SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000.
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
Commission File Number 1-7626
DOING BUSINESS AS
SENSIENT TECHNOLOGIES CORPORATION
WISCONSIN 39-0561070 --------- ---------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.) INCORPORATION OR ORGANIZATION) 777 EAST WISCONSIN AVENUE MILWAUKEE, WISCONSIN 53202-5304 ------------------------------- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES AND ZIP CODE) |
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (414) 271-6755
SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:
TITLE OF EACH CLASS NAME OF EXCHANGE ------------------- ON WHICH REGISTERED Common Stock, $.10 par value ------------------- Associated Preferred Share Purchase Rights New York Stock Exchange, Inc. |
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
None
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes |X| No |_|
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. |_|
There were 48,264,808 shares of Common Stock outstanding as of February 28, 2001.
The aggregate market value of the voting Common Stock held by non-affiliates of the Registrant as of February 28, 2001 was $1,035,781,378. For purposes of this computation only, the Registrant's directors and executive officers were considered to be affiliates of the Registrant. Such characterization shall not be construed to be an admission or determination for any other purpose that such persons are affiliates of the Registrant.
DOCUMENTS INCORPORATED BY REFERENCE
1. Portions of the Company's Annual Report to Shareholders for the fiscal year ended December 31, 2000 (Parts I, II and IV of Form 10-K)
2. Portions of the Company's Notice of Annual Meeting and Proxy Statement dated March 28, 2001 (Part III of Form 10-K)
PART I
Item 1. Business
General
Universal Foods Corporation, which is doing business as Sensient Technologies Corporation (the "Company"), was incorporated in 1882 in Wisconsin. Its principal executive offices are located at 777 East Wisconsin Avenue, Milwaukee, Wisconsin 53202-5304, telephone (414) 271-6755.
On November 6, 2000, the Company began doing business under its new name, Sensient Technologies Corporation (NYSE: SXT).
On September 7, 2000, the Company's Board of Directors approved a change of the Company's fiscal year end from September 30 to December 31. The first annual period reported under the new fiscal year is for the twelve months ended December 31, 2000, as set forth herein.
In June 2000, the Company's Board of Directors approved a plan to sell the operations of the Company's Red Star Yeast & Products Division ("Red Star") in order to focus attention on faster growing, more profitable markets. Accordingly, commencing with the quarter ended June 30, 2000, the Company reported results from Red Star as a discontinued operation.
On February 23, 2001, the Company completed the sale of substantially all the assets of Red Star for a total business value of $122 million. As a result of this divestiture, the Company received cash proceeds of approximately $113 million, with $4 million received in the third quarter of 2000 and $109 million in February 2001. The Company also retained assets valued at approximately $9 million pursuant to a U.S. government antitrust order. The cash proceeds will be used to fund future acquisitions, repurchase stock and pay down debt.
Description of Business
Sensient Technologies Corporation is a manufacturer and marketer of high-performance components that add functionality to foods, cosmetics, pharmaceuticals and other products. The Company provides a full range of food and beverage flavors and colors, cosmetic and pharmaceutical additives, ink-jet inks, and ingredients for many of the world's best-known brands. The Company's principal products include:
o Flavors, flavor enhancers and bionutrients,
o Fragrances and aroma chemicals,
o Dehydrated vegetables and other food ingredients,
o Natural and synthetic colors,
o Ink-jet inks and high purity organic dyes.
The Company's operations, except for the Asia Pacific Division, are managed on a products and services basis. The Company's two reportable segments are its Flavors & Fragrances Group and its Color Group.
Flavors & Fragrances Group
The Company is a leading manufacturer and supplier of flavors, ingredient systems and aroma chemicals to the dairy, food processing, beverage, personal care and household products industries worldwide. The Company has a broad, distinctive and fully integrated product offering, ranging from savory flavor components to fully formulated flavor systems for dairy, beverage, and processed food applications.
The Flavors & Fragrances Group produces flavor and fragrance products that impart a desired taste, texture, aroma or other functionality to a broad range of consumer and other products. This Group includes the Company's dehydrated vegetable products business, which produces ingredients for food processors.
The Flavors & Fragrances Group operates principally through the Company's subsidiaries, Sensient Flavors Inc. (formerly, Universal Flavor Corporation) and Rogers Foods, Inc. The Group's plants are located in California, Illinois, Indiana, Michigan, Missouri, Wisconsin, Belgium, Canada, France, Germany, Ireland, Italy, Mexico, the Netherlands, Spain and the United Kingdom.
During 1998 the Company integrated its bioproducts business (which was formerly operated as a separate division known as Red Star BioProducts) into its Flavors & Fragrances Group. The bioproducts business serves the food, animal feed processing, and bionutrient industries with a broad line of natural extracts and specialty flavors. The Company produces various specialty extracts from yeast, vegetable proteins, meat, milk protein and other natural products which are used primarily as savory flavor, texture modifiers and enhancers in processed foods. The nutritional and functional properties of these extracts also make them useful in enzyme and pharmaceutical production. The Company believes it is the leading supplier of yeast extracts and the second leading supplier of hydrolyzed vegetable proteins in the U.S. market.
Strategic acquisitions have expanded the Company's flavors and fragrances product lines and processing capabilities. In January 1998, the Company acquired Arancia Ingredients Especiales, S.A. de C.V., a manufacturer of savory flavors and other food ingredients, improving access to the rapidly growing Latin American savory flavor market. In April 1998, the Company acquired an English savory and seasonings flavor manufacturer, DC Flavours Ltd., which further expanded the Company's technology and worldwide market presence and also gives the Company access to the snack food market, the fastest growing segment in Europe's food market. In May 1998, the acquisition of substantially all of the assets and business of the beverage business of German flavor manufacturer Sundi GmbH, with its emphasis on all-natural flavor ingredients, provided the Company with a point of entry into Germany, Europe's largest flavor market.
During the quarter ended June 30, 2000, the Company integrated its former Dehydrated Products Division into its Flavors & Fragrances Group. The Company believes it is the second largest producer of dehydrated onion and garlic products in the United States. The Company is also one of the largest producers and distributors of chili powder, paprika, chili pepper and dehydrated vegetables such as parsley, celery and spinach. Domestically, the Company sells dehydrated products to food manufacturers for use as ingredients and also for repackaging under private labels for sale to the retail market and to the food service industry.
The Company believes it is one of the leading dehydrators of specialty vegetables in Europe, operating through its Sensient Specialty Vegetables business. Advanced dehydration technologies utilized by Sensient Specialty Vegetables permit faster and more effective rehydration of ingredients used in many of today's popular convenience foods.
Color Group
Although statistics are not available, the Company believes that it is one of the world's largest producers of synthetic and natural colors. The Company also believes that it is the world's leading manufacturer of certified food colors. The Company makes synthetic and natural colors for domestic and international producers of beverages, bakery products, processed foods, confections, pet foods, cosmetics and pharmaceuticals. It also makes ink-jet inks and other high purity organic dyes.
The Company believes that its advanced process technology, state-of-the-art laboratory facilities and equipment, and a complete range of synthetic and natural color products constitute the basis for its market leadership position. Strategic acquisitions continue to enhance product and process technology synergies, as well as increasing its international presence.
The Color Group operates principally through the Company's subsidiary, Warner-Jenkinson Company, Inc., which has its principal manufacturing facilities in Missouri. Other Color Group facilities are located in New Jersey, Canada, Mexico, France, Italy, the United Kingdom, Germany, and the Netherlands.
Effective January 1, 2000, the Company expanded its European color business by acquiring Dr. Marcus GmbH, a leading manufacturer of natural colors located near Hamburg, Germany. On January 27, 2000, the Company acquired 100% of the ownership of Monarch Food Colors, a manufacturer of colors for the food, pharmaceutical and cosmetic industries located in High Ridge, Missouri. The Company had previously held a 24% ownership interest in Monarch Food Colors as a result of its April 1999 acquisition of Pointing Holdings Limited.
In February 1999, the Company expanded its cosmetics business through the purchase of Les Colorants Wackherr, a Paris-based producer of colors for major cosmetics houses throughout Europe, Asia and North America. Also in February 1999, the Company further developed its natural colors offerings by acquiring certain assets of Quimica Universal, a Peruvian producer of carminic acid and annatto, natural colors used in food and other applications. The Company acquired Pointing Holdings Limited, a
manufacturer of food colors located in the United Kingdom, in April 1999. The Pointing international color business significantly strengthened the Company's worldwide color capabilities. In August 1999, the Company acquired certain assets of Nino Fornaciari fu Riccardo SNC, an Italian producer of natural colors for the food and beverage industries.
In September 1998, the Company acquired Italian natural color producer Reggiana Antociani S.R.L., a company which specializes in the production of anthocyanin, which is extracted from grape skins and black carrots for use in fruit juices, flavored teas, wine coolers and fruit fillings, strengthening the Company's offerings in natural colors, the fastest growing segment of the worldwide food colors market.
The Company became a supplier of ink-jet inks for the ink-jet printer market with the acquisition of Tricon Colors in 1997. Also in 1997, the Company strengthened its presence in Latin America by acquiring certain assets of the food color business of Pyosa, S.A. de C.V., which is located in Monterrey, Mexico.
Asia Pacific Division
The Asia Pacific Division focuses on marketing the Company's diverse product line in the Pacific Rim under one name. Through its Sensient Asia Pacific Division, the Company offers a full range of products from its Flavors & Fragrances Group and Color Group, as well as products developed by regional technical teams to appeal to local preferences. Sales, marketing and technical functions are managed through the Asia Pacific Division's headquarters in Singapore. Manufacturing operations are located in Australia, China, New Zealand, and the Philippines.
Research and Development/Quality Assurance
The development of specialized products and services is a complex, technical process calling upon the combined knowledge and talents of the Company's research, development and quality assurance personnel. The Company believes that its competitive advantage lies in its ability to work with its customers to develop and deliver high-performance products that address the distinct needs of those customers.
The Company's research, development and quality assurance personnel make significant contributions toward improving existing products and developing new products tailored to customer needs, while providing on-going technical support and know-how to the Company's manufacturing activities. The Company employs approximately 220 people in research and development and quality assurance.
Expenditures for research and development in 2000 were $18,294,000 compared with $18,245,000 million in the calendar year ended December 31, 1999, and $17,055,000 in the calendar year ended December 31, 1998.
As part of its commitment to quality as a competitive advantage, the Company has undertaken efforts to achieve certification to the requirements established by the International Organization for Standardization in Geneva, Switzerland, through its ISO 9000 series of quality standards. Sites currently
certified include Sensient Flavors & Fragrances Group plants in the United States, Spain, Italy, Mexico, Belgium, Germany, the United Kingdom, Canada, France and the Netherlands; Sensient Color Group plants in the United States, the Netherlands, Mexico and United Kingdom; and Asia Pacific facilities in the Philippines.
Products and Application Activities
With the Company's strategic focus on high-performance components that bring life to products, the Company focuses on application activities and processing improvements in support of its customers' numerous new and reformulated products. The Company maintains many of its proprietary processes and formulae as trade secrets and under secrecy agreements with customers.
Lower calorie ingredients and sweeteners for dairy, food and beverage applications are a focus of development activity for the Flavors & Fragrances Group. Formulations for functional and textured beverages and flavors for snack and main meal items offer opportunities as well. Development of savory flavors accelerated with the integration of the Company's BioProducts Division in 1998 and the Dehydrated Products Division in 2000. The development of yeast derivatives and other specialty ingredients also provides growth opportunities in bionutrients and biotechnology markets, such as pharmaceuticals, vitamins, vaccines and bioremediation.
The natural food color market is a primary target for the Color Group. The acquisitions of Reggiana, Forniciari and Dr. Marcus (as discussed above) have provided new technologies in the extraction and purification of natural colors and have enabled rapid growth in the beverage, dairy and snack food segments. Recent expansion of the Color Group's purification technology will also open further opportunities in the ink-jet market.
Raw Materials
In producing its products, the Company uses a wide range of raw materials. Chemicals used to produce certified colors are obtained from several domestic and foreign suppliers. Raw materials for natural colors, such as carmine, beta-carotene, annatto and turmeric, are purchased from overseas and U.S. sources. In the production of flavors and fragrances, the principal raw materials include essential oils, aroma chemicals, botanicals, fruits and juices, and are primarily obtained from local vendors. Flavor enhancers and secondary flavors are produced from yeast, and vegetable materials such as corn and soybean. Chili peppers, onion, garlic and other vegetables are acquired under annual contracts with numerous growers in the western United States and Europe.
The Company believes that alternate sources of materials are available to enable it to maintain its competitive position in the event of an interruption in the supply of raw materials from a single supplier.
Competition
All Company products are sold in highly competitive markets. While no single factor is determinative, the Company's competitive position is based principally on process and applications expertise, quality, technological advances resulting from its research and development, and customer service and support. Because of its highly differentiated products, the Company competes with only a few companies across multiple ingredient lines, and is more likely to encounter competition specific to an individual product.
o Flavors and Fragrances. Competition to supply the flavors and fragrances industries has taken on an increasingly global nature. Most of the Company's customers do not buy their entire flavor and/or fragrance products from a single supplier. As a result, the Company does not compete with a single company in all product categories. Competition for the supply of flavors and fragrances is based on the development of customized ingredients for new and reformulated customer products, as well as on quality, customer service and price. Competition to supply dehydrated vegetable products is present through several large and small domestic competitors, as well competitors in other countries. Competition for the supply of dehydrated vegetables is based principally on product quality, customer service and price.
o Color. Competition in the color market is diverse, with the majority of the Company's competitors specializing in either synthetic dyes or natural colors. The Company believes that it gains a competitive advantage as the only major basic manufacturer of a full range of color products, including synthetic dyes and pigments as well as natural colors. Competition in the supply of ink-jet inks is based principally upon price, quality and service, as well as product development and technical capabilities. The Company competes against two main domestic competitors in supplying ink- jet inks and believes it gains an advantage as a low cost, high quality supplier.
o Asia Pacific. Because of the broad array of products available to customers of the Asia Pacific Division, the Company is able to offer a wider product base than many of its competitors. Competition is based upon reliability in product quality, service and price as well as technical support available to customers.
Foreign Operations
The information appearing under the heading "Geographic Information" in Note 11 to the Consolidated Financial Statements of the Company, which appears on pages 40 and 41 of the Company's 2000 Annual Report, is incorporated herein by reference.
Patents, Formulae and Trademarks
The Company owns or controls many patents, formulae and trademarks related to its businesses. The businesses are not materially dependent upon patent or trademark protection; however, trademarks, patents and formulae are important for the continued consistent growth of the Company.
Employees
As of December 31, 2000, the Company employed 3,722 persons worldwide including 349 employees with discontinued operations.
Regulation
Compliance with government provisions regulating the discharge of material into the environment, or otherwise relating to the protection of the environment, did not have a material adverse effect on the Company's operations for the year covered by this report. Compliance is not expected to have a material adverse effect in the succeeding two years as well. As is true with the food industry in general, the production, packaging, labeling and distribution of certain of the products of the Company are subject to the regulations of various federal, state and local governmental agencies, in particular the U.S. Food & Drug Administration.
Item 2. Properties
The locations and the nature of the primary production operations of the Company's principal facilities are as follows:
Flavors & Fragrances Group:
United States
Amboy, IL: Ingredients and flavors
Fenton, MO: Flavors
Greenfield, CA: Dehydrated products
Harbor Beach, MI: Flavors and flavor enhancers
Indianapolis, IN: Flavors
Juneau, WI: Flavor enhancers and extracts
Livingston, CA: Dehydrated products
Turlock, CA: Dehydrated products
Belgium
Brussels: Natural health ingredients
Heverlee: Ingredients and flavors
Canada
Cornwall, Ontario: Flavor enhancers and extracts
Delta, B.C: Ingredients and flavors
Rexdale, Ontario: Ingredients and flavors
Tara, Ontario: Flavors and flavor enhancers
France
Marchais: Dehydrated products
Strasbourg: Flavor enhancers and extracts
Germany
Bremen: Flavors and juice/flavor systems
Great Britain
Bletchley: Flavors and extracts
Felinfach (Wales): Flavors and flavor enhancers
Ireland
Middleton: Dehydrated products
Italy
Milan: Flavors
Mexico
Celaya: Flavor enhancers and savory flavors
Mexico City/Vallejo: Fragrances
Tlalnepantla: Ingredients and flavors
Netherlands
Elboorg: Dehydrated products
Spain
Granada: Fragrances, aroma chemicals and extracts
Color Group:
United States
Elmwood Park, NJ (two plants):
Colors/dyes and ink-jet products
High Ridge, MO: Natural and synthetic colors
South Plainfield, NJ (two plants):
Cosmetic/pharmaceutical colors
St. Louis, MO: Natural and synthetic colors
Canada
Kingston, Ontario: Synthetic and natural colors
France
Saint Ouen L'Aumone: Cosmetic colors
Germany
Geesthacht (Hamburg): Natural colors
Great Britain
King's Lynn: Natural and synthetic colors and dyes
Prudhoe: Synthetic colors
Italy
Reggio Emilia (Parma) (two plants):
Natural colors
Mexico
Lerma: Synthetic and natural colors
Netherlands
Amersfoort: Synthetic colors
Asia Pacific:
Australia
Keysborough, Victoria:
Colors and flavors
China
Guangzhou (leased facility):
Colors and flavors
New Zealand
Mt. Wellington: Flavors
Philippines
Pasig City (Manila) (leased facility):
Colors and flavors
Except as noted above, all properties are owned and none is held subject to any material encumbrance.
Item 3. Legal Proceedings
The Company is a party to various legal proceedings related to its business. The Company believes that adverse decisions in these proceedings would not, individually or in the aggregate, subject the Company to damages of a material amount.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders during the last quarter of 2000.
Executive Officers of the Registrant
The executive officers of the Company and their ages as of March 1, 2001, are as follows:
Name Age Position ---- --- -------- Kenneth P. Manning 59 Chairman, President and Chief Executive Officer Richard Carney 50 Vice President - Human Resources Steven O. Cordier 45 Vice President - Administration Michael duBois 54 President - Flavors & Fragrances Group John L. Hammond 54 Vice President, Secretary and General Counsel Richard F. Hobbs 53 Vice President and Chief Financial Officer Jack H. Koberstine 44 Vice President, Marketing John R. Mudd 45 President - Color Group Ralph G. Pickles 54 President - Asia Pacific Stephen J. Rolfs 36 Vice President - Treasurer Jorge E. Slater 53 President - Dehydrated Products Dr. Ho-Seung Yang 53 Vice President - Technologies |
The Company has employed all of the individuals named above for at least the past five years, except Messrs. duBois, Hammond, Koberstine, Mudd, Rolfs, Slater, and Yang.
Mr. duBois joined the Company in May 1998 as President of the Flavor Division. From 1994 until joining the Company, Mr. duBois was employed by Bush Boake Allen, Inc., a food flavor and fragrance company, as Vice President Sales and Marketing, Flavors North America, and as Vice President/General Manager, Seasonings Division. From 1991 to 1994, he served as Vice President - Sales and Marketing, Flavor and Fruit Division for Sanofi Bio-Industries, a flavor company. Prior to joining Sanofi, Mr. duBois held several positions with Firmenich, Incorporated, a fragrance and flavor company.
Mr. Hammond joined the Company in January 1998, as Vice President, Secretary and General Counsel. From 1992 to 1997, Mr. Hammond was employed by The Providence Journal Company, a newspaper, cable and broadcast television company, initially as Vice President - Legal, and subsequently as Vice President, General Counsel and Chief Administrative Officer. From 1989 to 1992, Mr. Hammond was Vice President, General Counsel and Secretary of Landstar System, Inc., a trucking company. Prior to that,
Mr. Hammond was employed by The Singer Company for ten years and was Deputy General Counsel at the time of his departure.
Mr. Koberstine joined the Company in 1998 as Vice President/General Manager of the Dairy and Food Ingredients business of the Company's Flavor Division. In April 2000, Mr. Koberstine became President of the Company's Red Star Yeast & Products Division, and in February 2001, he became Vice President, Marketing. Prior to joining the Company, Mr. Koberstine was employed by Hercules, Inc. for 15 years, with his final assignment as Director of Sales and Marketing, North America, for that company's food ingredients business.
Mr. Mudd re-joined the Company in January 2000 and became President of the Company's Color Division in February 2000. Mr. Mudd served as President of Monarch Food Colors from May 1993 until the Company acquired that business in January 2000. Prior to his service with Monarch Food Colors, the Company had employed Mr. Mudd for approximately 12 years.
Mr. Rolfs joined the Company as Manager - Corporate Development in 1997 and was appointed Vice President and Treasurer in July 2000. Prior to that appointment, he served as the Company's Vice President-Development since 1998. Prior to joining the Company, Mr. Rolfs was employed by Brown-Forman Corporation, a beverage and consumer products company, from 1993 to 1997, initially as a Financial Analyst and then as Assistant Vice President. Prior to that, Mr. Rolfs worked for the public accounting firm of Ernst & Young from 1986 to 1991.
Mr. Slater was appointed President - Dehydrated Products Division in 2000. Mr. Slater was first employed by the Company in August of 1996 and served as Vice President and Managing Director of the Asia Pacific Division prior to being elected its President in April 1998. From 1994 to 1996, Mr. Slater worked at McCormick & Company, Inc., a spice and seasonings company, as Vice President and Managing Director Asia Pacific. Prior to joining McCormick & Company, Inc., Mr. Slater worked for Dole Packaged Foods Company and, prior to that, for International Flavors and Fragrances, Inc.
Dr. Yang was elected Vice President - Technologies in January 1998. From 1990 to 1998, Dr. Yang was employed by SK Chemicals in Seoul, Korea, where he held the positions of managing director of corporate planning and development, managing director, group chairman's office and director, life science and development.
PART II
Item 5. Market For The Registrant's Common Stock and Related Stockholder Matters
The only market in which the common stock of the Company is traded is the New York Stock Exchange. The range of the high and low sales prices as quoted in the New York Stock Exchange - Composite Transaction tape for the common stock of the Company and the amount of dividends declared for fiscal 2000 appearing under "Common Stock Prices and Dividends" on page 46 of the 2000 Annual Report to Shareholders are incorporated by reference. In fiscal 2000, common stock dividends were paid on a quarterly basis, and it is expected that quarterly dividends will continue to be paid in the future.
On February 10, 2000, the Board of Directors established a share repurchase program that authorizes the Company to repurchase up to five million shares of the Company's common stock. As of March 9, 2001, 3,046,300 shares had been repurchased under this program. This program replaced a share repurchase program authorized in 1994 under which the Company had repurchased the entire five million shares authorized for repurchase.
On June 25, 1998, the Board of Directors of the Company adopted a preferred stock shareholder rights plan which is described in Note 6 of Notes to Consolidated Financial Statements - "Shareholders' Equity" on pages 36 and 37 of the 2000 Annual Report to Shareholders and which is incorporated by reference.
The number of shareholders of record on March 9, 2001 was 4,782.
Item 6. Selected Financial Data
The selected financial data required by this item is incorporated by reference from the "Five Year Review" and the notes thereto on pages 44 and 45 of the 2000 Annual Report to Shareholders.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
The information required by this item is set forth under "Management's Analysis of Operations and Financial Condition" on pages 22 through 27 of the 2000 Annual Report to Shareholders and is incorporated by reference.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The information required by this item is set forth under "Market Risk Factors" on pages 25 and 26 of the 2000 Annual Report to Shareholders and is incorporated by reference.
Item 8. Financial Statements and Supplementary Data
The financial statements and supplementary data required by this item are set forth on pages 28 through 43 of the 2000 Annual Report to Shareholders and are incorporated by reference.
Item 9. Disagreements on Accounting and Financial Disclosure
None.
PART III
Item 10. Directors and Executive Officers of the Registrant
Information regarding directors and officers appearing under "Election of Directors" (ending at "Committees of the Board of Directors") and "Section 16(a) Beneficial Ownership Reporting Compliance" on pages two through five and page 17, respectively, of the Proxy Statement for Annual Meeting of Shareholders of the Company dated March 28, 2001 ("Proxy Statement"), is incorporated by reference. Additional information regarding executive officers appears at the end of Part I above.
Item 11. Executive Compensation
Information relating to compensation of directors and officers is incorporated by reference from "Director Compensation and Benefits" on page seven of the Proxy Statement, "Compensation and Development Committee Report" on pages 11 and 12 of the Proxy Statement, and "Executive Compensation" on pages 13 through 15 of the Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management
The discussion of securities ownership of certain beneficial owners and management appearing under "Principal Shareholders" on pages nine and 10 of the Proxy Statement is incorporated by reference.
Item 13. Certain Relationships and Related Transactions
There are no family relationships between any of the directors, nominees for director and officers of the Company nor any arrangement or understanding between any director or officer or any other person pursuant to which any of the nominees has been nominated. No director, nominee for director or officer had any material interest, direct or indirect, in any business transaction of the Company or any subsidiary during the period January 1, 2000, through December 31, 2000, or in any such proposed transaction. In the ordinary course of business, the Company engages in business transactions with companies whose officers or directors are also directors of the Company. These transactions are routine in nature and are conducted on an arm's-length basis. The terms of any such transactions are comparable at all times to those obtainable in business transactions with unrelated persons.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a) Documents filed:
1. and 2: Financial Statements and Financial Statement Schedules.
See below for "List of Financial Statements and
Financial Statement Schedules." 3. Exhibits: The Exhibit Index following this report is incorporated by reference herein. No instruments defining the rights of holders of long-term debt of the Company and its consolidated subsidiaries are filed herewith because, with the exception of Exhibit 4.2, no long-term debt instrument authorizes securities exceeding 10% of the total consolidated assets of the Company. The Company agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request. |
(b) Reports on Form 8-K:
No reports on Form 8-K were filed during the quarter
ended December 31, 2000. List of Financial Statements and Financial Statement Schedules Page Reference in 1. Financial Statements 2000 Annual Report To Shareholders --------------- The following consolidated financial statements of Sensient Technologies Corporation and subsidiaries are incorporated by reference from the Annual Report to Shareholders for the year ended December 31, 2000: Independent Auditors' Report 43 Consolidated Balance Sheets-December 31, 2000 and 1999 29 Consolidated Statements of Earnings - Years ended December 31, 2000, 1999 and 1998 28 Consolidated Statements of Shareholders' Equity - Years ended December 31, 2000, 1999 and 1998 30-31 Consolidated Statements of Cash Flows - Years ended December 31, 2000, 1999 and 1998 32 Notes to Consolidated Financial Statements 33-42 |
Page Reference in 2. Financial Statement Schedules Form 10-K Form 10-K --------- Independent Auditors' Report 17 Schedule II - Valuation and Qualifying Accounts and Reserves 18 |
All other schedules are omitted because they are inapplicable, not required by the instructions or the information is included in the consolidated financial statements or notes thereto.
Independent Auditors' Report
To the Shareholders and Board of Directors of Sensient Technologies Corporation:
We have audited the consolidated financial statements of Universal Foods Corporation d/b/a Sensient Technologies Corporation and subsidiaries (the "Company") as of December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, and have issued our report thereon dated February 23, 2001, which report includes an explanatory paragraph as to the change in accounting of amortizing unrecognized net gains and losses related to the Company's obligation for post-retirement benefits. Such consolidated financial statements and report are included in your 2000 Annual Report to Shareholders and are incorporated herein by reference. Our audits also included the consolidated financial statement schedule of Sensient Technologies Corporation, listed in Item 14. This consolidated financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, such consolidated financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly in all material respects the information set forth therein.
