def14a
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the
Securities
Exchange Act of 1934 (Amendment
No. )
Filed by the
Registrant þ
Filed by a Party other than the
Registrant o
Check the appropriate box:
o Preliminary
Proxy Statement
o Confidential,
for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
þ Definitive
Proxy Statement
o Definitive
Additional Materials
o Soliciting
Material under
Rule 14a-12
International Flavors & Fragrances Inc.
(Name of Registrant as Specified
In Its Charter)
(Name of Person(s) Filing Proxy
Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
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No fee required.
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Fee computed on table below per Exchange Act
Rules 14a-6(i)(1)
and 0-11.
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Per unit price or other underlying value of transaction computed
pursuant to Exchange Act
Rule 0-11
(Set forth the amount on which the filing fee is calculated and
state how it was determined):
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Proposed maximum aggregate value of transaction:
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Fee paid previously with preliminary materials.
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Check box if any part of the fee is offset as provided by
Exchange Act
Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its
filing.
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1)
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Amount Previously Paid:
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2)
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Form, Schedule or Registration Statement No.:
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International
Flavors & Fragrances Inc.
521 West
57th
Street
New York, NY 10019
Dear Shareholder:
I am pleased to invite you to attend the 2011 Annual Meeting of
Shareholders of International Flavors & Fragrances
Inc. to be held on Tuesday, May 3, 2011 at
10:00 A.M. Eastern Time at our offices at
521 West
57th
Street, New York, New York 10019. (Attendees are requested to
enter at 533
West 57th Street.)
Details regarding the business to be conducted are described in
the accompanying Notice of Annual Meeting and Proxy Statement.
We take advantage of the Securities and Exchange
Commissions rule that allows us to furnish our proxy
materials to our shareholders over the Internet. We believe
electronic delivery helps expedite the receipt of materials and,
by printing and mailing a smaller volume, helps lower our costs
and reduce the environmental impact of our annual meeting
materials. Beginning on March 16, 2011, a Notice of
Internet Availability of Proxy Materials (which we refer to as
the Notice of Internet Availability) or a full set
of proxy materials will be mailed to our shareholders. The
Notice of Internet Availability contains instructions on how to
access the Notice of Annual Meeting, Proxy Statement and Annual
Report to Shareholders online. If you receive a Notice of
Internet Availability, you will not receive a printed copy of
these materials, unless you specifically request one. The Notice
of Internet Availability contains instructions on how to receive
a paper copy of the proxy materials.
Your vote is very important to us. Whether or not you plan to
attend the meeting, I hope that you will vote as soon as
possible. You may vote over the Internet, by telephone or, if
you request or receive a printed copy of the proxy materials, by
completing, signing and mailing a proxy card.
Sincerely,
Douglas D. Tough
Chairman and Chief Executive Officer
March 11, 2011
Important Notice Regarding the Availability of Proxy
Materials for the Shareholder Meeting To Be
Held on May 3, 2011.
The proxy
statement and annual report to security holders are available at
www.proxyvote.com.
2011
ANNUAL MEETING OF SHAREHOLDERS
NOTICE OF ANNUAL MEETING AND PROXY STATEMENT
TABLE OF CONTENTS
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TIME:
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10:00 A.M. Eastern Time on Tuesday, May 3, 2011
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PLACE:
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International Flavors & Fragrances Inc.
521 West 57 Street
New York, NY 10019
(Attendees are requested to enter at 533 West 57 Street.)
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ITEMS OF BUSINESS:
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1. To elect 12 members of the Board of
Directors, each for a one-year term.
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2. To ratify the selection of PricewaterhouseCoopers
LLP as our independent registered public accounting firm for
2011.
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3. To hold an advisory vote on the compensation of
our executives.
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4. To hold an advisory vote regarding the frequency
of future advisory votes on the compensation of our executives.
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5. To consider such other business as may properly be
brought before the 2011 Annual Meeting and any adjournment or
postponement.
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RECORD DATE:
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You are entitled to vote at the 2011 Annual Meeting if you were
a shareholder of record at the close of business on
March 7, 2011.
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ANNUAL MEETING ADMISSION:
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In addition to a form of personal photo identification, you will
need either an admission ticket or proof that you own IFF shares
in order to attend the 2011 Annual Meeting. If you plan to
attend the meeting and have received a proxy card, please bring
the admission ticket accompanying the proxy card and check the
box on that proxy card indicating that you will be attending.
If you are a shareholder of record and you vote by Internet or
telephone, you may also indicate if you plan to attend the
meeting. If you do not have an admission ticket, you must bring
evidence of your ownership of IFF stock (which, if you are a
beneficial holder, can be obtained from your bank, broker or
other record holder of your shares) in order to be admitted.
You may also request a ticket by writing to the Office of the
Secretary, International Flavors & Fragrances Inc.,
521 West 57 Street, New York, New York 10019. Evidence of
your ownership must accompany your letter.
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PROXY VOTING:
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It is important that your shares be represented and voted at the
2011 Annual Meeting. You may vote your shares by voting in
person at the meeting, by Internet or by telephone, or by
completing and returning a proxy card. See details under the
heading How do I vote?.
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INSPECTION OF LIST OF SHAREHOLDERS OF RECORD:
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A list of the shareholders of record as of March 7, 2011
will be available for inspection at the 2011 Annual Meeting.
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By Order of the Board of Directors,
Jodie Simon Friedman
Vice President (U.S.), Deputy General Counsel
and Assistant Secretary
4
QUESTIONS
AND ANSWERS
ABOUT THE PROXY MATERIALS AND THE ANNUAL MEETING
Why am I
receiving these proxy materials?
We are providing you with proxy materials, or access thereto, in
connection with the solicitation by the Board of Directors of
International Flavors & Fragrances Inc., a New York
corporation (IFF, the Company,
we, us or our), of proxies
to be used at our 2011 Annual Meeting of Shareholders and at any
adjournment or postponement. Shareholders are invited to attend
the 2011 Annual Meeting, which will take place at
10:00 a.m. on Tuesday, May 3, 2011, and are requested
to vote on the proposals described in this Proxy Statement.
A full set of printed proxy materials or a Notice of Internet
Availability of Proxy Materials (Notice of Internet
Availability) will be sent to record and beneficial
shareholders starting on or around March 16, 2011, and the
proxy materials, including the Notice of Annual Meeting, Proxy
Statement and 2010 Annual Report, will be made available to
shareholders on the Internet on March 11, 2011.
Why did I
receive a Notice of Internet Availability of Proxy Materials
instead of a full set of proxy materials? Alternatively, why did
I receive a full set of printed proxy materials this year
instead of a Notice of Internet Availability?
Pursuant to rules adopted by the Securities and Exchange
Commission (SEC), we are providing access to the
Companys proxy materials over the Internet rather than
printing and mailing the proxy materials to all shareholders. We
believe electronic delivery will expedite the receipt of
materials and will help lower our costs and reduce the
environmental impact of our annual meeting materials. Therefore,
a Notice of Internet Availability will be mailed to shareholders
(or
e-mailed, in
the case of shareholders that have previously requested to
receive proxy materials electronically) starting on or around
March 16, 2011. The Notice of Internet Availability will
provide instructions as to how shareholders may access and
review the proxy materials on the website referred to in the
Notice of Internet Availability or, alternatively, how to
request that a copy of the proxy materials, including a proxy
card, be sent to them by mail. The Notice of Internet
Availability will also provide voting instructions. In addition,
shareholders may request to receive the proxy materials in
printed form by mail or electronically by
e-mail on an
ongoing basis for future shareholder meetings. Please note that,
while our proxy materials are available at the IFF website
referenced in the Notice of Internet Availability, no other
information contained on the website is incorporated by
reference in or considered to be a part of this document.
Certain of our record and beneficial shareholders may receive a
full set of printed proxy materials this year instead of a
Notice of Internet Availability either because that shareholder
previously requested to receive materials in printed form or
because the Company has the option to stratify its mailing by
sending a Notice of Internet Availability to certain
shareholders and a full printed set of proxy materials to
others. The following questions and answers about the proxy
materials and the Annual Meeting, while generally referring to
the Notice of Internet Availability, apply equally to those
shareholders receiving a full set of printed proxy materials.
What
information is contained in these materials?
The information included in this Proxy Statement relates to
proposals you will vote on at the 2011 Annual Meeting, the
voting process, the compensation of directors and our most
highly paid executive officers in 2010 and certain other
information.
How may I
obtain directions to attend the 2011 Annual Meeting of
Shareholders and vote in person?
You may obtain directions to attend the meeting and vote in
person by contacting the IFF operator
at (212) 765-5500.
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Why did I
receive more than one Notice of Internet Availability?
You may receive multiple Notices of Internet Availability if you
hold your shares of IFFs common stock in multiple accounts
(such as through a brokerage account and an employee benefit
plan). If you are a participant in the Companys Retirement
Investment Fund Plan (401(k)) and have common stock in a
plan account, you may receive a separate Notice of Internet
Availability, and your proxy, when executed in accordance with
the instructions in that Notice of Internet Availability, will
serve as voting instructions for the plan trustee. If you
hold your shares of IFFs common stock in multiple
accounts, you should vote your shares as described in each
separate Notice of Internet Availability you receive.
If you are a shareholder of record, are currently receiving
multiple Notices of Internet Availability and would like to
request delivery of a single Notice of Internet Availability in
the future, you may contact the Office of the Secretary,
International Flavors & Fragrances Inc., 521 West
57 Street, New York, New York 10019 (telephone:
(212) 765-5500).
If your shares are held in street name and you would
like to increase or decrease the number of Notices of Internet
Availability delivered to your household in the future, you
should contact your broker, bank or other custodian who holds
the shares on your behalf.
What is
the difference between a shareholder of record and a
street name holder?
If your shares are registered directly in your name with
IFFs transfer agent, American Stock Transfer &
Trust Company (AST), you are considered a
shareholder of record or a registered
shareholder of those shares. In this case, your Notice of
Internet Availability has been sent to you directly by IFF.
If your shares are held in a stock brokerage account or by a
bank, trust or other nominee or custodian, including shares you
may own as a participant in the Companys Retirement
Investment Fund Plan (401(k)), you are considered the
beneficial owner of those shares, which are held in
street name. A Notice of Internet Availability has
been forwarded to you by or on behalf of your broker, bank,
trustee or other holder, who is considered the shareholder of
record of those shares. As the beneficial owner, you have the
right to direct your broker, bank, trustee or other holder of
record as to how to vote your shares by following its
instructions for voting.
Who is
entitled to vote at the 2011 Annual Meeting?
IFFs Board of Directors has established March 7, 2011
as the record date for the 2011 Annual Meeting of Shareholders.
Only shareholders of record at the close of business on the
record date are entitled to receive notice of the annual meeting
and to vote at the 2011 Annual Meeting. At the close of business
on March 7, 2011, there were 80,277,871 outstanding shares
of IFFs common stock. Each share of common stock is
entitled to one vote on each matter properly brought before the
2011 Annual Meeting.
What will
I vote on?
There are four proposals scheduled to be voted on at the 2011
Annual Meeting:
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the election of 12 members of the Board of Directors, each to
hold office for a one-year term until the Annual Meeting in 2012;
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the ratification of PricewaterhouseCoopers LLP as our
independent registered public accounting firm for 2011;
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an advisory vote on the compensation of our named executive
officers in 2010 as disclosed in this Proxy Statement; and
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an advisory vote regarding the frequency of future advisory
votes on executive compensation.
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How many
votes must be present to hold the 2011 Annual Meeting?
A quorum is necessary to hold the 2011 Annual
Meeting. A quorum is established if the holders of a majority of
the votes entitled to be cast by shareholders are present at the
meeting, either in person or by
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proxy. Abstentions and broker non-votes are counted as present
for purposes of determining a quorum. Shares of common stock
represented by executed proxies received by the Company will be
counted for purposes of establishing a quorum at the meeting,
regardless of how or whether such shares are voted on any
specific proposal.
What are
the voting recommendations of IFFs Board of
Directors?
IFFs Board of Directors recommends that you vote your
shares as follows:
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FOR the election of each of the 12 nominees to the
Board;
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FOR the ratification of the selection of
PricewaterhouseCoopers LLP as IFFs independent registered
public accounting firm for 2011;
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FOR the approval of the compensation paid to our
named executive officers in 2010; and
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A recommendation that future votes on executive compensation be
held every year.
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How do I
vote?
You may vote in several different ways:
In person
at the 2011 Annual Meeting
You may vote in person at the 2011 Annual Meeting. You may also
be represented by another person at the meeting by executing a
proxy properly designating that person. If you are the
beneficial owner of shares held in street name, you
must obtain a legal proxy from your broker, bank or other holder
of record and present it to the inspectors of election with your
ballot to be able to vote at the meeting.
By
telephone
You may vote by calling the telephone number specified on the
website provided in the Notice of Internet Availability. Please
have your Notice of Internet Availability handy when you call,
and use any touch-tone phone to transmit your voting
instructions.
By
Internet
You may vote by using the Internet, www.proxyvote.com, to
submit your voting instructions. Please have your Notice of
Internet Availability handy when you go online. If you vote on
the Internet, you may also request electronic delivery of future
proxy materials.
By
mail
You may vote by completing, signing, dating and returning a
proxy card which will be mailed to you if you request delivery
of a full set of proxy materials. A proxy card may also be
mailed to you, at the Companys option, beginning on or
after the tenth day following the mailing of the Notice of
Internet Availability. In either case, a postage-paid envelope
will be provided along with the proxy card.
Telephone and Internet voting for shareholders of record will be
available until 11:59 PM Eastern Time on May 2, 2011.
A mailed proxy card must be received by May 2, 2011 in
order to be voted at the Annual Meeting. If you are a 401(k)
plan participant, telephone and Internet voting will be
available until, or your mailed proxy card must be received by,
11:59 P.M. Eastern Time on April 28, 2011. The
availability of telephone and Internet voting for beneficial
owners of other shares held in street name will
depend on your broker, bank or other holder of record and we
recommend that you follow the voting instructions on the Notice
of Internet Availability that you receive from them.
If you are mailed a set of proxy materials and a proxy card or
voting instruction card and you choose to vote by telephone or
by Internet, you do not have to return your proxy card or voting
instruction card.
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However, even if you plan to attend the 2011 Annual Meeting, we
recommend that you vote your shares in advance so that your vote
will be counted if you later decide not to attend the meeting.
How can I
change my vote?
If you are a shareholder of record, you may revoke your proxy
before it is exercised by:
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Sending a written notice to the Office of the Secretary,
International Flavors & Fragrances Inc., 521 West
57 Street, New York, New York 10019 stating that your proxy is
revoked. The notice must be received prior to the 2011 Annual
Meeting;
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Signing and delivering a later-dated proxy card to the Office of
the Secretary after voting by telephone or using the Internet,
so that it is received prior to the 2011 Annual Meeting;
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Voting by telephone or using the Internet after the date of your
proxy card and before the 2011 Annual Meeting; or
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Attending the 2011 Annual Meeting and voting in person by
ballot. Your attendance at the 2011 Annual Meeting in person
will not cause your previously granted proxy to be revoked
unless you specifically so request or you vote by ballot at the
meeting.
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If you are a beneficial owner of shares held in street
name, you may submit new proxy voting instructions by
contacting your bank, broker or other holder of record.
How are
votes counted?
In the election of the directors (Item 1 of the Proxy
Statement), your vote may be cast FOR or
AGAINST a nominee, or you may ABSTAIN.
Likewise, for the other proposals (Items 2 and 3 in this
Proxy Statement), other than the frequency advisory
vote (Item 4 in this Proxy Statement), your vote may be
cast FOR, AGAINST or you may
ABSTAIN. For the frequency advisory vote
(Item 4 in this Proxy Statement), you may vote for future
advisory votes on executive compensation to be held every
ONE, TWO, or THREE years or you
may ABSTAIN.
Additional information concerning the required vote for each
proposal, including the treatment of abstentions and broker
non-votes, is included below under the heading How many
votes are needed to approve the proposals?.
All executed proxies will be voted in accordance with the voting
instructions contained in those proxies. If you are a
shareholder of record and you furnish your proxy using the
Internet, by phone or by returning a proxy card but do not
indicate your voting preferences, the persons named in the proxy
will vote your shares represented by that proxy in accordance
with the recommendation of our Board of Directors as described
under the heading What are the voting recommendations of
IFFs Board of Directors?.
Who will
count the votes?
A representative from Broadridge Financial Solutions, Inc. will
tabulate the votes and serve as the Companys inspector of
election at the 2011 Annual Meeting.
What is
an abstention?
An abstention occurs when a shareholder executes a
proxy using the Internet, by phone or by returning a proxy card,
but he or she refrains from voting as to a particular matter by
indicating that he or she abstains as to that matter.
What is a
broker non-vote?
A broker non-vote occurs when a brokerage firm or
other nominee holding shares for a beneficial owner does not
vote on a particular proposal because the nominee does not have
authority to vote on a non-routine proposal without
receiving voting instructions from the beneficial owner. To the
extent that they
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have not received voting instructions on a
non-routine proposal, brokers report such number of
shares as non-votes.
Under New York Stock Exchange (NYSE) rules, the
election of directors (Item 1 in this Proxy Statement) will
be treated as a non-routine proposal. In addition,
the advisory vote on our executive compensation (Item 3 in
this Proxy Statement) and the advisory frequency
vote (Item 4 in this Proxy Statement) are both
non-routine proposals. This means that if a
brokerage firm holds your shares on your behalf, those shares
will not be voted on the election of directors or the two
advisory votes unless you provide instructions to that firm by
voting your proxy.
The ratification of the selection of an independent registered
public accounting firm (Item 2 in this Proxy Statement) is
considered a routine proposal, and brokers generally
may vote on behalf of beneficial owners who have not furnished
voting instructions, subject to the rules of the NYSE concerning
transmission of proxy materials to beneficial owners, and
subject to any proxy voting policies and procedures of those
brokerage firms.
In order to ensure that any shares held on your behalf by a
brokerage firm or other organization are voted in accordance
with your wishes, we encourage you to provide instructions to
that firm or organization by voting your proxy.
How many
votes are needed to approve the proposals?
The affirmative vote of a majority of the votes cast is required
for the election of directors, which means that a nominee must
receive a greater number of votes FOR his or her
election than votes AGAINST in order to be elected.
