the proper administration of the RSU Award. The Committee shall have the ability to modify the RSU Award provisions, to the extent necessary, or delegate such authority, to accommodate any changes in law or regulations in jurisdictions in which Participant will receive the RSU Award. The Committee will oversee the RSU Award calculations. All interpretations, decisions, or determinations made by the Committee pursuant to the RSU Award shall be final and conclusive.
|
10.
|
Amendment; Termination of the RSU Award.
The Committee has the right to revise, modify, or terminate the RSU Award in whole or in part at any time or for any reason, and the right to modify the RSU Award amount in accordance with Section 11(e) of the Plan.
|
11.
|
Tax Liability and Withholding
. The Participant shall be responsible for any tax liability that may arise as a result of the payments contemplated by the RSU Award or these RSU Terms and Conditions in accordance with Section 11(d) of the Plan. The Participant acknowledges the Company is authorized to withhold
taxes due, or potentially payable in connection with any payment of the RSU Award in accordance with Section 11(d) of the Plan. Further, the Participant agrees to any deduction or setoff by the Company as provided under Section 11(f) of the Plan.
|
12.
|
Compliance with Code Section 409A
. Section 11(j) of the Plan is hereby incorporated by reference.
|
13.
|
Severability; Survival of Terms
. Should any provision of the RSU Award or these RSU Terms and Conditions be held by a court of competent jurisdiction to be unenforceable, such holding shall not affect the validity of the remainder of the RSU Award or these RSU Terms and Conditions. These RSU Terms and Conditions shall apply to and bind the Participant and the Company and their respective permitted assignees and transferees, heirs, legatees, executors, administrators and legal successors.
|
14.
|
Entire Agreement; Dispute Resolution
. These RSU Terms and Conditions and all addendums hereto, the RSU Award Agreement and the Plan constitute the entire agreement of the parties with respect to the subject matter hereof and supersede in their entirety all prior undertakings and agreements of the Company and the Participant with respect to the subject matter hereof.
|
15.
|
Non U.S. Residents
. Rights and restrictions for Participants residing in foreign countries may differ and shall be based on applicable foreign law and will be governed by Section 11(K) of the Plan.
|
16.
|
Electronic Delivery
. The Company may, in its sole discretion, deliver any documents related to the RSU Award by electronic means. The Participant hereby
|
17.
|
Governing Law
. These RSU Terms and Conditions and the RSU Award Agreement shall be governed by and construed according to the laws of the State of New York and the United States without regard to principles of conflict of law.
|
18.
|
Consent for Data Transfer
. By accepting the RSU Award Agreement, the Participant voluntarily acknowledges and consents to the collection, use processing and transfer of personal data as described herein, including for the purpose of managing and administering the Plan, certain personal information, including name, home address and telephone number, date of birth, social security number or other employee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, and details of all options or any other entitlement to Shares or other equity of the Company awarded, canceled, purchased, vested, unvested or outstanding in Participant’s favor (“Data”). The Company and/or its affiliates will transfer Data among themselves as necessary for the purpose of implementation, administration and management of the Plan and may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. Participant authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Participant’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of Shares or equity on Participant’s behalf to a broker or other third party with whom Participant may elect to deposit any shares Stock acquired pursuant to the Plan. Participant may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect Participant’s ability to participate in the Plan.
|
19.
|
Addendum.
Notwithstanding any provision in these RSU Terms and Conditions to the contrary, the RSU Award shall be subject to any special terms and conditions for Participant’s country of residence set forth in an addendum to these RSU Terms and Conditions (an “
Addendum
”). Further, if Participant transfers Participant’s residence to another country, at the time of transfer, the special terms and conditions for such country will apply to Participant to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and regulations or to facilitate the operation and administration of the RSU Award and the Plan (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate Participant’s transfer). Any applicable Addendum shall constitute part of these RSU Terms and Conditions.
|
20.
|
Private Placement.
The grant of RSUs is not intended to be a public offering of securities in Participant’s country of residence (and country of employment, if
|
21.
|
Notices
. Any notice required or permitted to be given under this RSU Award Agreement or the RSU Terms and Conditions shall be in writing and shall be deemed to have been given when delivered personally or by courier, or sent by certified or registered mail, postage prepaid, return receipt requested, duly addressed to the party concerned at the address indicated below or to such changed address as such party may subsequently by similar process give notice of:
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of International Flavors & Fragrances Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: May 6, 2014
|
|||
|
By:
|
/s/ Douglas D. Tough
|
|
|
Name:
|
Douglas D. Tough
|
|
|
Title:
|
Chairman of the Board and Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q of International Flavors & Fragrances Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
Dated: May 6, 2014
|
|||
|
By:
|
/s/ Kevin C. Berryman
|
|
|
Name:
|
Kevin C. Berryman
|
|
|
Title:
|
Executive Vice President and Chief Financial Officer
|
By:
|
/s/ Douglas D. Tough
|
Name:
|
Douglas D. Tough
|
Title:
|
Chairman of the Board and Chief Executive Officer
|
Dated:
|
May 6, 2014
|
By:
|
/s/ Kevin C. Berryman
|
Name:
|
Kevin C. Berryman
|
Title:
|
Executive Vice President and Chief Financial Officer
|
Dated:
|
May 6, 2014
|