/s/ Deloitte & Touche LLP Milwaukee, Wisconsin February 23, 2001 |
SCHEDULE II
SENSIENT TECHNOLOGIES CORPORATION AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
(IN THOUSANDS)
YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
Additions Charged Valuation Accounts Deducted in the Balance at to Costs Balance Balance Sheet From the Assets To Beginning of and At End of Which They Apply Period Expenses Deductions(A) Period ---------------- ------ -------- ------------- ------ 1998 Allowance for losses: $4,059 $1,211 $359 $4,911 Trade accounts receivable ====== ====== ==== ====== 1999 Allowance for losses: $4,911 $283 $1,143 $4.051 Trade accounts receivable ====== ==== ====== ====== 2000 Allowance for losses: $4,051 $826 $2,029 $2,848 Trade accounts receivable ====== ==== ====== ====== |
(A) Accounts written off, less recoveries and reclassification of net assets held for sale in 2000.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/ John L. Hammond --------------------------- John L. Hammond Vice President, Secretary & General Counsel Dated: March 28, 2001 |
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below as of March 28, 2001, by the following persons on behalf of the Registrant and in the capacities indicated.
/s/ Kenneth P. Manning /s/ James A.D. Croft ------------------------------ ------------------------------ Kenneth P. Manning James A.D. Croft Chairman of the Board, Director President and Chief Executive Officer /s/ Richard F. Hobbs /s/ Alberto Fernandez ------------------------------ ------------------------------ Richard F. Hobbs Alberto Fernandez Vice President and Chief Director Financial Officer /s/ Richard A. Abdoo /s/ James L. Forbes ------------------------------ ------------------------------ Richard A. Abdoo James L. Forbes Director Director /s/ Michael E. Batten /s/ Dr. Carol I. Waslien Ghazaii ------------------------------ --------------------------------- Michael E. Batten Dr. Carol I. Waslien Ghazaii Director Director /s/ John F. Bergstrom /s/ William V. Hickey ------------------------------ ------------------------------ John F. Bergstrom William V. Hickey Director Director /s/ Dr. Fergus M. Clydesdale /s/ Essie Whitelaw ------------------------------ ------------------------------ Dr. Fergus M. Clydesdale Essie Whitelaw Director Director |
UNIVERSAL FOODS CORPORATION
D/B/A SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2000 ANNUAL REPORT ON FORM 10-K
Exhibit Incorporated by Filed Number Description Reference From Herewith ------ ----------- -------------- -------- 3.1 Universal Foods Corporation Amended Exhibit A to Definitive Proxy and Restated Articles of Incorporation, Statement filed on adopted January 21, 1999 Schedule 14A on December 15, 1998 (Commission File No. 1-7626) 3.2 Universal Foods Corporation d/b/a Sensient Exhibit 3.2 to Quarterly Report on Technologies Corporation Amended Form 10-Q for the quarter ended and Restated Bylaws, adopted September 30, 2000 (Commission File No. 1-7626) November 11, 1999, as amended September 7, 2000 4.1 Rights Agreement, dated as of August Exhibit 1.1 to Registration Statement on 6, 1998 between Registrant and Firstar Form 8-A dated July 20, 1998 Trust Company (Commission File No. 1-7626) 4.1(1) Amendment dated as of November 6, 2000 Exhibit 4.1 to the Quarterly Report on to the Rights Agreement dated as of Form 10-Q for the quarter ended August 6, 1998, between Registrant and September 30, 2000 (Commission File No. 1-7626) Wells Fargo Bank Minnesota, N.A. (as Successor to Firstar Trust Company), as Rights Agent 4.2 Indenture dated as of November 9, 1998 between Exhibit 4.1 to Registration Statement Registrant and The First National on Form S-3 dated November 9, 1998 Bank of Chicago, as Trustee (Commission File 333-67015) 10 Material Contracts 10.1 Management Contracts or Compensatory Plans 10.1(a) Executive Employment Contract Exhibit 10.2(a) to Annual Report on between Registrant and Kenneth P. Manning Form 10-K for the fiscal year ended dated November 11, 1999 September 30, 1999 (Commission File No. 1-7626) 10.1(b) Amended and Restated Change of Exhibit 10.2(b) to Annual Report on Control Employment and Severance Form 10-K for the fiscal year ended Agreement between Registrant and September 30, 1999 (Commission File No. 1-7626) Kenneth P. Manning dated November 11, 1999 10.1(c) 1985 Stock Plan for Executive Exhibit 10.2(c) to Annual Report on Employees Form 10-K for the fiscal year ended September 30, 1998 (Commission File No. 1-7626) |
UNIVERSAL FOODS CORPORATION
D/B/A SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2000 ANNUAL REPORT ON FORM 10-K
Exhibit Incorporated by Filed Number Description Reference From Herewith ------ ----------- -------------- -------- 10.1(d) Universal Foods Corporation 1990 Exhibit 10.2(d) to Annual Report on Employee Stock Plan, as amended Form 10-K for the fiscal year ended September 10, 1998 September 30, 1998 (Commission File No. 1-7626) 10.1(d)(1) Amendment of 1990 Employee Stock Plan X dated as of November 6, 2000 10.1(e) Universal Foods Corporation 1994 Exhibit 10.2(f) Annual Report on Employee Stock Plan, as amended Form 10-K for the fiscal year ended September 10, 1998 September 30, 1998 (Commission File No. 1-7626) 10.1 (e)(1) Amendment of 1994 Employee Stock Plan dated as of X November 6, 2000 10.1(f) Universal Foods Corporation 1998 Exhibit 10.2(h) to Annual Report on Stock Option Plan, as amended Form 10-K for the fiscal year ended September 10, 1998 September 30, 1998 (Commission File No. 1-7626) 10.1(f)(1) Amendment of 1998 Employee Stock Plan dated as of X November 6, 2000 10.1(g) 1999 Non-Employee Director Stock Appendix A to Definitive Proxy Option Plan Statement filed on Schedule 14A on December 17, 1999. (Commission File No. 1-7626) 10.1(g)(1) Amendment of 1999 Non-Employee Director Stock X Option Plan dated as of November 6, 2000 10.1(h) Amended and Restated Directors Appendix B to Definitive Proxy Deferred Compensation Plan Statement filed on Schedule 14A on December 17, 1999 (Commission File No. 1-7626) 10.1(h)(1) Amendment No. 1 to the Directors Deferred X Compensation Plan dated December 12, 2000 10.1(i) Management Income Deferral Plan, Exhibit 10.2(k) to Annual Report on including Amendment No. 1 thereto Form 10-K for the fiscal year ended dated September 10, 1998 September 30, 1998 (Commission File No. 1-7626) 10.1(i)(1) Amendment No. 2 to Management Income Deferral Plan X dated June 15, 2000 10.1 (i)(2) Amendment No. 3 to Management Income Deferral Plan X dated December 12, 2000 |
UNIVERSAL FOODS CORPORATION
D/B/A SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2000 ANNUAL REPORT ON FORM 10-K
Exhibit Incorporated by Filed Number Description Reference From Herewith ------ ----------- -------------- -------- 10.1(j) Executive Income Deferral Plan, including Amendment Exhibit 10.2 (1) to Annual Report on No. 1 thereto, dated September 10, 1998 Form 10-K for the fiscal year ended September 30, 1998 (Commission File No. 1-7626) 10.1(j)(1) Amendment No. 2 to Executive Income Deferral Plan X dated June 15, 2000 10.1(j)(2) Amendment No. 3 to the Executive Income Deferral X Plan Dated December 12, 2000 10.1(k) Form of Amended and Restated Exhibit 10.2(n) to Annual Report on Change of Control Employment and Form 10-K for the fiscal year ended Severance Agreement for Executive September 30, 1998 (Commission File No. 1-7626) Officers 10.1(k)(1) Form of Amendment to Change of Control Employment X and Severance Agreement for Executive Officers 10.1(l) Sensient Technologies Corporation Rabbi X Trust "A" Agreement dated January 1, 2001 between the Registrant and Marshall & Ilsley Trust Company 10.1(m) Trust Agreement, including Changes Exhibit 10.2(p) to Annual Report on upon Appointment of Successor Form 10-K for the fiscal year ended Trustee dated as of February 1, 1998 September 30, 1998 (Commission File No. 1-7626) between the Registrant and Firstar Bank, Milwaukee, N.A. ("Rabbi Trust B") 10.1(m)(1) Amendment No. 1 to Rabbi Trust B X dated January 1, 2001 between Registrant and Marshall & Ilsley Trust Company 10.1(m)(2) Changes upon Appointment of Successor Trustee for X Rabbi Trust B dated as of January 1, 2001 10.1(n) Trust Agreement, including Changes upon Appointment Exhibit 10.2(q) to Annual Report on of Successor Trustee, dated as of February 1, Form 10-K for the fiscal year ended 1998 between the Registrant and Firstar Bank, September 30, 1998 (Commission File No. 1-7626) Milwaukee N.A. ("Rabbi Trust C") 10.1(n)(1) Amendment No. 1 to Rabbi Trust C dated as of January 1, X 2001 between Registrant and Marshall & Ilsley Trust Company |
UNIVERSAL FOODS CORPORATION
D/B/A SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2000 ANNUAL REPORT ON FORM 10-K
Exhibit Incorporated by Filed Number Description Reference From Herewith ------ ----------- -------------- -------- 10.1(n)(2) Changes upon Appointment of Successor Trustee for X Rabbi Trust C dated as of January 1, 2001 10.1(o) Incentive Compensation Plan for Elected Appendix C to Definitive Proxy Corporate Officers Statement filed on Schedule 14A on December 17, 1999 (Commission File No. 1-7626) 10.1(o)(1) Amendment No. 1 to the Incentive Compensation Plan X for Elected Corporate Officers dated December 12, 2000 10.1(p) Form of Management Incentive Plan for Division Exhibit 10.2 (s) to Annual Report on Presidents Form 10-K for the fiscal year ended September 30, 1998 (Commission File No. 1-7626) 10.1(p)(1) Amendment No. 1 to the Management Incentive Plan X for Division Presidents dated December 12, 2000 10.1(q) Form of Management Incentive Plan for Exhibit 10.2(t) to Annual Report on Corporate Management Form 10-K for the fiscal year ended September 30, 1998 (Commission File No. 1-7626) 10.1(q)1) Amendment No. 1 to Management Incentive Plan for X Corporate Management dated December 12, 2000 10.1(r) Form of Management Incentive Plan for Exhibit 10.2(u) to Annual Report on Division Management Form 10-K for the fiscal year ended September 30, 1998 (Commission File No. 1-7626) 10.1(r)(1) Amendment No. 1 to Management Incentive Plan for X Division Management dated December 12, 2000 10.1(s) Form of Agreement for Executive Exhibit 10.2(v) to Annual Report on Officers (Supplemental Executive Form 10-K for the fiscal year ended Retirement Plan A), including September 30, 1998 (Commission File No. 1-7626) Amendment No.1 thereto dated September 10, 1998 10.1(s)(1) Amendment No. 2 to the Supplemental Executive X Retirement Plan A dated June 15, 2000 10.1(s)(2) Amendment No.3 to the Supplemental Executive Retirement Plan A dated December 12, 2000 X |
UNIVERSAL FOODS CORPORATION
D/B/A SENSIENT TECHNOLOGIES CORPORATION
EXHIBIT INDEX
2000 ANNUAL REPORT ON FORM 10-K
Exhibit Incorporated by Filed Number Description Reference From Herewith ------ ----------- -------------- -------- 10.1(t) Form of Agreement for Executive Officers X (Supplemental Executive Retirement Plan B), including Amendment No. 1 thereto dated September 10, 1998 10.1(t)(1) Amendment No. 2 to Supplemental Executive X Retirement Plan B dated June 15, 2000 10.1(t)(2) Amendment No. 3 to Supplemental Executive X Retirement Plan B dated December 12, 2000 10.1(u) Universal Foods Corporation Supplemental Benefit Exhibit 10.2(w) to Annual report on Plan , including Amendment No. 1 thereto dated Form 10-K for the fiscal year ended September 10, 1998 September 30, 1998 (Commission File No. 1-7626) 10.1(u)(1) Amendment No. 2 to Supplemental Benefit Plan dated X December 12, 2000 10.1(v) Universal Foods Corporation Transition Retirement Exhibit 10.2(x) to the Plan, including Amendment No. 1 thereto, dated Company's Annual Report on Form September 10, 1998 10-K for the fiscal year ended September 30, 1998 (Commission File No. 1-7626) 10.1(v)(1) Amendment No. 2 to the Transition Retirement Plan X dated December 12, 2000 13.1 Portions of Annual Report to Shareholders X for the year ending December 31, 2000 that are incorporated by reference 18 Deloitte & Touche LLP Letter re Change in Accounting X Principle 21 Subsidiaries of the Registrant X 23 Consent of Deloitte & Touche LLP X 99 Notice of Annual Meeting and Proxy Filed on Schedule 14A Statement dated March 28, 2001. dated March 28, 2001 (Commission File No. 1-7626) Except to the extent specifically incorporated by reference herein, the Proxy Statement shall not be deemed to be filed with the Securities and Exchange Commission as part of this Annual Report on Form 10-K |
EXHIBIT 10.1(d)(1)
AMENDMENT OF STOCK PLAN
AMENDMENT (this "Amendment") dated as of November 6, 2000 to the Universal Foods Corporation 1990 Employee Stock Plan (the "Plan").
WHEREAS, the Plan was established by Universal Foods Corporation, a Wisconsin corporation (the "Company") on January 25, 1990;
WHEREAS, on September 7, 2000 the name of the Company was changed by the Company's Board of Directors from Universal Foods Corporation to Sensient Technologies Corporation, subject to approval by the shareholders of the Company at its next Annual Meeting on April 26, 2001;
WHEREAS, commencing on November 6, 2000 (the "Launch Date") until such Annual Meeting the Company will utilize the name "Sensient Technologies Corporation" as a fictitious name and, when legally necessary or appropriate, the Company will refer to itself as "Universal Foods Corporation d/b/a Sensient Technologies Corporation"; and
WHEREAS, pursuant to Section 14 of the Plan the Company's Board of Directors may at any time amend the Plan subject to shareholder approval when required.
NOW THEREFORE, the Plan is hereby amended as follows:
1. Effective from and after the Launch Date, the Plan is hereby modified and amended by deleting all references to "Universal Foods Corporation" and substituting therefor "Universal Foods Corporation d/b/a Sensient Technologies Corporation." Upon approval of the new name by the Company's shareholders, the Plan shall be deemed amended so that use of the fictitious name shall cease and the Company shall be referred to as "Sensient Technologies Corporation." This Amendment shall be self-effecting upon shareholder approval without further action by the Company.
2. If the name "Sensient Technologies Corporation" is not approved by the shareholders, the use of the fictitious name shall cease and the Company shall once again be referred to as "Universal Foods Corporation" without further action by the Company.
3. In all respects not inconsistent with the terms of this Amendment, the Plan is hereby ratified, adopted, approved and confirmed.
IN WITNESS WHEREOF, this Amendment has been duly executed by the Company as of the day and year first written above.
UNIVERSAL FOODS CORPORATION d/b/a
SENSIENT TECHNOLOGIES CORPORATION
By: /s/: Richard Carney ------------------------------------ Richard Carney Vice President -- Human Resources |
EXHIBIT 10.1(e)(1)
AMENDMENT OF STOCK PLAN
AMENDMENT (this "Amendment") dated as of November 6, 2000 to the Universal Foods Corporation 1994 Employee Stock Plan (the "Plan").
WHEREAS, the Plan was established by Universal Foods Corporation, a Wisconsin corporation (the "Company") on January 27, 1994:
WHEREAS, on September 7, 2000 the name of the Company was changed by the Company's Board of Directors from Universal Foods Corporation to Sensient Technologies Corporation, subject to approval by the shareholders of the Company at its next Annual Meeting on April 26, 2001;
WHEREAS, commencing on November 6, 2000 (the "Launch Date") until such Annual Meeting the Company will utilize the name "Sensient Technologies Corporation" as a fictitious name and, when legally necessary or appropriate, the Company will refer to itself as "Universal Foods Corporation d/b/a Sensient Technologies Corporation"; and
WHEREAS, pursuant to Section 14 of the Plan the Company's Board of Directors may at any time amend the Plan subject to shareholder approval when required.
NOW THEREFORE, the Plan is hereby amended as follows:
1. Effective from and after the Launch Date, the Plan is hereby modified and amended by deleting all references to "Universal Foods Corporation" and substituting therefor "Universal Foods Corporation d/b/a Sensient Technologies Corporation." Upon approval of the new name by the Company's shareholders, the Plan shall be deemed amended so that use of the fictitious name shall cease and the Company shall be referred to as "Sensient Technologies Corporation." This Amendment shall be self-effecting upon shareholder approval without further action by the Company.
2. If the name "Sensient Technologies Corporation" is not approved by the shareholders, the use of the fictitious name shall cease and the Company shall once again be referred to as "Universal Foods Corporation" without further action by the Company.
3. In all respects not inconsistent with the terms of this Amendment, the Plan is hereby ratified, adopted, approved and confirmed.
IN WITNESS WHEREOF, this Amendment has been duly executed by the Company as of the day and year first written above.
UNIVERSAL FOODS CORPORATION d/b/a
SENSIENT TECHNOLOGIES CORPORATION
By: /s/: Richard Carney ------------------------------------ Richard Carney Vice President -- Human Resources |
EXHIBIT 10.1(f)(1)
AMENDMENT OF STOCK OPTION PLAN
AMENDMENT (this "Amendment") dated as of November 6, 2000 to the Universal Foods Corporation 1998 Stock Option Plan (the "Plan").
WHEREAS, the Plan was established by Universal Foods Corporation, a Wisconsin corporation (the "Company") on January 22, 1998;
WHEREAS, on September 7. 2000 the name of the Company was changed by the Company's Board of Directors from Universal Foods Corporation to Sensient Technologies Corporation, subject to approval by the shareholders of the Company at its next Annual Meeting on April 26, 2001;
WHEREAS, commencing on November 6, 2000 (the "Launch Date") until such Annual Meeting the Company will utilize the name "Sensient Technologies Corporation" as a fictitious name and, when legally necessary or appropriate, the Company will refer to itself as "Universal Foods Corporation d/b/a Sensient Technologies Corporation"; and
WHEREAS, pursuant to Section 14 of the Plan the Company's Board of Directors may at any time amend the Plan subject to shareholder approval when required.
NOW THEREFORE, the Plan is hereby amended as follows:
1. Effective from and after the Launch Date. the Plan is hereby modified and amended by deleting all references to "Universal Foods Corporation" and substituting therefor "Universal Foods Corporation d/b/a Sensient Technologies Corporation." Upon approval of the new name by the Company's shareholders, the Plan shall be deemed amended so that use of the fictitious name shall cease and the Company shall be referred to as "Sensient Technologies Corporation." This Amendment shall be self-effecting upon shareholder approval without further action by the Company.
2. If the name "Sensient Technologies Corporation" is not approved by the shareholders, the use of the fictitious name shall cease and the Company shall once again be referred to as "Universal Foods Corporation" without further action by the Company.
3. In all respects not inconsistent with the terms of this Amendment, the Plan is hereby ratified, adopted, approved and confirmed.
IN WITNESS WHEREOF, this Amendment has been duly executed by the Company as of the day and year first written above.
UNIVERSAL FOODS CORPORATION d/b/a
SENSIENT TECHNOLOGIES CORPORATION
By: /s/: Richard Carney ------------------------------------ Richard Carney Vice President -- Human Resources |
EXHIBIT 10.1(g)(1)
AMENDMENT OF STOCK OPTION PLAN
AMENDMENT (this "Amendment") dated as of November 6. 2000 to the Universal Foods Corporation 1999 Non-Employee Director Stock Option Plan (the "Plan").
WHEREAS, the Plan was established by Universal Foods Corporation, a Wisconsin corporation (the "Company") on January 27, 2000;
WHEREAS, on September 7, 2000 the fiscal year of the Company was changed by the Board of Directors to end on December 31 of each year, with the first full calendar fiscal year being the year ending December 31, 2000, so that the Company's next Annual Meeting will occur in April and not in January;
WHEREAS, on September 7, 2000 the name of the Company was chanced by the Company's Board of Directors from Universal Foods Corporation to Sensient Technologies Corporation, subject to approval by the shareholders of the Company at its next Annual Meeting on April 26, 2001;
WHEREAS, commencing on November 6, 2000 (the "Launch Date") until such Annual Meeting the Company will utilize the name "Sensient Technologies Corporation" as a fictitious name and, when legally necessary or appropriate, the Company will refer to itself as "Universal Foods Corporation d/b/a Sensient Technologies Corporation"; and
WHEREAS, pursuant to Section 14 of the Plan the Company's Board of Directors may at any time amend the Plan subject to shareholder approval when required.
NOW THEREFORE, the Plan is hereby amended as follows:
1. Effective from and after the Launch Date, the Plan is hereby modified and amended by deleting all references to "Universal Foods Corporation" and substituting therefor "Universal Foods Corporation d/b/a Sensient Technologies Corporation." Upon approval of the new name by the Company's shareholders, the Plan shall be deemed amended so that use of the fictitious name shall cease and the Company shall be referred to as "Sensient Technologies Corporation." This Amendment shall be self-effecting upon shareholder approval without further action by the Company.
2. If the name "Sensient Technologies Corporation" is not approved by the shareholders, the use of the fictitious name shall cease and the Company shall once again be referred to as "Universal Foods Corporation" without further action by the Company.
3. Section 7.1 of the Plan is hereby amended to delete "1st of February" in the first line thereof and insert in its place "1st of May" so that the annual award will follow the new Annual Meeting date.
4. In all respects not inconsistent with the terms of this Amendment, the Plan is hereby ratified, adopted, approved and confirmed.
IN WITNESS WHEREOF, this Amendment has been duly executed by the Company as of the day and year first written above.
UNIVERSAL FOODS CORPORATION d/b/a
SENSIENT TECHNOLOGIES CORPORATION
By: /s/: Kenneth P. Manning ------------------------------------ Kenneth P. Manning Chairman, President & Chief Executive Officer |
EXHIBIT 10.1(h)(1)
AMENDMENT NO. 1 TO THE
UNIVERSAL FOODS CORPORATION
DIRECTORS' DEFERRED COMPENSATION PLAN
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Directors' Deferred Compensation Plan (the "Plan") for eligible directors of the Company; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such changes and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows, effective as of the dates noted below:
1. Effective as of November 6, 2000, the Plan shall be known as the:
"Sensient Technologies Corporation Directors' Deferred Compensation Plan".
2. Effective as of November 6, 2000, Section 1. is amended in its entirety to read as follows:
"1. Establishment.
The Sensient Technologies Corporation Directors' Deferred Compensation Plan (the "Plan") was established for the benefit of eligible members of the Board of Directors of Universal Foods Corporation d/b/a Sensient Technologies Corporation and, effective upon approval of the shareholders, to be known as Sensient Technologies Corporation (the "Company"). The Plan is administered by the Company, and the plan year is the fiscal year of the Company."
3. Effective as of October 1, 2000, the last sentence of Section 6. is amended in its entirety to read as follows:
"For fiscal years ending prior to October 1, 2000, such interest income shall be credited to the Account on each September 30 on which there is a balance in a Director's Account, and for each fiscal year ending after October 1, 2000, such interest income
shall be credited to the Account on each December 31 on which there is a balance in a Director's Account."
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES
CORPORATION
By: /s/ Richard Carney ------------------------------------ |
EXHIBIT 10.1(i)(1)
AMENDMENT NO. 2 TO THE
UNIVERSAL FOODS CORPORATION
MANAGEMENT INCOME DEFERRAL PLAN
WHEREAS, Universal Foods Corporation (the "Company") sponsors the Universal Foods Corporation Management Income Deferral Plan (the "Plan") for selected management employees; and
WHEREAS, the Company desires to amend the Plan to provide for: (a) automatic lump sum distributions of participants' account balances following a change of control of the Company; (b) under certain circumstances, an elective lump sum distribution option at a participant's retirement; and (c) under certain circumstances, an elective participant in-service lump sum distribution option; and
WHEREAS, the Company desires to amend the Plan to: (a) designate the Company's Benefits Investment Committee as the Plan's administrator and to vest such committee with the authority to construe and interpret the Plan; and (b) to vest the Company's Benefits Administrative Committee with the authority to determine claims.
NOW THEREFORE, the Plan is hereby amended as follows effective as of June 15, 2000.
1. The last sentence of Section I. of the Plan is hereby deleted in its entirety.
2. Subsection A. of Section IV. of the Plan entitled "At Retirement" is hereby amended by inserting the following new paragraph as the first paragraph of such subsection:
"A participant may elect to receive a lump sum distribution of his or her accumulated account balance payable at retirement but only if the Executive either makes such election at least one full calendar year prior to his or her retirement, or in lieu of such advance election, elects that his or her accumulated account balance be reduced by six percent (6%) at retirement.
Or"
3. Section IV. of the Plan is further amended by the addition of a new subsection D., entitled "In-Service Election", to read as follows:
"D. In-Service Election
A participant, prior to his or her termination of employment, may elect to receive a lump sum distribution of his or her accumulated account balance payable either: (i) as soon as administratively feasible on or after the January 1 following one full calendar year from the date of such election;
or (ii) as soon as administratively feasible following such election, but in such event, the participant's accumulated account balance will be reduced by six percent (6%) at the time of payment. If a participant makes an in-service distribution election, his or her deferrals under the plan shall be suspended for the remainder of the calendar year in which such election is made and for the next two succeeding full calendar years."
4. Subsection A. of Section X. of the Plan is hereby amended in its entirety to read as follows:
"A. (i) Notwithstanding any other provision of this plan, in the event of the change of control of the Company, each participant (or, if the participant is deceased, the participant's spouse or other designated beneficiary) shall receive a lump sum distribution of his or her accumulated account balance (or a lump sum distribution or his or her remaining payments if already in pay status as soon as administratively feasible after the date of such chance of control. (ii) Subject to Section V., each participant employed with the Company as of the date of the change of control shall continue to be eligible to participate in this plan until his or her termination of employment or retirement, and upon such Executive's termination or retirement any deferrals (and interest credited on such deferrals) under this plan subsequent to the lump sum distribution under paragraph (i) above shall be payable as provided in Section IV., as applicable." |
5. Section XIII. of the Plan is hereby amended by the addition of new subsections E. and F. at the end thereof to read as follows:
"E. The Company's Benefits Investment Committee, members of which are appointed by the Chief Executive Officer of the Company, shall be responsible for the general operation and administration of this plan and shall have the full authority to interpret and construe this plan. The Company's Benefits Investment Committee's interpretation and construction of this plan, and actions thereunder, shall be binding and conclusive on all persons and for all purposes.
F. The Company's Benefits Administrative Committee, members of which are appointed by the Chief Executive Officer of the Company, shall have the full authority to determine and review claims for benefits under this plan. The Company's Benefits Administrative Committee's determination of benefit claims under this plan, and actions thereunder, shall be binding and conclusive on all persons and for all purposes."
IN WITNESS WHEREOF, this Amendment has been duly executed this 15th day of June, 2000.