Votes cast do not include any abstentions or broker non-votes
with respect to a nominees election and, therefore
abstentions and broker non-votes will have no effect on the
outcome of the elections. The Companys By-laws include
this majority voting standard for uncontested elections and
provide that any director nominee in an uncontested election who
does not receive an affirmative majority of votes cast must
promptly offer his or her resignation. A description of the
process which, under our By-laws and Corporate Governance
Guidelines, will be followed if such an event occurs, is
included in this Proxy Statement under the heading
Proposals Requiring Your
Vote-Item 1-Election
of Directors.
The affirmative vote of a majority of the votes cast is required
to ratify the selection of PricewaterhouseCoopers LLP
(PwC) as the Companys independent registered
public accounting firm for 2011. Votes cast do not include any
abstentions or broker non-votes with respect to this proposal
and, therefore abstentions and broker non-votes will have no
effect on the outcome of this proposal.
Since the vote regarding out executive compensation and the vote
regarding the frequency of future votes on executive
compensation are advisory in nature and non-binding on the
Company, there is no set approval requirement;
however, the votes cast in connection with the vote on our
executive compensation and the vote regarding the frequency of
future votes on executive compensation will be considered in the
manner described in each of the proposals.
Where can
I find the voting results of the 2011 Annual Meeting?
IFF will announce preliminary voting results at the 2011 Annual
Meeting and will publish final results in a Current Report on
Form 8-K
to be filed with the SEC within 4 business days of the 2011
Annual Meeting.
Do I need
an admission ticket to attend the 2011 Annual Meeting?
You will need either an admission ticket or proof that you own
IFF shares to enter the 2011 Annual Meeting. If you plan to
attend the meeting and have received a proxy card, please bring
the admission ticket accompanying the proxy card and check the
box on that proxy card indicating that you will be attending. If
you are a shareholder of record and you vote by Internet or
telephone, you may also indicate if you plan to attend the
meeting. If you do not have an admission ticket, you must bring
evidence of your ownership of
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IFF stock (which, if you are a beneficial holder, can be
obtained from your bank, broker or other record holder of your
shares), in order to be admitted. You may also request a ticket
by writing to the Office of the Secretary, International
Flavors & Fragrances Inc., at the address noted above.
Evidence of your ownership must accompany your letter. You must
also present a form of personal photo identification in order to
be admitted to the meeting.
How do I
obtain a separate Notice of Internet Availability if I share an
address with other shareholders?
When more than one shareholder of record of IFFs common
stock shares the same address, we may deliver only one Notice of
Internet Availability to that address unless we have received
contrary instructions from one or more of those shareholders.
Similarly, brokers and other nominees holding shares of
IFFs common stock in street name for more than
one beneficial owner with the same address may deliver only one
Notice of Internet Availability to that address if they have
received consent from those beneficial owners. We will deliver
promptly upon written or oral request a separate Notice of
Internet Availability to any shareholder, including a beneficial
owner of shares held in street name, at a shared
address to which a single Notice of Internet Availability was
delivered. To receive additional Notices of Internet
Availability, or if you are a shareholder of record and would
like to receive separate Notices of Internet Availability for
future annual meetings, you may call or write the Office of the
Secretary, International Flavors & Fragrances Inc.,
521 West 57 Street, New York, New York 10019 (telephone:
212-765-5500).
If you are a beneficial owner of shares held in street
name and would like to receive separate Notices of
Internet Availability, you may contact your bank, broker or
other holder of record. In addition, if you are a shareholder of
record who shares the same address with another shareholder of
record and you currently receive separate copies of the Notice
of Internet Availability, you may write or call the Office of
the Secretary as indicated above to request that a single Notice
of Internet Availability be delivered to that address.
Who pays
for the cost of this proxy solicitation?
IFF will pay the entire cost of soliciting proxies. In addition
to solicitation by mail, proxies may be solicited on the
Companys behalf by directors, officers or employees in
person, by telephone, by facsimile or by electronic mail. The
Company has retained Georgeson Inc. to assist in proxy
solicitation for a fee of $7,500 plus expenses. The Company will
reimburse banks, brokers and other custodians, nominees and
fiduciaries for their costs in sending proxy materials to the
beneficial owners of the Companys common stock.
How can I
obtain a copy of IFFs Annual Report on
Form 10-K
for the year ended December 31, 2010?
IFF will on a request in writing provide without charge to
each person from whom proxies are being solicited for the 2011
Annual Meeting a copy of our Annual Report on
Form 10-K
for the year ended December 31, 2010, including the
financial statements and any schedules, required to be filed
with the Securities and Exchange Commission, excluding exhibits.
We may impose a reasonable fee for providing the exhibits to the
Annual Report on
Form 10-K.
Requests should be made to the Office of the Secretary,
International Flavors & Fragrances Inc., 521 West
57 Street, New York, N.Y. 10019. IFFs Annual Report on
Form 10-K
is also available free of charge through the Investor
Relations SEC Filings link on our website,
www.iff.com.
10
CORPORATE
GOVERNANCE
Corporate
Governance Guidelines
Our Board of Directors has responsibility for overseeing the
management of the Company. The Board has adopted Corporate
Governance Guidelines which summarize the practices the Board
will follow with respect to Board membership and selection,
responsibilities of directors, Board meetings, evaluation of the
Chief Executive Officer (CEO), succession planning,
Board committees and director compensation. In December 2010,
and subsequently in February 2011, the Nominating and Governance
Committee and the Board reviewed and revised the Corporate
Governance Guidelines. A copy of the Companys Corporate
Governance Guidelines is available through the Investor
Relations Corporate Governance link on the
Companys website, www.iff.com.
Board
Leadership Structure
To ensure independence and breadth of needed expertise and
diversity of our Board of Directors, our Corporate Governance
Guidelines require our Board to be comprised of between seven
and thirteen members, a majority of whom are required to be
independent in accordance with NYSE standards. Our Board is
currently comprised of 13 members, 12 of whom are independent,
and all Board committees are composed solely of independent
directors. Pursuant to the Corporate Governance Guidelines, our
Board is free to choose its Chairman of the Board in any way
that seems best for the Company at any time and we believe that
this flexibility allows our Board to re-evaluate the particular
leadership needs of the Company at any point in time based on
the particular facts and circumstances then affecting our
business. As a result, the Board does not have a policy that
requires the roles of Chairman of the Board and CEO to be
separate or, if the Board determines at any time that these
roles should be separate, a policy that dictates whether the
Chairman of the Board should be selected from the non-employee
directors or an employee of the Company. Because our Corporate
Governance Guidelines do not require separation of the Chairman
and CEO positions, the Board has also established the role of
independent Lead Director as an integral part of our Board
leadership structure to serve as the liaison between the
independent directors and the Chairman and CEO. The role and
responsibilities of our Lead Director are described below under
the heading Lead Director.
On October 1, 2009, Douglas D. Tough, who was a Board
member at the time, assumed the role of non-executive Chairman,
with the plan that he would assume the additional role of CEO
when his contract with his then employer expired, no later than
the first quarter of 2010. On March 1, 2010, Mr. Tough
assumed the additional role of CEO. As our prior Chairman and
Chief Executive Officer resigned from these positions effective
September 30, 2009, in the interim, beginning on
October 1, 2009, our Board established a temporary Office
of the CEO, which was comprised of three executive officers: our
Executive Vice President and Chief Financial Officer
(CFO), our Group President, Fragrances, and our
Group President, Flavors. Knowing that this arrangement would be
in place only on a temporary basis, the Board chose to establish
the temporary Office of the CEO comprised of these three
executive officers because the Board believed that this
structure best suited the needs of the Company in terms of
filling the CEO position with persons most familiar with the
Company until Mr. Tough was able to assume the role and
responsibilities of the CEO, while also allowing these
executives to maintain and fulfill the responsibilities
associated with their current positions. The temporary Office of
the CEO was disbanded when Mr. Tough assumed the role as
our CEO on March 1, 2010.
With regard to the currently combined positions of Chairman and
CEO, we believe that this leadership structure has been
effective for the Company, and this Board leadership structure
is commonly utilized by other public companies in the United
States. We believe that combining the roles of Chairman and CEO
provides us with a distinct leader and allows us to present a
single, uniform voice to our customers, business partners,
shareholders and employees. We also believe that designating an
independent Lead Director provides the opportunity for many of
the benefits similar to having an independent Chairman and
provides an appropriately balanced form of leadership for our
Company. In addition, our Board is otherwise comprised solely of
independent directors who together oversee the Companys
business. Our independent
11
directors evaluate the performance of our CEO on an annual basis
through an objective procedure developed by our wholly
independent Nominating and Governance Committee. If at any point
in time the Board feels that its current leadership structure
may be better served by separating the roles of Chairman and
CEO, it may then determine to separate these positions. However,
at this point in time, we believe that the current board
leadership structure is the best structure for our Company and
our shareholders.
Lead
Director
Our Lead Director is elected by and from our independent Board
members and has clearly delineated and comprehensive duties. The
role of our Lead Director includes (i) presiding over
meetings of non-employee directors and providing prompt feedback
regarding those meetings to the Chairman and CEO,
(ii) providing suggestions for Board meeting agendas, with
the involvement of our Chairman and CEO and input from other
directors, (iii) assuring that the Board and the Chairman
and CEO understand each others views on all critical
matters, (iv) monitoring significant issues occurring
between Board meetings and assuring Board involvement when
appropriate, (v) serving as a sounding board for our
Chairman and CEO and (vi) ensuring, in consultation with
our Chairman and CEO, the adequate and timely exchange of
information and supporting data between the Companys
management and the Board.
Board and
Committee Memberships
Our Board has an Audit Committee, a Compensation Committee and a
Nominating and Governance Committee, each of which operates
under a written charter adopted by the Board. Each committee
reviews its charter at least annually and recommends charter
changes to the Board as appropriate. In December 2010, each of
the Audit Committee, the Compensation Committee and the
Nominating and Governance Committee reviewed and revised its
charter. The revised charter of each committee was subsequently
approved by the Board. Under the charter of each committee, the
committee annually reviews the committees own performance.
A current copy of each of the Audit Committee, Compensation
Committee and Nominating and Governance Committee charters is
available through the Investor Relations Corporate
Governance link on the Companys website,
www.iff.com.
The table below provides the current membership for each of our
Board committees and identifies our current Lead Director.
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Nominating &
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Name
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Audit
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Compensation
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Governance
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Lead Director
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Margaret Hayes Adame
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Marcello Bottoli
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X
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Linda B. Buck
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J. Michael Cook
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Roger W. Ferguson, Jr.
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X
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Andreas Fibig
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X
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Peter A. Georgescu
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Alexandra A. Herzan
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Henry W. Howell, Jr.
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Katherine M. Hudson
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Arthur C. Martinez
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Dale F. Morrison
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Douglas D. Tough
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12
Risk
Management Oversight
Our Board of Directors oversees the Companys risk
management processes and, pursuant to the charter of the Audit
Committee, the Audit Committee assists the Board in reviewing
and assessing with management this process, the Companys
risk profile, and the policies and procedures put in place to
manage such risks, in particular as they relate to financial
risk assessment and financial risk management. The Audit
Committee reports to the full Board, which considers the
Companys risk profile and its general risk management
strategy. The Board and the Audit Committee focus on the most
significant risks facing the Company, including operational
risk, financial risk, credit risk and liquidity risk, as well as
the Companys general risk management strategy, and also
seek to ensure that risks undertaken by the Company are
consistent with the Boards approach to risk. While the
Board oversees the Companys risk management, Company
management is primarily responsible for
day-to-day
risk management processes, and reports to either the full Board
or the Audit Committee, as requested by the Board, regarding
these processes. We believe this division of responsibility is
the most effective approach for addressing the Companys
risk management.
For a discussion of our Compensation Committees role in
risk management oversight in connection with our compensation
structure for our executive and non-executive employees, see
below under the heading Assessment of Incentive Risk.
Audit
Committee
Our Audit Committee oversees and reviews the Companys
financial reporting process and the integrity of the
Companys financial statements and related financial
information, the Companys internal control environment,
systems and performance, the audit process of the Companys
independent accountant and the qualifications, independence,
appointment and performance of the independent accountant, the
process and performance of the Companys internal audit
function, the Companys financial risk management
processes, and the procedures for monitoring compliance with
laws and regulations and with the Companys Code of
Business Conduct and Ethics.
Our Board has determined that each of Mr. Howell, Ms.
Hudson, Mr. Martinez and Mr. Morrison is an
audit committee financial expert under applicable
rules of the SEC and has accounting or related financial
management expertise as required by applicable NYSE rules. The
Board has also determined that all members of the Audit
Committee meet the financial literacy standards of the NYSE.
None of our Audit Committee members currently serves on the
audit committee of more than three public companies. The Audit
Committee has established, together with members of the
Companys management, a hiring policy for employees or
former employees of the Companys independent accountant,
consistent with the requirements of the NYSE. Under procedures
adopted by the Audit Committee, the Audit Committee also reviews
and pre-approves all audit and non-audit services performed by
the Companys independent accountant. The Audit Committee
may, when it deems appropriate, delegate authority to one or
more Audit Committee members or subcommittees.
Compensation
Committee
Our Compensation Committee is responsible for establishing
executive officer compensation, for making recommendations to
the full Board concerning chief executive officer and director
compensation and for overseeing the compensation and benefit
programs for other employees.
Processes
and Procedures Regarding Compensation
Role of the Compensation Committee
Under our Compensation Committees charter, the
Compensation Committee is responsible for assisting the Board in
ensuring that long term and short term compensation provide
performance incentives to management, and that compensation
plans are appropriate and competitive and reflect the goals and
performance of management and the Company. As discussed in more
detail under the heading
13
Compensation Discussion and Analysis, the
Compensation Committee considers, as appropriate and as
contemplated by Company policies, plans and programs,
Company-wide performance against applicable annual and long term
performance goals pre-established by the Compensation Committee.
If the Compensation Committee deems it appropriate, it may
delegate any of its responsibilities to one or more Compensation
Committee members or subcommittees.
The Compensation Committee works with the Board, other Board
committees and the Companys senior management, and meets
regularly in executive session, without Company management
present. The Compensation Committee establishes an annual
schedule for matters to be considered by it, including approving
our senior executives performance objectives and taking
compensation actions. The Compensation Committee makes
recommendations to the Board concerning the compensation and
benefits of non-employee directors, after reviewing and
considering recommendations from its independent compensation
consultant, and makes recommendations to the independent
directors of the Board regarding the chief executive
officers compensation. The Compensation Committee also
reviews and adopts, and where necessary or appropriate,
recommends for Board
and/or
shareholder approval, our compensation and benefits policies,
plans and programs and amendments thereto, taking into account
economic and business conditions, and comparative/competitive
compensation and benefit performance levels. Eligible employees
and the type, amount and timing of compensation and benefits
under our compensation and benefits policies, plans and programs
are also determined by the Compensation Committee. In fulfilling
its responsibilities, the Compensation Committee conducts or
authorizes studies and surveys on compensation practices in
relevant industries to maintain the Companys
competitiveness and ability to recruit and to retain highly
qualified personnel. At least every two years, with the
assistance of an experienced independent compensation
consultant, the Compensation Committee conducts a survey of
comparative/competitive executive officer compensation. The
Compensation Committee is authorized to retain compensation
consultants or advisors to assist it in evaluating CEO, senior
executive and outside director compensation. The Compensation
Committee has the sole authority to retain and to terminate any
such consultants or advisors, including the sole authority to
approve their fees and other retention terms. The Compensation
Committees independent compensation consultant for 2010
was W.T. Haigh & Company.
Assessment of Incentive Risk
In the fourth quarter of 2010, the Compensation Committee,
working with its independent compensation consultant, conducted
a risk assessment of the Companys executive compensation
programs. The goal of this assessment was to determine whether
the general structure of the Companys executive
compensation policies and programs, annual and long term
performance goals
and/or the
administration of the programs posed any material risks to the
Company. In addition, with the input of the Companys
Senior Vice President, Human Resources, the Committee reviewed
compensation programs and policies below the executive level in
a Company-wide risk assessment. The Committee shared the results
of this review with our full Board of Directors as part of the
Committees report to the Board. For 2011 compensation
policies, programs and annual and long term performance goals,
the Committee intends to follow this same approach.
The Committee determined that the performance goals and
incentive plan structures established in 2010 would not result
in excessive risk that inappropriate business decisions or
strategies would be made or implemented by our senior executives
and/or
employees generally. The approved goals under our Annual
Incentive Plan (AIP) and Long Term Incentive Plan
(LTIP) (and similar programs established for
non-executive employees) are entirely consistent with our
financial plans and strategies and operating model reviewed with
our Board, which monitors operational and financial performance
and material business decisions and initiatives throughout the
year. In addition, incentive awards have generally been made
based on a review of achievement against certain financial
metrics, which lessens the risk associated with relying on any
single financial metric. We believe these factors encourage our
executive officers to manage the Company in a prudent manner.
14
Role of Compensation Consultants
As discussed in more detail in this Proxy Statement under the
heading Compensation Discussion and Analysis
Role of Outside Advisors and Management, the Compensation
Committee directly engaged W.T. Haigh & Company as its
independent compensation consultant to conduct a
benchmarking survey in 2010. The Compensation
Committee also directly engaged W.T. Haigh & Company
for recommendations on executive and non-employee director
compensation in 2010 and continues to do so in 2011. Our CEO and
our Senior Vice President, Human Resources work with the
Compensation Committee and the Committees independent
compensation consultant. W.T. Haigh & Company does not
provide any non-executive compensation related services to the
Company. Management also retains its own outside compensation
consultants. In 2010, management retained Steven
Hall & Partners for advisory services in connection
with executive compensation plans, including the Companys
post-employment benefits, and Buck Consultants for actuarial
work, plan structure and similar services for the Companys
retirement plans.
Role of Management
Our Compensation Committee relies on management for legal, tax,
compliance, finance and human resource recommendations, data and
analysis for the design and administration of the Companys
compensation, benefits and perquisite programs for our senior
executives. The Compensation Committee combines this information
with the recommendations and information from its independent
compensation consultant.