UNIVERSAL FOODS CORPORATION
By: /s/: Richard Carney ------------------------------------- Attest: /s/ John L. Hammond ------------------- |
EXHIBIT 10.1(i)(2)
AMENDMENT NO. 3 TO THE
UNIVERSAL FOODS CORPORATION
MANAGEMENT INCOME DEFERRAL PLAN
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Executive Income Deferral Plan (the "Plan") for employees of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the April 2001 Annual Meeting of Shareholders; and
WHEREAS, the Company wishes to amend the Plan to reflect such change.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of November 6, 2000:
1. The Plan shall be known as the: "Sensient Technologies Corporation Management Income Deferral Plan".
2. Section I. is amended in its entirety to read as follows:
"I. Purpose
The Sensient Technologies Corporation Management Income Deferral Plan (the "Plan") was established effective as of July 15, 1987 by the Board of Directors of Universal Foods Corporation d/b/a Sensient Technologies Corporation, and effective upon shareholder approval, to be known as Sensient Technologies Corporation (the "Company") as an alternative voluntary income deferral plan for selected management employees unable to participate to the maximum extent in the Company sponsored 401(k) plan because of tax code limitations. The Plan is administered by the Vice President of Human Resources, under the direction of the Benefits Administrative Committee, and the plan year is the twelve-month period commencing on January 1st and ending on December 31st. The plan year of the Plan is the fiscal year of the Company."
3. Sections IX and XII are amended throughout by replacing all references to "Universal Foods Corporation" with "the Company".
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPRORATION
By: /s/ Richard Carney ------------------------------------ |
EXHIBIT 10.1(j)(1)
AMENDMENT NO. 2 TO THE
UNIVERSAL FOODS CORPORATION
EXECUTIVE INCOME DEFERRAL PLAN
WHEREAS, Universal Foods Corporation (the "Company") sponsors the Universal Foods Corporation Executive Income Deferral Plan (the "Plan") for selected executive employees; and
WHEREAS, the Company desires to amend the Plan to provide for: (a) automatic lump sum distributions of participants' account balances following a change of control of the Company; (b) under certain circumstances, an elective lump sum distribution option at a participant's retirement; and (c) under certain circumstances, an elective participant in-service lump sum distribution option; and
WHEREAS, the Company desires to amend the Plan to: (a) designate the Company's Benefits Investment Committee as the Plan's administrator and to vest such committee with the authority to construe and interpret the Plan; and (b) to vest the Company's Benefits Administrative Committee with the authority to determine claims.
NOW THEREFORE, the Plan is hereby amended as follows effective as of June 15, 2000.
1. The last sentence of Section I. of the Plan is hereby deleted in its entirety.
2. Subsection A. of Section IV. of the Plan entitled "At Retirement" is hereby amended by inserting the following new paragraph as the first paragraph of such subsection:
"A participant may elect to receive a lump sum distribution of his or her accumulated account balance payable at retirement but only if the Executive either makes such election at least one full calendar year prior to his or her retirement, or in lieu of such advance election, elects that his or her accumulated account balance be reduced by six percent (6%) at retirement.
Or"
3. Section IV. of the Plan is further amended by the addition of a new subsection D., entitled "In-Service Election", to read as follows:
"D. In-Service Election
A participant, prior to his or her termination of employment, may elect to receive a lump sum distribution of his or her accumulated account balance payable either: (i) as soon as administratively feasible on or after the January 1 following one full calendar year from the date of such election;
or (ii) as soon as administratively feasible following such election, but in such event, the participant's accumulated account balance will be reduced by six percent (6%) at the time of payment. If a participant makes an in-service distribution election, his or her deferrals under the plan shall be suspended for the remainder of the calendar year in which such election is made and for the next two succeeding full calendar years."
4. Subsection A. of Section X. of the Plan is hereby amended in its entirety to read as follows:
"A. (i) Notwithstanding any other provision of this plan, in the event of the change of control of the Company, each participant (or, if the participant is deceased, the participant's spouse or other designated beneficiary) shall receive a lump sum distribution of his or her accumulated account balance (or a lump sum distribution or his or her remaining payments if already in pay status) as soon as administratively feasible after the date of such chance of control.
(ii) Subject to Section V., each participant employed with the
Company as of the date of the change of control shall
continue to be eligible to participate in this plan until
his or her termination of employment or retirement, and
upon such Executive's termination or retirement any
deferrals (and interest credited on such deferrals) under
this plan subsequent to the lump sum distribution under
paragraph (i) above shall be payable as provided in
Section IV., as applicable."
5. Section XIII. of the Plan is hereby amended by the addition of new subsections E. and F. at the end thereof to read as follows:
"E. The Company's Benefits Investment Committee, members of which are appointed by the Chief Executive Officer of the Company, shall be responsible for the general operation and administration of this plan and shall have the full authority to interpret and construe this plan. The Company's Benefits Investment Committee's interpretation and construction of this plan, and actions thereunder, shall be binding and conclusive on all persons and for all purposes.
F. The Company's Benefits Administrative Committee, members of which are appointed by the Chief Executive Officer of the Company, shall have the full authority to determine and review claims for benefits under this plan. The Company's Benefits Administrative Committee's determination of benefit claims under this plan, and actions thereunder, shall be binding and conclusive on all persons and for all purposes."
IN WITNESS WHEREOF, this Amendment has been duly executed this 15th day of June, 2000.
UNIVERSAL FOODS CORPORATION
By: /s/: Richard Carney ------------------------------------- Attest: /s/ John L. Hammond ------------------- |
EXHIBIT 10.1(j)(2)
AMENDMENT NO. 3 TO THE
UNIVERSAL FOODS CORPORATION
EXECUTIVE INCOME DEFERRAL PLAN
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Executive Income Deferral Plan (the "Plan") for employees of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company has chanced its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such change.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of November 6. 2000:
1. The Plan shall be known as the: "Sensient Technologies Corporation Executive Income Deferral Plan".
2. Section 1. is amended in its entirety to read as follows:
"I. Purpose
The Sensient Technologies Corporation Executive Income Deferral Plan (the "Plan"), was established effective July 15, 1987 by the Board of Directors of Universal Foods Corporation d/b/a Sensient Technologies Corporation, and effective upon shareholder approval, to be known as Sensient Technologies Corporation (the "Company") as an alternative voluntary income deferral plan of up to 25% of total salary and bonus for selected executives unable to participate to the maximum extent in the Company sponsored 401(k) plan because of tax code limitations. The Plan is administered by the Vice President of Human Resources, under the direction of the Benefits Administrative Committee, and the plan year is the twelve-month period commencing on January 1st and ending on December 31st. The plan year of the Plan is the fiscal year of the Company."
3. Sections IX and XIII are amended throughout by replacing all additional references to "Universal Foods Corporation" with the "Company".
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/: Richard Carney ------------------------------------- |
EXHIBIT 10.1(k)(1)
[LETTERHEAD]
Date
Name
Address
Address
Re: Amendment to Change of Control Employment and Severance Agreement
Dear ____________________:
As you know, effective as of November 6, 2000, the Board of Directors approved a change in the name of the corporation, subject to shareholder approval at the Annual Meeting of Shareholders in or about April 2001. Once shareholder approval is obtained Universal Foods Corporation (the "Corporation") will officially become Sensient Technologies Corporation. In anticipation of such approval, the Corporation will begin to do business as Sensient Technologies Corporation. In addition, the Corporation has changed its fiscal year from the 12-month period beginning on October 1st, to the twelve-month period beginning on January 1st. We would like to update your Chance of Control Employment and Severance Agreement, to reflect the name change and the change in the Corporation's fiscal year. To that end, please review the following, sign and return a copy of this letter to: ___________________________ __________________________________ by no later than:___________________.
The Change of Control Employment and Severance Agreement entered into 1w and between Universal Foods Corporation, and [NAME] dated as of [DATE] is amended as follows:
1. The reference to "Universal Foods Corporation" in the introductory paragraph is replaced with "Universal Foods Corporation d/b/a Sensient Technologies Corporation, and effective upon shareholder approval, to be known as Sensient Technologies Corporation".
2. Subparagraph (ii) of paragraph (b) of Section 4. Annual Bonus., is amended to read as follows:
"(ii) Annual Bonus. In addition to Annual Base Salary, the Executive shall be awarded, for each fiscal year ending during the Employment Period, an annual bonus (the "Annual Bonus") in cash at least equal to the Executive's highest bonus under the Company's [APPLICABLE PLAN NAME], or any comparable bonus under any predecessor or successor plan, for the last three full fiscal years prior to the Effective Date (annualized in the event that the Executive was not employed by the Company for the whole such fiscal year or in the event of a short fiscal year consisting of less than twelve full months) (the "Recent Annual
Bonus"). Each such Annual Bonus shall be paid no later than the end of the third month following the close of the fiscal year for which the Annual Bonus is awarded, unless the Executive shall elect to defer the receipt of such Annual Bonus."
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: __________________________________________
Chairman & Chief Executive Officer
EXECUTIVE
(Signature and Date)
EXHIBIT 10.1(l)
SENSIENT TECHNOLOGIES CORPORATION
RABBI TRUST "A" AGREEMENT
This Trust Agreement is made effective as of the 1st day of January, 2001 by and between Universal Foods Corporation d/b/a Sensient Technologies Corporation and effective upon shareholders approval to be known as Sensient Technologies Corporation, a Wisconsin corporation (the "Company"), and Marshall & Ilsley Trust Company (the "Trustee").
WHEREAS, the Company is obligated in accordance with the terms of various agreements listed on Appendix A, as the same may be amended from time-to-time (collectively the "Contracts"), to make certain payments for the benefit of selected Company executives (the "Executives") in the event of a change of control of the Company; and
WHEREAS, as the Company has incurred or expects to incur liability under the terms of such Contracts, the Company established a trust (the "Trust") and entered into a trust agreement dated September 1, 2000 (the "Prior Trust Agreement") with Firstar Bank, Milwaukee, N.A., as trustee (the "Prior Trustee"), with the intention that the Company would make contributions to such Trust to provide itself with a source of funds to assist it in meeting its liabilities under the Contracts (the "Executives"); and
WHEREAS, it is the intention of the Company that the Trust shall constitute an unfunded arrangement and shall not affect the status of any Contract as an unfunded plan maintained for the purpose of providing deferred compensation for a select group of management or highly compensated employees for purposes of Title I of the Employee Retirement Income Security Act of 1974, as amended; and
WHEREAS, the Company has appointed the Trustee to succeed the Prior Trustee of the Trust effective as of January 1, 2001; and
WHEREAS, the Prior Trust Agreement is revocable by the Company because the Trust has not been funded due to a change of control as provided therein; and
WHEREAS, the Company and the Trustee desire to amend and restate the Trust Agreement (hereinafter the "Trust Agreement") to enable the Trustee to administer all of the assets held by the Prior Trustee in the Trust, subject to the claims of the Company's creditors in the event the Company becomes Insolvent, as herein defined, until the Company's obligations are paid in accordance with the terms of the Contracts; and
NOW, THEREFORE, in consideration of the mutual agreements of the parties as contained in this Trust Agreement, the Trust shall be comprised, held and disposed of as follows:
Section 1. Successor Trust
(a) The Company and Trustee hereby acknowledge the deposit with the Trustee of assets previously held under the Prior Trust Agreement, which shall continue as the principal of the Trust.
(b) The Trust shall become irrevocable upon a Change of Control, as defined herein.
(c) The Trust is intended to be a grantor trust, of which the Company is the grantor, within the meaning of subpart E, part 1, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.
(d) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of the Company and shall be used exclusively for the uses and purposes of paying benefits to Executives as required by the Contracts and claims of general creditors, as herein set forth. Executives shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Contracts and this Trust Agreement shall be mere unsecured contractual rights of Executives against the Company. Any assets held by the Trust will be subject to the claims of the Company's general creditors under federal and state law in the event the Company is Insolvent, as defined in Section 3(a) herein.
(e) The Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with the Trustee to augment the principal to be held, administered and disposed of by the Trustee as provided in this Trust Agreement. Neither the Trustee nor any Executive shall have any right to compel such additional deposits.
(f) Upon a Change of Control as defined herein, the Company shall, within five (5) business days following the Change of Control, make an irrevocable contribution to the Trust in an amount that is sufficient to pay the Executives the benefits to which Executives would be entitled pursuant to the terms of the Contract(s) as of the date on which the Change of Control occurred; provided, however, payment of benefits through this Rabbi Trust A shall not duplicate any benefits payable to Executives through Rabbi Trust B or C (which provide for payment of benefits for several non-qualified benefit plans of the Company) or any other irrevocable trust arrangement providing for secured payment of benefits to Executives, notwithstanding that the benefits shall be payable upon a Change of Control pursuant to the terms of the Contracts.
Section 2. Payments to Executives
(a) Upon a Change of Control, within five (5) business days following such Change of Control, the Company shall deliver to the Trustee a schedule (the "Payment Schedule") that indicates the amounts payable in respect of each Executive, that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for under the Contracts), and the time of
commencement for payment of such amounts. Except as otherwise provided herein, the Trustee shall make payments to the Executives in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal, state or local taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Contracts and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by the Company.
(b) The entitlement of an Executive to benefits under a Contract shall be determined by the Company or such party as it shall designate, and any claim for such benefits shall be considered and reviewed under procedures determined by the Company and uniformly applied.
(c) The Company may make payment of benefits directly to Executives as they become due under the terms of the Contracts. The Company shall notify the Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to Executives. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Contracts, the Company shall make the balance of each such payment as it falls due. The Trustee shall notify the Company where principal and earnings are not sufficient.
Section 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When The Company is Insolvent
(a) The Trustee shall cease payment of benefits to Executives if the Company is Insolvent. The Company shall be considered "Insolvent" for purposes of this Trust Agreement if (i) the Company is unable to pay its debts as they become due, (ii) the Company is subject to a pending proceeding as a debtor under the United States Bankcruptcy Code, or (iii) the Company is determined to be insolvent by any state or federal regulatory authority.
(b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of the Company under federal and state law as set forth below.
(1) The Board of Directors and the Chief Executive Officer of the Company shall have the duty to inform the Trustee in writing that the Company is Insolvent. If a person claiming to be a creditor of the Company alleges in writing to the Trustee that the Company has become Insolvent, the Trustee shall determine whether the Company is Insolvent and, pending such determination, the Trustee shall discontinue payment of benefits to Executives.
(2) Unless the Trustee has actual knowledge that the Company is Insolvent, or has received notice from the Company or a person claiming to be a creditor alleging that the Company is Insolvent, the Trustee shall have no duty to inquire whether the Company is Insolvent. The Trustee may in all events rely on such evidence concerning whether the Company is Insolvent as may be furnished to the Trustee and that provides the Trustee with a reasonable basis for making a determination whether the Company is Insolvent.
(3) If at any time the Trustee has determined that the Company is Insolvent, the Trustee shall discontinue payments to Executives and shall hold the assets of the Trust for the benefit of the Company's general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Executives to pursue their rights as general creditors of the Company with respect to benefits due under the Contracts or otherwise.
(4) The Trustee shall resume the payment of benefits to Executives in accordance with Section 2 of this Trust Agreement only after the Trustee has determined that the Company is not Insolvent (or is no longer Insolvent).
(c) Provided that there are sufficient assets, if the Trustee discontinues the payment of benefits from the Trust pursuant to Section 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Executives under the terms of the Contracts for the period of such discontinuance, less the aggregate amount of any payments made to Executives by the Company in lieu of the payments provided for hereunder during any such period of discontinuance.
Section 4. Payments to Company
Except as provided in Section 3 hereof, after a Change of Control, the Company shall have no right or power to direct the Trustee to return to the Company, or to divert to others, any of the Trust assets before all payment of benefits have been made to Executives pursuant to the terms of the Contracts, except in the case of a termination of the Trust pursuant to Section 12.
Section 5. Investment Authority
(a) Investments of the Trust shall be limited to cash, cash equivalents and other short time fixed income securities (including any such security from which the Trustee or an affiliate receives any compensation or fee). Prior to a Change in Control, the Company shall have sole authority to direct the Trustee as to such specific securities in which Trustee shall invest such Trust Fund assets. Following a Change in Control, such powers and authority regarding investments shall be rest solely with the Trustee who shall invest such Trust Fund assets in its sole discretion in cash equivalents and other short time fixed income securities (including any such security from which the Trustee or an affiliate receives any compensation or fee). In no event shall any investment authority be exercisable by or rest with Executives; provided that, voting rights with respect to Trust assets will be exercised by the Company prior to a Change in Control and will be exercised by the Trustee after a Change in Control.
(b) The Company shall have the right at anytime, and from time to time in its sole discretion, to substitute assets of equal fair market value for any assets held by the Trust. This right is exercisable by the Company in a nonfiduciary capacity without the approval or consent of any person in a fiduciary capacity.
(c) The Trustee shall also have the following additional powers:
(1) To receive and hold all contributions paid to it by the Company, provided, however, that the Trustee shall have no duty to require any contributions to be made to it;
(2) To effectuate the written investment instructions given by the Company or its designee without regard to any law now or hereafter in force limiting investments of fiduciaries;
(3) To retain in the Trust for investments any property deposited by the Trustee hereunder;
(4) To have the authority to invest and reinvest assets of the Trust in cash, cash equivalents and other short time fixed income securities (including any such security from which the Trustee or an affiliate receives any compensation or fee);
(5) To retain in the Trust for investment or pending distributions, any portion of the Trust in cash deemed appropriate by the Trustee;
(6) To establish accounts in any affiliate of the Trustee and in such other banks and financial institutions as the Trustee deems appropriate to carry out the purpose of the Trust;
(7) To deposit securities with a clearing corporation as defined in Article Eight of the Uniform Commercial Code; to hold the certificates representing securities, including those in bearer form, in bulk form with and to merge such certificates into certificates of the same class of the same issuer which constitutes assets of other accounts or owners, without certification as to the ownership attached; and to utilize a book-entry system for the transfer or pledge of securities held by the Trustee or by a clearing corporation, provided that the records of the Trustee shall indicate the actual ownership of the securities and other property of the Trust Fund;
(8) To participate in and use the Federal book-entry account system, a service provided by the Federal Reserve Bank for its member banks for deposit of Treasury securities; and
(9) To hold securities or property in the name of the Trustee or its nominee or nominees or in such other form as it determines best with or without disclosing the Trust relationship, providing the records of the Trust shall indicate the actual ownership of such securities or other property.
Section 6. Disposition of Income
As determined in the sole discretion of the Company prior to a Change of Control, all or part of the income received by the Trust, net of expenses and taxes, shall be returned to the Company, as determined by the Company. Following a Change in Control, all income shall be accumulated and reinstated.
Section 7. Accounting by Trustee
The Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between the Company and the Trustee. Within thirty 30 days after the removal or resignation of the Trustee, the Trustee shall deliver to the Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be.
Section 8. Responsibility of Trustee
(a) The Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims; provided, however, that the Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by the Company which is contemplated by, and in conformity with, the terms of the Contracts or this Trust and is given in writing by the Company. In the event of a dispute between the Company and a party, the Trustee may apply to a court or competent jurisdiction to resolve the dispute.
(b) If the Trustee undertakes or defends any litigation arising in connection with this Trust, the Company agrees to indemnify the Trustee against the Trustee's costs, expenses and liabilities (including, without limitation, attorneys' fees and expenses) relating thereto and to be primarily liable for such payments. If the Company does not pay such costs, expenses and liabilities in a reasonably timely manner, the Trustee may obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may also be counsel for the Company generally) with respect to any of its duties or obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder.
(e) The Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein; provided, however, that if an insurance policy is held as an asset of the Trust, the Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy.
(f) Notwithstanding any powers granted to the Trustee pursuant to this Trust Agreement or to applicable law, the Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code.
(g) The Company hereby agrees to indemnify and to hold Trustee harmless from and against all claims, expenses (including reasonable attorney fees), liabilities, damages, actions or other charges incurred by or assessed against Trustee, other than on account of Trustee's own gross negligence or willful misconduct, as a direct or indirect result of anything done or omitted by Trustee in reliance upon the directions, or absence of directions, of the Company, any investment advisor or manager, or as a direct or indirect result of any act or omission of a predecessor trustee or any other person charged under any agreement affecting the assets of the Trust for investment responsibility with respect to such assets.
Section 9. Compensation and Expenses of Trustee
The Company shall pay all administrative costs and the Trustee's fees and expenses. If not so paid, the costs, fees and expenses shall be paid from the Trust.
Section 10. Resignation and Rein oval of Trustee
(a) The Trustee may resign at any time by written notice to the Company, which shall be effective no less than thirty (30) days after receipt of such notice unless the Company and the Trustee agree otherwise.
(b The Trustee may be removed by the Company on fifteen (15) days notice or upon shorter notice accepted by the Trustee.
(c) Upon resignation or removal of the Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within thirty (30) days after receipt of notice of resignation, removal or transfer, unless the Company extends such time limit.
(d) If the Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 hereof, by the effective date of resignation or removal under paragraphs (a) or (b) of this section. If no such appointment has been made, the Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of the Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust.
Section 11. Appointment of Successor
If the Trustee resigns or is removed in accordance with Section 10
(a) or (b) hereof, the Company may appoint any third party, such as a bank trust
department or other party that may be granted corporate trustee powers under
state law, as a successor to replace the
Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new Trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former Trustee shall execute any instrument necessary or reasonably requested by the Company or the successor Trustee to evidence the transfer.
The successor Trustee need not examine the records and any acts of any prior Trustee and may retain or dispose of any existing Trust assets, subject to Sections 7 and 8 hereof. The successor Trustee shall not be responsible for, and Company shall indemnify and defend the successor Trustee from, any claim or liability resulting from any action or inaction of any prior Trustee or from any other past event, or any condition existing at the time it becomes successor Trustee.
Section 12. Amendment or Termination
(a) Prior to a Change of Control, this Trust Agreement may be amended by a written instrument executed by the Trustee and the Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Contracts or shall make the Trust revocable after it has become irrevocable in accordance with Section 1(b) hereof.
(b) The Trust shall not terminate until the date on which Executives are no longer entitled to benefits pursuant to the terms of the Contracts, unless approved as provided in Section 12(c) hereof
(c) After a Change of Control, upon written approval of Executives entitled to payment of not less than sixty-five percent (65%) of benefits payable under the Payment Schedule, the Company may terminate this Trust prior to the time all benefits payable under the Payment Schedule have been made. All assets in the Trust at termination shall be returned to the Company.
Section 13. Miscellaneous
(a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.
(b) Benefits payable to Executives under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process.
(c) This Trust Agreement shall be governed by and construed in accordance with the laws of Wisconsin.
(d) For purposes of this Trust, Change of Control shall mean:
(1) the acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended) (a "Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Securities Exchange Act of 1934, as amended) of 20% or more of either (A) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock") or (B) the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors (the "Outstanding Company Voting Securities"); provided, however, that for purposes of this subsection (1), the following acquisitions shall not constitute a Change of Control: (I) any acquisition directly from the Company, (II) any acquisition by the Company, (III) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company or (IV) any acquisition pursuant to a transaction which complies with clauses (A), (B) and (C) of subsection (3) of this paragraph (d); or
(2) individuals who, as of January 1, 2001, constitute the Board of Directors (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board of Directors; provided, however, that any individual becoming a director subsequent to January 1, 2001 whose election, or nomination for election by the Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board of Directors; or
(3) consummation by the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another entity (a "Business Combination"), in each case, unless, following such Business Combination, (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such business combination beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or of such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or the action of the Board, providing for such Business Combination; or
(4) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
Section 14. Effective Date
The effective date of this Trust Agreement shall be January 1, 2001.
IN WITNESS WHEREOF, the Company and Trustee have caused this Trust Agreement to be duly executed as of the Effective Date indicated above.
UNIVERSAL FOODS CORPORATION d/b/a
SENSIENT TECHNOLOGIES CORPORATION
By: /s/: John L. Hammond -------------------------------------------- Title: Vice President, Secretary & General Counsel -------------------------------------------- Attest: /s/ Stephen Cordier -------------------------------------------- Title: Vice President & Treasurer -------------------------------------------- |
MARSHALL & ILSLEY TRUST COMPANY
By: /s/: Michael J. Shlensky -------------------------------------------- Title: Vice President -------------------------------------------- Attest: /s/ Michael C. Wieber -------------------------------------------- Title: Vice President -------------------------------------------- |
Appendix A
SENSIENT TECHNOLOGIES CORPORATION
RABBI TRUST "A" AGREEMENT
1. Executive Employment Contract, dated November 5, 1987, as amended May 10, 1988, by and between Universal Foods Corporation and Kenneth P. Manning.
2. Change of Control and Severance Agreements entered into between Sensient Technologies and certain Executives from time to time, benefits under which are to be provided to the Trustee upon a Change of Control, as
provided in Section 2 of the Trust Agreement.
EXHIBIT 10.1(m)(1)
AMENDMENT NO. 1 TO THE
TRUST AGREEMENT FOR RABBI TRUST B
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") is obligated under certain non-qualified plans and/or agreements (the "Plans") to make certain deferred and other payments to certain present, future and former directors and executives of the Company who have satisfied the eligibility requirements of such Plans, and for purposes of assuring that such payments are made in satisfaction of such obligations the Company has established a trust in the form of this rabbi trust (commonly referred to as "Rabbi Trust B") which is subject to the claims of the Company's existing or future general creditors; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the trust agreement for Rabbi Trust B to reflect such changes and other matters relating thereto effective with the change in trustee.
NOW, THEREFORE, the trust agreement for Rabbi Trust B is hereby amended as follows, effective as of December 31, 2000:
1. The introductory paragraph of the Trust Agreement is amended by inserting "d/b/a Sensient Technologies Corporation, and effective upon shareholder approval, to be known as Sensient Technologies Corporation" immediately following "Universal Foods Corporation".
2. The first sentence of paragraph (c) of Section 2.01 is hereby amended in its entirety to read as follows:
"As of each December 31, the Company shall recalculate the amount of assets which would be required to be delivered pursuant to Section 2.01(a) as of such date. If the amount so calculated exceeds the fair market value of the assets then held in trust, the Company shall promptly (and in no event later than twenty-five (25) days from such date) pay to the Trustee: (i) an amount in cash, marketable securities (valued at their fair market value) or life insurance policies or any combination thereof equal to such excess; less (ii) the amount, if any, of interest and other income earned on the Trust Corpus and received by the Trustee during the year then ended at December 31."
3. Paragraph (b) of Section 2.02 is hereby amended in its entirety to read as follows:
"(b) Except as hereinafter provided, all interest and other income earned on the investment of the Trust Corpus, except dividends on and proceeds from life insurance policies, shall be the property of the Company and shall not constitute a part of the Trust Corpus. Within twenty (20) days after the end of each year ending December 31, the Trustee shall notify the Company of the amount of such interest and other income received by the Trustee during such year then ended. Such interest and other income received by the Trustee during each year then ending December 31 shall be paid over to the Company by the Trustee within thirty (30) days after the end of each such year. The amount of such interest or other income so payable to the Company shall be reduced to the extent that it offsets the excess otherwise required to be paid by the Company to the Trustee pursuant to Section 2.01(c) hereof, and only the remainder, if any, shall be paid to the Company."
4. The first sentence of paragraph (c) of Section 4.01 is hereby amended in its entirety to read as follows:
"The Trustee shall maintain such books, records and accounts as may be necessary for the proper administration of the Trust Corpus, including, without limitation, as provided in Section 2.01 hereof, and shall render to the Company on or prior to each January 31, beginning January 31, 2002, until the termination of this Trust, an accounting with respect to the Trust Corpus as of the end of the immediately preceding December 31 (and as of the date of the Trust's termination)."
5. Section 6.04 is amended by replacing the reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
6. Schedule A is amended throughout by replacing each reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
IN WITNESS WHEREOF, this Amendment has been duly executed this 1st day of January, 2001.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/: John L. Hammond ------------------------------------ |
MARSHALL & ILSLEY TRUST COMPANY
By: /s/: Michael C. Wieber, V.P. /s/: Michael J. Shlensky, V.P. ------------------------------------ |
EXHIBIT 10.1(m)(2)
UNIVERSAL FOODS CORPORATION
TRUST AGREEMENT FOR RABBI TRUST B
Changes Upon Appointment of Successor Trustee
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") desires to appoint, effective as of January 1, 2001, Marshall & Ilsley Trust Company ("M&I") as successor trustee of Universal Foods Corporation Rabbi Trust B under the Trust Agreement dated January 18, 1988; and
THEREFORE, it is hereby agreed by the parties to the Trust Agreement for Rabbi Trust C, pursuant to the next to last sentence of Section 5.02, Amendment and Waiver, of the Trust Agreement, that, effective as of January 1, 2001:
1. Marshall & Ilsley Trust Company shall be successor trustee to Firstar Bank, Milwaukee, N.A.
2. The addresses for Notices to the Company and the Trustee provided in
Section 6.04, Notices, shall be changed to reflect the actual
addresses of the parties from time to time, with any party providing
other parties notice of any change pursuant to the procedure of
Section 6.04.
IN WITNESS WHEREOF, the parties have executed this Changes Upon Appointment of Successor Trustee as of the 1st day of January, 2001.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES MARSHALL & ILSLEY COMPANY CORPORATION By: /s/: John L. Hammond By: /s/: Michael C. Wieber -------------------------------- ------------------------------ Name: John L. Hammond Name: Michael C. Wieber Title: Vice President, Secretary Title: Vice President and General Counsel By: /s/: Michael J. Shlensky ------------------------------ Name: Michael J. Shlensky Title: Vice President |
EXHIBIT 10.1(n)(1)
AMENDMENT NO. 1 TO THE
TRUST AGREEMENT FOR RABBI TRUST C
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") is obligated under certain non-qualified plans and/or agreements (the "Plans") to make certain deferred and other payments to certain present, future and former directors and employees of the Company who have satisfied the eligibility requirements of such Plans and for purposes of assuring that such payments are made in satisfaction of such obligations the Company has established a trust in the form of a rabbi trust (commonly referred to as "Rabbi Trust C") which will be subject to the claims of the Company's existing or future general creditors; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001.
WHEREAS, the Company wishes to amend the trust agreement for Rabbi Trust C to reflect such changes and other matters relating thereto effective with the change in trustee.
NOW, THEREFORE, the trust agreement for Rabbi Trust C is hereby amended as follows, effective as of December 31, 2000:
1. The introductory paragraph is amended by inserting "d/b/a Sensient Technologies Corporation and effective upon shareholders approval, to be known as Sensient Technologies Corporation" immediately following "Universal Foods Corporation".
2. The first sentence of paragraph (c) of Section 2.01 is amended in its entirety to read as follows:
"As of each December 31, the Company shall recalculate the amount of assets which would be required to be delivered pursuant to Section 2.01(a) as of such date. If the amount so calculated exceeds the fair market of the assets then held in trust, the Company shall promptly (and in no event later than twenty five (25) days from such date) pay to the Trustee: (i) an amount in cash, marketable securities (valued at their fair market value) or life insurance policies or any combination thereof equal to such excess; less (ii) the amount, if any, of interest and other income earned on the Trust Corpus and received by the Trustee during the year then ended at December 31."
3. Paragraph (b) of Section 2.02 is amended in its entirety to read as follows:
"(b) Except as hereinafter provided, all interest and other income earned on the investment of the Trust Corpus, except dividends on and proceeds from life insurance policies, shall be the property of the Company and shall not constitute a part of the Trust Corpus. Within twenty (20) days after the end of each year ending December 31, the Trustee shall notify the Company of the amount of such interest and other income received by the Trustee during such year then ended. Such interest and other income received by the Trustee during each year then ending December 31 shall be paid over to the Company by the Trustee within thirty (30) days after the end of each such year. The amount of such interest or other income so payable to the Company shall be reduced to the extent that it offsets the excess otherwise required to be paid by the Company to the Trustee pursuant to Section 2.01(c) hereof, and only the remainder, if any, shall be paid to the Company."
4. The first sentence of paragraph (c) of Section 4.01 is hereby amended in its entirety to read as follows:
"The Trustee shall maintain such books, records and accounts as may be necessary for the proper administration of the Trust Corpus, including, without limitation, as provided in Section 2.01 hereof, and shall render to the Company on or prior to each January 31, beginning January 31, 2002, until the termination of this Trust, an accounting with respect to the Trust Corpus as of the end of the immediately preceding December 31 (and as of the date of the Trust's termination)."
5. Section 6.04 is amended by replacing the reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
6. Schedule A is amended throughout by replacing each reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
IN WITNESS WHEREOF, this Amendment has been duly executed this 1st day of January, 2001
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/: John L. Hammond ------------------------------- John L. Hammond |
MARSHALL & ILSLEY TRUST COMPANY
/s/: Michael C. Wieber, V.P. ------------------------------- /s/: Michael J. Shlensky, V.P. ------------------------------- |
EXHIBIT 10.1(n)(2)
UNIVERSAL FOODS CORPORATION
TRUST AGREEMENT FOR RABBI TRUST C
Changes Upon Appointment of Successor Trustee
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") desires to appoint, effective as of January 1, 2001, Marshall & Ilsley Trust Company ("M&I") as successor trustee of Universal Foods Corporation Rabbi Trust C under the Trust Agreement dated September 8, 1988; and
THEREFORE, it is hereby agreed by the parties to the Trust Agreement for Rabbi Trust C, pursuant to the next to last sentence of Section 5.02, Amendment and Waiver, of the Trust Agreement, that, effective as of January 1, 2001:
1. Marshall & Ilsley Trust Company shall be successor trustee to Firstar Bank, Milwaukee, N.A.
2. The addresses for Notices to the Company and the Trustee provided in
Section 6.04, Notices, shall be changed to reflect the actual
addresses of the parties from time to time, with any party providing
other parties notice of any change pursuant to the procedure of
Section 6.04.
IN WITNESS WHEREOF, the parties have executed this Changes Upon Appointment of Successor Trustee as of the 1st day of January, 2001.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES MARSHALL & ILSLEY COMPANY CORPORATION By: /s/: John L. Hammond By: /s/: Michael C. Wieber -------------------------------- ------------------------------- Name: John L. Hammond Name: Michael C. Wieber Title: Vice President, Secretary Title: Vice President and General Counsel By: /s/: Michael J. Shlensky ------------------------------- Name: Michael J. Shlensky Title: Vice President |
EXHIBIT 10.1(o)(1)
AMENDMENT NO. 1 TO THE
UNIVERSAL FOODS CORPORATION
INCENTIVE COMPENSATION PLAN FOR ELECTED CORPORATE OFFICERS
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Incentive Compensation Plan for Elected Corporate Officers (the "Plan"), which was approved by the shareholders of the Company on January 27, 2000 to restate and replace the Universal Foods Corporation Management Incentive Plan for Elected Corporate Officers; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such changes and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of the dates noted below:
1. Effective as of November 6, 2000, this Plan shall be known as the:
"Sensient Technologies Corporation Incentive Compensation Plan For Elected
Corporate Officers".
2. Effective as of November 6, 2000, the first sentence of Section I. is amended in its entirety to read as follows:
"The name of this Plan is the Sensient Technologies Incentive Compensation Plan for Elected Corporate Officers (formerly known as the Universal Foods Corporation Incentive Compensation Plan for Corporate Officers)."
3. Effective as of November 6, 2000, paragraph A. of Section II. is amended by replacing the reference to "Universal Foods Corporation" with "the Company".
4. Effective as of as of November 6, 2000, Paragraph E. of Section II. is amended to read:
"E. 'Company' means Universal Foods Corporation d/b/a Sensient Technologies Corporation, and effective upon approval of the shareholders, to be known as Sensient Technologies Corporation."
5. Effective as of January 1, 2000, a new paragraph G. is added to Section
II. to read as follows:
"G. 'Fiscal Year' means: (i) for the period on or after January 1, 2000, each twelve (12) consecutive month period beginning on January 1 and ending on December 31; (ii) for the period on or after October 1, 1999 and before January 1, 2000, the three (3) consecutive month period beginning on October 1, 1999 and ending on December 31, 1999; and (iii) for the period prior to October 1, 1999, each twelve (12) consecutive month period beginning on October 1 and ending the following September 30."
6. Effective as of January 1, 2000, paragraphs originally designated G.,
H., I., J., K. and L. of Section II. are re-designated as paragraphs H., I., J.,
K., L. and M., respectively.
7. Effective as of January 1, 2000, paragraph H. of Section II. is amended in its entirety to read follows:
"H. 'Fiscal Year Salary' means the base pay earned by a Participant during the relevant Fiscal Year, exclusive of any incentive compensation or supplemental payments by the Company."
8. Effective as of November 6, 2000, paragraph L. of Section II. is amended in its entirety to read as follows:
"L. 'Plan' means this Sensient Technologies Corporation Incentive Compensation Plan for Elected Corporate Officers."
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/ Richard Carney ------------------------------------ |
EXHIBIT 10.1(p)(1)
AMENDMENT NO. 1 TO THE
UNIVERSAL FOODS CORPORATION
MANAGEMENT INCENTIVE PLAN FOR DIVISION PRESIDENTS
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Management Incentive Plan for Division Presidents (the "Plan") for division presidents of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such changes and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of the date noted below:
1. Effective as of November 6, 2000, the Plan shall be known as the:
"Sensient Technologies Corporation Management Incentive Plan for Division
Presidents".
2. Effective as of November 6, 2000, the first sentence of Section I. is amended in its entirety to read as follows:
"The name of this Plan is the Sensient Technologies Corporation Management Incentive Plan for Division Presidents (formerly known as the Universal Foods Corporation Management Incentive Plan for Division Presidents)".
3. Effective as of November 6, 2000, paragraph C. of Section II. is amended by replacing the reference to "Universal Foods Corporation" with "the Company".
4. Effective as of November 6, 2000, Paragraph G. of Section II. is amended to read:
"G. 'Company' means Universal Foods Corporation d/b/a Sensient Technologies Corporation, and effective upon approval of the shareholders, to be known as Sensient Technologies Corporation."
5. Effective as of November 6, 2000, paragraph H. of Section II. is amended by replacing the reference to the "Corporation" with the "Company".
6. Effective as of January 1, 2000, a new paragraph J. is added to Section
II. to read:
"J. 'Fiscal Year' means: (i) for the period on or after January 1,
2000, each twelve (12) consecutive month period beginning on
January 1 and ending on December 31; (ii) for the period on or
after October 1, 1999 and before January 1, 2000, the three
(3) consecutive month period beginning on October 1, 1999 and
ending on December 31, 1999; and (iii) for the period prior to
October 1, 1999, each twelve (12) consecutive month period
beginning on October 1 and ending the following September 30."
7. Effective as of January 1, 2000, paragraphs originally designated J.,
K., L., and M. of Section II. are re-designated as paragraphs K., L., M., and
N., respectively.
8. Effective as of January 1, 2000, paragraph K. of Section II. is amended in its entirety to read as follows:
"K. "Fiscal Year Salary' means the base pay earned by a participant during the relevant Fiscal Year, exclusive of any incentive compensation or supplemental payments by the Company."
9. Effective as of November 6, 2000, paragraph J. of Section II. is amended in its entirety to read as follows:
"J. 'Plan' means this Sensient Technologies Corporation Management Incentive Plan for Division Presidents."
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/ Richard Carney ------------------------------------ |
EXHIBIT 10.1(q)(1)
AMENDMENT NO. 1 TO THE
UNIVERSAL FOODS CORPORATION
MANAGEMENT INCENTIVE PLAN FOR CORPORATE MANAGEMENT
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Management Incentive Plan for Corporate Management (the "Plan") for corporate management employees of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such changes and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of the dates noted below:
1. Effective as of November 6, 2000, the Plan shall be known as the:
"Sensient Technologies Corporation Management Incentive Plan for Corporate
Management".
2. Effective as of November 6, 2000, the first sentence of Section I. is amended in its entirety to read as follows:
"The name of this Plan is the Sensient Technologies Corporation Management Incentive Plan for Corporate Management (formerly known as the Universal Foods Corporation Management Incentive Plan for Corporate Management)."
3. Effective as of November 6, 2000, paragraph A. of Section II. is amended by replacing the reference to "Universal Foods Corporation" with "the Company".
4. Effective as of November 6, 2000, paragraph D. of Section II. is amended in its entirety to read as follows:
"D. 'Company' means Universal Foods Corporation d/b/a Sensient Technologies Corporation and, effective upon approval of the shareholders, to be known as Sensient Technologies Corporation."
5. Effective as of January 1, 2000, a new paragraph F. is added to Section
II. to read as follows:
"F. 'Fiscal Year' means (i) for the period on or after January 1, 2000, each twelve (12) consecutive month period beginning on January 1
and ending on December 31; (ii) for the period on or after October 1, 1999 and before January 1, 2000, the three (3) consecutive month period beginning on October 1, 1999 and ending on December 31, 1999; and (iii) for the period prior to October 1, 1999, each twelve (12) consecutive month period beginning on October 1 and ending the following September 30."
6. Effective as of January 1, 2000, paragraphs originally designated F.,
G., H., I., and J. of Section II. are re-designated as paragraphs G., H., I.,
J., and K., respectively.
7. Effective as of January 1, 2000, paragraph G. of Section II. is amended in its entirety to read as follows:
"G. 'Fiscal Year Salary' means the base pay earned by a participant during the relevant Fiscal Year, exclusive of any incentive compensation or supplemental payments by the Company."
8. Effective as of November 6, 2000, paragraph J. of Section II. is amended in its entirety to read as follows:
"J. 'Plan' means this Sensient Technologies Corporation Management Incentive Plan for Corporate Management."
9. Effective as of November 6, 2000, paragraph K. of Section II. is amended by replacing the reference to "Universal Foods Corporation" with "the Company".
10. Effective as of as of November 6, 2000, Section III. is amended by replacing the reference to "Universal Foods Corporation" with "the Company".
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/ Richard Carney ------------------------------------- |
EXHIBIT 10.1(r)(1)
AMENDMENT NO. 1 TO THE
UNIVERSAL FOODS CORPORATION
MANAGEMENT INCENTIVE PLAN FOR DIVISION MANAGEMENT
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Management Incentive Plan for Division Management (the "Plan") for division management employees of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such changes and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of the dates noted below:
1. Effective as of November 6, 2000, the Plan shall be known as the:
"Sensient Technologies Corporation Management Incentive Plan for Division
Management".
2. Effective as of November 6, 2000, the first sentence of Section I. is amended in its entirety to read as follows:
"The name of this Plan is the Sensient Technologies Corporation Management Incentive Plan for Division Management (formerly known as the Universal Foods Corporation Management Incentive Plan for Division Management)."
3. Effective as of November 6, 2000, paragraph F. of Section II. is amended in its entirety to read as follows:
"F. 'Company' means Universal Foods Corporation d/b/a Sensient Technologies Corporation, and effective upon approval of the shareholders, to be known as Sensient Technologies Company."
4. Effective as of November 6, 2000, paragraph G. of Section II. is amended to replace the reference to "Corporation" with "Company".
5. Effective as of January 1, 2000, a new paragraph I. is added to
Section II. to read as follows:
"I. 'Fiscal Year' means (i) for the period on or after January 1,
2000, each twelve (12) consecutive month period beginning on
January 1 and ending on December 31; (ii) for the period on or
after October 1, 1999 and before January 1, 2000, the three
(3) consecutive
month period beginning on October 1, 1999 and ending on December 31, 1999; and (iii) for the period prior to October 1, 1999, each twelve (12) consecutive month period beginning on October 1 and ending the following September 30."
6. Effective January 1, 2000, paragraphs originally designated I.,
J., K., and L. of Section II. are re-designated as paragraphs J., K., L., and
M., respectively.
7. Effective January 1, 2000, paragraph J. of Section II. is amended to read as follows:
"J. 'Fiscal Year Salary' means the base pay earned by a participant during the relevant Fiscal Year, exclusive of any incentive compensation or supplemental payments by the Company."
8. Effective as of November 6, 2000, paragraph K. of Section II. is amended in its entirety to read as follows:
"K. 'Plan' means this Sensient Technologies Corporation Management Incentive Plan for Division Management."
9. Effective as of November 6, 2000, Section III. is amended by replacing the reference to "Universal Foods Corporation" with "the Company".
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/: Richard Carney ---------------------------------- |
EXHIBIT 10.1(s)(1)
AMENDMENT NO. 2 TO THE
UNIVERSAL FOODS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
WHEREAS, Universal Foods Corporation (the "Company") sponsors the Universal Foods Corporation Supplemental Executive Retirement Plan (the "Plan") for certain key employees; and
WHEREAS, the Company desires to amend the Plan to provide for automatic lump sum distributions of participants' benefits following a change of control of the Company and to provide for a lump sum distribution option upon a participant's retirement under certain circumstances; and
WHEREAS, the Company desires to amend the Plan to: (a) designate the Company's Benefits Investment Committee as the Plan's administrator and to vest such committee with the authority to construe and interpret the Plan; and (b) to vest the Company's Benefits Administrative Committee with the authority to determine claims.
NOW THEREFORE, the Plan is hereby amended as follows effective as of June 15, 2000.
1. Section 2 of the Plan is hereby amended by the addition of new subsections H. and I. at the end thereof to read as follows:
"H. 'Benefits Administrative Committee' means the Benefits Administrative Committee of the Company, members of which are appointed by the Chief Executive Officer or the Company."
I. 'Benefits Investment Committee' means the Benefits Investment Committee of the Company, members of which are appointed by the Chief Executive Officer of the Company."
2. Section 5 of the Plan is hereby amended by inserting the following new paragraph as the first paragraph of the subsection entitled "Retirement Benefit":
"The Executive may elect a retirement income benefit payable in the form of a lump sum distribution but only if the Executive makes such election at least one full calendar year prior to his or her Early Retirement Date or Normal Retirement Date, as applicable, or in lieu of such advance election, elects that his or her retirement income benefit be actuarially reduced by six percent (6%) at retirement. If the Executive makes a lump sum distribution election, his or her retirement income benefit will equal the lump sum actuarial equivalent of a benefit, payable for a guaranteed 15 year period, equal to the product of the designated percentage (as set forth in this Section above) and the greater of the Executive's base salary at the time of retirement or the Executive's average base
salary prior to reduction for the Executive's contribution during the 60 highest paid consecutive calendar months of the last 120 calendar months immediately prior to retirement, reduced, as applicable, by: (i) an actuarially reduction of three percent (3%) for each full year the Executive's Early Retirement Date precedes the Executive's Normal Retirement Date; and (ii) an actuarially reduction of six percent (6%) if timely advance election of the lump sum form of payment is not made. The actuarial assumptions to be applied in calculating the actuarial equivalent of an Executive's retirement income benefit under this provision shall be determined as of the date of the Executive's retirement by the Chief Executive Officer of the Company based upon the recommendations of the Benefits Investment Committee.
(or)"
3. Subsection A. of Section 14 of the Plan is hereby amended in its entirety to read as follows;
"A. 1. Notwithstanding any other provision of the Plan, including specifically Sections 5. and 8., in the event of the change of control of the Company, each Executive employed with the Company as of the date of the change of control shall receive, in lieu of any benefit accrued under any other provision of the Plan (other than paragraph 4. below of this subsection A., if applicable), a change of control benefit as calculated under paragraph 3. below of this subsection A. payable in the form of a lump sum distribution as soon as administratively feasible after the date of such change of control, regardless of the Executive's age or period of continuous service as of the date of the change of control. 2. Notwithstanding any other provision of the Plan, including specifically Section 5., in the event of the change of control of the Company, each Executive who terminated employment before the date of the change of control (except for an Executive of a division of the Company divested before the change of control, unless otherwise determined by the Benefits Investment Committee in its discretion) who has not received full payment of his or her accrued benefit under Section 5. (or if any such Executive is deceased, such Executive's spouse or other designated beneficiary) shall receive, in full satisfaction of such accrued benefit, a lump sum distribution of the actuarial equivalent of such accrued benefit (or a lump sum distribution of the actuarial equivalent of his or her remaining payments if already in pay status) as soon as administratively feasible after the date of such change of control. 3. The change of control benefit calculated under this subsection A. will equal the lump sum actuarial equivalent of a benefit, payable |
for a guaranteed 15 year period, equal to the product of the designated percentage (as set forth in Section 5.) and the greater of the Executive's base salary as of the date of the change of control or the Executive's average base salary, prior to reduction for the Executive's contribution, during the 60 highest paid consecutive calendar months of the last 120 calendar months immediately prior to the date of the change of control (without imposition of a reduction of 3% for each full year the payment date precedes the Executive's Normal Retirement Date, if applicable).
4. Subject to Section 3., each Executive employed with the Company as of the date of the change of control shall continue to be eligible to participate in this Plan until his or her termination of employment, and, upon such Executive's termination he or she shall be eligible for any benefits accrued under the Plan subsequent to the payment of the change of control benefit, regardless of the Executive's age or period of continuous service as of the date of his or her termination of employment. With respect to any such accrued benefit, the Executive may elect retirement benefits under subsection B. of Section 5. payable at any time following his or her termination of employment and attainment of age 55, and the survivor income benefit in subsection A. of Section 5. shall apply until such election is made. The calculation of the Executive's accrued benefit following the change of control will equal the actuarial equivalent of a benefit, payable for a guaranteed 15 year period, equal to the product of the designated percentage (as set forth in Section 5.) and the greater of the Executive's base salary as of the Executive's termination of employment or the Executive's average base salary, prior to reduction for the Executive's contribution, during the 60 highest paid consecutive calendar months of the last 120 calendar months immediately prior to the date of the Executive's termination of employment, actuarially reduced for the change of control benefit determined under paragraph 3. above of this subsection A. (but without imposition of a reduction of 3% for each full year the payment date precedes the Executive's Normal Retirement Date, if applicable). After termination of employment, no further contributions shall be required of the Executive under Section 4.
5. The actuarial assumptions to be applied in calculating the actuarial equivalent of an Executive's benefit under this subsection A. shall be determined as of the date of the change of control or the Executive's termination of employment, as applicable, by the Chief Executive Officer of the Company based upon the recommendations of the Benefits Investment Committee."
4. The Plan is hereby amended by the addition of a new "SECTION 20. ADMINISTRATION" to read as follows:
"SECTION 20. ADMINISTRATION
A. The Benefits Investment Committee shall be responsible for the general operation and administration of the Plan and shall have the full authority to interpret and construe the Plan. The Benefits Investment Committee's interpretation and construction of the Plan, and actions thereunder, shall be binding and conclusive on all persons and for all purposes.
B. The Benefits Administrative Committee shall have the full authority to determine and review claims for benefits under this plan. The Benefits Administrative Committee's determination of benefit claims under this plan, and actions thereunder, shall he binding and conclusive on all persons and for all purposes."
IN WITNESS WHEREOF, this Amendment has been duly executed this 15th day of June, 2000.
UNIVERSAL FOODS CORPORATION
By: /s/: Richard Carney --------------------------- Attest: /s/: John L. Hammond --------------------- |
EXHIBIT 10.1(s)(2)
AMENDMENT NO. 3 TO THE
UNIVERSAL FOODS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
(commonly known as SERP "A")
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Supplemental Executive Retirement Plan (commonly known as "SERP A") (the "Plan") for employees of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such changes and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of the dates noted below:
1. Effective as of November 6, 2000, the Plan shall be known as the:
"Sensient Technologies Corporation Supplemental Executive Retirement Plan A".
2. Effective as of November 6, 2000, Section 1. of the Plan is amended in its entirety to read as follows:
"SECTION 1. PURPOSE
The purpose of the Sensient Technologies Corporation Supplemental Executive Retirement Plan (the "Plan") is to enable Universal Foods Corporation d/b/a Sensient Technologies Corporation, and, effective upon shareholder approval, to be known as Sensient Technologies Corporation (the "Company") to attract, retain, and motivate certain key employees and to provide retirement and survivor benefits for the employees, their surviving spouses and designated beneficiaries. The Company intends the Plan to be a non-qualified supplemental executive retirement plan for certain key employees, as designated and described herein."
3. Effective as of November 6, 2000, Paragraph A. of Section 2. is amended in its entirety to read as follows:
"A. 'Board of Directors' means the board of directors of the Company."
4. Effective as of October 1, 2000, Paragraph D. of Section 2. is amended in its entirety to read as follows:
"D. 'Fiscal Year' means: (i) on or after January 1, 2001, each twelve (12) consecutive month period commencing on January 1 and ending the following December 31; (ii) on or after October 1, 2000, but prior to January 1, 2001, the three (3) consecutive month period commencing October 1, 2000 and ending December 31, 2000; and (iii) prior to October 1, 2000, each twelve (12) consecutive month period beginning October 1 and ending the following September 30.
5. Effective as of November 6, 2000, Paragraph E. of Section 2. is amended in its entirety to read as follows:
"E. 'Company' means Universal Foods Corporation d/b/a Sensient Technologies Corporation and, and effective upon approval of the shareholders, to be known as Sensient Technologies Corporation, and shall include all of its wholly-owned subsidiaries."
6. Effective as of November 6, 2000, Section 19. is amended by replacing the reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
7. Effective as of November 6, 2000, Exhibit A is amended throughout by replacing each reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
8. Effective as of November 6, 2000, Exhibit B is amended throughout by replacing each reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPRORATION
By: /s/: Richard Carney ------------------------------------- |
EXHIBIT 10.1(t)
UNIVERSAL FOODS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN B
SECTION 1. PURPOSE
Universal Foods Corporation (the "Company") hereby affirms the establishment of a non-qualified supplemental executive retirement plan for certain key employees, as designated and described herein, which shall be known as the Universal Foods corporation SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN B (the "Plan").
The purpose of the Plan is to enable the Company to attract, retain, and motivate certain key employees and to provide retirement and survivor benefits for the employees, their surviving spouses and designated beneficiaries.
SECTION 2. DEFINITIONS
For the purpose of this Plan, certain words or phrases used herein will have the following meanings:
A. "Board of Directors" means the Board of Directors of Universal Foods Corporation.
B. "Disability" means permanent long-term disability for which the Executive would be entitled to long-term disabi1ity benefits under the Company's Disability Income Plan. Determination of such Disability applied to this Plan shall be made at the sole discretion of the Company and the decision of the Company shall be final. During periods of determined Disability, the Executive shall be considered to be in the full employ of the Company for the purpose of this Plan.
C. "Executive" means a selected employee of the Company designated to participate in the Plan by the Chief Executive Officer.