Our CEO and Senior Vice President, Human Resources, generally
attend Compensation Committee meetings. Neither of them
participates in any decisions relating to his or her own
compensation. CEO performance and compensation are discussed by
the Compensation Committee in executive session, with advice and
participation from the Companys independent compensation
consultant where and as requested by the Committee. Our CEO and
Senior Vice President, Human Resources, without the presence of
any other members of senior management, actively participate in
the performance and compensation discussions for our senior
executives, including making recommendations to the Compensation
Committee as to the amount and form of compensation.
Nominating
and Governance Committee
Our Nominating and Governance Committee monitors Board
composition and director qualification requirements, identifies
qualified individuals to serve on the Board, recommends to the
Board a slate of nominees for election by the shareholders at
the annual meeting of shareholders, reviews potential Board
candidates (as further described below under the heading
Director Candidates), reviews management succession
plans and monitors corporate governance issues. In addition,
this Committee has developed a process for conducting an annual
evaluation of the effectiveness of the Board as a whole, as well
as for reviewing the contributions of individual directors.
Independence
of Directors and Committee Members and Related Person
Matters
The Board has affirmatively determined that each current
director and nominee for director, other than Mr. Tough,
has no material relationship with the Company affecting his or
her independence as a director, and that each is
independent within the meaning of the Boards
independence standards, which are the same categorical
independence standards as established by the New York Stock
Exchange in Section 303A.02 of the NYSE Listed Company
Manual. In making each of these independence determinations, the
Board considered and broadly assessed, from the standpoint of
materiality and independence, all of the information provided by
each director or nominee in response to detailed inquiries
concerning his or her independence and any direct or indirect
business, family, employment, transactional or other
relationship or affiliation of such director with the Company.
Our review of the information provided in response to these
inquiries indicated that none of our independent directors
engaged in any transactions, relationships or arrangements that
might affect the determination of their independence or which
would require Board review. The Board has also determined that
each member of the Audit Committee, Compensation Committee and
Nominating and Governance Committee is independent under these
15
independence standards and, with respect to each member of the
Audit Committee, is also independent under the independence
criteria required by the SEC for audit committee members and,
with respect to each member of the Compensation Committee, is an
outside director pursuant to the criteria
established by the Internal Revenue Service and is a
non-employee director pursuant to criteria
established by the SEC.
Our Board of Directors has adopted a written policy for the
review and the approval or ratification of any related person
transaction. This policy is available through the Investor
Relations Corporate Governance link on the
Companys website, www.iff.com. The policy defines
related person and related person
transaction in a detailed manner. Under the policy, a
related person transaction requires the approval or ratification
of the Nominating and Governance Committee. The Audit Committee
will be consulted if accounting issues are involved in the
transaction. Under the policy, a related person transaction will
be approved or ratified only if the Nominating and Governance
Committee determines that it is being entered into in good faith
and on fair and reasonable terms which are in the interest of
the Company and its shareholders. No related person may
participate in the review of a transaction in which he or she
may have an interest. In addition, except for non-discretionary
contributions made pursuant to the Companys matching
contributions program, a charitable contribution by the Company
to an organization in which a related person is known to be an
officer, director or trustee will be subject to approval or
ratification under the policy by the Nominating and Governance
Committee.
There were no related person transactions since the
beginning of 2010 involving any director, director nominee or
executive officer of the Company, any known 5% shareholder of
the Company or any immediate family member of any of the
foregoing persons (together related persons). A
related person transaction generally means a
transaction involving more than $120,000 in which the Company is
a participant and in which a related person has a direct or
indirect material interest under SEC rules.
Board and
Committee Meetings
Our Board of Directors held six meetings during 2010. The Audit
Committee held six meetings, the Compensation Committee held six
meetings and the Nominating and Governance Committee held six
meetings during 2010. Each of our directors attended at least
75% of the total meetings of the Board and Committees on which
he or she served during 2010. All of our directors who were
serving on the day of last years Annual Meeting attended
that meeting, other than a director who retired that day. Under
our Corporate Governance Guidelines, unless there are mitigating
circumstances, such as medical, family or business emergencies,
Board members should endeavor to participate in person in all
Board meetings and all Committee meetings of which the director
is a member and to attend the Companys annual meeting of
shareholders. The non-management directors of the Company, all
of whom are currently independent, meet in executive session,
without the presence of any corporate officer or member of
management, in conjunction with regular meetings of the Board.
During 2010, the non-management directors met in executive
session as part of every Board meeting.
Shareholder
Communications
Shareholders and other parties interested in communicating
directly with the Lead Director, the non-management directors as
a group or all directors as a group, may do so by writing to the
Lead Director or the Non-Management Directors or the Board of
Directors, in each case,
c/o Secretary,
International Flavors & Fragrances Inc., 521 West
57th Street, New York, New York 10019. The Nominating and
Governance Committee has approved a process for handling letters
received by the Company and addressed to the Lead Director, the
non-management members of the Board or the entire Board. Under
that process, the Secretary of the Company forwards to the Lead
Director all correspondence received, without opening or
screening.
16
Director
Candidates
Our Nominating and Governance Committee has established a policy
regarding the consideration of director candidates, including
candidates recommended by shareholders. The Nominating and
Governance Committee, together with other Board members, will
from time to time, as appropriate, identify the need for new
Board members. Proposed director candidates who would satisfy
the criteria described below and who otherwise qualify for
membership on the Board are identified by the Nominating and
Governance Committee. In identifying candidates, the Nominating
and Governance Committee seeks input and participation from
other Board members and other appropriate sources so that all
points of view can be considered and so that the best possible
candidates can be identified. The Nominating and Governance
Committee may also engage a search firm to assist it in
identifying potential candidates. Members of the Nominating and
Governance Committee and other Board members, as appropriate,
will interview selected director candidates, evaluate the
director candidates and determine which candidates are to be
recommended by the Nominating and Governance Committee to the
Board.
Under the Companys policy regarding director candidates,
if a shareholder wishes to submit a director candidate for
consideration by the Nominating and Governance Committee, the
shareholder must submit that recommendation to the Nominating
and Governance Committee,
c/o the
Secretary of the Company, in writing, not less than
120 days nor more than 150 days prior to the
anniversary date of the prior years annual meeting. The
request must be accompanied by the same information concerning
the director candidate and nominating shareholder as described
in Article I, Section 3(a) of the Companys
By-laws for shareholder nominations for director to be presented
at an annual shareholders meeting. The Nominating and Governance
Committee may also request any additional background or other
information from any director candidate or recommending
shareholder as it may deem appropriate.
Board candidates are considered based on various criteria which
may change over time and as the composition of the Board
changes. At a minimum, our Nominating and Governance Committee
considers the following factors as part of its review of all
director candidates and in recommending potential director
candidates to the Board:
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Judgment, character, expertise, skills and knowledge useful to
the oversight of the Companys business;
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Diversity of viewpoints, backgrounds, experiences and other
demographics;
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Business or other relevant experience; and
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The extent to which the interplay of the candidates
expertise, skills, knowledge and experience with that of other
Board members will build a Board that is effective, collegial
and responsive to the needs of the Company and to the
requirements and standards of the NYSE and the SEC.
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To ensure independence and to provide the breadth of needed
expertise and diversity of our Board, our Corporate Governance
Guidelines require our Board to be comprised of between seven
and thirteen members. The Board periodically reviews its size
and makes appropriate adjustments. While the Nominating and
Governance Committee has not adopted a formal diversity policy
with regard to the selection of director nominees, diversity is
one of the factors that the Committee considers in identifying
director nominees. As part of this process, the Committee
evaluates how a particular candidate would strengthen and
increase the diversity of the Board in terms of how that
candidate may contribute to the Boards overall balance of
perspectives, backgrounds, knowledge, experience, skill sets and
expertise in substantive matters pertaining to the
Companys business. The Committee also annually reviews
each current board members suitability for continued
service as a director of the Company. In addition, in the event
that a current director has a significant change in status,
including changes that may impact the diversity of the Board,
such as changes in employment or skill set, the director is
required to report that change to the Board so that the
Nominating and Governance Committee can review the change and
make a recommendation to the full Board regarding the continued
appropriateness of that directors Board membership.
17
Code of
Business Conduct and Ethics
We have adopted a Code of Business Conduct and Ethics (the
Code) that applies to our chief executive officer,
principal financial officer, principal accounting officer and to
all other Company directors, officers and employees. A copy of
the Code is available through the Investor Relations
Corporate Governance link on our website, www.iff.com.
Only the Board of Directors or the Audit Committee of the Board
may grant a waiver from any provision of the Code in favor of a
director or executive officer, and any such waiver will be
publicly disclosed. The Company will disclose substantive
amendments to and any waivers from the Code granted to the
Companys chief executive officer, principal financial
officer or principal accounting officer, as well as any other
executive officer or director, on the Companys website,
www.iff.com.
18
DIRECTORS
COMPENSATION
Annual Director Cash and Equity Compensation
Each non-employee director who served during 2010 received an
annual retainer of $175,000 relating to the service year from
the 2010 Annual Meeting of Shareholders to the 2011 Annual
Meeting. Of this amount, we paid $75,000 in cash in November,
and we paid $100,000 in Restricted Stock Units
(RSUs) issued under our shareholder-approved stock
award and incentive plan on the date of the 2010 Annual Meeting
of Shareholders. The RSUs vest on the third anniversary of the
grant date and are subject to accelerated vesting upon a change
in control. The number of RSUs granted, 1,987, was based on the
closing market price of the Companys common stock on the
grant date. Once the RSUs vest, each non-employee director is
required to defer all of the vested RSUs under our Deferred
Compensation Plan until he or she separates from service on our
Board of Directors. Given that RSUs will be deferred until each
directors separation from service and each directors
stock ownership will increase during his or her term of service,
there are no minimum share ownership requirements applicable to
our directors. Any director who is an employee of the Company
does not receive any additional compensation for his or her
service as a director. The $75,000 cash portion of
Mr. Toughs annual retainer for service as a
non-employee director from the date of the 2009 Annual Meeting
of Shareholders until he became our CEO on March 1, 2010
was prorated based on the number of days he served as a
non-employee director. In 2010, the Company paid $12,123 in cash
to Mr. Tough for his service as a non-employee director
(with the remainder of $50,959 having been paid to him in 2009).
Annual Committee Chair and Lead Director Compensation
During 2010, the Chairperson of the Audit Committee received an
annual cash retainer of $15,000. The Chairperson of each of the
Compensation Committee and Nominating and Governance Committee
each received an annual cash retainer of $10,000. The Lead
Director received an annual cash fee of $15,000.
Participation in the Companys Deferred Compensation
Plan
Non-employee directors are eligible to participate in our
Deferred Compensation Plan (DCP). In addition to
mandatory deferral of vested RSUs granted in or after 2008, a
non-employee director may defer all or a portion of his or her
cash compensation, as well as any RSUs granted to him or her
prior to 2008, subject to tax law requirements. Additional
details regarding our DCP may be found in this Proxy Statement
under the heading Non-Qualified Deferred
Compensation. Non-employee directors are not entitled to
matching contributions or the 25% premium on deferrals into our
common stock fund described in that section. Earnings on any
deferrals into the interest bearing account of the DCP were not
above market and thus are not included in the Director
Compensation Table below.
Other
We reimburse our non-employee directors for travel and lodging
expenses incurred in connection with their attendance at Board
and Committee meetings, our shareholder meetings and other
Company-related activities.
In addition, each current and former director, including any
former employee directors, who began service as a director
before May 14, 2003 is eligible to participate in our
Director Charitable Contribution Program (DCCP).
Under the DCCP, directors are paired together and the Company
purchased joint life insurance policies on the lives of each
paired set of participating directors. The Company is the owner
and sole beneficiary of the policies and is responsible for
payment of any premiums. In 2009, the insurance policies were
restructured so that no further premiums are required. Assuming
no changes to the current Federal tax laws relating to
charitable contributions, and if certain other assumptions are
met, the Company expects to recover all of the premium costs
that have been paid by the Company and the after-tax cost of the
Companys anticipated charitable contributions pursuant to
this program. After a covered director dies, the Company will
donate $500,000 to one or more qualifying charitable
organizations previously designated by the deceased director.
19
Directors first elected on or after May 14, 2003 do not
participate in the DCCP. However, all current directors,
including those who participate in our DCCP, are eligible to
participate in our Matching Gift Program. Under this Program, it
is The IFF Foundations intent to match, on a dollar for
dollar basis, contributions to qualifying charitable
organizations up to a maximum of $10,000 per person per year.
Changes to Directors Compensation for 2011
In December 2010, our Board of Directors, based on the
recommendation of the Compensation Committees independent
compensation consultant and the Compensation Committee, approved
an increase in the cash portion of the annual retainer for
non-employee directors from $75,000 to $100,000, effective with
the service term commencing as of the date of the 2011 Annual
Meeting. The increase in cash retainer was made based on the
fact that (i) the directors retainer has not been
increased since 2007 and (ii) the total retainer was
positioned below the median versus the Consumer Peer Group based
on a November 2010 review conducted by the independent
consultant. The Board also approved an increase in the annual
retainer of the Chairman of the Compensation Committee, from
$10,000 to $15,000, effective as of the date of the 2011 Annual
Meeting. This change was made to reflect the increasing service
requirements of our Compensation Committee Chairman and to
reflect peer company practices for Compensation Committee
Chairperson compensation.
The following table details the compensation paid to or earned
by our non-employee directors for the year ended
December 31, 2010.
2010
Directors
Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
All Other
|
|
|
|
|
Fees Earned or
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
|
Name(1)
|
|
Paid in Cash ($)(2)
|
|
($)(3)(4)
|
|
($)(5)
|
|
($)
|
|
Total ($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d)
|
|
(g)
|
|
(h)
|
|
Margaret Hayes Adame
|
|
$
|
75,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
169,138
|
|
Marcello Bottoli
|
|
$
|
75,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
169,138
|
|
Linda B. Buck
|
|
$
|
75,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
169,138
|
|
J. Michael Cook
|
|
$
|
85,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
10,000
|
(6)
|
|
$
|
189,138
|
|
Roger W. Ferguson, Jr.
|
|
$
|
75,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
169,138
|
|
Peter A. Georgescu
|
|
$
|
85,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
10,000
|
(6)
|
|
$
|
189,138
|
|
Alexandra A. Herzan
|
|
$
|
75,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
10,000
|
(6)
|
|
$
|
179,138
|
|
Henry W. Howell, Jr.
|
|
$
|
90,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
9,000
|
(6)
|
|
$
|
193,138
|
|
Katherine M. Hudson
|
|
$
|
75,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
169,138
|
|
Arthur C. Martinez
|
|
$
|
90,014
|
|
|
$
|
94,124
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
184,138
|
|
Burton M. Tansky(7)
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
|
|
(1) |
|
Compensation paid to our CEO Douglas D. Tough for his service as
a non-employee director of the Company during 2010 is included
in the Summary Compensation Table and is not included in this
table. |
|
(2) |
|
The amounts in this column include the following amounts
deferred in 2010 under our Deferred Compensation Plan:
Mr. Cook $85,014, Mr. Ferguson
$75,014, Mr. Georgescu $85,014,
Mr. Howell $90,014. Earnings in our DCP were
not above-market or preferential and thus are not reported in
this table. |
|
(3) |
|
The amounts in the Stock Awards and Option Awards columns
represent the aggregate grant date fair value of equity awards
granted during the fiscal year ended December 31, 2010,
computed in accordance with FASB ASC Topic 718. Details on and
assumptions used in calculating the grant date fair value of
RSUs and options may be found in Note 11 to the
Companys audited financial statements for the year ended
December 31, 2010 included in the Companys Annual
Report on
Form 10-K
filed with the SEC on February 24, 2011. |
20
|
|
|
(4) |
|
Each director (other than Mr. Tansky) received a grant on
April 27, 2010 of 1,987 RSUs under our 2010 Stock Award and
Incentive Plan. None of our Directors forfeited any RSUs or
shares of deferred stock during 2010. |
|
|
|
On December 31, 2010, our directors held the following
number of RSUs and shares of deferred common stock:
Mrs. Adame: 7,472 RSUs and 10,104 deferred shares,
Mr. Bottoli: 7,472 RSUs and 1,522 deferred shares,
Dr. Buck: 7,472 RSUs and 1,522 deferred shares,
Mr. Cook: 7,472 RSUs and 11,373 deferred shares,
Mr. Ferguson: 1,987 RSUs and 0 deferred shares,
Mr. Georgescu: 7,472 RSUs and 27,080 deferred shares,
Mrs. Herzan: 7,472 RSUs and 6,471 deferred shares,
Mr. Howell: 7,472 RSUs and 18,186 deferred shares,
Ms. Hudson: 6,569 RSUs and 0 deferred shares,
Mr. Martinez: 7,472 RSUs and 22,110 deferred shares,
Mr. Tansky: 5,485 RSUs and 0 deferred shares. |
|
|
|
The deferred shares, which are held under the DCP, result from
deferral of vested equity grants, voluntary deferral of retainer
fees or the crediting of additional share units as a result of
reinvestment of dividend equivalents. Deferred shares will be
settled by delivery of common stock upon the directors
separation from service on the Board of Directors, or, in the
case of voluntary deferrals, as otherwise elected by the
director. All of the deferred shares are included for each
director in the Beneficial Ownership Table. |
|
(5) |
|
We did not grant any options to our directors in 2010. None of
the options held by any director expired or were forfeited
during 2010. On December 31, 2010, our directors held the
following number of outstanding options: Mrs. Adame: 12,000
options, Mr. Bottoli: 0 options, Dr. Buck: 0 options,
Mr. Cook: 12,000 options, Mr. Georgescu: 9,000
options, Mrs. Herzan: 6,000 options, Mr. Howell: 0
options, Ms. Hudson: 0 options, Mr. Martinez: 6,000
options and Mr. Tansky: 3,000 options. |
|
(6) |
|
This amount represents a matching charitable contribution paid
by the Company during 2010 under the Companys Matching
Gift Program. |
|
(7) |
|
Mr. Tansky retired as a member of our Board of Directors
effective as of our 2010 Annual Meeting date. His fees for
service as a director during 2010 were paid in 2009. |
21
SECURITIES
OWNERSHIP OF MANAGEMENT, DIRECTORS
AND CERTAIN OTHER PERSONS
Beneficial
Ownership Table
Directors
and Executive Officers
The following table sets forth certain information regarding the
beneficial ownership of the Companys Common Stock as of
March 3, 2011, by each director and nominee for director,
the persons named in the Summary Compensation Table in this
Proxy Statement and all directors and executive officers as a
group.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rights to Acquire
|
|
|
|
|
|
|
|
|
|
Beneficial
|
|
|
|
|
|
|
Shares of
|
|
|
Ownership of
|
|
|
|
|
|
|
Common Stock
|
|
|
Shares of
|
|
|
|
|
|
|
Beneficially
|
|
|
Common Stock
|
|
|
Percent
|
|
|
|
Owned(1)
|
|
|
(2)
|
|
|
of Class
|
|
|
Margaret Hayes Adame
|
|
|
14,604
|
|
|
|
12,000
|
|
|
|
(3
|
)
|
Kevin C. Berryman
|
|
|
35,026
|
|
|
|
0
|
|
|
|
(3
|
)
|
Marcello Bottoli
|
|
|
1,522
|
|
|
|
0
|
|
|
|
(3
|
)
|
Linda B. Buck
|
|
|
1,522
|
|
|
|
0
|
|
|
|
(3
|
)
|
Angelica T. Cantlon
|
|
|
28,761
|
|
|
|
0
|
|
|
|
(3
|
)
|
J. Michael Cook
|
|
|
13,373
|
|
|
|
12,000
|
|
|
|
(3
|
)
|
Roger W. Ferguson, Jr.