D. "Final Base Salary" means the greater of (i) the Executive's monthly base salary at the appropriate time or (ii) the average of the Executive's monthly base salary during the 60 highest paid consecutive calendar months during the last 120 calendar months immediately prior to the appropriate time. The appropriate time for this purpose is the earlier of retirement, death, Disability, or for purposes of Section 14, termination. For purposes of this Plan, "monthly base salary" means the Executive's gross base salary prior to reduction for the Executive's contribution pursuant to Section 4.
E. "Company" means Universal Foods Corporation and all of its wholly-owned subsidiaries.
F. "Normal Retirement Date" means the earlier of (i) the date the Executive attains age 62 or (ii) the later of (A) the date the Executive attains age 55 and (B) the date his or her age and years of continuous service with the Company equals or exceeds 85.
G. "Early Retirement Date" means the later of (i) the date the Executive attains age 55 and (ii) the date the Executive has completed 10 or more years of continuous service with the Company.
SECTION 3. DESIGNATION OF EMPLOYEE PARTICIPATING IN PLAN
The Chief Executive Officer shall have the sole discretion, from time to time, to designate which employees shall participate in the Plan. Such a designated employee shall be called "Executive" and participation shall be evidenced by Executive's execution of this Agreement.
If an Executive declines participation in the Plan at the time of the offer from the Company, a Waiver of Participation form must be signed (Exhibit A attached hereto and incorporated herein by reference).
SECTION 4. EXECUTIVE CONTRIBUTION
While employed with the Company, Executive will contribute on a payroll basis, through a reduction in base salary, an annual amount equal to the Northwestern Mutual Life Insurance Company's non-rated term insurance premium applicable to a life insurance benefit of two times the Executive's base salary in effect on the date of acceptance into the Plan.
SECTION 5. BENEFITS
Except as otherwise provided in Section 14, participating Executives, their spouses and designated beneficiaries shall only be entitled to benefits under this Plan if the Executive is employed by the Company at time of death or until his or her Early Retirement Date, whichever occurs earlier.
A. In the event the Executive dies while employed by the Company, the Executive will have a survivor income benefit payable to his or her designated beneficiary for a guaranteed period (Section 19). The benefit will equal the designated percentage of the Executive's Final Base Salary (see Section 19).
B. At retirement, the benefit in paragraph A shall no longer be available, and the Executive shall elect one of the alternatives in paragraphs 1, 2 and 3 below.
1. The Executive may elect to continue in effect a survivor income benefit payable to his or her designated beneficiary for a guaranteed period (see Section 19) commencing after the Executive's death. The benefit will equal the designated percentage (see Section 19) of the Executive's Final Base Salary,
reduced if applicable by the early retirement provision in paragraph C below based on the Executive's retirement date.
2. The Executive may elect to receive a supplemental retirement income benefit payable for a guaranteed period (See Section 19) to the Executive or, in the event of the Executive's death, his or her designated beneficiary. The benefit will be the designated percentage (see Section 19) of the Executive's Final Base Salary, reduced if applicable by the early retirement provision in paragraph C below. Payments cease after an aggregate of the guaranteed period of payments have been made to the Executive and the beneficiary.
3. The Executive may elect to receive an actuarially equivalent lifetime supplemental retirement income benefit in a joint and survivor form with the Executive's spouse on the date of retirement as the contingent beneficiary. The benefit will be the designated percentage of the Executive's Final Base Salary (see Section 19), reduced, if applicable, by the early retirement provision in paragraph C below and further reduced to cover the cost for providing the benefit over the lives of the Executive and the spouse. The benefit for a surviving spouse will be 50% of the monthly benefit for the Executive. The minimum benefit to be paid in the aggregate to the Executive, spouse, and designated beneficiary will be equal to the aggregate dollar amount which would have been payable in the guaranteed period of payout in paragraph 2 above. Therefore, after the death of the later to die of the Executive and the Executive's spouse the designated beneficiary shall receive the remainder of the minimum benefit. If the aggregate payments to the Executive and the Executive's spouse were made for at least the guaranteed period, the remainder of the minimum benefit shall be paid in a lump sum. If the aggregate payments to the Executive and the Executive's spouse were made for less than the guaranteed period, the remainder of the minimum benefit shall be paid in equal monthly installments over the period necessary such that the aggregate payment period for all benefits related to the Executive equals the guaranteed period. The actuarial reductions, from the guaranteed period amount in paragraph 2 above, to obtain the 50% joint and survivor benefit are:
Executive's Age at Retirement Reduction ---------- --------- 55 8 56 7 57 6 58 5 59 4 60 3 61 2 62 0 |
C. In the event that the Executive retires after the Early Retirement Date but prior to the Normal Retirement Date, the retirement benefit in paragraph B.1, 2 and 3 above will be reduced 3% for each full year the retirement precedes the Executive's Normal Retirement Date.
SECTION 6. MANNER OF PAYING BENEFITS
Within 60 days following the death or retirement of the Executive eligible under
Section 5, an initial benefit payment shall be made as defined under Section 5.
All subsequent benefits under this Plan shall accrue on the first day of each
succeeding month after such payment and shall be made on or about such day
during the period for which benefits are payable.
SECTION 7. BENEFICIARY DESIGNATIONS
The benefits payable by the Company under Section 5 shall be paid as they become due to the beneficiary or beneficiaries as designated by the Executive in writing on the Beneficiary Designation form (Exhibit B attached hereto and incorporated herein by reference.) The Executive shall have the right to change or amend such beneficiary designation from time to time (without the consent of any prior beneficiary) by submitting a newly executed Exhibit B to the Company. If the Executive fails to make such beneficiary designation or if no beneficiary so designated survives the Executive, payments shall be made as they become due to the duly appointed personal representative of the estate of the Executive.
SECTION 8. TERMINATION OF EMPLOYMENT
Except as otherwise provided in Section 14, if an Executive's employment with the Company is terminated prior to the Executive's Early Retirement Date, either by the Company or by the Executive, with or without cause, no amounts shall be paid under any provision of this Plan. Disability or death shall not be deemed a termination of employment for purposes of this Section.
SECTION 9. DISABILITY
If the Executive incurs a Disability, Executive contributions will be waived unless and until the Executive returns to full employment. Retirement benefits will not be payable under this Plan while the Executive is receiving benefits under the Company's Disability Income Plan. Retirement benefits will commence with the later of the cessation of such Disability Income Plan payments or the Executive's Normal Retirement Date, such later date being the Executive's retirement for purposes of this Plan.
SECTION 10. TITLE TO LIFE INSURANCE
If the Company elects to purchase a life insurance contract to provide the Company with funds to make payments hereunder, the Company shall at all times be the sole owners of and the beneficiary under such contract, and shall have the unrestricted right to use all amounts and to exercise all options and privileges thereunder without knowledge or consent of the Executive, his or her designated beneficiary or any third party. It is expressly agreed that neither the Executive, designed beneficiary, nor any third party shall have any right, title, or interest whatsoever in or to any such contract.
SECTION 11. PAYMENTS ARE NOT SECURED
The Executive, his or her designated beneficiary or any third party having or claiming a right to payments hereunder or to any interest in this Plan shall rely solely on the unsecured promise of the Company, and nothing herein shall be construed to give the Executive, his or her spouse or designated beneficiary or any third party any right, title, interest, or claim in or to any specific asset, fund, reserve, account or property of any kind whatsoever owned by the Company or in which it may have any right, title or interest now or in the future. The Executive shall have the right to enforce his or her claim against the Company in the same manner as any unsecured creditor.
SECTION 12. NON-ASSIGNABILITY OF BENEFITS
No rights of any kind under this Plan shall be transferable or assignable by the Executive, spouse or any designated beneficiary or be subject to alienation, encumbrance, garnishment, attachment, execution, levy or seizure by legal process of any kind, voluntary or involuntary.
SECTION 13. AMENDMENT
This Plan may be amended at any time or from time to time by the Company. Any amendment shall not reduce the benefit of any participating Executive, or any party receiving benefits under this Plan without a consent in writing by the affected Executive or party, as applicable. The failure of either the Company or the Executive to enforce any of the provisions hereof shall not be deemed a waiver thereof. No provision of this Plan shall be deemed to have been waived or modified unless such waiver or modification shall be in
writing and signed by the appropriate party. The Company reserves the right to terminate the Plan at any time. The termination of the Plan shall not affect the payment of benefits due to or accrued by any Executive, Executive's spouse, or designated beneficiary covered by the Plan prior to termination.
SECTION 14. CHANGE OF CONTROL OF THE COMPANY
A. Notwithstanding any other provision of this Plan, including specifically Sections 5 and 8 above, in the event of a change of control of the Company, the Company shall continue to provide the survivor income and retirement income benefits described in Section 5 above for Executives participating in the Plan when such change of control occurs. Further, any Executive whose employment terminates for any reason after such change of control occurs shall be eligible for benefits under the Plan regardless of his or her age or period of continuous service as of the date of his or her termination of employment. The Executive may elect retirement benefits under Section 5.B at any time after attainment of age 55 (subject to the 3% per year reduction in Section 5.C for commencement prior to Normal Retirement Date), and the survivor income benefit in Section 5A shall apply until such election is made. After termination of employment, no further contribution shall be required of the Executive under Section 4.
B. For purposes of paragraph A of this Section, the term "change of control of the Company" means:
(i) the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934 (the Exchange Act)(a Person) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 20% or more of either (A) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock")
or (B) the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Company Voting Securities");
provided, however, that for purposes of this subparagraph (i), the
following acquisitions shall not constitute a Change of Control: (1)
any acquisition directly from the Company, (2) any acquisition by
the Company, (3) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company, or (4) any acquisition
pursuant to a transaction which complies with Clauses (A), (B) and
(C) of subparagraph (iii) of this paragraph B; or
(ii) individuals who, as of September 10, 1998, constitute the Board (the "Incumbent Board") cease for any reason to constitute at least a majority of the Board; provided, however, that any individual becoming a director subsequent to September 10, 1998 whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board; or
(iii) consummation by the Company of a reorganization, merger or consolidation or sale or other disposition of all or substantially all of the assets of the Company or the acquisition of assets of another entity (a "Business Combination"), in each case unless, following such Business Combination (A) all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such Business Combination beneficially own, directly or indirectly, more than 50% of, respectively the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such Business Combination (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) in substantially the same proportions as their ownership immediately prior to such Business Combination of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding any employee benefit plan (or related trust) of the Company or of such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such Business Combination or the combined voting power of the then outstanding voting securities of such corporation except to the extent that such ownership existed prior to the Business Combination and (C) at least a majority of the members of the board of directors of the corporation resulting from such Business Combination were members of the Incumbent Board at the time of the execution of the initial agreement, or the action of the Board, providing for such Business Combination; or
(iv) approval by the shareholders of the Company of a complete liquidation or dissolution of the Company.
SECTION 15. FORFEITURE OF BENEFITS
Executive shall forfeit any right to receive benefits hereunder (including any benefits payable to Executive's spouse or designated beneficiary), and all benefit payments hereunder shall
terminate, if, at any time during the period in which Executive, his/her spouse and designated beneficiaries shall be entitled to benefits under this Plan or benefits are being paid hereunder, Executive, directly or indirectly, either individually or as an employee, officer, principal, agent, partner, shareholder, owner, trustee, beneficiary, co-venturer, distributor or consultant or in any other capacity: (1) within the continental United States, in a capacity that could reasonably be expected to cause Executive to use or disclose confidential information of the Company acquired by Executive during the term of Executive's employment with the Company, and in a manner materially detrimental to the business of the Company, participates in, becomes associated with, provides assistance to, or has a financial or other interest in any business, activity or enterprise which competes (with any product or product lines of the Company) for Active Customers of the business of the Company or any Successor or assign of the Company; (2) induces or attempts to induce any employee, officer, director, sales representative, consultant or other personnel of the Company to terminate his or her relationship or breach his or her agreements with the Company; or (3) within the continental United States induces or attempts to induce any Active Customer of the Company to cease doing business, in whole or in part, with or through the Company, or to do business with any other person, firm, partnership, corporation or any other entity competitive with the business of the Company. The ownership of less than a five percent (5%) interest in a corporation whose shares are traded in a recognized stock exchange or traded in the over-the-counter market, even though that corporation may be a competitor of the Company, shall not be deemed financial participation in a competitor. "Active Customer" shall mean any customer of the Company which purchased any of the Company's products or services during the one-year period preceding the date Executive engages in any activity specified in subsection (1) or (3) above.
In the event of a change of control of the Company (as defined in Section 14 above), this forfeiture provision shall be void.
SECTION 16. SUCCESSORS AND ASSIGNS
If the Company sells, assigns or transfers all or substantially all of its business and assets to any party, excluding affiliates of the Company, or if the Company merges into or consolidates or otherwise combines with any party which is a continuing or successor entity, then the Company shall assign all of its right, title and interest in this Plan as of the date of such event to the party which is either the acquiring or successor corporation, and such party shall assume and perform from and after the date of such assignment all of the terms, conditions and provisions imposed under this Plan upon the Company. In case of such assignment by the Company and such assumption and agreement by such party all further rights as well as all other obligations of the Company under this Plan thenceforth shall cease and terminate and thereafter the expression "the Company" wherever used herein shall be deemed to mean such party.
SECTION 17. NON-GUARANTEE OF EMPLOYMENT
This Plan shall not be construed as giving the Executive the right to be retained as an employee of the Company for any period.
SECTION 18. VESTING
There is no vesting under the Plan.
SECTION 19. DESIGNATED PERCENTAGES AND GUARANTEED PERIOD
The designated percentage under Section 5 for the Executive is 25%
The designated guaranteed period under Section 5 for the Executive is 20 years.
SECTION 20. MISCELLANEOUS
The Plan supercedes and modifies in all respect any prior version of the Company's Supplemental Executive Retirement Plan B and any amendments thereto. The Plan is executed by Executive in consideration of continued employment with the Company, Company's continuation of the Plan and Executive's potential receipt of benefits under the Plan.
SECTION 21. NOTICES
All notices, requests, demands, and other communications under this Plan shall be in writing and delivered in person or by certified mail, postage prepaid as follows:
Company
Universal Foods Corporation
433 East Michigan Street
Milwaukee, WI 53201
Attn: Vice President-
Human Resources
Executive
Steven O. Cordier
140 Indian Creek Court
Fox Point, WI 53217-2321
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of _________________ 1999.
Universal Foods Corporation By: ____________________________________ Richard Carney, Vice President-Human Resources (CORPORATE SEAL) Attest: _________________________________________ John L. Hammond, Secretary _________________________________________ Steven O. Cordier, Executive |
Exhibit A
UNIVERSAL FOODS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN B
WAIVER OF PARTICIPATION
On ____________________________, I was given the opportunity to participate in the Universal Foods Corporation Supplemental Executive Retirement Plan B. In accordance with the policy established under the Plan, each designated Executive is given 60 days from the notice of designation (the "Notice") to participate before the offer is withdrawn, unless at a later date the offer is reinstated by Universal Foods Corporation. I acknowledge and understand this limitation relative to my participation in the Plan.
Because the elapsed time since receipt of the Notice exceeds 60 days, there will be no benefits available to me or to any of my beneficiaries under the Plan. I further understand that my future participation in the Plan is solely within the discretion of Universal Foods Corporation.
Date:________________________________
Exhibit B
UNIVERSAL FOODS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN B
Beneficiary Designation
I, _____________________________, hereby designate the following as my Primary Beneficiary under my Supplemental Executive Retirement Plan B with Universal Foods Corporation:
Primary Beneficiary's Name Relationship to me
If the Primary Beneficiary does not survive me or survives me, but dies before actual payment in full of my benefits, or if there be no named Primary Beneficiary, the remaining portion of my benefits shall he paid in equal shares to the following Contingent Beneficiaries.
_____________________________________ ______________________________________ Contingent Beneficiary's Name Relationship to me _____________________________________ ______________________________________ Contingent Beneficiary's Name Relationship to me _____________________________________ ______________________________________ Contingent Beneficiary's Name Relationship to me |
Upon the death of a Contingent Beneficiary, any remaining portion of said benefits shall be paid in equal shares to his or her children living at the time each payment is to be made in accordance with the Plan. Upon the death of a Contingent Beneficiary who is not survived by a child or children, or upon the death of the last surviving child of a Contingent Beneficiary, any remaining portion of his or her beneficial interest shall be paid in equal shares to the then living Contingent Beneficiaries and the children of any then deceased Contingent Beneficiaries, any such child or children to be paid (as described in the preceding sentence) only the share the parent would receive if living.
If none of the foregoing persons are living when any benefits under the Plan are payable, any remaining installments shall be paid to the personal representative of the last to die of me or any designated beneficiary.
This form constitutes a revocation in full of any Beneficiary Designations previously made by me and may be changed or revoked by me at any time, provided that such subsequent designations be in writing and filed with Universal Foods Corporation.
Witness: Date:_________________________________ _____________________________________ ______________________________________ (Cannot be a Beneficiary) Signature of Employee |
Receipt of the above Beneficiary Designation is hereby acknowledged by:
UNIVERSAL FOODS CORPORATION
Date: ______________________________ By:___________________________________
EXHIBIT 10.1(t)(1)
AMENDMENT NO. 2 TO THE
UNIVERSAL FOODS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN B
WHEREAS, Universal Foods Corporation (the "Company") sponsors the Universal Foods Corporation Supplemental Executive Retirement Plan B (the "Plan") for certain key employees; and
WHEREAS, the Company desires to amend the Plan to provide for automatic lump sum distributions of participants' benefits following a change of control of the Company and to provide for a lump sum distribution option upon a participant's retirement under certain circumstances; and
WHEREAS, the Company desires to amend the Plan to: (a) designate the Company's Benefits Investment Committee as the Plan's administrator and to vest such committee with the authority to construe and interpret the Plan; and (b) to vest the Company's Benefits Administrative Committee with the authority to determine claims.
NOW THEREFORE, the Plan is hereby amended as follows effective as of June 15, 2000.
1. Section 2 of the Plan is hereby amended by the addition of new subsections H. and I. at the end thereof to read as follows:
"H. 'Benefits Administrative Committee' means the Benefits Administrative Committee of the Company, members of which are appointed by the Chief Executive Officer of the Company."
I. 'Benefits Investment Committee' means the Benefits Investment Committee of the Company, members of which are appointed by the Chief Executive Officer of the Company."
2. Subsection B. of Section 5. of the Plan is hereby amended by replacing the phrase "paragraphs 1, 2 and 3 below" contained in its penumbra paragraph with the phrase "paragraphs 1., 2., 3. and 4. below" and by inserting a new paragraph 4. at the end thereof to read as follows:
"4. The Executive may elect a retirement income benefit payable in the form of a lump sum distribution but only if the Executive makes such election at least one full calendar year prior to his or her Early Retirement Date or Normal Retirement Date, as applicable, or in lieu of such advance election, elects that his or retirement income benefit be actuarially reduced by six percent (6%) at retirement. If the Executive makes a lump sum distribution election, his or her retirement income benefit will equal the lump sum actuarial equivalent of a benefit, payable for a guaranteed 20
year period, equal to the designated percentage of the Executive's Final Base Salary, reduced, as applicable, by: (i) the early retirement provision in subsection C. below based on the Executive's retirement date; and (ii) an actuarially reduction of six percent (6%) if timely advance election of the lump sum form of payment is not made. The actuarial assumptions to be applied in calculating the actuarial equivalent of an Executive's retirement income benefit under this paragraph 4. shall be determined as of the date of the Executive's retirement by the Chief Executive Officer of the Company based upon the recommendations of the Benefits Investment Committee."
3. Subsection C. of Section 5. of the Plan is hereby amended by replacing the phrase "paragraphs B.2 and 3 above" contained therein with the phrase "paragraphs 2., 3., and 4. of subsection B. above".
4. Subsection A. of Section 14. of the Plan is hereby amended in its entirety to read as follows:
"A. 1. Notwithstanding any other provision of the Plan, including specifically Sections 5. and 8., in the event of the change of control of the Company, each Executive employed with the Company as of the date of the change of control shall receive, in lieu of any benefit accrued under any other provision of the Plan (other than paragraph 4. below of this subsection A., if applicable), a change of control benefit as calculated under paragraph 3. below of this subsection A. payable in the form of a lump sum distribution as soon as administratively feasible after the date of such change of control, regardless of the Executive's age or period of continuous service as of the date of the change of control.
2. Notwithstanding any other provision of the Plan, including specifically Section 5., in the event of the change of control of the Company, each Executive who terminated employment before the date of the change of control (except for an Executive of a division of the Company divested before the change of control, unless otherwise determined by the Benefits Investment Committee in its discretion) who has not received full payment of his or her accrued benefit under Section 5. (or if any such Executive is deceased, such Executive's spouse or other designated beneficiary) shall receive, in full satisfaction of such accrued benefit, a lump sum distribution of the actuarial equivalent of such accrued benefit (or a lump sum distribution of the actuarial equivalent of his or her remaining payments if already in pay status) as soon as administratively feasible after the date of such change of control.
3. The change of control benefit calculated under this subsection
A. will equal the lump sum actuarial equivalent of a benefit,
payable for a guaranteed 20 year period, equal to the product
of the designated percentage of the Executive's Final Base
Salary and such Executive's Final Base Salary as of the date
of the change of control (without imposition of a reduction of
3% for each full year the payment date precedes the
Executive's Normal Retirement Date, if applicable).
4. Subject to Section 3., each Executive employed with the Company as of the date of the change of control shall continue to be eligible to participate in this Plan until his or her termination of employment, and upon such Executive's termination he or she shall be eligible for any benefits accrued under the Plan subsequent to the payment of the change of control benefit, regardless of the Executive's age or period of continuous service as of the date of his or her termination of employment. With respect to any such accrued benefit, the Executive may elect retirement benefits under subsection B. of Section 5. payable at any time following his or her termination of employment and attainment of age 55, and the survivor income benefit in subsection A. of Section 5. shall apply until such election is made. The calculation of the Executive's accrued benefit following the change of control will equal the actuarial equivalent of a benefit, payable for a guaranteed 20 year period, equal to the product of the designated percentage of the Executive's Final Base Salary and such Executive's Final Base Salary as of the date of the Executive's termination of employment, actuarially reduced for the change of control benefit determined under paragraph 3. above of this subsection A. (but without imposition of a reduction of 3% for each full year the payment date precedes the Executive's Normal Retirement Date, if applicable). After termination of employment, no further contributions shall be required of the Executive under Section 4.
5. The actuarial assumptions to be applied in calculating the actuarial equivalent of an Executive's benefit under this subsection A. shall be determined as of the date of the change of control or the Executive's termination of employment, as applicable, by the Chief Executive Officer of the Company based upon the recommendations of the Benefits Investment Committee."
5. The Plan is hereby amended by the addition of a new "SECTION
20. ADMINISTRATION" to read as follows:
"SECTION 20. ADMINISTRATION
A. The Benefits Investment Committee shall be responsible for the general operation and administration of the Plan and shall have the full authority to interpret and construe the Plan. The Benefits Investment Committee's interpretation and construction of the Plan, and actions thereunder, shall be binding and conclusive on all persons and for all purposes.
B. The Benefits Administrative Committee shall have the full authority to determine and review claims for benefits under this plan. The Benefits Administrative Committee's determination of benefit claims under this plan, and actions thereunder, shall be binding and conclusive on all persons and for all purposes."
IN WITNESS WHEREOF, this Amendment has been duly executed this 15th day of June 2000.
UNIVERSAL FOODS CORPORATION
By: /s/: Richard Carney ---------------------------- Attest: /s/: John L. Hammond ---------------------------- |
EXHIBIT 10.1(t)(2)
AMENDMENT NO. 3 TO THE
UNIVERSAL FOODS CORPORATION
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN B
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Supplemental Executive Retirement Plan B (the "Plan") for eligible employees of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such change and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of November 6, 2000:
1. The Plan shall be known as the: "Sensient Technologies Corporation Supplemental Executive Retirement Plan B".
2. Section 1. of the Plan is amended in its entirety to read as follows:
"SECTION 1. PURPOSE
The purpose of the Sensient Technologies Corporation Supplemental Executive Retirement Plan B (the "Plan") is to enable Universal Foods Corporation d/b/a Sensient Technologies Corporation, and, effective upon shareholder approval, to be known as Sensient Technologies Corporation (the "Company") to attract, retain, and motivate certain key employees and to provide retirement and survivor benefits for the employees, their surviving spouses and designated beneficiaries. The Company intends the Plan to be a non-qualified supplemental executive retirement plan for certain key employees, as designated and described herein."
3. Paragraph A. of Section 2. is amended in its entirety to read as follows:
"A. 'Board of Directors' means the board of directors of the Company."
4. Paragraph E. of Section 2. is amended in its entirety to read as follows:
"E. 'Company' means Universal Foods Corporation d/b/a Sensient Technologies Corporation and, effective upon approval of the shareholders, to be known as Sensient Technologies Corporation, and shall include all of its wholly-owned subsidiaries."
5. Section 19. is amended by replacing the reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
6. Exhibit A is amended throughout by replacing each reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
7. Exhibit B is amended throughout by replacing each reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPRORATION
By: /s/ Richard Carney ------------------------------ |
EXHIBIT 10.1(u)(1)
AMENDMENT NO. 2 TO THE
UNIVERSAL FOODS
SUPPLEMENTAL BENEFIT PLAN
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies (the "Company") sponsors the Universal Foods Supplemental Benefit Plan (the "Plan") for employees of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such changes and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of the dates noted below:
1. Effective as of November 6, 2000, the Plan shall be known as the:
"Sensient Technologies Supplemental Benefit Plan".
2. Effective as of November 6, 2000, Section 1. is amended in its entirety to read as follows:
"Section 1. Purpose
The purpose of the Sensient Technologies Supplemental Benefit
Plan ("Plan") is to reimburse certain employees for various
reductions in qualified plan benefits in the Sensient Technologies
Retirement Employee Stock Ownership Plan, the Sensient Technologies
Transition Retirement Plan, the Sensient Technologies Corporation
Savings Plan, which reductions are caused by (i) restrictions in
Section 401(a)(17), 410, or 415 of the Internal Revenue Code, (ii)
the maximum limitation on employer and employee contributions under
Sections 401(k), 401(m), and 402(g), of the Internal Revenue Code
and (iii) the deferral of a portion of their cash compensation
pursuant to nonqualified deferred compensation arrangements."
3. Effective as of November 6, 2000, paragraph (c) of Section 2. is amended in its entirety to read as follows:
"(c) 'Company' means Universal Foods Corporation d/b/a Sensient Technologies Corporation and, effective upon approval of the shareholders, to be known as Sensient Technologies Corporation."
4. Effective as of November 6, 2000, the Plan is amended throughout by replacing each additional reference to "Universal Foods Corporation" with "Sensient Technologies Corporation".
5. Effective as of November 6, 2000, the Plan is amended throughout by replacing each reference to "UFC Stock" with "STC Stock".
6. Effective as of November 6, 2000, the Plan is amended throughout by deleting each reference to the "Universal Foods Corporation Retirement Plan-General Participating Group".
7. Effective November 6, 2000, paragraph (1) of Section 2. is deleted, and the following paragraphs of Section 2 are re-lettered accordingly.
8. Effective as of October 1, 2000, Section 4. is amended in its entirety to read as follows:
"Section 4. Savings Plan Matching Supplement.
An Executive's Plan Account shall be allocated an amount
(i) for the period prior to October 1, 2000; as of September
30, 1989 and each September 30 thereafter; and (ii) for the
period on and after October 1, 2000; as of December 31, 2000
and each December 31 thereafter, equal to the difference
between (A) and (B), where:
(A) is the amount of matching Employer contributions
that would have been allocated to the account of the
Executive for each plan year under the Savings Plan,
assuming:
(1) the Executive had made the maximum pre-tax
deposits for the plan year,
(2) the 415 Limit and $200,000 Limit were
inapplicable, and
(3) the limitations on employer and employee
contributions under Code Sections 401(k), 401(m),
and 402(g) were inapplicable, and
(B) is the actual matching Employer contribution
allocable to the Executive's Savings Plan account for
the plan year."
9. Effective as of October 1, 2000, Section 5. is amended in its entirety to read as follows:
"Section 5. ESOP Supplement.
An Executive's Plan Account shall be allocated an amount (i) for the period prior to October 1, 2000; as of September 30, 1989 and each September 30 thereafter; and (ii) for the period on
and after October 1, 2000; as of December 31, 2000 and each December 31 thereafter, equal to the difference between (A) and (B), where:
(A) is the amount of allocations that would have been made to the account of the Executive for each plan year under Section 4.5 of the ESOP, assuming the 415 Limit, the $200,000 Limit and the Deferred Compensation Limit were inapplicable, and
(B) is the actual Section 4.5 allocation to the Executive's ESOP account for the year."
10. Effective as of October 1, 2000, Section 6. is amended in its entirety to read as follows:
"Section 6. Transition Supplement.
"An Executive's Plan Account shall be allocated an amount (i)
for the period prior to October 1, 2000; as of September 30, 1989
and each September 30 thereafter; and (ii) for the period on and
after October 1, 2000; as of December 31, 2000 and each December 31
thereafter, equal to the amount of allocations that would have been
made to the account of the Executive for each plan year under
Section 4.1 of the Transition Plan, assuming the 415 Limit were
inapplicable and the Executive were a Participant in the Transition
Plan with the benefit determined by the Benefits Administrative
Committee. This Transition Supplement shall be the Executive's
applicable dollar amount for such year as specified in Appendix A
attached hereto."
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/: Richard Carney ------------------------------------ |
EXHIBIT 10.1(v)(1)
AMENDMENT NO. 2 TO THE
UNIVERSAL FOODS
TRANSITION RETIREMENT PLAN
(As Restated Effective October 1, 1998)
WHEREAS, Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") sponsors the Universal Foods Corporation Transition Retirement Plan, as restated effective October 1, 1998 (the "Plan") for employees of the Company who have satisfied the eligibility requirements of the Plan; and
WHEREAS, the Company's fiscal year has changed to the calendar year; and
WHEREAS, the Company has changed its name to Sensient Technologies Corporation, subject to shareholder approval at the annual meeting of shareholders scheduled to be held in April 2001; and
WHEREAS, the Company wishes to amend the Plan to reflect such changes and other matters relating thereto.
NOW, THEREFORE, the Plan is hereby amended as follows effective as of the date noted below:
1. Effective as of November 6, 2000, the Plan shall be known as the:
"Sensient Technologies Transition Retirement Plan".
2. Effective as of November 6, 2000, Section 1.1 is amended in its entirety to read as follows:
"1.1 Name of Plan. The name of the Plan is the Sensient Technologies Transition Retirement Plan. It is sometimes referred to herein as the 'Plan'. Prior to November 6, 2000, the Plan was referred to as the Universal Foods Transition Retirement Plan."
3. Effective as of November 6, 2000, the Plan is amended throughout by replacing each reference to "Universal Foods Retirement Employee Stock Ownership Plan" with "Sensient Technologies Retirement Employee Stock Ownership Plan".
4. Effective as of November 6, 2000, the Plan is amended throughout by replacing each reference to "UFC Stock" with "STC Stock".
5. Effective as of November 6, 2000, Section 1.3 is amended by deleting the first sentence thereof and by replacing it with the following: "The Plan was established effective as of September 8, 1988, to provide a supplemental arrangement to protect certain non-highly compensated employees whose benefits under the Sensient Technologies Employees Stock Ownership Plan were projected to be significantly less than the projected benefits they would have received under the applicable defined benefit plan in existence prior to 1988."; and by adding at the end of Section 1.3 a new sentence as follows: "The Plan was further amended
effective October 1, 2000, to reflect the change in the Plan's Plan Year to a calendar year, and as of November 6, 2000 to reflect the change in the name of the Company."
6. Effective as of November 6, 2000, Section 1.5 is amended to read as follows:
"1.5 Company. The 'Company' means Universal Foods Corporation d/b/a Sensient Technologies Corporation, and effective upon approval of the shareholders, to be known as Sensient Technologies Corporation, or any successor by merger, purchase, or otherwise, with respect to its employees or any other company with a United States payroll participating in the Plan as provided in Section 12.1."
7. Effective as of November 6, 2000, the Plan is amended throughout by replacing each reference to "Universal Foods Corporation" with "the Company".
8. Effective as of October 1, 2000, Section 2.12 is amended in its entirety to read as follows:
"2.12 Highly Compensated Employee.
(a) For Plan Years beginning prior to October 1, 2000: A 'Highly Compensated Employee' is, for purposes of a Plan Year, any Employee who is a 'highly compensated employee' within the meaning of Section 414(q) of the Internal Revenue Code for such Plan Year. A 'Highly Compensated Employee' shall include any Employee who (i) is a Five Percent (5%) Owner of the Company or an Affiliated Company at any time during either such Plan Year or the prior Plan Year, (ii) received compensation (as defined in Section 9.3 of the Plan) in excess of $80,000 (or such greater amount as adjusted by the Secretary of the Treasury) during the prior Plan Year and, for Plan Years beginning on and after October 1, 1998, was in the top-paid group of employees for such prior Plan Year (consisting of the top twenty percent (20%) of Employees when ranked on the basis of compensation paid during the Plan Year), or (iii) is a former Employee who was a Highly Compensated Employee when such Employee separated from service with the Company or an Affiliated Company or was a Highly Compensated Employee at any time after attaining age 55.
(b) For Plan Years beginning on and after October 1, 2000: A 'Highly Compensated Employee' is, for purposes of a Plan Year, any Employee who performs service for the Company or an Affiliated Company during the 'determination year' and who is a 'highly compensated employee' within the meaning of Section 414(q) of the Internal Revenue Code for such Plan Year. A 'Highly Compensated Employee' shall include any Employee who (i) is a
Five Percent (5%) Owner of the Company or an Affiliated Company at any time during either the 'look-back year' or the current Plan Year, (including the short Plan Year period of October 1, 2000 through December 31, 2000), (ii) received compensation (as defined in Section 9.3 of the Plan) in excess of $80,000 (or such greater amount as adjusted by the Secretary of the Treasury) during the 'look-back year' (as such term is defined herein) and was in the top-paid group of employees for such 'look-back year' (consisting of the top twenty percent (20%) of Employees when ranked on the basis of compensation paid during the year), or (iii) is a former Employee who was a Highly Compensated Employee when such Employee separated from service with the Company or an Affiliated Company or was a Highly Compensated Employee at any time after attaining age 55.
(c) For purpose of this Section, the following definitions shall apply:
(i) 'determination year' means the Plan Year with respect to which the determination of an individual's status as a 'highly compensated employee' (or as a 'nonhighly compensated employee') is being made.
(ii) 'look-back year' means the period of twelve (12) consecutive months immediately preceding the 'determination year' except that for the purposes of determining 'look-back year' data, data for the calendar year beginning with or within the 'look-back' year shall be deemed to be the data for the 'look-back year'."
9. Effective as of October 1, 2000, Section 2.19 is amended in its entirety to read as follows:
"2.19 Plan Year. The period on which records of the Plan are kept. Prior to October 1, 2000, the 'Plan Year' is the twelve (12) consecutive month period commencing on each October 1 and ending the following September 30. The period of October 1, 2000 to December 31, 2000 shall be a short 'Plan Year'. On and after October 1, 2000, the 'Plan Year' is the twelve (12) consecutive month period beginning on January 1 of each year and ending the following December 31."
10. Effective as of October 1, 2000, Section 4.1(b) is amended in its entirety to read as follows:
"(b) Notwithstanding paragraph (a) above, for any Participant entitled to share in an allocation for a Plan Year due to meeting the requirements of paragraphs (b) or (c) of Section 4.4, the applicable dollar amount multiplied by a fraction, the numerator of which is the number of nearest completed months (employment on the
fifteenth (15th) day of the month being treated as a full month) and the denominator of which is twelve (12) (three (3) for the short Plan Year beginning on October 1, 2000 and ending December 31, 2000)."
11. Effective as of October 1, 2000, paragraph (b) of Section 6.3 is amended in its entirety to read as follows:
"(b) If a Participant incurs a Termination of Employment prior to entitlement to a Vested Balance in accordance with the requirements of Section 6.2, the Nonvested Balance of such former Participant's Company Contribution Account will be treated as a conditional forfeiture on the last day of the Plan Year immediately following a one (1) year Break in Service by such former Participant. If such former Participant is rehired prior to such date, his or her Nonvested Balance shall remain in his or her account and continue to vest in accordance with the terms of the Plan. If such former Participant is rehired after the last day of the Plan Year but prior to a final forfeiture, his or her conditionally forfeited account balance shall be restored from forfeitures or Company contributions to the Plan. The former Participant's Nonvested Balance shall be declared a final forfeiture upon a five (5) year Break in Service after the Employee's Termination of Employment (a six (6) year Break in Service for Terminations of Employment occurring prior to January 1, 1999), and the former Participant shall have no rights to restoration of his or her forfeited Nonvested Balance."
12. Effective as of October 1, 2000, paragraph (a) of Section 9.1 is amended by replacing the reference to "(i) $30,000" with "(i) $30,000 ($7,500 for the Plan Year beginning October 1, 2000 and ending December 31, 2000)".
13. Effective as of October 1, 2000, Section 9.4 is amended by the addition of the following paragraph to the end thereof:
"Notwithstanding the foregoing, on and after October 1, 2000, 'limitation year' shall be defined as the twelve (12) consecutive month period beginning on January 1 of each year and ending the following December 31. The period of October 1, 2000 through December 31, 2000 shall be a short 'limitation year'."
14. Effective as of November 6, 2000, Appendices I and II are amended throughout by replacing each reference to "Universal Foods Corporation " with "Sensient Technologies Corporation".
IN WITNESS WHEREOF, this Amendment has been duly executed this 12th day of December, 2000.
UNIVERSAL FOODS CORPORATION
d/b/a SENSIENT TECHNOLOGIES CORPORATION
By: /s/: Richard Carney ------------------------------------ |
EXHIBIT 13.1
MANAGEMENT'S ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION
Overview
In June 2000, as part of the Company's strategy to focus on faster-growing, more profitable markets, the Company decided to divest the Red Star Yeast business. As the result of this decision, the operating results of the Yeast business are reported separately from continuing operations. The Company completed the sale of Red Star Yeast on February 23, 2001, for a total business value of $122 million. As a result of this transaction, the Company received cash proceeds of $113 million: $4 million received in the third quarter of 2000 and a $109 million transaction in February 2001. The Company also retained assets valued at $9 million under a U.S. government antitrust order. The immediate cash proceeds of $113 million will be used to fund future acquisitions, repurchase stock and pay down debt.
In the fourth quarter of 2000, as part of an ongoing program to reduce costs and increase operating efficiencies, the Company began consolidating facilities and streamlining its workforce. These actions will deliver annualized savings of $10 million starting in 2002, with $4 million anticipated in 2001. In addition, these steps resulted in a special fourth quarter charge of $19 million ($13.3 million after tax, or $0.27 per share). This charge includes $11 million of severance and other employee separation costs associated with the reduction of 200 positions, a $6 million charge related to facility closures and $2 million for other items. Total cash expenditures in connection with these actions will approximate $13 million. The Company has spent $3 million through December 31, 2000, and expects to spend the remainder in 2001.
The Company took actions in 2000 related to postretirement benefits that reduced postretirement costs in the current year, and will result in future annual cost reductions, with approximately $1.0 million anticipated in 2001. These changes are detailed in Note 9 in the accompanying financial statements.
Operating earnings in 2000 reached $131.2 million, compared to $124.3 million in 1999, excluding the special charge of $19 million in 2000. Net earnings were $62.0 million in 2000, compared to $81.8 million in 1999. The earnings reduction primarily reflects the one time special charge for facilities consolidation ($13.3 million after tax), and a $12.0 million reduction in the net earnings reported by the discontinued Yeast business.
2000 vs. 1999 - Continuing Operations
During 2000, the Company integrated its Dehydrated Products division with the Flavor division and restated its reportable segments as the Flavors & Fragrances Group and the Color Group. The merging of Dehydrated with the Flavor & Fragrances Group enhances the Company's product development capabilities and reduces costs.
Revenue for 2000 increased $12.9 million, or 1.6%, to $809.2 million from $796.3 million in 1999. This revenue increase reflects growth in the Color Group of $34.3 million, which resulted from greater sales volume and the acquisition of two color companies, Dr. Marcus GmbH and Monarch Food Colors, L.P. The Flavors & Fragrances Group reported 3.0% lower revenue, as prices for dehydrated products declined industry-wide in 2000. Volumes of dehydrated products increased 10% from 1999, resulting in market share gain. Revenue was significantly affected by unfavorable currency exchange rates, primarily a declining Euro, reducing reported revenue by approximately $31 million. Lower prices for dehydrated products also affected revenue unfavorably; excluding these two factors,
22 SENSIENT 2000 ANNUAL REPORT
reported revenue for 2000 would have increased by 7% over the prior year.
Gross margin was 35.1% in 2000 compared to 33.9% in 1999. Gross margin in the Color Group rose 0.3% from increased sales of higher-margin color products. Gross margin in the Flavors & Fragrances Group increased 0.5% as margins improved in traditional flavors, but were partially offset by reduced margins for dehydrated products.
In 2001, the Company is implementing price increases for dehydrated products. In addition, margins for flavors, fragrances and color products sold in the Asia Pacific region improved in 2000.
[GRAPH] Operating Margins [EXCLUDING SPECIAL CHARGES] 96 97 98 99 00 12.8% 12.7% 15.0% 15.6% 16.2% |
Selling and administrative expenses rose $7.4 million to $153.0 million, a 5.1% increase. The Flavors & Fragrances Group reported a 0.5% decrease and the Color Group reported a 6.8% increase, primarily as a result of acquisitions. Higher intangible amortization expense also increased selling and administrative expenses.
Operating income, excluding special charges in 2000, increased $6.9 million to $131.2 million, or 5.6%. Operating income for the Color Group increased $11.6 million or 19.6% as volumes and margins increased substantially. Operating income for the Flavors & Fragrances Group declined $1.9 million as gains in traditional flavors only partially offset lower operating income from dehydrated products. Excluding the effect on operating income of lower prices for dehydrated products, the Flavors & Fragrances Group operating profit increased by 14% over the prior year. Price increases and continued growth in sales volume should result in future growth of operating income for both Groups.
Interest expense increased $6.7 million to $34.2 million in 2000. The increase was primarily due to additional outstanding borrowings, which were used to fund acquisitions.
The effective tax rate for 2000 was 27.8% compared to 31.3% in 1999. The 2000 tax rate includes the tax benefit from ceasing Dehydrated operations in Ireland, and the 1999 tax rate includes the benefit from settlement of prior years' issues. Excluding the effect of these items, the effective tax rate would have been approximately 31.9% in 2000 and 33.5% in 1999.
Earnings from continuing operations, excluding special charges in 2000, were $69.6 million or $1.42 per share diluted, an increase of 8.4%.
1999 vs. 1998 - Continuing Operations
Revenue for 1999 increased $76.4 million, or 10.6%, to $796.3 million from $719.8 million in 1998. The Color Group revenue increased $59.8 million from volume increases and acquisitions of natural color and cosmetic color businesses. For the Flavors & Fragrances Group, volume was particularly strong in the dairy, beverage and food flavors product categories. Dehydrated products reported increased onion volumes, though garlic volumes declined.
Gross margin was 33.9% in 1999 compared to 34.0% in 1998. The Color Group gross margin declined slightly as the Company modified its product mix. Gross margin for the Flavors & Fragrances Group did not change.
23 SENSIENT 2000 ANNUAL REPORT
Selling and administrative expenses increased $9.0 million to $145.6 million but decreased as a percent of revenue to 18.3% from 19.0%. Selling and administrative expenses as a percent of revenue was lower in the Flavors & Fragrances Group and flat for the Color Group. During 1999, the Company discontinued its frozen vegetable operations in Ireland at a cost of approximately $2.7 million. Corporate expenses fell as increases in intangible amortization expense were offset by a $1.9 million favorable settlement of a previously accrued litigation claim.
Operating income in 1999 increased $16.4 million, or 15.2%, to $124.3 million. Operating income increased $2.4 million, or 3.0%, in the Flavors & Fragrances Group as the traditional flavor business in the U.S. continued to improve and the Group benefited from recent acquisitions. Operating income in the Color Group was $59.4 million in 1999 compared to $48.5 million in 1998, an increase of 22.4%. The increase is the result of increased volumes and lower product costs.
[GRAPH]
Capital Expenditures/Depreciation
[FROM CONTINUING OPERATIONS, IN MILLIONS]
96 97 98 99 00 22.7 26.6 30.8 32.7 35.5 49.3 54.2 52.5 50.8 45.2 |
Interest expense increased $5.4 million to $27.4 million in 1999. The increase was caused by additional outstanding borrowings, which were used primarily to fund acquisitions.
The effective income tax rate for 1999 was 31.3% compared to 30.8% in 1998. Both years include the benefits from settlements for prior years' issues that reduced the effective rate 2.2% in 1999 and 1.7% in 1998.
Earnings from continuing operations in 1999 increased $7.1 million to $66.5 million or 12.0%.
Liquidity and Financial Position
Cash provided by operating activities of continuing operations was $75.1 million in 2000, $61.8 million in 1999 and $82.5 million in 1998. Operating cash flow provided the primary source of funds to finance operating needs, capital expenditures and shareholder dividends.
Cash used for investment activities was $90.1 million in 2000, $121.0 million in 1999 and $129.9 million in 1998. Cash used for acquisitions was $50.2 million in 2000 and $58.4 million in 1999. Current year acquisitions included Dr. Marcus GmbH, a manufacturer of natural colors, and Monarch Food Colors, L.P., a color manufacturer for the food, pharmaceutical and cosmetic industries. Capital expenditures totaled $45.2 million in 2000 and $50.8 million in 1999.
Financing activities provided cash of $1.4 million in 2000, $37.8 million in 1999 and $24.1 million in 1998. Net additional borrowings were $56.1 million in 2000 and $89.7 million in 1999. During 2000, the Company entered into a $150 million dual currency revolving loan agreement of which $100 million matures in June 2005 and $50 million matures in June 2001. The Company maintains debt levels considered prudent based on its cash flows, interest coverage and percentage of total debt to total capital. The Company has a share repurchase program under which it is authorized to repurchase up to 5.0 million shares. At December 31, 2000, 2.2 million shares are available under the authorization. During 2000 and 1999, the Company repurchased 2.4 million and 1.5 million shares of treasury stock at a cost of $46.7 million and $31.7 million, respectively.
24 SENSIENT 2000 ANNUAL REPORT
The Company has paid uninterrupted quarterly cash dividends since commencing public trading in its stock more than 36 years ago. In 2000 and 1999, dividends paid per share were $0.53.
The impact of inflation on both the Company's financial position and results of operations has been minimal and is not expected to adversely affect 2001 results.
The Company's financial position remains strong, enabling it to meet cash requirements for operations, capital expansion programs and dividend payments to shareholders.
Market Risk Factors
The Company is exposed to market risks, including changes in interest rates, currency exchange rates and commodity prices. To manage the volatility relating to these exposures on a consolidated basis, the Company nets the exposures to take advantage of natural offset and enters into various derivative transactions for some of the remaining exposures pursuant to the Company's policies covering hedging practices. The financial impacts of these hedging instruments are offset by corresponding changes in the underlying exposures being hedged. The Company does not hold or issue derivative financial instruments for trading purposes. Note 1 to the Consolidated Financial Statements includes a discussion of the Company's accounting policies for financial instruments.
The Company has performed strongly as a result of its global reach. Because the Company manufactures and sells its products throughout the world, it is exposed to movements in foreign currency exchange rates. The major foreign currency exposures involve the markets in Western Europe, Mexico and Canada. The primary purpose of the Company's foreign currency hedging activities is to protect against the volatility associated with foreign currency sales, purchases of materials and other assets and liabilities created in the normal course of business. The Company utilizes foreign exchange contracts with durations of generally less than 12 months. In addition, the Company enters into forward exchange contracts to hedge intercompany financing transactions and foreign source income. At December 31, 2000 and 1999, unrealized gains and losses on outstanding foreign exchange contracts are not material. At December 31, 2000 and 1999, the potential gain or loss in the fair value of the Company's outstanding foreign exchange contracts, assuming a hypothetical 10% fluctuation in the currencies of such contracts, would be approximately $6.0 million and $6.9 million, respectively. However, it should be noted that any change in the value of the contracts, real or hypothetical, would be significantly offset by an inverse change in the value of the underlying hedged items. In addition, this hypothetical calculation assumes that each exchange rate would change in the same direction relative to the U.S. dollar.
The Company manages its debt structure and interest rate risk through the use of fixed rate and floating rate debt and through the use of derivatives. The Company's primary exposure is to U.S. interest rates. The Company uses interest-rate swaps to hedge its exposure to interest rate changes and also to lower its financial costs. In 2000 and 1999, certain foreign currency interest rate swaps were designated as hedges to the Company's related net foreign investments. At December 31, 2000, no interest rate swaps were outstanding. On January 2, 2001, the Company borrowed 100 million Euros and designated the borrowings as a partial hedge of the Company's Euro net asset position.
25 SENSIENT 2000 ANNUAL REPORT
The following table summarizes the Company's debt obligations at December 31, 2000. The interest rates represent weighted-average rates, with the period-end rate used for the variable rate debt obligations. The fair value of the debt obligations approximated the recorded value as of December 31, 2000. (See Notes 4 and 5 to the Consolidated Financial Statements.)
Expected Year of Maturity ----------------------------------------------------------------------------------------------- Dollars in thousands 2001 2002 2003 2004 2005 Thereafter Total ------------------------------------------------------------------------------------------------------------------------------------ Fixed rate $ 7,800 $ 41,862 $ 11,799 $ 11,663 $ 17,774 $ 234,043 $ 324,941 Average interest rate 6.9% 6.9% 6.8% 6.8% 6.7% 6.7% Variable rate $ 99,347 -- -- -- $ 100,000 -- $ 199,347 Average interest rate 7.6% -- -- -- 7.6% -- ------------------------------------------------------------------------------------------------------------------------------------ |
The Company is the purchaser of certain commodities such as corn, soybean meal, and fruits. The Company generally purchases these commodities based upon market prices that are established with the vendor as part of the purchase process. In general, the Company does not use commodity financial instruments to hedge commodity prices due to a high correlation between the commodity cost and the ultimate selling price of the product. On occasion, the Company may enter into non-cancelable contracts, as deemed appropriate, to reduce the effect of price fluctuations on future manufacturing requirements.
Euro Conversion
A single currency, the Euro, was introduced in Europe on January 1, 1999. Of the 15 member countries of the European Union, 11 adopted the Euro as their legal currency on that date. Fixed conversion rates between the national currencies of these 11 countries and the Euro were established on that date. The national currencies are scheduled to remain legal tender as denominations of the Euro during the transition period ending December 31, 2001. During this transition period, parties may settle transactions using either the Euro or a participating country's national currency. At the current time, the Company does not believe that the conversion to the Euro will have a material impact on its business or its financial condition.
Outlook
This report contains forward-looking statements that reflect management's current assumptions and estimates of future economic circumstances, industry conditions, Company performance and financial results. The Private Securities Litigation Reform Act of 1995 provides a safe harbor for such forward-looking statements. A variety of factors could cause the Company's actual results and experience to differ materially from the anticipated results. These factors and assumptions include the pace and nature of new product introductions by the Company's customers; execution of the Company's acquisition program; industry and economic factors related to the Company's domestic and international business; and the outcome of various productivity-improvement and cost-reduction efforts.
26 SENSIENT 2000 ANNUAL REPORT
The Company seeks to increase revenue and profits through a number of strategic actions. Strategies for growth include further development of existing markets and entry into new product and geographic markets. In addition, the Company continues to enhance its technologies and broaden its product base. The Company has built strong relationships with market leaders in each of the industries that it serves by providing superior technical support and service.
The Company continues to seek opportunities to grow in both food and non-food markets. Current non-food applications include cosmetics, personal care products, pharmaceutical ingredients, inks for ink-jet printers and a variety of other products. The Company believes that the technologies of the Color Group provide the greatest opportunities for growth in non-food applications.
The Company completed two acquisitions in 2000 and four acquisitions in 1999. The 2000 acquisition of Dr. Marcus GmbH expanded the Company's natural color capabilities and increased the Company's market position in Germany. The Company also completed the acquisition of Monarch Food Colors, L.P., a color manufacturer for the food, pharmaceutical and cosmetic industries. The 1999 acquisition of Pointing Holdings Ltd. has provided new opportunities for geographic growth. The acquisition of Les Colorants Wackherr provides the Company with an important strategic base and an enhanced line of colors and ingredient systems for the cosmetic industry. The Company continues to broaden its line of natural colors. The acquisition of certain assets of Quimica Universal has enhanced the Company's capabilities in the production of annatto and carminic acid-based products. The acquisition of the natural color business of Nino Fornaciari fu Riccardo S.N.C. broadens and expands the Company's offerings in anthocyanin.
Acquisitions remain an important part of the Company's overall plan for growth. The Company continues to aggressively pursue attractive acquisition opportunities and expects to add additional new businesses during 2001.
27 SENSIENT 2000 ANNUAL REPORT
CONSOLIDATED STATEMENTS OF EARNINGS
In thousands except per share amounts
YEARS ENDED DECEMBER 31, 2000 1999 1998 ------------------------------------------------------------------------------------------------------------------------------------ Revenue $809,163 $796,250 $719,808 Cost of products sold 524,960 526,367 475,330 Selling and administrative expenses 153,010 145,618 136,633 Special charges (see Note 13) 19,000 -- -- ---------------------------------------------- Operating income 112,193 124,265 107,845 Interest expense 34,165 27,425 21,977 ---------------------------------------------- Earnings from continuing operations before income taxes 78,028 96,840 85,868 Income taxes 21,681 30,329 26,467 ---------------------------------------------- Earnings from continuing operations 56,347 66,511 59,401 Earnings from discontinued operations 3,265 15,250 14,847 Accounting change 2,431 -- -- ---------------------------------------------- Net earnings $ 62,043 $ 81,761 $ 74,248 ---------------------------------------------- Basic earnings per share Continuing operations $ 1.15 $ 1.32 $ 1.16 Discontinued operations .07 .30 .29 Accounting change .05 -- -- ---------------------------------------------- Net earnings $ 1.27 $ 1.63 $ 1.45 ---------------------------------------------- Diluted earnings per share Continuing operations $ 1.15 $ 1.31 $ 1.14 Discontinued operations .07 .30 .29 Accounting change .05 -- -- ---------------------------------------------- Net earnings $ 1.26 $ 1.61 $ 1.43 ---------------------------------------------- Average common shares outstanding - basic 48,898 50,296 51,168 ---------------------------------------------- Average common shares outstanding - diluted 49,166 50,791 51,883 ---------------------------------------------- |
See notes to consolidated financial statements.