|
|
|
0
|
|
|
|
0
|
|
|
|
(3
|
)
|
Beth E. Ford
|
|
|
27,862
|
|
|
|
0
|
|
|
|
(3
|
)
|
Peter A. Georgescu
|
|
|
40,580
|
|
|
|
9,000
|
|
|
|
(3
|
)
|
Alexandra Herzan
|
|
|
813,792
|
(4)
|
|
|
6,000
|
|
|
|
1.01
|
%
|
Henry W. Howell, Jr.
|
|
|
19,186
|
|
|
|
0
|
|
|
|
(3
|
)
|
Katherine M. Hudson
|
|
|
2,500
|
|
|
|
0
|
|
|
|
(3
|
)
|
Arthur C. Martinez
|
|
|
25,860
|
|
|
|
6,000
|
|
|
|
(3
|
)
|
Nicolas Mirzayantz
|
|
|
79,621
|
|
|
|
0
|
|
|
|
(3
|
)
|
Douglas D. Tough
|
|
|
58,896
|
|
|
|
0
|
|
|
|
(3
|
)
|
Hernan Vaisman
|
|
|
47,537
|
|
|
|
0
|
|
|
|
(3
|
)
|
Dennis M. Meany(5)
|
|
|
88,742
|
|
|
|
0
|
|
|
|
(3
|
)
|
Burton M. Tansky(6)
|
|
|
8,143
|
|
|
|
3,000
|
|
|
|
(3
|
)
|
All Directors and Executive Officers as a Group
(18 persons)(7)
|
|
|
1,221,383
|
|
|
|
45,000
|
|
|
|
1.61
|
%
|
See footnotes on the following page.
22
Certain
Other Owners
The following table sets forth information regarding each person
known by us to be the beneficial owner of more than 5% of the
Companys outstanding Common Stock as of March 3, 2011
based on a review of filings with the SEC. Unless otherwise
indicated, beneficial ownership is direct.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of Shares and Nature of Beneficial Ownership
|
|
|
Sole
|
|
Shared
|
|
Sole
|
|
Shared
|
|
|
|
|
Voting
|
|
Voting
|
|
Investment
|
|
Investment
|
|
Percent
|
Name and Address of Beneficial Owner
|
|
Power
|
|
Power
|
|
Power
|
|
Power
|
|
of Class
|
|
BlackRock Inc.(8)
|
|
|
4,686,587
|
|
|
|
0
|
|
|
|
4,686,587
|
|
|
|
0
|
|
|
|
5.86
|
%
|
40 East 52nd Street
New York, NY 10022
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
T. Rowe Price Associates, Inc.(9)
|
|
|
1,482,409
|
|
|
|
0
|
|
|
|
6,582,623
|
|
|
|
0
|
|
|
|
8.20
|
%
|
100 E. Pratt Street
Baltimore, MD 21202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Vanguard Group, Inc.(10)
|
|
|
101,130
|
|
|
|
0
|
|
|
|
3,992,695
|
|
|
|
101,130
|
|
|
|
5.12
|
%
|
100 Vanguard Blvd.
Malvern, PA 19355
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This column includes share unit balances held in the IFF Stock
Fund under our Deferred Compensation Plan credited to
participants accounts (where applicable) and, for
executive officers may include certain premium share units held
under that plan as well as unvested shares of Purchased
Restricted Stock. Premium share units held by executives in the
IFF Stock Fund are subject to vesting and may be forfeited if
the participants employment is terminated. |
|
(2) |
|
The shares listed in this column are those which the named
person has (or will have within 60 days after March 3,
2011) the right to acquire by the exercise of stock options
granted by the Company. |
|
(3) |
|
Less than 1%. |
|
(4) |
|
Mrs. Herzan is a director of the van Ameringen Foundation,
Inc., which owns 274,673 shares, President, Treasurer and a
director of the Lily Auchincloss Foundation, which owns
11,000 shares, a trustee and a beneficiary of a trust which
holds 519,581 shares, and a trustee and a beneficiary of a
trust which owns 567 shares, all of which shares are
included in Mrs. Herzans ownership. Mrs. Herzan
disclaims beneficial ownership of the shares owned by the van
Ameringen Foundation, Inc. and the Lily Auchincloss Foundation.
She directly owns 1,500 shares. |
|
(5) |
|
Based on a Form 5 filed with the SEC on February 8,
2011 and other information available to the Company. |
|
(6) |
|
Based on a Form 4 filed with the SEC on April 29, 2010
and other information available to the Company. |
|
(7) |
|
Excluding Mr. Meany, who is no longer employed by the
Company, and Mr. Tansky, who retired from his directorship. |
|
(8) |
|
As reported in Schedule 13G/A dated as of February 4,
2011. |
|
(9) |
|
As reported in Schedule 13G/A dated as of February 10,
2011. |
|
(10) |
|
As reported in Schedule 13G dated as of February 10,
2011. |
23
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934
requires our directors and executive officers to file reports of
their initial holdings of IFF common stock and any subsequent
transactions in Company shares with the SEC and to provide the
Company with copies of all such filings. The Company must report
any failures to file by the required dates. Based on a review of
our 2010 records we believe that our directors and officers who
were subject to Section 16 met all applicable filing
requirements.
Directors
and Officers Indemnification and Insurance
Our By-laws provide for the indemnification of our officers and
directors against certain liabilities that could potentially be
incurred by them in connection with the performance of their
duties to the Company and its subsidiaries. Our By-laws
authorize the Company to provide indemnification and advancement
rights by separate agreement to certain persons, including our
officers and directors, and our Board has approved a form of
indemnification agreement to be entered into with each of our
directors and officers. The Company also maintains directors and
officers liability indemnification insurance coverage. This
insurance covers director and officers individually where
exposures exist, other than those for which the Company is able
to provide direct or indirect indemnification. The current
policies run from March 18, 2010 through March 18,
2011 and are in the process of being renewed. The primary
carrier under the current policy is ACE American Insurance
Company. The current annual premium for this program is
$936,150. No sums have been paid under this coverage to the
Company or any director or officer, nor have any claims for
reimbursement been made under this policy.
Shareholders
Proposals
In order for a shareholder proposal to be considered for
inclusion in IFFs proxy materials for next years
annual meeting of shareholders, the Secretary of the Company
must receive the written proposal no later than
November 11, 2011. Under Article I, Section 3 of
the Companys By-laws, in order for a shareholder to submit
a proposal or to nominate any director at an annual meeting of
shareholders, the shareholder must give written notice to the
Secretary of the Company not less than 60 days nor more
than 90 days prior to the anniversary date of this
years annual meeting of shareholders. The notice must also
meet all other requirements contained in the Companys
By-laws, including the requirement to contain specified
information about the proposed business of the candidate and the
shareholder making the proposal. If the next annual meeting is
scheduled on a date that is not within 30 days before or
after the anniversary date of this years annual meeting,
the Secretary of the Company must receive the notice given by
the shareholder not later than the close of business on the
tenth day following the day on which the notice of the date of
next years annual meeting is mailed or public disclosure
of the date of next years annual meeting is made,
whichever occurs first.
24
PROPOSALS REQUIRING
YOUR VOTE
ITEM 1
ELECTION OF DIRECTORS
Information
about Nominees
Our Board of Directors currently has thirteen members. Each of
these Board members, other than Peter A. Georgescu, is standing
for election to hold office until the next annual meeting of
shareholders.
On February 1, 2011, our Board amended the provisions of
the Companys By-laws setting out eligibility requirements
for our directors in order to transition to a system whereby the
maximum time period for which a director may serve as a director
is based on the directors years of service instead of an
age-based standard. The By-laws were amended to provide that no
director of the Company, other than a director who is a
Grandfathered Person (defined below) or a director who is also
an officer of the Company, will be eligible to continue to serve
as a director of the Company after the date of, or to stand for
the re-election at, an annual meeting of shareholders, if as of
the date of that annual meeting the person shall have served as
a director of the Company for twelve consecutive full annual
terms. Additionally, the amendment provides that no director who
is a Grandfathered Person will be eligible to continue to serve
as a director of the Company after the date of, or stand for the
re-election at, the annual meeting of shareholders following the
date of his or her 72nd birthday. A Grandfathered
Person is defined as any person serving as a director of
the Company as of February 1, 2011 whose age as of that
date plus the number of full annual terms that such person
served as a director of the Company as of that date is equal to
or exceeds 75. The following directors of the Company are
Grandfathered Persons who are standing for election: Margaret
Hayes Adame, J. Michael Cook and Arthur C. Martinez.
Mr. Georgescu, who is also a Grandfathered Person under the
amended By-laws, is 72 as of the date of this Proxy Statement;
therefore, he will retire as a director as of the 2011 Annual
Meeting. Prior to this amendment to our By-laws, none of the
directors of the Company was eligible to continue to serve as a
director of the Company after the date of, or stand for the
re-election
at, the annual meeting of stockholders following the date of his
or her 72nd birthday.
The affirmative vote of a majority of the votes cast is required
for the election of directors, which means that a nominee must
receive a greater number of votes FOR his or her
election than votes AGAINST in order to be elected.
Votes cast do not include any abstentions or broker non-votes
with respect to a nominees election.
Our By-laws include this majority voting standard for
uncontested elections and provide that any director nominee in
an uncontested election who does not receive an affirmative
majority of votes cast must promptly offer his or her
resignation. If this situation were to occur, the process
outlined in our By-laws and Corporate Governance Guidelines
would be followed and generally the Nominating and Governance
Committee of our Board of Directors would consider the
resignation offer and make a recommendation to the Board. The
independent directors on the Board would then evaluate and
determine whether to accept or reject the resignation based on
the relevant facts and circumstances. Any director who so
tenders a resignation will not participate in the deliberations
of either the Nominating and Governance Committee or the
independent directors. The Board of Directors will promptly
disclose its decision and the basis for that decision in a
filing with the SEC. Under our By-laws, a plurality voting
standard would apply in a contested director election, which
would occur if, as of the record date for the meeting where
directors are to be elected, the number of director nominees
exceeds the number of directors to be elected at such meeting.
Each nominee elected as a director will continue in office until
his or her successor has been elected and qualified, or until
his or her earlier death, resignation or retirement. Each
nominee has indicated that he or she will serve if elected. We
expect each nominee for election as a director to be able to
stand for election and to serve if elected. If any nominee is
not able to serve (which is not anticipated), proxies will be
voted in favor of the remainder of those nominated and may be
voted for substitute nominees, unless the Board chooses to
reduce the number of directors serving on the Board.
The principal occupation and certain other information regarding
the background and qualifications of the nominees, including the
experience and skills that led to the selection of that nominee
for membership on our Board, are set forth on the following
pages. All of the nominees are presently directors of the
Company and all of the nominees, except for Andreas Fibig and
Dale F. Morrison, were elected by our shareholders at the
Companys 2010 Annual Meeting of Shareholders. In March
2011, Mr. Fibig and Mr. Morrison were appointed by the
Board to fill newly-created Board positions. Both new directors
were
25
recommended to the Nominating and Governance Committee following
a requested search by an independent global search firm and
interviews by the Lead Director (who is a member of that
Committee) and the Chairman of the Board. They were both
recommended for a number of valuable characteristics they would
bring to the Board, including, in the case of Mr. Fibig,
broad business experience, including extensive product and
strategic development experience and numerous international
roles, and, in the case of Mr. Morrison, extensive
marketing experience and financial expertise, including his
current position as a chief executive officer of a global
multinational company.
IFFs Board of Directors recommends a vote FOR the
election of the nominees as Directors.
The following table sets forth the names, ages, principal
occupations and other information about the director nominees:
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Margaret Hayes Adame,
71Ms. Adame is
President and Chief Executive Officer of Fashion Group
International, Inc. (FGI) since 1992, an international trade
organization with 5,000 members throughout the world. FGIs
production of runway trends, business symposiums and special
events in the fashion industry provide Ms. Hayes with a unique
insight into the Companys markets, particularly the
fragrance market. Prior senior level experience in the
specialty retail/department store sector buttresses her
understanding of areas into which our products are sold. She is
a recipient of numerous achievement awards, including ones from
the Fragrance Foundation, Cosmetic Executive Women and the
Fragrance Research Fund. This experience has led her to make
numerous contributions as a director of IFF where she has served
since 1993. Ms. Hayes is also a director of Movado Group, Inc
and has been a trustee of Montefiore Medical Center since 1995.
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Marcello Bottoli,
48An Italian
national with extensive international experience, Mr. Bottoli is
currently an operating partner of Advent International, a global
private equity firm. Previously, Mr. Bottoli played a key role
in a number of businesses, including the initial public offering
of Benckiser N.V. on the Amsterdam and New York stock exchanges
(1997), and the integration of leading brands following the
Reckitt & Colman and Benckiser merger (1999), with emphasis
on consumer, strategic insights, creativity and research and
development; as President and Chief Executive Officer of Louis
Vuitton Malletier, a manufacturer and retailer of luxury
handbags and accessories (until 2002); and as President and
Chief Executive Officer of Samsonite Inc., a luggage
manufacturer and distributor (until January 2009). His
experience as a chief executive and within the industries to
which IFF sells its products has led Mr. Bottoli to provide many
insights and contributions on the IFF Board. Mr. Bottoli serves
on the board of directors of True Religion Brand Jeans, a
California-based fashion jeans, sportswear and accessory
manufacturer and retailer, and Pandora A/S, a designer,
manufacturer and marketer of hand finished and modern jewelry.
He has served on IFFs Board since 2007.
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Linda B. Buck,
64A Howard Hughes
Medical Institute Investigator and Member at Fred Hutchinson
Cancer Research Center, a biomedical research institute, and
Affiliate Professor of Physiology and Biophysics at the
University of Washington, Dr. Bucks research has
provided key insights into the mechanisms underlying the sense
of smell. This experience is useful to the Companys
research and development efforts in both flavors and fragrances,
as is Dr. Bucks technical background in evaluating a
host of issues. Dr. Buck is the recipient of numerous
awards, including The Nobel Prize in Physiology or Medicine in
2004. Dr. Buck served on the board of directors of DeCode
Genetics Inc., a biotechnology company, from 2005 to 2009 and
joined IFFs Board in 2007.
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J. Michael Cook,
68The Chairman and
Chief Executive Officer Emeritus of Deloitte & Touche, a
leading global professional services firm, Mr. Cook has been a
leader of his profession. His experience as a Chief Executive
Officer and in accounting and in corporate governance is an
asset to the Company, and he is one of the leaders of the IFF
Board. He has served as Chairman of the American Institute of
Certified Public Accountants and a member of its Auditing
Standards Board. He led the Board of the Financial Accounting
Foundation, the overseer of accounting standards boards, and the
World Congress of Accountants. Mr. Cook is an emeritus member of
the Advisory Council of the Public Company Accounting Oversight
Board (PCAOB) and was a member of the SECs Advisory
Committee on Improvements to Financial Reporting. In 2002, Mr.
Cook was named one of the Outstanding Directors in America by
Directors Alert and was a member of the National
Association of Corporate Directors Blue Ribbon
Commissions Director Professionalism and Audit Committee.
He served as a director of Eli Lilly and Dow Chemical Company
and is currently a Trustee of the Scripps Research Institute, a
director of Comcast Corporation and Chairman of the Board of
Comeback America Initiative (CAI). Mr. Cook joined IFFs
Board in 2000.
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26
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Roger W. Ferguson, Jr.,
59The President
and Chief Executive Officer, since 2008, of TIAA-CREF, a
financial services company with over $450 billion in assets at
year end, Mr. Ferguson has a broad educational background which
includes a law degree and a Ph.D. in economics. His outstanding
work experience includes service with a major law firm, various
policy-making positions with the Federal Reserve, eventually
serving as its Vice-Chairman from 1999 until 2006, and service
as Chairman of Swiss Re America Holding Corporation from
2006-2008, a global reinsurance company. He also serves as a US
Presidential Economic Advisor. Mr Ferguson currently serves
on the Advisory Committee of Brevan Howard Asset Management, the
international council of advisors of the China Banking
Regulatory Commission, the Board of Trustees of the Committee
for Economic Development, the Board of Overseers of Memorial
Sloan-Kettering
Cancer Center, and the Board of Directors of the Partnership for
New York City. This background provides excellent experience for
dealing with the varied financial and other issues which the
Companys Board deals with on a regular basis. Mr. Ferguson
has been a member of IFFs Board since 2010.
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Andreas Fibig,
49Based in Berlin,
Germany, Mr. Fibig has been Chairman of the Board of
Management of Bayer Schering Pharma AG, the pharmaceutical
division of Bayer AG, since September 2008. Prior to this
position, Mr. Fibig held a number of positions of
increasing responsibility at Pfizer Inc., including as Senior
Vice President in the US Pharmaceutical Operations group
(from 2007-2008) and as President, Latin America, Africa and
Middle East (from 2006-2007). These positions, including prior
work experience with Pharmacia GmbH and Boehringer Ingelheim
GmbH, have provided him with extensive experience in
international business, product development and strategic
planning, which are assets to IFFs Board. Mr. Fibig
is a Board member of EFPIA, the European Federation of
Pharmaceutical Industries and Associations, and chairs the Board
of Trustees of the Max Planck Institute for Infection Biology.