28 SENSIENT 2000 ANNUAL REPORT
CONSOLIDATED BALANCE SHEETS
Dollars in thousands except per share amounts
DECEMBER 31, 2000 1999 ----------------------------------------------------------------------------------------------------------------------------------- Assets Current Assets: Cash and cash equivalents $ 3,217 $ 114 Trade accounts receivable less allowance for losses of $2,848 and $4,051 121,719 139,120 Inventories 235,363 229,203 Prepaid expenses and other current assets 32,234 26,925 Deferred income taxes 16,023 10,311 Net assets held for sale 82,842 -- -------------------------------- Total current assets 491,398 405,673 Other assets 63,742 70,571 Intangibles - at cost, less accumulated amortization of $59,675 and $50,149 293,600 271,065 Property, Plant and Equipment: Land and buildings 162,196 173,537 Machinery and equipment 392,065 508,127 -------------------------------- 554,261 681,664 Less accumulated depreciation 238,753 297,260 -------------------------------- 315,508 384,404 ----------------------------------------------------------------------------------------------------------------------------------- Total assets $ 1,164,248 $ 1,131,713 -------------------------------- Liabilities and Shareholders' Equity Current Liabilities: Short-term borrowings $ 99,347 $ 77,995 Accounts payable and accrued expenses 115,615 111,536 Salaries, wages and withholdings from employees 12,086 14,321 Income taxes 17,284 24,368 Current maturities of long-term debt 7,800 9,495 -------------------------------- Total current liabilities 252,132 237,715 Deferred income taxes 35,707 27,513 Other deferred liabilities 19,475 20,670 Accrued employee and retiree benefits 22,735 34,565 Long-term debt 417,141 380,378 Commitments and contingencies -- -- Shareholders' Equity: Common stock par value $.10 a share, authorized 250,000,000 shares; issued 53,954,874 shares 5,396 5,396 Additional paid-in capital 72,870 74,279 Earnings reinvested in the business 518,128 482,080 Treasury stock, 5,403,015 and 4,090,351 shares, respectively, at cost (106,472) (81,046) Accumulated other comprehensive income (70,900) (47,966) Other (1,964) (1,871) -------------------------------- 417,058 430,872 ----------------------------------------------------------------------------------------------------------------------------------- Total liabilities and shareholders' equity $ 1,164,248 $ 1,131,713 -------------------------------- |
See notes to consolidated financial statements.
29 SENSIENT 2000 ANNUAL REPORT
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
Dollars in thousands except per share amounts
Additional Earnings reinvested Common stock paid-in capital in the business --------------------------------------------------------------------------------------------------- Balances at December 31, 1997 $ 5,396 $ 74,507 $ 379,962 Net earnings 74,248 Currency translation Total comprehensive income Cash dividends paid - $.53 a share (27,155) Stock options exercised (332) Benefit plans 441 Restricted stock 128 Other 7 Purchase of treasury stock --------------------------------------------------------------------------------------------------- Balances at December 31, 1998 5,396 74,751 427,055 Net earnings 81,761 Currency translation Total comprehensive income Cash dividends paid - $.53 a share (26,735) Stock options exercised (428) Benefit plans (154) Restricted stock 106 Other 4 (1) Purchase of treasury stock --------------------------------------------------------------------------------------------------- Balances at December 31, 1999 5,396 74,279 482,080 Net earnings 62,043 Currency translation Total comprehensive income Cash dividends paid - $.53 a share (25,997) Stock options exercised (1,931) Benefit plans 493 Restricted stock 31 Other (2) 2 Purchase of treasury stock --------------------------------------------------------------------------------------------------- Balances at December 31, 2000 $ 5,396 $ 72,870 $ 518,128 --------------------------------------------------------------------------------------------------- |
See notes to consolidated financial statements
30 SENSIENT 2000 ANNUAL REPORT
Treasury stock Unearned Accumulated other Total ------------------------- portion of comprehensive comprehensive Shares Amount restricted stock income income -------------------------------------------------------------------------------------------------------------------------------- Balances at December 31, 1997 3,057,544 $ (52,301) $ (898) $ (28,144) Net earnings $ 74,248 Currency translation (8,983) (8,983) ----------- Total comprehensive income $ 65,265 ----------- Cash dividends paid - $.53 a share Stock options exercised (863,441) 14,940 Benefit plans (125,956) 2,197 Restricted stock (39,200) 734 (539) Other 8,704 (238) Purchase of treasury stock 906,200 (21,379) -------------------------------------------------------------------------------------------------------------- Balances at December 31, 1998 2,943,851 (56,047) (1,437) (37,127) Net earnings $ 81,761 Currency translation (10,839) (10,839) ----------- Total comprehensive income $ 70,922 ----------- Cash dividends paid - $.53 a share Stock options exercised (118,967) 2,229 Benefit plans (193,660) 3,822 Restricted stock (39,000) 769 (434) Other 5,627 (111) Purchase of treasury stock 1,492,500 (31,708) -------------------------------------------------------------------------------------------------------------- Balances at December 31, 1999 4,090,351 (81,046) (1,871) (47,966) Net earnings $ 62,043 Currency translation ( 22,934) (22,934) ----------- Total comprehensive income $ 39,109 ----------- Cash dividends paid - $.53 a share Stock options exercised (722,654) 14,126 Benefit plans (348,441) 6,865 Restricted stock (21,000) 445 (93) Other 5,859 (113) Purchase of treasury stock 2,398,900 (46,749) -------------------------------------------------------------------------------------------------------------- Balances at December 31, 2000 5,403,015 $ (106,472) $ (1,964) $ (70,900) -------------------------------------------------------------------------------------------------------------- |
See notes to consolidated financial statements
31 SENSIENT 2000 ANNUAL REPORT
Consolidated Statements of Cash Flows
Dollars in thousands YEARS ENDED DECEMBER 31, 2000 1999 1998 ----------------------------------------------------------------------------------------------------------- Cash Flows from Operating Activities Earnings from continuing operations $ 56,347 $ 66,511 $ 59,401 Adjustments to arrive at net cash provided by operating activities: Depreciation and amortization 45,554 40,804 37,039 Special charges 19,000 -- -- Gain on sale of assets (4,211) -- (3,277) Changes in operating assets and liabilities (net of effects from acquisition of businesses): Trade accounts receivable (4,002) (10,220) (4,399) Inventories (17,363) (17,890) (7,920) Prepaid expenses and other assets (7,357) (2,052) (4,005) Accounts payable and accrued expenses (7,595) (16,562) (18,220) Salaries, wages and withholdings from employees (621) (1,866) 2,044 Income taxes (7,672) (3,817) 12,510 Deferred income taxes 4,829 10,190 9,535 Other liabilities (1,818) (3,268) (214) ----------------------------------------------------------------------------------------------------------- Net cash provided by operating activities of continuing operations 75,091 61,830 82,494 Net cash provided by operating activities of discontinued operations 16,554 21,256 22,573 ----------------------------------------------------------------------------------------------------------- 91,645 83,086 105,067 ------------------------------------ Cash Flows from Investing Activities Acquisition of property, plant and equipment (55,525) (61,662) (62,487) Acquisition of businesses - net of cash acquired (50,190) (58,361) (68,670) Proceeds from sale of assets 11,681 4,465 6,656 Decrease (increase) in other assets 3,951 (5,476) (5,410) ----------------------------------------------------------------------------------------------------------- Net cash used in investing activities (90,083) (121,034) (129,911) ------------------------------------ Cash Flows from Financing Activities Proceeds from additional borrowings 131,337 259,359 55,191 Reduction in debt (75,188) (169,628) 2,365 Purchase of treasury stock (47,531) (30,505) (21,379) Dividends (25,997) (26,735) (27,155) Proceeds from options exercised and other equity transactions 18,776 5,281 15,115 ----------------------------------------------------------------------------------------------------------- Net cash provided by financing activities 1,397 37,772 24,137 ------------------------------------ Effect of exchange rate changes on cash and cash equivalents 144 (118) (628) ----------------------------------------------------------------------------------------------------------- Net increase (decrease) in cash and cash equivalents 3,103 (294) (1,335) Cash and cash equivalents at beginning of year 114 408 1,743 ----------------------------------------------------------------------------------------------------------- Cash and cash equivalents at end of year $ 3,217 $ 114 $ 408 ------------------------------------ Cash paid during the year for: Interest $ 33,054 $ 25,172 $ 22,703 Income taxes 28,349 29,803 9,758 Liabilities assumed in acquisitions 1,841 34,868 -- ----------------------------------------------------------------------------------------------------------- |
See notes to consolidated financial statements.
32 SENSIENT 2000 ANNUAL REPORT
Notes to Consolidated Financial Statements
Tabular amounts in thousands except per share data Years ended December 31, 2000, 1999 and 1998
Summary of Significant Accounting Policies
Principles of Consolidation The consolidated financial statements include the accounts of Universal Foods Corporation d/b/a Sensient Technologies Corporation and its subsidiaries (the "Company"). All significant intercompany accounts and transactions are eliminated.
Fiscal Year and Name Change During 2000, the Company changed its name to Sensient Technologies Corporation. In addition, the Company's fiscal year was changed from September 30 to December 31. The Company's financial statements have been restated on a calendar year basis.
Use of Estimates The preparation of the consolidated financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
Revenue Recognition The Company recognizes revenue upon shipment of goods to customers.
In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin No. 101, "Revenue Recognition in Financial Statements" ("SAB 101"). The Company adopted SAB 101 in the fourth quarter of 2000. Adoption of this standard did not have a material impact on the Company's financial statements.
Cash Equivalents Highly liquid investments with maturities of three months or less when acquired are considered cash equivalents.
Inventories Inventories are stated at the lower of cost or market. Cost is determined using the first-in, first-out (FIFO) method.
Property, Plant and Equipment Property, plant and equipment are recorded at cost reduced by accumulated depreciation. Depreciation is provided over the estimated useful life using the straight-line method for financial reporting.
Intangibles The excess cost over net assets of businesses acquired and other intangibles are amortized using the straight-line method over primarily 40 years.
Impairment of Long-lived Assets The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying amount of the assets may not be fully recoverable. The Company performs undiscounted cash flow analyses to determine if an impairment exists. If an impairment is determined to exist, any related impairment loss is calculated based on discounted operating cash flows.
Financial Instruments The Company uses derivative financial instruments for the purpose of hedging currency and interest rate exposures which exist as part of ongoing business operations. As a policy, the Company does not engage in speculative or leveraged transactions, nor does the Company hold or issue financial instruments for trading purposes.
Interest Rate Swap Agreements The Company may utilize interest rate swap agreements to lower funding costs, to diversify sources of funding or to alter interest rate exposure. Amounts paid or received on interest rate swap agreements are deferred and recognized as adjustments to interest expense. Gains and losses realized upon the settlement of such contracts are deferred and amortized to interest expense over the remaining term of the debt instrument or are recognized immediately if the underlying instrument is settled.
Foreign Currency Contracts The Company enters into forward and swap contracts to hedge transactions denominated in foreign currencies in order to reduce the currency risk associated with fluctuating exchange rates. Such contracts are
33 SENSIENT 2000 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2000, 199 and 1998
used primarily to hedge certain intercompany cash flows, purchases of certain raw materials and finished goods, for payments arising from certain foreign currency denominated obligations and to hedge net assets in foreign subsidiaries. Realized and unrealized gains and losses from instruments qualifying as hedges are deferred as part of the cost basis of the underlying transaction. Realized and unrealized gains and losses from foreign currency contracts used as economic hedges but not qualifying for hedge accounting are recognized currently as income or expense.
Translation of Foreign Currencies For all significant foreign operations, the functional currency is the local currency. Assets and liabilities of foreign operations are translated into United States dollars at current exchange rates. Income and expense accounts are translated into United States dollars at average exchange rates prevailing during the year. Adjustments resulting from the translation of assets and liabilities to U.S. dollars are included as foreign currency translation adjustments in shareholders' equity. Transaction gains and losses are included in earnings for the period.
Stock-Based Compensation The Company accounts for its stock-based compensation plans using the intrinsic value-based method in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees".
Earnings Per Share The difference between basic and diluted earnings per share is the dilutive effect of stock options and restricted stock. All earnings per share amounts are presented on a diluted basis unless otherwise noted.
Research and Development Research and development costs are charged to selling and administrative expenses in the year they are incurred. Research and development costs related to continuing operations were $18,294,000, $18,245,000 and $17,055,000 for the years ended December 31, 2000, 1999 and 1998, respectively.
New Pronouncements In June 1998, the Financial Accounting Standards Board issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities." This statement, as subsequently amended, was adopted effective January 1, 2001. The Company evaluated the impact of this statement and has concluded that its adoption will not have a material impact on the Company's financial statements.
Acquisitions
During 2000, the Company acquired two businesses for cash of $49,425,000. The preliminary allocation of purchase price resulted in goodwill of $43,505,000 which is being amortized on the straight-line method over 40 years. Acquisitions made during 2000 were Dr. Marcus GmbH, a leading manufacturer of natural colors; and Monarch Food Colors, L.P., a color manufacturer for the food, pharmaceutical and cosmetic industries.
During 1999, the Company acquired businesses for a total of $93,205,000. The allocations of purchase price resulted in goodwill of $73,594,000 which is being amortized on the straight-line method over 40 years. Acquisitions made during 1999 include Les Colorants Wackherr, a manufacturer of colors and ingredients for the cosmetic industry, and Pointing Holdings Ltd., primarily a manufacturer of food colors. The Company also made other smaller acquisitions during the year.
During 1998, the Company acquired four businesses for cash of $69,459,000. The allocations of purchase price resulted in goodwill of $46,931,000 which is being amortized on the straight-line method over 40 years. The businesses acquired were Arancia Ingredientes Especiales, S.A. de C.V., a manufacturer of savory flavors and other food ingredients, DC Flavours Ltd., a manufacturer of savory flavors and seasonings, Sundi GmbH, a German flavor manufacturer, and Reggiana Antociani S.R.L., a manufacturer of natural colors for the food and beverage industries.
34 SENSIENT 2000 ANNUAL REPORT
The above acquisitions have been accounted for as purchases and, accordingly, their results of operations have been included in the financial statements since their respective dates of acquisition. On an unaudited pro-forma basis, the effects of the acquisitions were not significant to the Company's results of operations.
Inventories
Inventories include finished and in-process products totaling $157,680,000 and $154,261,000 at December 31, 2000 and 1999, respectively, and raw materials and supplies of $77,683,000 and $74,942,000 at December 31, 2000 and 1999, respectively.
Debt
Long-term debt consists of the following obligations at December 31:
2000 1999 ----------------------------------------------------------------------------- 9.06% senior notes due through July 2004 $ 24,000 $ 29,000 7.59% senior notes due through December 2008 30,000 30,000 7.06% senior notes due through December 2002 30,000 30,000 6.99% senior notes due through December 2007 40,000 40,000 6.77% senior notes due through January 2010 15,000 15,000 6.70% senior notes repaid in 2000 -- 20,000 6.68% senior notes due through January 2011 15,000 15,000 6.38% senior notes repaid in 2000 -- 20,000 6.60% notes due April 2009 149,026 148,940 Commercial paper and other short-term notes 100,000 -- Various other notes 21,915 41,933 ------------------- 424,941 389,873 Current maturities 7,800 9,495 ----------------------------------------------------------------------------- Total long-term debt $417,141 $380,378 ------------------- |
In November 1998, the Company filed a shelf registration statement with the Securities and Exchange Commission pursuant to which the Company may from time to time issue debt securities of up to $300 million in the aggregate. The first transaction under the shelf registration statement was the issuance of $150 million in unsecured notes due April 1, 2009 with an annual stated interest rate of 6.50% (effective rate 6.60%).
The Company has a $150 million dual-currency revolving loan agreement with a group of five banks, of which $100 million matures in June 2005 and $50 million matures in June 2001. Interest rates are determined based upon the LIBOR rate plus margin. A facility fee is payable on the total amount of the commitment.
At December 31, 2000, $100 million of short-term borrowings were classified as long-term debt reflecting the Company's intent and ability, through the revolving loan agreement, to refinance these borrowings.
The Company issues short-term commercial paper obligations supported by committed lines of credit included in the revolving loan agreement. The Company also issues other short-term notes. At December 31, 2000, the Company had $17.5 million available under the revolving loan agreement and $54 million available under uncommitted lines of credit from several banks.
The aggregate amounts of maturities on long-term debt each year for the five years subsequent to December 31, 2000 are as follows: 2001, $7,800,000; 2002, $41,862,000; 2003, $11,799,000; 2004, $11,663,000; and 2005, $117,774,000.
Substantially all of the senior loan agreements contain restrictions concerning interest coverage, borrowings, investments and tangible net worth amounts. Earnings reinvested of $60,728,000 at December 31, 2000 were unrestricted.
35 SENSIENT 2000 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Year ended December 31, 2000, 1999 and 1998
Short-term borrowings consist of commercial paper, uncommitted loans and loans to foreign subsidiaries denominated in local currencies which are borrowed under various foreign uncommitted lines of credit. The weighted average interest rates on short-term borrowings including amounts reclassified to long-term debt were 7.57% and 6.40% at December 31, 2000 and 1999, respectively.
On January 2, 2001, the Company entered into a revolving credit line that allows it to borrow up to 100 million Euros through December 31, 2001. The interest rates are determined based upon the Euribor rate plus margin. On January 2, 2001, the Company borrowed 100 million Euros and repaid domestic short-term borrowings. This Euro obligation has been designated as a partial hedge of the Company's Euro net asset position.
Financial Instruments and Risk Management
Foreign Currency Contracts The Company uses forward exchange contracts to reduce the effect of fluctuating foreign currencies on short-term foreign currency-denominated intercompany transactions and other known foreign currency exposures. At December 31, 2000 and 1999, the Company had forward exchange contracts, generally with maturities of one year or less, of $83,130,000 and $87,744,000, respectively.
The Company had foreign currency and related interest rate swap agreements which were executed to reduce the Company's borrowing costs and serve as hedges of the Company's net assets in foreign subsidiaries, denominated in Euros. As of December 31, 2000, no swap agreements were outstanding. At December 31, 1999, the notional principal amount of these agreements was $90,175,000. The notional amount is used to calculate interest payments which are exchanged over the life of the swap transaction and is equal to the amount of foreign currency or dollar principal exchanged at maturity.
Concentrations of Credit Risk Counterparties to currency exchange and interest rate swap contracts consist of large major international financial institutions. The Company continually monitors its positions and the credit ratings of the counterparties involved and limits the amount of credit exposure to any one party. While the Company may be exposed to potential losses due to the credit risk of non-performance by these counterparties, losses are not anticipated.Concentrations of credit risk with respect to accounts receivable are limited due to the large number of customers, generally short payment terms, and their dispersion across geographic areas.
Fair Values The carrying amount of cash and cash equivalents, trade receivables, financial instruments, accounts payable, accrued expenses and short-term borrowings approximated fair value as of December 31, 2000 and 1999.
The fair value of the Company's long-term debt, including current maturities, is estimated using discounted cash flows based on the Company's current incremental borrowing rates for similar types of borrowing arrangements. The fair value at December 31, 2000 and 1999 was approximately $412,271,000 and $365,214,000, respectively.
Shareholders' Equity
On April 9, 1998, the Company declared a 2-for-1 stock split in the form of a 100% stock dividend, which was distributed on May 22, 1998, to shareholders of record on May 6, 1998.
On June 25, 1998, the Board of Directors declared a dividend of one preferred share purchase right (a "Right") for each outstanding share of common stock, par value of $.10 per share, of the Company. The dividend was paid on August 6, 1998, to the shareholders of record on that date. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series A Participating Cumulative
36 SENSIENT 2000 ANNUAL REPORT
Preferred Stock, without par value (the "Preferred Share"), of the Company at a price of $125 per one one-thousandth of a Preferred Share, subject to adjustment. The Right becomes exercisable and tradable ten days after a person or group acquires 20% or more, or makes an offer to acquire 20% or more of the Company's outstanding common stock. When exercisable, each Right entitles the holder to purchase $250 worth of Company common stock for $125. Further, upon the occurrence of a merger or transfer of more than 50% of the Company's assets, the Right entitles the holder to purchase common stock of an acquiring company having a market value equivalent to two times the exercise price of the Right. At no time does the Right have any voting power. The Right is subject to redemption by the Company's Board of Directors for $.01 per Right at any time prior to the date on which a person or group acquires beneficial ownership of 20% or more of the Company's common stock. The Rights expire on September 30, 2008. The Rights replace rights issued under a prior rights plan, which were redeemed on August 6, 1998.
The Company is authorized to issue 250,000 shares of cumulative preferred stock, of which 100,000 shares are classified as Series A Participating Cumulative Preferred Stock and were initially reserved for issuance under the Rights plan.
Stock Plans
Under the 1998 Stock Option Plan, up to 2,400,000 shares of common stock are available for awards, of which no more than 600,000 shares may be restricted stock. The Company may also issue up to 2,400,000 shares of common stock pursuant to the exercise of stock options or the grant of restricted stock under the 1994 Employee Stock Plan. Under the 1994 Plan, up to 500,000 shares may be awarded as restricted stock. Generally, stock options become exercisable over a three year vesting period and expire 10 years from the date of grant. Awarded shares of restricted stock become freely transferable at the end of five years. During the period of restriction, the employee has voting rights and is entitled to receive all dividends and other distributions paid with respect to the stock. The 1994 Plan also authorizes the grant of up to 800,000 stock appreciation rights in connection with stock options.
The Company has adopted the disclosure-only provisions of SFAS No. 123, "Accounting for Stock-Based Compensation." Accordingly, no compensation cost has been recognized for the Company's stock option plans. If the Company had elected to recognize compensation cost based on the fair value of the options granted at grant date as prescribed by SFAS No. 123, net earnings and earnings per common share would have been reduced to the pro forma amounts indicated below:
2000 1999 1998 --------------------------------------------------------------- Pro forma net earnings $ 60,542 $ 79,856 $ 72,682 Pro forma net earnings per common share: Basic $ 1.24 $ 1.59 $ 1.42 Diluted 1.23 1.57 1.40 The weighted-average fair value per share of options granted was $7.06 in 2000, $6.25 in 1999 and $4.84 in 1998. The fair value of each option grant is estimated on the date of grant using the Black-Scholes option-pricing model with the following assumptions: 2000 1999 1998 --------------------------------------------------------------- Dividend yield 2.3% 2.6% 1.9% Volatility 36.1% 24.0% 19.0% Risk-free interest rate 5.0% 6.4% 4.6% Expected term (years) 6 6 6 |
37 SENSIENT 2000 ANNUAL REPORT
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2000, 1999 and 1998
The changes in outstanding stock options during the three years ended December 31, 2000 are summarized below:
Shares Weighted --------------------- Outstanding average options Available price -------------------------------------------------------------------- Balances at December 31, 1997 3,708 559 $ 16.42 Authorized under the 1998 Plan 2,400 Granted 600 (600) 21.38 Restricted stock -- (42) 21.56 Exercised (916) -- 15.15 Cancelled (130) 130 18.25 -------------------------------------------------------------------- Balances at December 31, 1998 3,262 2,447 17.62 Granted 618 (618) 22.70 Restricted stock -- (39) 22.19 Exercised (168) -- 15.65 Cancelled (35) 35 21.35 -------------------------------------------------------------------- Balances at December 31, 1999 3,677 1,825 18.53 Granted 693 (693) 20.60 Restricted stock -- (41) 22.00 Exercised (783) -- 16.28 Cancelled (219) 219 21.30 -------------------------------------------------------------------- Balances at December 31, 2000 3,368 1,310 $ 19.30 ---------------------------------- Weighted Options average exercisable price -------------------------------------------------------------------- December 31, 1998 2,111 $16.45 December 31, 1999 2,527 $17.09 December 31, 2000 2,226 $18.25 The following summarizes information concerning currently outstanding and exercisable options: Range of exercise price ---------------------------- $14.12- $17.26- $20.38- 17.25- 20.37- 23.50- -------------------------------------------------------------------- Number outstanding 1,154 798 1,416 Weighted average remaining contractual life, in years 4.4 6.3 8.6 Weighted average exercise price $16.09 $19.03 $22.06 -------------------------------------------------------------------- Number exercisable 1,154 547 525 Weighted average exercise price $16.09 $19.33 $21.87 |
Retirement Plans
The Company provides benefits under defined contribution plans including a savings plan and an ESOP. The savings plan covers substantially all domestic salaried and certain non-union hourly employees and provides for matching contributions up to 4% of each employee's salary. The ESOP covers substantially all domestic employees not covered by a defined benefit plan and provides for contributions based on a percentage (6% each of the last three years) of each employee's compensation. Total expense related to continuing operations for the Company's defined contribution plans was $6,402,000, $6,170,000 and $5,916,000 in 2000, 1999 and 1998, respectively.
Other Postretirement Benefits
The Company provides certain health insurance benefits to eligible retirees and their dependents. Effective January 1, 2000 the Company began amortizing unrecognized net actuarial gains over a five year period. Prior to 2000, net actuarial gains were amortized over the average remaining service lives of active employees of approximately 19 years. The new method is preferable because it accelerates recognition of events that have already occurred. The cumulative effect of this change was a pre-tax credit of $3,953,000. The proforma retroactive effect of this change is not material.
During the fourth quarter of 2000, the Company amended the plan to require future retirees to pay 100% of the cost of health care coverage. This amendment resulted in a curtailment gain of $4,251,000 relating to continuing operations and $2,459,000 relating to discontinued operations. The net unrecognized prior service cost will be amortized over the estimated remaining lives of the retirees. These changes will reduce costs by approximately $1,000,000 in 2001. The Company funds benefit costs on a pay-as-you-go basis.
SENSIENT 2000 ANNUAL REPORT 38
The funded status of the postretirement benefit plan at December 31 was:
2000 1999 ---------------------------------------------- Benefit obligation at beginning of year $ 12,961 $ 13,216 Service cost 381 415 Interest cost 902 865 Plan amendment (7,808) -- Benefits paid (497) (1,104) Actuarial gain (11) (431) ---------------------------------------------- Benefit obligation at end of year 5,928 12,961 Plan assets -- -- ---------------------------------------------- Funded status (5,928) (12,961) Unrecognized prior service cost (credit) (7,808) (7,258) Unrecognized net actuarial gain (5,980) (10,886) ---------------------------------------------- Net amount recognized $(19,716) $(31,105) -------------------- |
Components of net periodic benefit cost for continuing operations were:
2000 1999 1998 -------------------------------------------------------- Service cost $ 253 $ 275 $ 292 Interest cost 526 498 580 Amortization of prior service cost (343) (343) (343) Curtailment (4,251) -- -- Recognized actuarial gain (674) (295) (267) -------------------------------------------------------- Postretirement benefit expense $(4,489) $ 135 $ 262 ----------------------------- |
The weighted average discount rates used in determining the accumulated postretirement benefit obligation at December 31, 2000 and 1999 were 7.50% and 7.25%, respectively. The health care cost trend rates were assumed to be 7.00% in 2000 and 7.75% in 1999, gradually declining to 5.5% by the year 2002 and remaining at that level thereafter.