He joined IFFs Board in 2011.
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Alexandra A. Herzan,
51As the
granddaughter of the founder of the Company, Ms. Herzan has a
long-term understanding of many aspects of its operations and
brings a unique perspective to Board deliberations.
Ms. Herzan is the President and Treasurer of the Lily
Auchincloss Foundation, Inc., a charitable foundation, and a
director of the van Ameringen Foundation, Inc. These positions
have provided executive experience as well as experience working
with teams. As a trustee of a number of private trusts she
developed financial savvy translatable to the Company business.
Ms. Herzan joined the IFF Board in 2003.
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Henry W. Howell, Jr.,
69During his
34 years with J.P. Morgan, a financial services firm,
Mr. Howell secured extensive business development, finance and
international management experience which is very useful in
analyzing various Company issues which arise at the Board of
Directors, including new capital projects and acquisitions. This
experience also serves the Company well in considering Audit
Committee and Nominating and Governance Committee issues. While
at J.P. Morgan, Mr. Howell had several overseas assignments
including head of banking operations in Germany and CEO of
J.P. Morgans 40% owned, Australian merchant banking
affiliate which was publicly listed and operated throughout the
country. Both these assignments enhanced his ability to analyze
complex international business and financial matters. He is
currently on the Board of the Chicago History Museum, as well as
other charitable organizations. Mr. Howell joined IFFs
Board in 2004.
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Katherine M. Hudson,
64As Chairperson,
President and Chief Executive Officer of Brady Corporation, a
global manufacturer of identification solutions and specialty
industrial products, from 1994 until 2004, Ms. Hudson oversaw a
doubling of annual revenues. Prior experience with Eastman Kodak
(24 years) covered various areas of responsibility
including systems analysis, supply chain, finance and
information technology. This broad experience has translated to
sound guidance to the Company and its Board. Ms. Hudson has
served as a director on the boards of Apple Computer
Corporation, a designer and manufacturer of consumer electronics
and software products, and CNH Global NV, a manufacturer of
agricultural and construction equipment. She currently sits on
the board and is chairperson of the Audit Committee of Charming
Shoppes, Inc., a womans specialty retailer, and has served
on the IFF Board since 2008.
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27
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Arthur C. Martinez,
71Having served as
Chairman and Chief Executive Officer of Sears, Roebuck and
Company, a large retailer, from 1995 until 2000, Mr. Martinez
obtained experience on a myriad of issues arising in a large
corporation. This experience, along with the financial expertise
which led him to be Chairman of the Board of the Federal Reserve
Bank of Chicago from 2000 until 2002, enable him to provide
expert guidance and leadership to IFF and its Board of
Directors. He is also a director of PepsiCo, Inc.,
IAC/InterActiveCorp, Liz Claiborne, Inc., AIG/American
International Group, Inc., and Chairman of the Board of HSN,
Inc, as well as numerous non-profit boards. Mr. Martinez joined
the IFF Board in 2000.
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Dale Morrison,
62Mr. Morrison
has served, since 2004, as the President and Chief Executive
Officer of McCain Foods Limited, an international leader in the
frozen food industry. A food industry veteran, his experience
includes service as CEO and President of Campbell Soup Company,
various roles at General Foods and PepsiCo and an operating
partner of Fenway Partners, a private equity firm.
Mr. Morrison is a seasoned executive with strong consumer
marketing and international credentials and his knowledge of
IFFs customer base is invaluable to our Board.
Mr. Morrison is currently a Director of the Center of
Innovation at the University of North Dakota. He joined
IFFs Board in 2011.
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Douglas D. Tough,
61Mr. Tough has
been IFFs Chairman and Chief Executive Officer since March
2010. Previously, he served as Chief Executive Officer and
Managing Director of Ansell Limited, a global leader in
healthcare barrier protection, from 2004 until March 2010. Mr.
Tough joined the IFF Board in 2008 and served as its
non-Executive Chairman from October 2009 until he became CEO of
the Company on March 1, 2010. Mr. Toughs experience
as the CEO of a major global company is directly translatable to
his work as Chairman and CEO of IFF, as is his prior
17 year service with Cadbury Schweppes Plc, a major food
and beverage company, in a variety of executive positions
throughout North America and the rest of the world.
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28
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ITEM 2
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RATIFICATION
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
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The Audit Committee has selected PricewaterhouseCoopers LLP as
the Companys independent registered public accounting firm
for 2011, and the Board of Directors has directed that our
management submit that selection for ratification by our
shareholders at the 2011 Annual Meeting. Although ratification
is not required by our By-laws or otherwise, we are submitting
the selection of PricewaterhouseCoopers LLP to our shareholders
for ratification as a matter of good corporate governance. The
Audit Committee will consider the outcome of our
shareholders vote in connection with the Audit
Committees selection of the Companys independent
registered public accounting firm in the next fiscal year, but
is not bound by the shareholders vote. Even if the selection is
ratified, the Audit Committee may, in its discretion, direct the
appointment of a different independent auditor at any time if it
determines that a change would be in the best interests of the
Company and our shareholders.
Representatives of PricewaterhouseCoopers LLP are expected to
attend the 2011 Annual Meeting, where they will be available to
respond to questions and, if they desire, to make a statement.
IFFs Board of Directors recommends a vote FOR the
ratification of the Audit Committees selection of
PricewaterhouseCoopers LLP as the Companys Independent
Registered Public Accounting Firm for 2011.
Principal
Accountant Fees and Services
The following table provides detail about fees for professional
services rendered by PricewaterhouseCoopers LLP for the years
ended December 31, 2010 and December 31, 2009.
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2010
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2009(5)
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Audit Fees (1)
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$
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3,307,441
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$
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3,684,900
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Audit-Related Fees (2)
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58,759
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75,100
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Tax Fees (3)
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2,185,715
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2,097,100
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All Other Fees (4)
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23,557
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11,000
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Total
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$
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5,575,472
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$
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5,868,100
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(1)
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Audit Fees were for professional
services rendered for audits of the Companys consolidated
financial statements and statutory and subsidiary audits,
consents and review of reports filed with the SEC and
consultations concerning financial accounting and reporting
standards. Audit Fees also included the fees associated with an
annual audit of the Companys internal control over
financial reporting, as required by Section 404 of the
Sarbanes-Oxley Act of 2002, integrated with the audit of the
Companys annual financial statements.
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(2)
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Audit-Related Fees were for
assurance and related services for employee benefit plan audits,
attestation services that are not required by statute or
regulation and in 2010, consultations concerning statutory
audits.
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(3)
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Tax Fees were for services related
to tax compliance, including the preparation of tax returns and
claims for refund, and tax planning and tax advice, including
assistance with and representation in tax audits and appeals,
tax services for employee benefit plans, indirect taxes and
expatriate tax compliance services.
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(4)
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All Other Fees were for software
licenses and other professional services.
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(5)
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Certain fees in 2009, including
out-of-pocket costs, have been reclassified out of All Other
Fees into the appropriate services to which they apply.
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Audit
Committee Pre-Approval Policies and Procedures
The Audit Committees policy is to pre-approve all audit
and non-audit services by category, including audit-related
services, tax services and other permitted non-audit services,
to be provided by the independent registered public accounting
firm to the Company. In accordance with the policy, the Audit
Committee regularly reviews and receives updates on specific
services provided by the independent registered public
accounting firm, and the Companys management may submit
additional services for approval.
To facilitate the approval process, the Audit Committee may
delegate pre-approval authority to the Committee chairperson, or
to the Companys Chief Financial Officer (for services,
other than audit or attest services) to the extent permitted
under the SECs pre-approval requirements. The Committee
member or CFO to whom such authority is delegated must report,
for informational purposes only, any pre-approval decisions to
the Audit Committee at its next scheduled meeting.
All services rendered by PricewaterhouseCoopers LLP to the
Company are permissible under applicable laws and regulations.
During 2010, all services performed by PricewaterhouseCoopers
LLP which were subject to the SECs pre-approval
requirements were approved by the Audit Committee in accordance
with the Committees pre-approval policy.
29
AUDIT
COMMITTEE REPORT
The Audit Committee (we, us or the
Committee) oversees the Companys financial
reporting process on behalf of the Board of Directors.
Management has the primary responsibility for the financial
statements and the reporting process, including the systems of
internal control over financial reporting and disclosure
controls designed to ensure compliance with accounting standards
and applicable laws and regulations.
The Companys independent auditors, PricewaterhouseCoopers
LLP (PwC), report directly to us. We have sole
authority to appoint, oversee, evaluate and discharge the
independent auditors and to approve the fees paid by the Company
for their services. PwC annually performs an independent audit
of the consolidated financial statements and expresses an
opinion on the conformity of those financial statements with
U.S. generally accepted accounting principles and the
effectiveness of the Companys internal control over
financial reporting. PwC also conducts quarterly reviews of the
Companys financial statements.
We review with PwC the scope of its services, the results of its
audits and reviews, its evaluation of the Companys
internal control over financial reporting, and the overall
quality of the Companys financial reporting. We meet
regularly with PwC, and separately with the Companys
internal auditors, without management present. We also meet
regularly with management without PwC present, and we discuss
managements evaluation of PwCs performance.
For 2010, we have reviewed and discussed the Companys
audited financial statements with management and PwC. We have
reviewed and discussed with management its process for preparing
its report on its assessment of the Companys internal
control over financial reporting, and at regular intervals we
received updates on the status of this process and actions taken
by management to respond to issues and deficiencies identified.
We discussed with PwC its audit of the effectiveness of the
Companys internal control over financial reporting. We
discussed with PwC and the Companys internal auditors the
overall scope and plans for their respective audits.
We have reviewed with PwC its judgments about the quality of the
Companys accounting principles as applied in the
Companys financial reporting and other matters as are
required to be discussed by the Statement on Auditing Standards
(SAS) No. 61 (Communication with Audit Committees), as
amended (AICPA Professional Standards Vol. 1, AU
Section 380), as adopted by the Public Company Accounting
Oversight Board in Rule 3200T, as may be modified or
supplemented. We also received from PwC and discussed with PwC
its written disclosures and the letter regarding its
independence from management and the Company as required by
applicable requirements of the Public Company Accounting
Oversight Board regarding the independent accountants
communications with the audit committee concerning independence.
We concluded that PwCs independence was not compromised by
the non-audit services provided by PwC, the majority of which
consisted of tax services.
In reliance on the reviews and discussions referred to above, we
recommended to the Board (and the Board subsequently approved
our recommendation) that the audited financial statements be
included in the Annual Report on
Form 10-K
for the year ended December 31, 2010 for filing with the
SEC. We also evaluated and selected PwC as the Companys
independent auditors for 2011, which the shareholders will be
asked to ratify at the 2011 Annual Meeting of Shareholders.
Audit Committee
Katherine M. Hudson
(Chairperson)
Margaret Hayes Adame
Henry W. Howell, Jr.
Arthur C. Martinez
30
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ITEM 3
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ADVISORY
VOTE ON EXECUTIVE COMPENSATION
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The Dodd-Frank Wall Street Reform and Consumer Protection Act of
2010 (known as the
Dodd-Frank
Act), provides that a public companys proxy statement in
connection with the companys annual meeting of
shareholders must, at least once every three years, allow
shareholders to cast an advisory, nonbinding vote regarding the
compensation of the companys named executive officers as
disclosed in accordance with the SECs rules.
As discussed in the Compensation Discussion and Analysis and the
tables and narratives that follow, the compensation packages for
our named executive officers are designed to attract, retain and
motivate our executives who are critical to our success, to
reward achievement of both annual and long term performance
goals, as well as to align the interests of our executives with
those of our shareholders. Pursuant to our programs, an average
of 73% of each named executive officers 2010 target total
direct compensation is considered variable and,
therefore, tied to our companys performance based on a
number of financial goals
and/or
company stock price performance.
For example, the Companys 2010 Annual Incentive Plan
(AIP) provides for awards to be earned based on the
Companys performance against sales growth, operating
profit, gross margin and working capital objectives. Our
2010-2012,
2009-2011
and
2008-2010
Long-Term Incentive Plan (LTIP) performance cycles
provide for awards to be earned based on our annual earnings per
share (EPS) performance and our annual and cumulative total
shareholder return (TSR) performance relative to the S&P
500. In addition, a supplemental performance metric was added
for the
2008-2010
LTIP performance cyle. This supplemental metric was based on
improvement in operating profit margin (Earnings before interest
and taxes) for 2010 as compared to 2009. In the case of our AIP
and LTIP programs, actual awards can vary from 0% to 200% of the
target amount and are dependent upon our performance versus each
programs predefined performance objectives. In addition,
under our Equity Choice Program (ECP), the ultimate value
realized by the executive is dependent upon our stock price
performance over the vesting period.
For additional information on the compensation program for our
named executive officers, including specific information about
compensation in 2010, please read the Compensation Discussion
and Analysis, along with the subsequent tables and narrative
descriptions.
At the 2011 Annual Meeting, we will ask our shareholders to
approve our named executive officer compensation as described in
this proxy statement. This proposal, referred to as a
Say-on-Pay
Proposal, provides our shareholders with the opportunity
to express their views on our named executive officers
compensation. In accordance with the Dodd-Frank Act, the vote
will be an advisory vote regarding our Companys named
executive officer compensation program generally and does not
examine any particular compensation element individually.
Accordingly, the Company will present the following advisory
Say-on-Pay
Proposal at the 2011 Annual Meeting for shareholder approval:
RESOLVED, that, the compensation paid to the
Companys named executive officers, as disclosed in this
proxy statement for the Companys 2011 Annual Meeting of
Shareholders pursuant to the compensation disclosure rules of
the Securities and Exchange Commission, including the
Compensation Discussion and Analysis, the compensation tables
and related narrative disclosure, is hereby approved.
This
say-on-pay
vote is advisory, and therefore not binding on the Company, the
Compensation Committee or our Board. However, the Compensation
Committee intends to review the results of the advisory vote and
will be cognizant of the feedback received from the voting
results as it completes its annual review and engages in the
compensation planning process.
The Board of Directors believes the compensation of our named
executive officers is appropriate and promotes the best
interests of our shareholders and therefore recommends that
shareholders vote FOR approval of this resolution.
31
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ITEM 4
|
ADVISORY
VOTE ON THE FREQUENCY OF THE ADVISORY VOTE ON EXECUTIVE
COMPENSATION
|
In accordance with the Dodd-Frank Act, we are seeking an
advisory, non-binding, vote on the frequency of future
shareholder advisory votes on our executive compensation
programs as disclosed pursuant to the SECs disclosure
rules. A shareholder advisory vote on executive compensation
(such as Item 3 in this Proxy Statement) is referred to as
a Say on Pay Proposal. In this Item 4, we are
asking for shareholder input as to whether, after this year, a
Say on Pay Proposal should occur every year, every two years or
every three years. Future votes on the frequency of future Say
on Pay Proposals will occur at an interval decided by the Board
of Directors, but not with less frequency than at least once
every six years.
We are recommending that a Say on Pay Proposal be submitted to
shareholders every year. Our Board of Directors believes that an
advisory vote every year is the best approach for our Company
and our shareholders. An annual advisory vote provides more
frequent shareholder feedback to our Board of Directors, the
Compensation Committee and management regarding our executive
compensation programs and policies. Our Board of Directors,
Compensation Committee and management intend to consider this
advisory vote as part of the design of our executive
compensation programs and communication of such programs to our
shareholders.
You may cast your vote for your preferred frequency for future
Say on Pay Proposals by indicating your choice that future Say
on Pay Proposals should be submitted to shareholders every year,
every two years or every three years, or you may choose to
abstain from voting on this issue, in response to the resolution
set forth below.
RESOLVED, that whichever of the three frequency choices
of: every year, every two years or every three years receives
the most shareholder votes will be considered the
shareholders preferred frequency in regard to how often a
Say on Pay Proposal should be submitted to the
Companys shareholders in future Company proxy statements
relating to our Annual Meetings of Shareholders.
If none of the three choices receives a majority of the votes
cast, the choice that receives the most number of votes will be
considered to be the result of this advisory, non-binding
shareholder vote. Uninstructed proxy cards will be voted in
accordance with the Board of Directors recommendation that
a Say on Pay Proposal be submitted to shareholders every year.
Although this vote regarding the frequency of future Say on Pay
Proposals is advisory only, our Board of Directors, Compensation
Committee and management will review the results and give
appropriate consideration to the outcome of the voting on this
proposal.
IFFs Board of Directors believes that it is in the best
interest of the Company to have Say on Pay Proposals considered
by shareholders every year, and therefore recommends that
shareholders vote for a frequency of ONE YEAR for
future Say on Pay Proposals in response to this resolution.
32
EXECUTIVE
COMPENSATION
COMPENSATION
DISCUSSION AND ANALYSIS
Introduction
This Compensation Discussion & Analysis
(CD&A) describes IFFs executive
compensation program for 2010 and certain elements of the 2011
program. It explains how the Compensation Committee of our Board
of Directors (the Committee) determined 2010
compensation for our executives, including the persons
identified as Named Executive Officers (NEOs) in
this Proxy Statement.
As reflected in the Corporate Governance Board
Leadership Structure section of this Proxy Statement and in the
tables and narratives following this CD&A, on
October 1, 2009 Douglas D. Tough, who was then a member of
our Board of Directors, assumed the role of non-executive
Chairman, with the plan that he would assume the additional role
of Chief Executive Officer (CEO) when his contract
with his then employer expired. In conjunction with this change
in management which was approved by our Board of Directors, upon
the recommendation of the Committee with the assistance of its
independent compensation consultant, the Board (with
Mr. Tough recusing himself) approved Mr. Toughs
compensation package. The Company entered into a letter
agreement with him on September 8, 2009 reflecting the
approved compensation. On March 1, 2010, Mr. Tough
assumed the role of Chairman and CEO.
In the interim, beginning on October 1, 2009 until
March 1, 2010, our Board established a temporary Office of
the CEO, which was comprised of Kevin C. Berryman, our Executive
Vice President and Chief Financial Officer (CFO),
Nicolas Mirzayantz, our Group President, Fragrances and Hernan
Vaisman, our Group President, Flavors. As a result, we have
seven NEOs being reported in this Proxy Statement, including the
three individuals who served together in the temporary Office of
the CEO, as well as Beth E. Ford, our Executive Vice President,
Head of Supply Chain, Dennis M. Meany, our former Senior Vice
President, General Counsel and Secretary, and Angelica Cantlon,
our Senior Vice President, Human Resources (SVP HR).
Mr. Meany, age 63, retired from the Company on
December 31, 2010.
Although he was not yet serving as CEO, Mr. Tough, together
with Ms. Cantlon, our SVP HR, assisted the Committee in its
determinations regarding the compensation of our NEOs (other
than the CEO) for 2010. Their roles in assisting the Committee
remained generally consistent with the roles the CEO and the SVP
HR have played in prior years. The members of the temporary
Office of the CEO did not participate in decisions regarding
executive compensation during their tenure in this office.
Executive
Summary
The following summarizes the Companys executive
compensation program for 2010 including:
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Executive compensation program objectives;
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Components of total direct compensation;
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Consideration of market benchmarks;
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2010 compensation highlights and actions;
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Pay for performance and variable, at-risk pay; and
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Other key program features.
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Executive
Compensation Program Objectives
The Companys executive compensation program is intended to
meet the following objectives:
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Attract, retain and develop talented individuals who are
critical to our success by providing competitive total
compensation opportunities relative to similar companies in our
peer groups, consistent with the Companys performance.
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Motivate and reward our executives for the achievement of both
annual and long-term business goals and strategic objectives by
providing a significant portion of compensation that is variable
and tied directly to achievement of these goals and objectives.
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Align the interests of our executives with those of our
shareholders by providing a significant portion of our
executives total direct compensation in the form of
Company stock and to encourage their direct investment as well
as long-term ownership.
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In furtherance of the above objectives, we believe that
executive compensation should (i) be tied to overall
Company performance; (ii) reflect each executives
level of responsibility; (iii) vary based on individual
performance and contribution; and (iv) include a
significant equity component. Our performance goals for
compensation purposes are based on the challenging financial and
strategic expectations set by our Board of Directors for our
entire organization.
Components
of Total Direct Compensation (see
pages 43-52)
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Fixed or
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Component
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Variable
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Objective
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Base Salary (see page 43)
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Fixed
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Attract and retain executives by offering salary that is
competitive with market opportunities and that recognizes
executives organization level, role, responsibility and
experience.
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Annual Incentive Plan
(AIP) (see page 44)
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Variable
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Motivate and reward the achievement of the Companys annual
performance objectives including sales growth, operating profit,
gross margin and working capital.
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Long-Term Incentive Plan
(LTIP) (see page 47)
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Variable
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Motivate and reward the annual and cumulative earnings per share
(EPS) and relative total shareholder return
(TSR) performance over rolling three-year periods.
Also, align executives interests with those of
shareholders by paying 50% of the earned award in Company stock
and including TSR as a key measure of long-term performance.
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Equity Choice Program
(ECP) (see page 50)
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Variable
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Align executives interests with interests of shareholders
through equity-based compensation. Encourage direct investment
in the Company when participants choose Purchased Restricted
Stock.
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Illustrative
Mix of Compensation
The average of each NEOs percentage of compensation that
is considered variable (based on target performance) versus
fixed, short-term versus long-term and cash versus equity, in
each case as a portion of total target compensation is
illustrated below:
34
Market
Benchmarking (see page 38)
The Committees philosophical goal is to
position target total compensation at generally the 60th to 65th
percentile of relevant market benchmarks. To help the Committee
determine appropriate target compensation levels of our
executives, the Committees independent compensation
consultant used publicly available compensation data from 17
Consumer Product Peer Companies, 15 Specialty Chemical and
Flavoring Peer Companies and, in addition, third party general
industry survey data. Based on an analysis of this data by the
consultant, a market reference range is set for each
executive, generally between the
50th and
75th
percentile of the most appropriate market data for that
executives position, which is considered in setting each
executives compensation. In 2010, our NEOs average
target total compensation was positioned at the 61st percentile.
2010
Compensation Actions and Performance Highlights (see
pages 43-52)
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Base Salary (page 43). Three of our six
NEOs eligible for salary increases received an increase in 2010.
The decisions whether or not to increase salaries were generally
based on position versus market and internal salary
relationships. The average increase for those NEOs receiving
increases approximated 7%. Mr. Tough became an employee of
the Company in 2010 and was not eligible for a salary increase.
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AIP Award (pages 44-47). The Company had
strong performance results across all business segments and
performance measures for 2010. 2010 performance versus its 2010
AIP goals on a corporate basis was determined to be at 179.5% of
target, reflecting strong local currency revenue growth, sharply
higher operating profit in dollars, and significant reductions
in core working capital requirements. Gross margin as a percent
of sales was the only AIP metric that did not meet target,
reflecting rising input costs in the second half of the year and
higher manufacturing expenses needed to meet customer delivery
requirements in a more complex operating environment. On
average, individual AIP awards paid to our NEOs were 176.5% of
target. The Pay for Performance chart below
illustrates differences in payout relative to AIP performance
versus goals over the five-year period covering 2006 to 2010.
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LTIP Award (pages 47-50). For the three-year
LTIP performance cycle covering
2008-2010,
performance was determined to be at 121.7% of target. The
company earned 80% of target for its EPS performance, 151.3% of
target for its relative TSR performance and 49% of target for
the 2010 supplemental measure of operating profit margin
improvement. The Pay for Performance chart below
illustrates variability of payout relative to LTIP performance
versus goals over the five three-year periods ending 2006 to
2010.
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ECP Award (pages 50-52). In 2010, as it has
since 2006, the Committee granted participants an ECP award
denominated as a dollar value within a competitive range
developed based on peer group and survey long-term incentive
practices data. With respect to the form of an ECP award, each
individual may choose from purchased restricted stock
(PRS) (where a participant may purchase shares of
stock at 50% of the market price), stock-settled appreciation
rights (SSARs) or time-vested restricted stock units
(RSUs). Based on the participants election as
to which form of equity comprises their individual grants, grant
date values can range from 80% of the initial award value (with
the maximum amount of time-vested RSUs selected) to 120% of the
initial award value (with the maximum amount of PRS selected).
In 2010, our NEOs were granted an average initial award value of
$635,714. Based on their individual ECP elections, on a
risk-adjusted basis (as described below under Equity Choice
Program and Other Equity Awards), 105.1% of the NEOs
aggregate initial award value was granted to them (excluding our
CEOs sign-on grant). Actual value delivered will depend on
future stock price performance.
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Pay
for Performance and Incentive Compensation Variability
2006 2010
The following chart illustrates the variability of actual awards
earned as a percent of target relative to AIP and LTIP
performance versus goals over the five-year period covering 2006
to 2010:
Other
Key Program Features
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Stock Ownership and Share Retention (see
page 52). Our executives, including our
NEOs, are required to meet certain stock ownership guidelines.
Until the targeted ownership level is achieved, all of our NEOs
are required to hold 50% of net gain shares. These
targeted ownership levels are a key feature of our overall
compensation program intended to align our executive teams
interests with those of our shareholders.
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Retirement Benefits and Perquisites (see
page 52-54). We provide retirement benefits
that the Company believes are competitive with our peer
companies. We provide supplemental benefits so that our
executives may receive the full benefit earned under the
retirement formula without reduction based on tax-qualified
limits. We also provide certain perquisites that we believe are
appropriate for our senior executives.
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Executive Separation Policy (ESP,
page 54). We provide severance and other
benefits to our senior executives including our NEOs whose
employment is terminated not for cause. We believe this policy
is necessary to retain and attract top executive talent and is
consistent with policies in companies with whom we compete for
talent. The level of separation compensation, which was reduced
by the Committee for certain executives in 2007, varies by the
executives organization level, consistent with market
practices and levels. In addition, the Committee took the
following actions during 2010:
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Eliminated Tax
Gross-Ups
for New Participants (see page 54). On December 14,
2010, based on the recommendation of the Committee, our Board
adopted the elimination of any tax
gross-up
payments related to severance payments in connection with a
change in control for new employees after March 8, 2010.
Participants in the Executive Severance Plan (ESP) prior to that
date remain eligible for a tax
gross-up
unless a cut-back of 10% or less in severance payments
eliminates the imposition of excise tax related to golden
parachute payments. Mr. Tough is not eligible to
receive tax
gross-up
payments under his negotiated letter agreement.
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Added Double Trigger Equity Acceleration Feature: On
December 14, 2010, the Board amended the ESP to provide
that any equity awards made after this date would accelerate in
connection with a change in control only if an ESP participant
is terminated without cause or terminates for Good
Reason within two years following a change in control.
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Consideration
of Shareholder Advisory Vote
The Committee believes that the non-binding shareholder advisory
vote on the Companys executive compensation, as set forth
in Item 3 Advisory Vote on Executive
Compensation, will provide useful feedback to the Committee
regarding whether it is achieving its goal of designing an
executive compensation program that promotes the best interests
of the Company by providing its executives with the appropriate
compensation and meaningful incentives. The Committee intends to
review the results of the advisory vote, being completed for the
first time this year, and will be cognizant of this feedback as
it completes its annual review of each pay element and the total
compensation packages for our NEOs with respect to the next
fiscal year.
Role of
Compensation Committee, Outside Advisors and
Management
Compensation
Committee
Pursuant to its Charter, the Committee assists the Board in
ensuring that a proper system of long term and short term
compensation is in place to provide performance-oriented
incentives to management, and that compensation plans are
appropriate and competitive and properly reflect the objectives
and performance of management and the Company. The Committee has
responsibility for overseeing the determination, implementation
and administration of remuneration, including compensation,
benefits and perquisites, of all executive officers and other
members of senior management. The Committee recommends CEO
compensation to the full Board for its approval.
Outside
Advisors
To assist it in fulfilling its responsibilities, the Committee
engaged W.T. Haigh & Company
(W.T. Haigh) as its independent compensation
consultant throughout 2010. W.T. Haigh regularly participates in
Committee meetings and meets privately with the Committee at its
request. To date, W.T. Haigh has worked exclusively on executive
and director compensation initiatives and plans on behalf of the
Committee and does not have other consulting arrangements with
the Company.
In 2010, W.T. Haigh reviewed and made recommendations to the
Committee concerning our executive compensation philosophy and
programs including:
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re-affirming the Companys executive compensation
philosophy;
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conducting total compensation market reviews for 30 executive
positions, including each NEO position;
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conducting total compensation market reviews for and advising on
non-employee director compensation;
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supporting the administration of the Companys existing
AIP, LTIP and ECP; and
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reviewing executive benefits and perquisites and the relevant
design features, including the ESP and payments of benefits that
may be triggered in the event of a termination following a
change in control.
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The Company also retains Steven Hall & Partners for
advisory services concerning compensation plan documents,
including the Companys equity award and incentive,
executive separation and deferred compensation plans, and Buck
Consultants for actuarial work and other services relating to
the Companys retirement plans and other post-employment
benefits. These services are administrative or technical in
37
nature and neither of these consultants played a role in
determining or recommending the amount or form of executive or
director compensation during 2010.
Management
With the input of W.T. Haigh, our CEO and Senior Vice President,
Human Resources, evaluated the performance and competitive pay
position for each NEO, other than themselves, and made
recommendations to the Committee concerning each such
officers target 2010 compensation. Our CEO followed the
same process with regard to the target 2010 compensation
for our SVP HR, without her input. The members of the temporary
office of the CEO did not participate in this process. Both our
CEO and Senior Vice President, Human Resources, generally attend
Committee meetings but do not attend the portion(s) of meetings
where their own compensation is discussed or determined. They
periodically provide the Committee with updates of progress
against our performance goals, and provide managements
views and recommendations concerning compensation elements
including:
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performance criteria and targets under our AIP and LTIP,
including potential threshold and maximum performance targets,
based on the Companys financial, operating and strategic
plans;
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placement of executives within salary grades;
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adjustments to a particular executives compensation,
including equity compensation, based on individual performance,
responsibilities or other considerations;
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the Companys executive separation policy; and
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perquisites.
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Our management also provides similar input to W.T. Haigh but
does not oversee its activities.
Principles
for Setting Compensation Levels
On an annual basis, the Committee reviews and approves the
compensation for our executive officers and other members of
senior management, including our NEOs. As in prior years, the
Committees decisions for 2010 compensation took into
account the compensation range for each executives grade,
as well as market benchmarking and individual
performance. We use a global grading structure for our
employees, including our executives, with compensation ranges
for each grade. Executives are placed in a particular grade
based on internal factors (including scope of responsibilities
and job complexity) and an external market evaluation. The
external market evaluation is based on published third party
general survey information and a review of like positions within
our selected peer groups described below. This process is often
referred to as market benchmarking. Benchmarking
also provides information that we use in internal pay review for
various positions and grade levels. We update the external
market benchmarking and peer group data annually.
Benchmarking
Peer
Groups
We use compensation data from other companies to benchmark our
compensation levels. However, it is difficult to define a single
peer group for our market benchmarking that appropriately
reflects the particular diversity of responsibilities within our
business. The Company has few publicly traded competitors and
our industry is highly fragmented, both geographically and
across product lines. Therefore, with assistance from its
independent compensation consultant, the Committee identified
two separate and distinct peer groups a consumer
product companies peer group and a specialty chemical and
flavoring companies peer group. The Committee, based on the
input of its independent compensation consultant, decided to use
the following criteria in reviewing and selecting the peer group
companies:
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1.
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US publicly traded companies of comparable size (generally based
on revenue of $1B $5B and market capitalization of
$1B $8B);
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2.
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Global scope with significant international presence
(international operations generally accounting for at least 25%
of total revenues);
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3.
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Strong in-house Research and Development activities (R&D
expense generally over 1% of total revenue);
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4.
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Growth orientation, with positive sales and earnings growth over
the three years prior to the review and selection of the peer
groups;
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5.
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Competitors for executive talent; and
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6.
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Progressive companies with positive reputations.
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Based on the foregoing criteria, in July 2009, the Committee
approved the peer groups consisting of the following companies,
and these peer groups were used for 2010 compensation
benchmarking:
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Consumer Product Peer
Group
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Specialty Chemical &
Flavoring Peer Group
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Alberto-Culver
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Albemarle
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Church & Dwight
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Arch Chemicals
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Clorox
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Cabot
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Del Monte Foods
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Corn Products
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Elizabeth Arden
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Cytec Industries
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Energizer Holdings
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Ecolab
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Estee Lauder
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Ferro
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Herbalife
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FMC
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Hershey
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HB Fuller
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Hormel Foods
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Lubrizol
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Jarden
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PolyOne
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McCormick
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RPM
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Newell Rubbermaid
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Sensient
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Nu Skin Enterprises
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Sigma-Aldrich
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Ralcorp
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Valspar
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Revlon
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Tupperware
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Based on the recommendation of its independent compensation
consultant, the Committee approved certain changes from the peer
groups used for 2009 compensation decisions, which are reflected
in the peer groups above. Certain companies were eliminated from
the previous peer groups due to changes in their business scope,
their type of ownership or their being acquired, and those
companies were replaced by companies considered more in line
with the criteria described above. At the time of the
Committees review and selection of the above peer groups,
IFF was positioned at approximately the
40th
percentile of both peer groups in terms of revenue, the primary
scope comparison measure. IFFs current relative revenue
remains positioned as approximately the
40th
percentile.
Our peer groups for compensation benchmarking (as listed above)
are different from the peer group used in our financial
performance graph included in our Annual Report on
Form 10-K.
Both the compensation and financial peer groups include
companies that are international in scope
and/or sell
39
their products to the types of customers that also buy our
products. However, the financial performance peer group includes
companies that exceed the size criteria identified for our
compensation peer groups. The Committee believes that, for the
compensation peer groups, comparably sized companies better
reflect the competition we face for executive talent.
General
Survey Data
To support the Committees analysis of our 2010 executive
compensation levels and to enable the Committee to obtain a more
general understanding of current compensation practices, the
Committees independent compensation consultant also
provided general industry data from Towers Perrins 2009
Executive Compensation Database, a broad-based survey. In
addition, the consultant provided data relating to a segment of
this database consisting of companies having $1 billion to
$3 billion in reported revenues, as well as a larger sample
of companies with median revenues of $5.5 billion, in each
case excluding energy and financial companies. These two
industry segments were excluded from the data because we believe
these industry business models and their pay practices are less
comparable to ours, particularly in a volatile economic climate.
Market
Reference and Setting Target Total Direct
Compensation
Based on the compensation peer group and other data, the
Committees independent compensation consultant develops
median and
75th
percentile market reference values for each
executive position. In doing so, and to reflect the most
relevant source for competitive executive talent for that
position, the peer groups and general industry data may be
assigned a different weight depending upon the position. The
market weighting for each position is reviewed and
agreed to in principle by the Committee at the same time the
Committee approves the peer groups, and for 2010 compensation
decisions did not change from the prior year. As noted above,
the Committees philosophical goal is to
position target total compensation at approximately the 60th to
65th percentile of relevant benchmarks.
The Committees independent compensation consultant
analyzes each executives actual and target total direct
pay (as described below under Compensation Elements and
Targeted Mix) against the median to
75th
percentile range of each executives market reference, and
reviews this analysis with the Committee and, in the case of the
compensation of NEOs other than the CEO, with the CEO.
Individual components of total direct pay (meaning salary,
annual incentive compensation, long term incentive compensation
and equity awards) are benchmarked versus market on an
individual basis for our CEO, on an average basis for our
EVPs and Group Presidents, collectively, and on an average
basis for our SVPs, collectively. In determining total
target direct pay for each executive in 2010, the Committee
considered the consultants market reference analysis. In
addition, the Committee considered a number of other important
factors, including each executives:
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individual performance;
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scope of responsibilities;
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relative responsibilities compared with other senior Company
executives;
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contribution relative to overall Company performance;
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compensation relative to his or her peers within the
organization;
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long term potential; and
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retention.
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The Committee uses the market reference range in order to
establish a starting point for the compensation levels that the
Committee believes would provide our executive team with
competitive compensation in order to incentivize and retain our
top executives. However, the actual total target direct pay
approved by the Committee may be above or below the market
reference range based on the Committees review of market
compensation levels and taking all of the above factors into
account.