Assumed health care cost trend rates have a significant effect on the amounts reported for the health care plan. A one percentage point change in assumed health care cost trend rates would have the following effects:
1% 1% increase decrease ------------------------------------------------------ Effect on total of service and interest cost components $ 99 $ (92) Effect on postretirement benefit obligation 302 (283) |
Income Taxes
The provision for income taxes for continuing operations is as follows:
2000 1999 1998 ----------------------------------------------------- Currently payable: Federal $ 2,603 $ 7,292 $ 10,020 State 1,152 2,212 2,440 Foreign 16,659 12,462 7,296 Deferred (benefit): Federal 3,932 6,308 5,976 State 534 988 936 Foreign (3,199) 1,067 (201) ----------------------------------------------------- $ 21,681 $ 30,329 $ 26,467 ------------------------------- |
The tax effects of temporary differences that give rise to significant portions of deferred tax assets and liabilities consist of the following:
2000 1999 ---------------------------------------------------------------------- Deferred tax assets: Benefit plans $(12,841) $(16,988) Liabilities and reserves (8,922) (4,875) Foreign operating loss carryovers (11,586) (17,551) Other (5,207) -- -------------------- Gross deferred tax assets (38,556) (39,414) Valuation allowance 12,364 14,307 -------------------- Total deferred tax assets (26,192) (25,107) -------------------- Deferred tax liabilities: Property, plant and equipment 29,283 23,219 Other 16,593 19,090 -------------------- Total deferred tax liabilities 45,876 42,309 -------------------- Net deferred tax liabilities $ 19,684 $ 17,202 -------------------- |
SENSIENT 2000 ANNUAL REPORT 39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2000, 1999 and 1998
At December 31, 2000 foreign operating loss carryovers were $37,692,000. Included in the total are losses of $10,982,000 that expire through 2010 and $26,710,000 that do not expire.
The effective tax rate for continuing operations differs from the statutory federal income tax rate of 35% as described below:
2000 1999 1998 -------------------------------------------------------- Taxes at statutory rate 35.0% 35.0% 35.0% State income taxes, net of federal income tax benefit 1.9 2.1 2.6 Tax credits (6.4) (4.9) (4.7) Foreign tax rate 2.8 1.1 (0.5) Tax benefit of business closure (4.1) -- -- Settlements of prior years' issues -- (2.2) (1.7) Other, net (1.4) 0.2 0.1 -------------------------------------------------------- Effective tax rate 27.8% 31.3% 30.8% -------------------------- |
The effective tax rates would have been 31.9%, 33.5% and 32.5% in 2000, 1999, and 1998, respectively, excluding the tax benefit of business closure and favorable impact of prior year settlements.
Earnings from continuing operations, before income taxes, are summarized as follows:
2000 1999 1998 ------------------------------------------- United States $45,730 $61,236 $64,449 Foreign 32,298 35,604 21,419 ------------------------------------------- $78,028 $96,840 $85,868 --------------------------- |
Domestic income taxes have not been provided on undistributed earnings of foreign subsidiaries which are considered to be permanently invested. If undistributed foreign earnings were to be remitted, foreign tax credits would substantially offset any resulting domestic tax liability.
The accounting policies of the segments are the same as those described in the summary of significant accounting policies. The Company evaluates performance based on operating income of the respective business units before goodwill amortization, interest expense and income taxes. Total revenue and operating income by business segment and geographic region include both sales to customers, as reported in the Company's statements of earnings, and intersegment sales, which are accounted for at prices which approximate market prices and are eliminated in consolidation. Corporate and other revenue consist primarily of flavor, fragrances and color products sold by the Asia Pacific division.
Assets by business segment and geographic region are those assets used in the Company's continuing operations in each segment and geographic region. Corporate and other assets consist primarily of property, investments and goodwill. Capital expenditures are reported exclusive of discontinued operations and acquisitions.
Segment Information The Company's operations, except for the Asia Pacific division, are managed on a products and services basis. During 2000 the Company decided to dispose of its Yeast business (see Note 12) and integrate its Dehydrated Products division with the Flavor division. As a result of these changes the reportable segments were changed to Flavors & Fragrances and Color. The Company's Flavors & Fragrances segment produces flavor and fragrance products that impart a desired taste or smell to a broad range of consumer products. The Color segment produces color products which are used by manufacturers of various food and other consumer products.
SENSIENT 2000 ANNUAL REPORT 40
Flavors & Corporate Fragrances Color and Other Consolidated -------------------------------------------------------------------------------------------------------------- 1998 Revenue from external customers $ 493,004 $ 182,197 $ 44,607 $ 719,808 Intersegment revenue 19,577 7,335 -- 26,912 ---------------------------------------------------------------- Total revenue 512,581 189,532 44,607 746,720 ---------------------------------------------------------------- Operating income (loss) 80,085 48,504 (20,744) 107,845 Interest expense -- -- 21,977 21,977 ---------------------------------------------------------------- Earnings (loss) before income taxes 80,085 48,504 (42,721) 85,868 ---------------------------------------------------------------- Assets 438,879 160,812 291,020 890,711 Capital expenditures 39,592 9,836 3,077 52,505 Depreciation and amortization 21,475 7,095 8,469 37,039 1999 Revenue from external customers $ 509,721 $ 237,016 $ 49,513 $ 796,250 Intersegment revenue 17,473 12,315 -- 29,788 ---------------------------------------------------------------- Total revenue 527,194 249,331 49,513 826,038 ---------------------------------------------------------------- Operating income (loss) 82,501 59,363 (17,599) 124,265 Interest expense -- -- 27,425 27,425 ---------------------------------------------------------------- Earnings (loss) before income taxes 82,501 59,363 (45,024) 96,840 ---------------------------------------------------------------- Assets 444,010 222,170 362,613 1,028,793 Capital expenditures 31,380 12,359 7,081 50,820 Depreciation and amortization 21,535 8,756 10,513 40,804 2000 Revenue from external customers $ 488,976 $ 263,813 $ 56,374 $ 809,163 Intersegment revenue 22,148 19,838 -- 41,986 ---------------------------------------------------------------- Total revenue 511,124 283,651 56,374 851,149 ---------------------------------------------------------------- Operating income (loss) 80,598 70,986 (39,391) 112,193 Interest expense -- -- 34,165 34,165 ---------------------------------------------------------------- Earnings (loss) before income taxes 80,598 70,986 (73,556) 78,028 ---------------------------------------------------------------- Assets 451,547 235,383 394,476 1,081,406 Capital expenditures 26,546 12,834 5,819 45,199 Depreciation and amortization 23,117 9,712 12,725 45,554 Special charges -- -- 19,000 19,000 |
Geographic Information The Company has manufacturing plants or sales offices in North and South America, Europe, Asia, Australia and Africa.
2000 1999 1998 --------------------------------------------------- Revenue from external customers U.S.A $407,329 $401,405 $392,178 Europe 204,452 208,913 156,798 Asia Pacific 65,708 57,946 51,681 Other 131,674 127,986 119,151 --------------------------------------------------- Consolidated $809,163 $796,250 $719,808 ------------------------------ Long-lived assets U.S.A $306,311 $292,563 $274,614 Europe 281,638 269,751 201,850 Asia Pacific 11,829 11,588 7,968 Other 73,072 72,761 64,895 --------------------------------------------------- Consolidated $672,850 $646,663 $549,327 ------------------------------ |
SENSIENT 2000 ANNUAL REPORT 41
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2000, 1999 and 1998
In June 2000, the Company's Board of Directors approved a plan to dispose of the operations of its Yeast business. Accordingly, the operating results of the Yeast business have been reported separately from continuing operations and reported as a separate line item on the statement of earnings. The Company has also restated its prior statements of earnings to present the earnings of the Yeast business as a discontinued operation.
Summarized financial information for the discontinued operation is as follows:
2000 1999 1998 ------------------------------------------------ Revenue $120,232 $141,291 $145,610 Earnings before income taxes 5,264 24,597 23,947 Income taxes 1,999 9,347 9,100 ------------------------------------------------ Earnings from discontinued operations $ 3,265 $ 15,250 $ 14,847 ------------------------------ |
The 2000 earnings before income taxes includes $2,400,000 of legal and other costs relating to the sale of the business and a credit of $2,459,000 from the curtailment of postretirement health care benefits (see Note 9.)
Earnings from July 1, 2000 to December 31, 2000 were $2,188,000. The effective tax rates for all years presented is higher than the statutory rate of 35% because of state income taxes.
The assets and liabilities of the Yeast business at December 31, 2000 have been reflected as a net current asset and are reported as a separate line item on the balance sheet. On February 23, 2001 the Company completed the sale of substantially all of its Yeast business for approximately $113 million in cash, of which $4 million was received in August 2000.
The components of net assets held for sale at December 31, 2000 are as follows:
Current assets $20,130 Total assets 95,018 --------------------------------------- Current liabilities 12,176 --------------------------------------- Net assets held for sale $82,842 ------- |
The Company recorded special charges of $19,000,000 ($13,300,000 after tax, $0.27 per share) in 2000 related primarily to a facilities consolidation plan which will achieve manufacturing efficiencies in both the flavor and color businesses. In addition, this charge includes non-recurring items such as name and fiscal year change costs and severance costs incurred in 2000. The $19,000,000 charge includes $11,000,000 of severance and other employee separation costs associated with a workforce reduction of approximately 200 employees, a $6,000,000 impairment charge related to facility closures, and $2,000,000 of other items. The cost savings resulting from this plan are expected to be recognized beginning in 2001.
Total cash expenditures in connection with these actions will approximate $13,000,000. The Company has spent $3,000,000 through December 31, 2000 and expects to spend the remainder in 2001.
The Company is involved in various claims and litigation arising in the normal course of business. In the opinion of management and Company counsel, the ultimate resolution of these actions will not materially affect the consolidated financial position, results of operations or cash flows of the Company.
SENSIENT 2000 ANNUAL REPORT 42
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL STATEMENTS
Years ended December 31, 2000, 1999 and 1998
The management of Sensient Technologies Corporation is responsible for preparation of the financial statements and other financial information included in this annual report. The financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America.
It is management's policy to maintain a control-conscious environment through an effective system of internal accounting controls. These controls are supported by the careful selection of competent and knowledgeable personnel and by the communication of standard accounting and reporting policies and procedures throughout the Company. These controls are adequate to provide reasonable assurance that assets are safeguarded against material loss or unauthorized use and to produce the records necessary for the preparation of reliable financial information. There are limits inherent in all systems of internal control based on the recognition that the costs of such systems should be related to the benefits to be derived. Management believes that its systems provide this appropriate balance.
The control environment is complemented by the Company's internal audit function, which evaluates the adequacy of the controls, policies and procedures in place, as well as adherence to them, and recommends improvements for implementation when applicable. In addition, the Company's independent auditors, Deloitte & Touche LLP, have developed an understanding of the Company's accounting and financial controls and have conducted such tests as they considered necessary to render an opinion on the Company's financial statements.
The Board of Directors pursues its oversight role with respect to the Company's financial statements through the Audit Committee, which is composed solely of outside directors. The Audit Committee recommends selection of the Company's auditors and meets with them and the internal auditors to review the overall scope and specific plans for their respective audits and results from those audits. The Committee also meets with management to review overall accounting policies relating to the reporting of financial results. Both the independent auditors and internal auditors have unrestricted access to the Audit Committee.
/s/ Kenneth P. Manning Kenneth P. Manning Chairman, President and Chief Executive Officer /s/ Richard F. Hobbs Richard F. Hobbs Vice President and Chief Financial Officer |
INDEPENDENT AUDITORS' REPORT
To the Shareholders and Board of Directors of Sensient Technologies Corporation:
We have audited the accompanying consolidated balance sheets of Universal Foods Corporation, d/b/a Sensient Technologies Corporation, and subsidiaries (the "Company") as of December 31, 2000 and 1999, and the related consolidated statements of earnings, shareholders' equity and cash flows for each of the three years in the period ended December 31, 2000. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2000 and 1999, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2000 in conformity with accounting principles generally accepted in the United States of America.
As discussed in Note 9 to the Consolidated Financial Statements, effective January 1, 2000, the Company changed its method of amortizing unrecognized net gains and losses related to the Company's obligation for postretirement benefits.
/s/ Deloitte & Touche LLP Milwaukee, Wisconsin February 23, 2001 |
SENSIENT 2000 ANNUAL REPORT 43
FIVE YEAR REVIEW
Dollars in thousands except per share data 2000 ------------------------------------------------------------------------------------------------- Summary of Operations Revenue $ 809,163 100.0% Cost of products sold 524,960 64.9 Selling and administrative expenses 153,010 18.9 Special charges 19,000 2.3 ------------------------------------------------------------------------------------------------- Operating income 112,193 13.9 Interest expense 34,165 4.3 ------------------------------------------------------------------------------------------------- Earnings from continuing operations before income taxes 78,028 9.6 Income taxes 21,681 2.6 ------------------------------------------------------------------------------------------------- Earnings from continuing operations 56,347 7.0 Earnings from discontinued operations 3,265 0.4 Accounting change 2,431 0.3 ------------------------------------------------------------------------------------------------- Net earnings $ 62,043 7.7% ------------------------------- Net earnings per share: Basic earnings per share Continuing operations before accounting change $ 1.15 Discontinued operations .07 Accounting change .05 ------------------------------------------------------------------------------------------------- Net earnings $ 1.27 ------------------------------- Diluted earnings per share Continuing operations before accounting change $ 1.15 Discontinued operations .07 Accounting change .05 ------------------------------------------------------------------------------------------------- Net earnings $ 1.26 ------------------------------- Other Related Data Earnings per share from continuing operations excluding special charges $ 1.42 Dividend per share, declared and paid .53 Average shares outstanding: Basic 48,898,000 Diluted 49,166,000 Book value per common share $ 8.59 Price range per common share 16.00 - 23.19 Share price at December 31 22.75 Capital expenditures from continuing operations 45,199 Depreciation from continuing operations 35,507 Amortization from continuing operations 10,047 Total assets 1,164,248 Long-term debt 417,141 Shareholders' equity 417,058 Return on average shareholders' equity 14.7% Total debt to total capital 55.7% Employees 3,722 ------------------------------------------------------------------------------------------------- |
The 2000 results include a charge for restructuring costs and the effect of a
postretirement health care plan amendment (see Notes 9 and 13).
The 1997 results include a pretax charge of $7.5 million for integrating two
divisions.
The 1996 results include pretax charges of $25 million relating to adopting SFAS
No. 121 and restructuring costs.
44 SENSIENT 2000 ANNUAL REPORT
Five Year Review
Dollars in thousands except per share data 1999 1998 ----------------------------------------------------------------------------------------------------------------------------- Summary of Operations Revenue $ 796,250 100.0% $ 719,808 100.0% Cost of products sold 526,367 66.1 475,330 66.0 Selling and administrative expenses 145,618 18.3 136,633 19.0 Special charges -- 0.0 -- 0.0 ----------------------------------------------------------------------------------------------------------------------------- Operating income 124,265 15.6 107,845 15.0 Interest expense 27,425 3.4 21,977 3.1 ----------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations before income taxes 96,840 12.2 85,868 11.9 Income taxes 30,329 3.8 26,467 3.6 ----------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations 66,511 8.4 59,401 8.3 Earnings from discontinued operations 15,250 1.9 14,847 2.0 Accounting change -- 0.0 -- 0.0 ----------------------------------------------------------------------------------------------------------------------------- Net earnings $ 81,761 10.3% $ 74,248 10.3% ------------------------------------------------------ Net earnings per share: Basic earnings per share Continuing operations before accounting change $ 1.32 $ 1.16 Discontinued operations .30 .29 Accounting change -- -- ----------------------------------------------------------------------------------------------------------------------------- Net earnings $ 1.63 $ 1.45 ------------------------------------------------------ Diluted earnings per share Continuing operations before accounting change $ 1.31 $ 1.14 Discontinued operations .30 .29 Accounting change -- -- ----------------------------------------------------------------------------------------------------------------------------- Net earnings $ 1.61 $ 1.43 ------------------------------------------------------ Other Related Data Earnings per share from continuing operations excluding special charges $ 1.31 $ 1.14 Dividend per share, declared and paid .53 .53 Average shares outstanding: Basic 50,296,000 51,168,000 Diluted 50,791,000 51,883,000 Book value per common share $ 8.64 $ 8.09 Price range per common share 18.25 - 27.38 19.44 - 27.75 Share price at December 31 20.38 27.44 Capital expenditures from continuing operations 50,820 52,505 Depreciation from continuing operations 32,709 30,810 Amortization from continuing operations 8,095 6,229 Total assets 1,131,713 995,865 Long-term debt 380,378 291,304 Shareholders' equity 430,872 412,591 Return on average shareholders' equity 19.4% 18.5% Total debt to total capital 52.1% 45.7% Employees 3,900 3,943 ----------------------------------------------------------------------------------------------------------------------------- Dollars in thousands except per share data 1997 1996 --------------------------------------------------------------------------------------------------------------------------- Summary of Operations Revenue $ 686,317 100.0% $ 649,856 100.0% Cost of products sold 463,311 67.5 436,453 67.2 Selling and administrative expenses 136,118 19.8 130,163 20.0 Special charges -- 0.0 25,000 3.8 --------------------------------------------------------------------------------------------------------------------------- Operating income 86,888 12.7 58,240 9.0 Interest expense 18,077 2.7 15,047 2.4 --------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations before income taxes 68,811 10.0 43,193 6.6 Income taxes 17,456 2.5 14,446 2.2 --------------------------------------------------------------------------------------------------------------------------- Earnings from continuing operations 51,355 7.5 28,747 4.4 Earnings from discontinued operations 14,721 2.1 15,851 2.5 Accounting change -- 0.0 -- 0.0 --------------------------------------------------------------------------------------------------------------------------- Net earnings $ 66,076 9.6% $ 44,598 6.9% -------------------------------------------------- Net earnings per share: Basic earnings per share Continuing operations before accounting change $ 1.01 $ .56 Discontinued operations .29 .31 Accounting change -- -- --------------------------------------------------------------------------------------------------------------------------- Net earnings $ 1.29 $ .87 -------------------------------------------------- Diluted earnings per share Continuing operations before accounting change $ 1.00 $ .56 Discontinued operations .29 .31 Accounting change -- -- --------------------------------------------------------------------------------------------------------------------------- Net earnings $ 1.28 $ .86 -------------------------------------------------- Other Related Data Earnings per share from continuing operations excluding special charges $ 1.00 $ .88 Dividend per share, declared and paid .52 .51 Average shares outstanding: Basic 51,062,000 51,257,000 Diluted 51,476,000 51,588,000 Book value per common share $ 7.44 $ 7.07 Price range per common share 16.00 - 21.47 14.00 - 20.19 Share price at December 31 21.13 17.63 Capital expenditures from continuing operations 54,230 49,312 Depreciation from continuing operations 26,622 22,707 Amortization from continuing operations 5,463 4,122 Total assets 889,530 789,593 Long-term debt 282,554 208,887 Shareholders' equity 378,522 359,819 Return on average shareholders' equity 17.7% 12.4% Total debt to total capital 43.3% 37.5% Employees 3,896 3,878 --------------------------------------------------------------------------------------------------------------------------- |
The 2000 results include a charge for restructuring costs and the effect of a
postretirement health care plan amendment (see Notes 9 and 13).
The 1997 results include a pretax charge of $7.5 million for integrating two
divisions.
The 1996 results include pretax charges of $25 million relating to adopting SFAS
No. 121 and restructuring costs.
45 SENSIENT 2000 ANNUAL REPORT
Quarterly Data
Dollars in thousands except per share amounts
[UNAUDITED] Continuing Continuing Earnings operations operations from earnings earnings Gross continuing Net per share per share Revenue profit operations earnings basic diluted ------------------------------------------------------------------------------- 2000 First Quarter $205,163 $ 70,943 $ 19,208 $ 22,780 $ .39 $ .39 Second Quarter 204,149 73,864 17,914 17,850 .36 .36 Third Quarter 206,991 73,038 17,456 18,385 .36 .36 Fourth Quarter 192,860 66,358 1,769 3,028 .04 .04 ------------------------------------------------------------------------------- 1999 First Quarter $185,643 $ 62,346 $ 15,195 $ 19,032 $ .30 $ .30 Second Quarter 201,758 67,389 16,878 20,726 .34 .33 Third Quarter 210,156 73,593 20,314 23,506 .40 .40 Fourth Quarter 198,693 66,555 14,124 18,497 .28 .28 ------------------------------------------------------------------------------- |
Net earnings for the first quarter of 2000 have been restated to reflect the effect of an accounting change (see Note 9).
The 2000 fourth quarter operating results include a special charge (see Note 13) and the effect of a postretirement plan amendment (see Note 9).
COMMON STOCK PRICES AND DIVIDENDS
Market price Dividends High Low per share ------------------------------------------------------------------------------- 2000 First Quarter $ 21.38 $ 17.00 $ .1325 Second Quarter 21.25 16.00 .1325 Third Quarter 21.75 18.63 .1325 Fourth Quarter 23.19 19.00 .1325 ------------------------------------------------------------------------------- 1999 First Quarter $ 27.38 $ 20.00 $ .1325 Second Quarter 23.63 20.06 .1325 Third Quarter 23.56 20.13 .1325 Fourth Quarter 22.81 18.25 .1325 ------------------------------------------------------------------------------- |
46 SENSIENT 2000 ANNUAL REPORT
EXHIBIT 18
February 23, 2001
Sensient Technologies Corporation
777 E. Wisconsin Avenue
Milwaukee, WI 53202
Dear Sirs/Madams:
We have audited the consolidated financial statements of Universal Foods Corporation d/b/a Sensient Technologies Corporation (the "Company") as of December 31, 2000 and 1999, and for each of the three years in the period ended December 31, 2000, included in your Annual Report on Form 10-K to the Securities and Exchange Commission and have issued our report thereon dated February 23, 2001, which expresses an unqualified opinion and includes an explanatory paragraph concerning a change in the Company's method of amortizing unrecognized actuarial gains and losses related to postretirement benefits other than pensions from the minimum amortization method as defined by Statement of Financial Accounting Standards No. 106, to a method whereby the Company will amortize into income any unrecognized actuarial gains and losses in excess of a 10% corridor over the lesser of five years or the average remaining service period of active participants. Note 9 to such financial statements contains a description of your change in accounting during the year ended December 31, 2000 related to post retirement benefits other than pensions. In our judgment, such change is to an alternative accounting principle that is preferable under the circumstances.
Yours truly,
/s/ DELOITTE & TOUCHE LLP |
EXHIBIT 21
Subsidiaries of Universal Foods Corporation d/b/a Sensient Technologies Corporation
Name State or other jurisdiction of incorporation ---- -------------------------------------------- Universal Foods Corporation d/b/a Sensient Technologies Corporation Wisonsin Sensient Technologies Canada, Inc. Canada Sensient Technologies Foreign Sales Corporation Virgin Islands Universal Holding, Inc. Nevada Universal Foods Corporation - Ireland Ireland Universal Health Care Management Company Wisconsin Sensient Technologies (UK) Limited United Kingdom Universal Foods Holding SARL (Luxembourg) Luxembourg Universal Foods (Luxembourg) SARL Luxembourg UF Holdings (Malta) Limited Malta Universal Holdings Cayman Cayman Sensient Technologies Holding Deutschland GmbH Germany Sensient Flavors Inc. Delaware Sensient Flavors - Canada, Incorporated Canada Sensient Flavors International, Incorporated Indiana Sensient Flavors SARL France DGF Universal Fragrances, SA Spain Universal Flavors Belgium N.V. Belgium Universal Flavors SRL Italy Sensient Flavors Mexico SA. de CV Mexico DGF - Sensient Fragrances Mexico SA de CV Mexico Flavor Burst, Inc. Illinois Biolux Finance SA (Biofin) Belgium U.F. Biolux S.A. Belgium Sensient Flavors Strasbourg S.A.S. France Promavil S.A. Belgium Sensient Flavors (Wales) Limited United Kingdom Universal Flavors Limited United Kingdom D.C. Flavours Limited United Kingdom Sensient Flavors Distribution GmbH Germany Sensient Flavors Deutschland GmbH Germany Warner-Jenkinson Universal Foods BV Netherlands Warner-Jenkinson (Canada) Limited Canada Sensient Technical Colors, LLC New Jersey Warner-Jenkinson Company, Inc. New York Warner-Jenkinson SA de CV Mexico Warner-Jenkinson Europe Limited United Kingdom Warner-Jenkinson Europe SARL France Reggiana - Warner Jenkinson Srl. Italy Warner - Jenkinson SA Argentina SCI Cesar France SCI Griseda France Warner Jenkinson Europe GmbH Germany Warner Jenkinson Europe - Goldmann Geschaftsfuhrungs GmbH Germany Warner Jenkinson Europe - Goldmann GmbH & Co KG Germany Sensient France SAS France Financiere Wackherr France Les Colorants Wackherr France LCW do Brasil Brazil LCW Polska Poland LCW Iberica Spain Pointing Holdings Limited United Kingdom Pointing Limited United Kingdom Pointing International Limited United Kingdom Pointing (SA) (Pty.) Limited South Africa Pointing Color Inc. Minnesota Monarch Food Colour LP Missouri Pointing Canada Limited Canada Pointing Mexico SA de CV Mexico Antociani Italia Srl Italy Ratina Partecipation Luxembourg Luxembourg Dr. Marcus Beteiligungs GmbH Germany Dr. Marcus & Co. K.G. Germany Dr. Marcus Verwaltungs GmbH Germany Dr. Marcus CZ s.r.o. Czech Republic Dr. Marcus France SARL France |
Dr. Marcus Hungaria KFT Hungary Dr. Marcus Polska Sp. Zo. O Poland Dr. Marcus COM.ROM.Srl Romania Inter Agro U.S.A., Inc. New York Universal Dehydrates Ltd. Ireland Freshfield Foods Ltd. Ireland Rogers Foods, Inc. California Universal Dehydrates B.V. Netherlands Universal Foods Limited United Kingdom Sensient Specialty Vegetables SA * France Hecon Groningen B.V. Netherlands Sensient Technologies Asia Pacific Pte. Ltd. Singapore Sensient Technologies (Thailand), Ltd. Thailand Sensient Technologies Australia Pty Ltd Australia Sensient Technologies Corporation (Japan) Japan Sensient Technologies (Philippines), Inc. Philippines Sensient Technologies Corporation (China) Ltd.* China Senseint Technologies Hong Kong Limited* Hong Kong |
* Company name change in process
EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 1 to Registration Statements No. 33-34555 and 33-55437 and Registration Statements No. 333-95991, 333-95993, 33-27356, 333-35877 and 333-45931 on Form S-8 and Registration Statement No. 333-67015 on Form S-3 of Universal Foods Corporation, d/b/e Sensient Technologies Corporation, of our report dated February 23, 2001, (which reports express an unqualified opinion and include an explanatory paragraph as to the change in accounting of amortizing unrecognized net gains and losses related to the Company's obligation for postretirement benefits) appearing and incorporated by reference in this Annual Report on Form 10-K of Sensient Technologies Corporation for the year ended December 31, 2000.
/s/ DELOITTE & TOUCHE LLP Milwaukee, Wisconsin March 27, 2001 |