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The following chart illustrates for each of our NEOs, the
NEOs relative position of the executives target
total direct pay as compared to the median and 75th percentile
market reference range for that particular executive:
Driven by our desire to create internal pay equity among our
senior executives, all of our Group Presidents and Executive
Vice Presidents have a comparable level of target total direct
compensation (based on the salaries for Messrs. Mirzayantz
and Vaisman approved in March 2010). This equalization process
has created some variance below the market reference range for
Messrs. Mirzayantz and Vaisman and above the market
reference range for Ms. Ford. Ms. Fords target
total direct compensation also reflects a compensation level
negotiated at the time of her hire in 2008.
Actual compensation paid for the year, as compared to target
compensation approved at the beginning of the year, may differ
depending on Company and individual performance. Actual
compensation paid is discussed below under Program Components
and Policies and in the tables and narratives following this
CD&A.
Tally
Sheets
In 2010, the Committee reviewed tally sheets for
certain NEOs, but, in part, because of the significant
management changes in 2010, did not consider these tally
sheets in making 2010 compensation decisions. These
tally sheets, which were prepared by the
Committees independent compensation consultant, were
designed to give the Committee a full view of compensation paid
to these NEOs, including an income statement
(showing all annual company costs for compensation paid to these
NEOs), a balance sheet (showing the compensation
that has been accrued under various plans for each individual)
and a liability sheet (showing the liability to the
Company if the individual were to separate from employment). The
Committee believes these tally sheets may be useful
in the future, when year over year and multi-year comparisons
can be made. The Committee did not otherwise refer to any type
of wealth accumulation analysis.
41
Compensation
Elements and Targeted Mix
Our executive compensation program includes direct pay and
indirect pay elements as follows.
Direct Pay
Direct pay consists of:
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Base salary;
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AIP award;
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LTIP award; and
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ECP award.
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AIP, LTIP and ECP awards are variable compensation components.
Their value is based on the Companys performance and, in
the case of the LTIP and ECP awards, the Companys share
price. The payouts under these annual and long term awards may
vary from year to year and thus reflect the impact our
executives have on our Companys success.
For 2010, at target AIP and LTIP achievement levels and actual
ECP award, the components of total direct pay for our CEO and
the average of our other NEOs, as a group, were as follows:
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(1)
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Excludes a one-time Equity Choice
Award grant made to Mr. Tough under the ECP valued at
$750,000 as a sign-on grant. Mr. Tough elected for this
grant, which vests 100% on the first anniversary of the
effective date of his hire as CEO, to be made as Purchased
Restricted Stock.
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The 80% weighting, in the case of our CEO, and the 72% average
weighting, in the case of our other NEOs, of direct pay towards
performance-based variable compensation closely aligns our
executives compensation opportunity with Company
performance by enabling our senior executives to earn more if
the Company achieves superior performance or will cause them to
earn less if we do not meet our performance goals or if the
value of our common stock does not increase over time. The
proportionately greater variable portion of direct
compensation targeted for our CEO reflects his role and
responsibility as our senior executive most accountable to our
Board of Directors and shareholders for entity-wide performance.
Long term compensation to our senior executives includes LTIP
awards and equity awards under our ECP. LTIP awards, if
earned, are paid out 50% in stock and 50% in cash. Equity makes
up a larger portion
of total long term compensation than non-equity. This approach
is intended to promote significant long term stock ownership by
each of our executives and to align their interests, and their
at-risk longer term compensation, with those of our
shareholders. The ECP, combined with our Share Retention Policy
discussed below, encourages stock ownership and real investment
in our Company.
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For 2010, the proportion of long term incentive compensation
opportunity provided in the form of equity versus cash for the
CEO and the average of our other NEOs, as a group, were as
follows:
The Committee periodically reviews and adjusts the mix between
short term and long term incentive compensation opportunities
and between cash and non-cash opportunities based on
(1) benchmarking and other external data,
(2) recommendations from its independent compensation
consultant and (3) recommendations from our CEO and Senior
Vice President, Human Resources. It should also be noted that
Mr. Berryman, Mr. Mirzayantz and Mr. Vaisman did
not receive any additional compensation for their temporary
additional responsibilities as part of the temporary office of
the CEO.
Indirect Pay
Indirect pay includes:
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Benefits (broad-based benefit programs);
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Deferred Compensation Plan (DCP);
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Pension Plan and Supplemental Retirement Plan (SRP)
for certain eligible executives; and
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Personal benefits (our perquisite program).
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Our executives participate in Company-sponsored benefit
programs, many of which are broadly available to our employees.
We also maintain other benefit and perquisite programs for our
senior management. In 2010, the Committees independent
compensation consultant reviewed the perquisites program for its
senior executives and advised the Committee that these programs
are in line with market practice. Accordingly, the Committee did
not make any changes to the perquisites program.
Program
Components and Policies
Salaries
The Committee reviews the salaries of our CEO and other senior
executives, including our other NEOs, annually. Effective
April 1, 2010, the Committee approved increases in the base
salaries for Messrs. Mirzayantz and Vaisman in the amount
of $25,000 and $50,000, respectively. Effective October 1,
2010, the Committee approved an increase in the base salary for
Ms. Cantlon, who commenced employment with the Company in
August 2009, in the amount of $15,000. The Committee approved
these increases to reflect current market conditions and, in the
case of Messrs. Mirzayantz and Vaisman, our two Business
Unit Presidents, to align their base salaries with each other
and with our Executive Vice Presidents. Based on the
Committees determination that the salaries of our senior
executives were in line with market reference, the Committee did
not approve increases in 2010 base salaries for any of our other
NEOs.
43
Annual
Incentive Plan
General: The Company maintains the AIP for our
NEOs and certain other employees. Payouts, which were approved
in early 2011 and awarded under our shareholder-approved 2010
Stock Award and Incentive Plan, depend on the achievement of
specific quantitative and strategic enterprise (i.e.,
Company-wide) performance goals, along with individual
contribution toward the enterprise results based on business
unit or functional goals. Each executive has the opportunity to
earn up to 200% of his or her target AIP award for significantly
above target or superior performance or lower than target (or
no) annual incentive compensation for below target performance.
At the beginning of 2010, the Committee approved the AIP targets
(stated as a percentage of base salary) as follows:
|
|
|
|
|
Target AIP as
|
Level
|
|
% Base Salary
|
Chairman & Chief Executive Officer
|
|
120%
|
Business Unit Presidents and Executive Vice Presidents
|
|
80%
|
Senior Vice Presidents
|
|
60%
|
The above AIP target percentages of the executives base
salaries did not change from the prior year.
Minimum
Funding: Failure
to meet the threshold level of performance overall in the
aggregate will generally result in no AIP award for that year.
However, the Committee may, under certain circumstances,
exercise discretion and pay out an award.
Goal Setting Process: Each year, our CEO
proposes and reviews with our Board the Companys annual
and long term financial goals, operational plans and strategic
initiatives. Based on these Board-approved strategic goals, the
CEO, the CFO and the SVP HR recommend to the Committee AIP
performance metrics that they deem to be appropriate. The
Committee considers these recommendations and consults with its
independent compensation consultant before approving the AIP
performance metrics. For 2010 AIP, the Committee, based upon the
recommendations from management and with the input of its
independent compensation consultant, decided to simplify the AIP
goals from those used for 2009 AIP and to make them more
consistent throughout the organization. Namely, the Committee
decided to eliminate the non-financial strategic goals and the
Balanced Scorecard approach that were used in the
past and instead to establish only financial goals for AIP. This
change to the AIP program helps align the corporate and business
unit components of our performance goals and provides consistent
definitions and metrics with which to measure performance. The
Committee decided to take this approach as it felt that by
providing greater focus and fewer metrics, company annual
operating performance and shareholder value could be enhanced.
2010 Financial Goals and Objectives: For 2010
AIP awards, the Committee approved four financial performance
metrics: local currency sales growth, an increase in operating
profit, gross margin improvements and improvements in working
capital. These financial goals were selected for the following
reasons:
|
|
|
|
|
Local currency sales growth helps to encourage both market share
and market expansion and also drives increases in gross profit.
By measuring achievement exclusive of currency fluctuations,
this goal helps to ensure that we are rewarding real incremental
achievement.
|
|
|
|
An increase in operating profit (in dollar terms) encourages the
management of gross profit dollars against operating expenses.
Achieving this goal helps provide the Company the funding to
reinvest in the business to drive future growth.
|
|
|
|
Improvement in gross margin percentage (%) is an important
measure for analyzing cost and efficiencies.
|
|
|
|
Improvements in working capital support better operating cash
flows. For this purpose, we define working capital as
inventories, trade accounts receivable less trade accounts
payable.
|
44
Each of the above financial goals was assigned a different
weighting as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate Participants (1)
|
|
|
|
Business Unit Participants (2)
|
|
|
|
|
Corporate
|
|
|
|
Bus. Unit
|
|
|
|
Corporate
|
|
|
|
Bus. Unit
|
|
|
|
Total
|
|
Performance Objective
|
|
|
Weighting
|
|
|
|
Weighting
|
|
|
|
Weighting
|
|
|
|
Weighting
|
|
|
|
Weighting
|
|
Local Currency Sales Growth
|
|
|
|
40
|
%
|
|
|
|
0
|
%
|
|
|
|
20
|
%
|
|
|
|
20
|
%
|
|
|
|
40
|
%
|
Operating Profit $
|
|
|
|
30
|
%
|
|
|
|
0
|
%
|
|
|
|
15
|
%
|
|
|
|
15
|
%
|
|
|
|
30
|
%
|
Gross Margin %
|
|
|
|
10
|
%
|
|
|
|
0
|
%
|
|
|
|
0
|
%
|
|
|
|
10
|
%
|
|
|
|
10
|
%
|
Working Capital
|
|
|
|
20
|
%
|
|
|
|
0
|
%
|
|
|
|
20
|
%
|
|
|
|
0
|
%
|
|
|
|
20
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
100
|
%
|
|
|
|
0
|
%
|
|
|
|
55
|
%
|
|
|
|
45
|
%
|
|
|
|
100
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
All NEOs except our two
Business Unit Presidents.
|
(2)
|
|
Our Business Unit Presidents
|
The local currency sales and operating profit goals were
assigned a greater weight than the gross margin and working
capital goals because the Committee believes that the first two
goals are the most relevant measures of overall annual Company
performance and are key to driving sustained long-term growth.
The gross margin and operating profit goals were new for 2010,
and replaced two goals that were used for 2009 AIP
awards earnings before interest and taxes
(represented as profit margin as a percentage of sales) and
return on invested capital.
The Committee believes that the above financial performance
criteria, which are derived from the Board-approved goals for
our Company, are critical measures of our operating success and
are strongly aligned with shareholder interests. For 2010, the
specific target levels for each financial objective were based
on improvement versus actual 2009 results. Achievement of the
targets would represent a significant step towards achieving the
Companys previously announced long term strategic
financial goals of growing local currency sales by 4% per year,
improving operating margins to 18% of sales and growing earnings
per share on average by 10+% per year, which goals were in place
at the time the AIP goals were set.
Overall
Company and Business Unit AIP Performance
Our actual performance against our 2010 AIP corporate financial
objectives is set forth in the tables below. In establishing AIP
financial objectives and in determining actual achievement
against financial goals, the Committee eliminates the impact of
certain discrete non-core revenues and expenses (net of related
benefits realized during the period). This is done by the
Committee in order to focus performance goals and achievement
against goals on our core operating results. For 2010, the AIP
financial goals and actual achievement against these financial
goals therefore have excluded approximately $10 million of
pre-tax costs associated with the European manufacturing
rationalization program. For comparability purposes, the
Committee also excluded (from both the AIP goals and actual
achievement against those goals) the benefits associated with
the 2009 implementation of a revised reporting methodology for
non-U.S. research
and development credits. Similarly, the Committee excluded the
effects of incentive compensation provisions in calculating
gross margin performance in order to better focus on the
underlying operating performance of the Companys product
portfolio. The Committee believes that the necessary
self-funding of incentive compensation payments is covered in
the operating profit component of the AIP
45
program. Based on the adjustments described above, our actual
performance results against our 2010 AIP financial targets are
set forth in the tables below for overall corporate and Business
Unit performance:
Corporate
Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Award
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payout as %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Target
|
|
|
|
Corporate
|
|
|
|
Weighted
|
|
Performance Objective
|
|
|
Target
|
|
|
|
Actual
|
|
|
|
(0%-200%)
|
|
|
|
Weighting
|
|
|
|
Award
|
|
Local Currency Sales Growth
|
|
|
|
2.5
|
%
|
|
|
|
13.1
|
%
|
|
|
|
200
|
%
|
|
|
|
40
|
%
|
|
|
|
80.0
|
%
|
Operating Profit $M
|
|
|
$
|
390.0
|
|
|
|
$
|
420.0
|
|
|
|
|
200
|
%
|
|
|
|
30
|
%
|
|
|
|
60.0
|
%
|
Gross Margin %
|
|
|
|
42.2
|
%
|
|
|
|
41.7
|
%
|
|
|
|
64
|
%
|
|
|
|
10
|
%
|
|
|
|
6.4
|
%
|
Working Capital
|
|
|
|
31.0
|
%
|
|
|
|
30.0
|
%
|
|
|
|
165
|
%
|
|
|
|
20
|
%
|
|
|
|
33.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Award (as % Target)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
|
|
|
179.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flavors
President Business Unit Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flavors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Flavors
|
|
|
|
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Award
|
|
|
|
President
|
|
|
|
Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payout as %
|
|
|
|
Business
|
|
|
|
Unit
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Target
|
|
|
|
Unit
|
|
|
|
Weighted
|
|
|
|
Corporate
|
|
|
|
Weighted
|
|
|
|
Total
|
|
Performance Objective
|
|
|
Target
|
|
|
|
Actual
|
|
|
|
(0%-200%)
|
|
|
|
Weighting
|
|
|
|
Award
|
|
|
|
Weighting
|
|
|
|
Award
|
|
|
|
Award
|
|
Local Currency Sales Growth
|
|
|
|
3.6
|
%
|
|
|
|
10.1
|
%
|
|
|
|
200.0
|
%
|
|
|
|
20
|
%
|
|
|
|
40.0
|
%
|
|
|
|
20
|
%
|
|
|
|
40.0
|
%
|
|
|
|
80.0
|
%
|
Operating Profit $M
|
|
|
$
|
234.0
|
|
|
|
$
|
243.0
|
|
|
|
|
176.9
|
%
|
|
|
|
15
|
%
|
|
|
|
26.5
|
%
|
|
|
|
15
|
%
|
|
|
|
30.0
|
%
|
|
|
|
56.5
|
%
|
Gross Margin %
|
|
|
|
42.6
|
%
|
|
|
|
42.3
|
%
|
|
|
|
77.6
|
%
|
|
|
|
10
|
%
|
|
|
|
7.8
|
%
|
|
|
|
0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
7.8
|
%
|
Working Capital
|
|
|
|
25.1
|
%
|
|
|
|
25.6
|
%
|
|
|
|
76.0
|
%
|
|
|
|
0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
20
|
%
|
|
|
|
33.1
|
%
|
|
|
|
33.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Award (as % Target)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
|
%
|
|
|
|
74.3
|
%
|
|
|
|
55
|
%
|
|
|
|
103.1
|
%
|
|
|
|
177.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fragrances
President Business Unit Performance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fragrance
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fragrance
|
|
|
|
President
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Award
|
|
|
|
President
|
|
|
|
Business
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payout as %
|
|
|
|
Business
|
|
|
|
Unit
|
|
|
|
|
|
|
|
Corporate
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of Target
|
|
|
|
Unit
|
|
|
|
Weighted
|
|
|
|
Corporate
|
|
|
|
Weighted
|
|
|
|
Total
|
|
Performance Objective
|
|
|
Target
|
|
|
|
Actual
|
|
|
|
(0%-200%)
|
|
|
|
Weighting
|
|
|
|
Award
|
|
|
|
Weighting
|
|
|
|
Award
|
|
|
|
Award
|
|
Local Currency Sales Growth
|
|
|
|
2.0
|
%
|
|
|
|
15.7
|
%
|
|
|
|
200.0
|
%
|
|
|
|
20
|
%
|
|
|
|
40.0
|
%
|
|
|
|
20
|
%
|
|
|
|
40.0
|
%
|
|
|
|
80.0
|
%
|
Operating Profit $M
|
|
|
$
|
197.0
|
|
|
|
$
|
239.0
|
|
|
|
|
200.0
|
%
|
|
|
|
15
|
%
|
|
|
|
30.0
|
%
|
|
|
|
15
|
%
|
|
|
|
30.0
|
%
|
|
|
|
60.0
|
%
|
Gross Margin %
|
|
|
|
41.8
|
%
|
|
|
|
41.7
|
%
|
|
|
|
92.5
|
%
|
|
|
|
10
|
%
|
|
|
|
9.3
|
%
|
|
|
|
0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
9.3
|
%
|
Working Capital
|
|
|
|
37.1
|
%
|
|
|
|
34.8
|
%
|
|
|
|
200.0
|
%
|
|
|
|
0
|
%
|
|
|
|
0.0
|
%
|
|
|
|
20
|
%
|
|
|
|
33.1
|
%
|
|
|
|
33.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Award (as % Target)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
|
%
|
|
|
|
79.3
|
%
|
|
|
|
55
|
%
|
|
|
|
103.1
|
%
|
|
|
|
182.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Individual
AIP Award and Discretionary Bonus Determination
The AIP payout for 2010 for the NEOs, based on the actual
achievement of financial objectives, is discussed in greater
detail under the heading Grants of Plan-Based Awards. Based on
the Company and Business Unit performance outlined in the tables
above, 2010 AIP awards were as follow:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Actual AIP $
|
|
|
|
Actual AIP $
|
|
|
|
|
|
|
|
|
|
|
|
|
Target AIP
|
|
|
|
Actual AIP as
|
|
|
|
for 2010
|
|
|
|
as % Base
|
|
Executive
|
|
|
2010 Salary
|
|
|
|
Target AIP %
|
|
|
|
$
|
|
|
|
% Target(4)
|
|
|
|
Performance
|
|
|
|
Salary
|
|
Douglas D. Tough(1)
|
|
|
$
|
1,000,000
|
|
|
|
|
120
|
%
|
|
|
$
|
1,207,233
|
|
|
|
|
176.4
|
%
|
|
|
$
|
2,129,559
|
|
|
|
|
213.0
|
%
|
Kevin C. Berryman
|
|
|
$
|
500,000
|
|
|
|
|
80
|
%
|
|
|
$
|
400,000
|
|
|
|
|
176.4
|
%
|
|
|
$
|
705,600
|
|
|
|
|
141.1
|
%
|
Nicolas Mirzayantz(2)
|
|
|
$
|
493,750
|
|
|
|
|
80
|
%
|
|
|
$
|
400,000
|
|
|
|
|
179.3
|
%
|
|
|
$
|
717,080
|
|
|
|
|
145.2
|
%
|
Hernan Vaisman(2)
|
|
|
$
|
487,500
|
|
|
|
|
80
|
%
|
|
|
$
|
400,000
|
|
|
|
|
174.3
|
%
|
|
|
$
|
697,280
|
|
|
|
|
143.0
|
%
|
Beth E. Ford
|
|
|
$
|
500,000
|
|
|
|
|
80
|
%
|
|
|
$
|
400,000
|
|
|
|
|
176.4
|
%
|
|
|
$
|
705,600
|
|
|
|
|
141.1
|
%
|
Dennis M. Meany
|
|
|
$
|
414,000
|
|
|
|
|
60
|
%
|
|
|
$
|
248,400
|
|
|
|
|
176.4
|
%
|
|
|
$
|
438,178
|
|
|
|
|
105.8
|
%
|
Angelica T. Cantlon(3)
|
|
|
$
|
318,750
|
|
|
|
|
60
|
%
|
|
|
$
|
191,268
|
|
|
|
|
176.4
|
%
|
|
|
$
|
337,397
|
|
|
|
|
105.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Monthly salary effective
March 1, 2010 through December 31, 2010 and AIP
calculated based on number of days employed in 2010.
|
(2)
|
|
For salary increases effective
April 1, target AIP is calculated as if the increase were
made January 1.
|
(3)
|
|
Salary increase effective
October 1, 2010 from $315,000 to $330,000 and AIP
calculated based on the number of days at each salary.
|
(4)
|
|
As adjusted to fund one-time
performance award for non-AIP participants.
|
46
In determining actual bonus amounts, while Company and Business
Unit performance would have allowed for higher bonus payments
based on the application of the AIP formula, the Committee
exercised its discretion to reduce the level of bonus awards and
lowered the bonus payments that would have otherwise been
payable to the NEOs by approximately $105,000 in the aggregate
in order to fund a one-time performance award for non-AIP
participants. In addition to the AIP payouts described above,
the Committee approved a discretionary one-time cash bonus of
$500,000 to Mr. Tough as a sign-on bonus payable
July 1, 2010 to compensate him for certain forfeited bonus
opportunities at his former employer. The Committee considered
this cash payment to be a reasonable inducement to retain
Mr. Toughs services as our Chairman and Chief
Executive Officer.
For the five AIP plan years from 2006 to and including 2010 the
actual corporate percentage payout under the AIP against the
annual performance goals ranged from 40% to 171.3%, with an
average payout of 101.4% of target over the five year period.
During this period, our local currency sales grew at a compound
annual growth rate of approximately 5%. Following a very
challenging 2009 that was impacted by the global financial
crisis, the Companys performance in 2010 rebounded
strongly. Local currency sales growth in 2010 was at an all-time
high of 13%, above several of our key competitors. The positive
impact of the higher sales volume plus margin improvement
associated with lower input costs and internal improvement
initiatives enabled us to improve operating profit (excluding
extraordinary or special items such as restructuring charges and
employee separation costs) by more than 200 basis points
versus 2009. Over the
2005-2010
period, operating profit (excluding extraordinary or special
items such as restructuring charges and employee separation
costs) increased by nearly 150% from $290 million in 2005
to $426 million in 2010. Our operating profit margin
improved by 170 basis points from 14.6% of sales to 16.3%
in 2010. Our core working capital improved over the same period,
declining from 32.7% of yearly sales to 30.1% by the end of 2010.
Long
Term Incentive Plan
In early 2010, the Committee approved grants of LTIP awards to
our senior executives, including our NEOs, under the
Companys shareholder-approved 2010 Stock Award and
Incentive Plan. These grants cover the
2010-2012
performance cycle. The Committee believes that commencing a new
3-year LTIP
cycle each year helps (i) to provide a regular opportunity
to re-evaluate long term measures, (ii) to align goals with
the ongoing strategic planning process; and (iii) to
reflect changes in our business priorities and market factors.
In early 2010, the Committee also approved a supplemental metric
for the 2010 segment of the
2008-2010
LTIP performance cycle. In early 2011, the Committee approved
payouts under the completed
2008-2010
LTIP performance cycle, as well as credits (or
bankings) for the 2010 segment of the ongoing
2009-2011
LTIP and 2010-2012 LTIP performance cycles.
2010-2012
LTIP
For the
2010-2012
LTIP performance cycle, the Committee approved LTIP target award
grants to our NEOs as follows:
|
|
|
|
Level
|
|
|
LTIP Target Amount
|
Chairman & Chief Executive Officer
|
|
|
$1,894,064(1)(2)
|
Executive Vice Presidents and Group Presidents
|
|
|
$450,000(2)
|
Senior Vice Presidents
|
|
|
60% of base salary
|
|
|
|
|
|
|
|
(1)
|
|
Reflects March 1, 2010
employment date.
|
|
(2)
|
|
The LTIP target amount for these
individuals was set at a fixed dollar amount, not a percentage
of base salary.
|
Based on the recommendation of its independent compensation
consultant, in 2010 the Committee approved increases in the LTIP
target for Mr. Berryman, Mr. Mirzayantz,
Mr. Vaisman and Ms. Ford over the prior year LTIP
performance cycle by $50,000, $70,000, $90,000 and $50,000,
respectively. These increases were part of our internal pay
equity analysis and were intended to align the LTIP target
amounts for all our Business Unit Presidents and Executive Vice
Presidents.
47
For the
2010-2012
performance cycle, the LTIP performance categories and their
respective weightings are:
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Weighting of
|
|
|
Percentage Weighting of
|
|
|
|
|
|
|
Earnings Per Share (EPS)
|
|
|
Total shareholder return
|
|
|
Total Weighting of
|
|
|
|
Growth out of the Total
|
|
|
(TSR) relative to the S&P
500*
|
|
|
Segment out of the Total
|
Segment
|
|
|
LTIP Cycle
|
|
|
out of the Total LTIP Cycle
|
|
|
LTIP Cycle
|
2010 Segment (Year 1)
|
|
|
12.5%
|
|
|
12.5%
|
|
|
25.0%
|
2011 Segment (Year 2)
|
|
|
12.5%
|
|
|
12.5%
|
|
|
25.0%
|
2012 Segment (Year 3)
|
|
|
12.5%
|
|
|
12.5%
|
|
|
25.0%
|
Cumulative Segment
(2010-2012)
|
|
|
0.0%
|
|
|
25.0%
|
|
|
25.0%
|
|
|
|
|
|
|
|
|
|
|
Total LTIP Cycle
|
|
|
37.5%
|
|
|
62.5%
|
|
|
100.0%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
|
The Committees independent
compensation consultant measures changes in stock price plus
dividends paid (assuming the dividends are reinvested) for the
S&P 500 companies over the performance period. The
market price for purposes of calculating the TSR of the Company
and the S&P 500 on each year-end or cycle-end date was or
will be determined based on the average closing price per share
of each companys common stock over the period of 20
consecutive trading days preceding that date, as reported by a
reputable reporting service.
|
In setting the
2010-2012
LTIP performance goals, the Committee believed that growth in
earnings per share is a key indicator for measuring improvement
in our long term shareholder value. For 2010, the EPS growth
target was established in light of the difficult economic
environment and its expected impact on our operating results.
The Committee also believes that TSR as compared to other public
companies in which shareholders may choose to invest is a good
indicator of our overall long term performance, and directly
ties our executives compensation opportunity to our share
price appreciation and dividend payments relative to a major
large-cap index.
Given the difficulty in setting long term goals in the current
economic environment, the Committee continues to believe that
the segmentation of each three year LTIP performance cycle
provides the Committee the opportunity to review LTIP goals
year-to-year
in order to align more closely with the Companys updated
strategic planning processes. Accordingly, the
2010-2012
LTIP performance cycle is administered in four performance
segments: Year 1, Year 2, Year 3 and Cumulative, as indicated in
the table above. For each of the first three annual performance
segments, the EPS goal and the TSR goal carry an equal
weighting. For the Cumulative segment, the TSR goal is weighted
at 100%. Due to the continued unsettled economic environment
when the
2010-2012
LTIP objectives were established and the continued difficulty of
setting a
3-year EPS
goal in that environment, as it did with the prior LTIP
performance cycle, the Committee decided not to include the
Cumulative
3-year
segment measurement with respect to the EPS goal. The EPS goal
for each annual segment is established by the Committee during
the first quarter of the applicable year.
For the 2010 segment of the
2010-2012
LTIP cycle, the relative minimum and maximum achievement levels
required for various payout levels were set as follows:
|
|
|
|
|
|
|
Criteria
|
|
Minimum (25%)
|
|
Target (100%)
|
|
Maximum (200%)
|
|
EPS Growth
|
|
92% of fiscal year target
|
|
Fiscal year target
|
|
108% of fiscal year target
|
TSR vs S&P 500
|
|
35th percentile
|
|
55th percentile
|
|
75th percentile
|
Performance results below the minimum achievement threshold for
a specific year or cumulatively, in the case of TSR, result in
no amounts being earned for that performance component.
For the
2010-2012
performance cycle, the minimum and maximum performance levels
for TSR remained at the
35th and
75th percentiles, respectively as they had for the previous
cycle. The Committee believed at the time that due to the
volatility in the equity markets, providing this broader
performance range might help mitigate the effects of volatility
of the Companys stock.
48
For the
2010-2012
performance cycle, the Committee determined that 50% of the
value of any payouts would be paid in cash and 50% would be paid
in full value shares. This is consistent with payout ratios for
the
2008-2010
and
2009-2011
LTIP performance cycles. The Committee believes that paying 50%
of the LTIP value in full value shares creates a stronger
alignment between executives and shareholders, and provides
additional incentive for executives to achieve superior Company
performance and to produce share price appreciation over the
three-year performance cycle. The number of shares of Company
stock for the 50% portion that would be paid in stock is
determined at the beginning of the cycle, based on $42.01 per
share, the closing market price on January 4, 2010, the
first stock trading day of the cycle. At the conclusion of each
performance segment, the dollar value and number of shares is
banked based on the performance of that segment.
When the three-year cycle is concluded and the LTIP payouts are
approved by the Committee, the cumulative dollar value and
cumulative number of full value shares are paid to the executive.
For the 2010 segment of the
2010-2012
LTIP performance cycle, the EPS of $3.37 was achieved, which is
192% of the target of $3.14 for the 2010 segment and our TSR was
positioned at approximately the
77th percentile
versus the S&P 500 which represents 200% of the target of
the 55th percentile for the 2010 segment. As a result, the
LTIP award earned and banked for the 2010 segment of
the
2010-2012
LTIP cycle was equal to 196% of target.
2009-2011
LTIP
For the 2010 segment of the
2009-2011
LTIP performance cycle, the achievement described above with
respect to the 2010 segment of the 2010 performance cycle was
applied to this performance cycle as well. As a result, the LTIP
award earned and banked for the 2010 segment of the
2009-2011
LTIP performance cycle was equal to 196% of target.
2008-2010
LTIP
In early 2010, the Committee approved a one-year supplemental
performance metric for the Companys
2008-2010
LTIP performance cycle. The supplemental metric relates to
improvement in operating profit (EBIT) margin measured over the
fiscal 2010 period as compared to 2009. The Committee
established this supplemental metric to provide increased focus
on the significance of driving improvement in operating profit
margin, which continues to be an important factor in increasing
long term shareholder value. The Committee decided to add this
one-year supplemental financial target as a means of providing
further targeted incentive for our senior management team to
continue to deliver improved financial results under this
metric, particularly in light of the global economic uncertainty
which began in late 2008 and has continued through the current
period.
Performance and related payout of awards relative to target,
including the supplemental metric, under the
2008-2010
LTIP cycle were determined based on the following minimum and
maximum achievement levels for the cycle, which levels, other
than the supplemental metric, were established at the beginning
of the cycle, and were calculated on a straight-line basis:
|
|
|
|
|
|
|
Criteria
|
|
Minimum (25%)
|
|
Target (100%)
|
|
Maximum (200%)
|
|
EPS Growth
|
|
70% of fiscal year target
|
|
Each fiscal year target
|
|
130% fiscal year target
|
TSR vs S&P 500
|
|
40th percentile
|
|
55th percentile
|
|
75th percentile
|
Supplemental Metric relating to improvement in operating profit
(EBIT) margin from 2009 to 2010
|
|
Operating profit of 15.9% of sales
|
|
Operating profit of 16.3% of Sales
|
|
Operating profit of 16.7% of sales
|
The overall payout for the
2008-2010
LTIP performance cycle of 121.7% was based on the following EPS
and TSR results against objectives, as determined by the
Committee in February 2011. For each segment in the LTIP cycle,
EPS and TSR are weighted equally.
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Combined
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment
|
|
|
Segment
|
|
|
Segment
|
|
|
Supplemental
|
|
|
|
|
|
|
|
|
|
Weighted EPS
|
|
|
Weighted TSR
|
|
|
Weighted
|
|
|
Weighted OP
|
|
|
Segment
|
|
|
Overall
|
|
Segment
|
|
Result
|
|
|
Result
|
|
|
Result
|
|
|
Result
|
|
|
Weighting
|
|
|
Result
|
|
|
2008
|
|
|
100.0
|
%
|
|
|
42.5
|
%
|
|
|
142.5
|
%
|
|
|
|
|
|
|
25.0
|
%
|
|
|
35.6
|
%
|
2009
|
|
|
0.0
|
%
|
|
|
62.5
|
%
|
|
|
62.5
|
%
|
|
|
|
|
|
|
25.0
|
%
|
|
|
15.6
|
%
|
2010 and Supplemental
|
|
|
30.0
|
%
|
|
|
100.0
|
%
|
|
|
130.0
|
%
|
|
|
24.5
|
|
|
|
25.0
|
%
|
|
|
38.6
|
%
|
Cumulative
|
|
|
30.0
|
%
|
|
|
97.5
|
%
|
|
|
127.5
|
%
|
|
|
|
|
|
|
25.0
|
%
|
|
|
31.9
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
100
|
%
|
|
|
121.7
|
%
|
The LTIP payout for the
2008-2010
performance cycle for the NEO group, based on the actual
achievement of quantitative objectives, is discussed in greater
detail following the Grants of Plan-Based Awards Table. The
payout for the
2008-2010
LTIP performance cycle was 121.7% as described above. In
establishing the LTIP EPS growth objective for each LTIP segment
and in determining actual achievement against that objective,
the Committee eliminates the impact of certain discrete non-core
costs (net of related benefits realized during the period), on a
consistent basis and for the same reason as discussed above
under Overall Company AIP Performance. During the
2008-2010
LTIP performance cycle, adjusted EPS (excluding extraordinary or
special items such as restructuring charges, pension curtailment
loss, employee separation costs, costs associated with the
change in CEO, material gains on disposition of assets and
certain one-time tax benefits) grew approximately 27%. As is the
case for the AIP calculation, both the LTIP goal and the
calculation of actual performance against that goal exclude the
impact associated with a revised reporting methodology for
non-U.S. research
and development credits.
For the LTIP performance cycles that concluded in 2006 through
and including 2010, the actual overall corporate percentage
payout under the LTIP against those long term cycle performance
goals ranged from 90.6% to 121.7%, with an average payout of
107.7% over the five LTIP performance cycles.
Equity
Choice Program and Other Equity Awards
In 2010, we continued the ECP for our senior executives under
our 2010 Stock Award and Incentive Plan. ECP participants,
including all of our NEOs, may choose from three types of equity
award grants purchased restricted stock
(PRS), stock settled appreciation rights
(SSARs), and restricted stock units
(RSUs) defined as follows:
|
|
|
|
|
PRS PRS are restricted shares of the
Companys stock which an ECP participant may purchase at a
50% discount off the closing market price on the grant date. An
ECP participant who chooses PRS is required to fund the purchase
of PRS from his or her own financial resources, thereby putting
the executives personal finances at risk. During the
restricted period, a PRS holder has the same rights as an
ordinary shareholder including the right to vote and
non-preferential dividend rights. On the vesting date, PRS
shares become unrestricted.
|
|
|
|
SSARs SSARs are essentially a contractual
right to receive the value, in shares of Company stock, of the
appreciation in the Companys stock price from the SSAR
grant date to the date the SSAR is exercised by the participant.
SSARs provide upside potential and alignment with shareholders
because SSARs have no value if the stock price remains the same
or decreases after the grant date. SSARs become exercisable on a
stated vesting date, and expire on the seventh anniversary of
the grant date. SSARs do not require a financial investment by
the SSAR grantee.
|
|
|
|
RSUs RSUs are the Companys promise to
issue unrestricted shares of the Companys stock on the
stated vesting date. RSUs continue to have value even when the
stock price remains the same or declines and do not require a
financial investment by the RSU grantee.
|
The Committee believes that by offering executives a choice as
to the form of their equity awards, the ECP will better address
their individual needs regarding financial planning, stage of
career and risk profile. In addition, the Committee believes
that a vesting period of approximately three-years for the
various
50
forms of equity is consistent with a goal of executive
retention, is an attractive tool for recruiting, motivating and
retaining executive talent and encourages alignment with
shareholders by reinforcing real investment and ownership by our
executives. From time to time, the Committee may award ECP
grants that have a shorter vesting period.
Under the ECP, each participant may choose among the three types
of equity up to the participants total award value. The
specific award value granted is determined by the Committee
considering factors such as individual performance and overall
contribution to the enterprise, future potential of the
executive, need for retention and relevant market long term and
total compensation levels.
An ECP participant may elect to receive his or her total dollar
award in increments of 10% across the three forms of equity with
a maximum allocation to RSUs of 50% of such total award value. A
participants dollar award value is converted into PRS,
SSARs and/or
RSUs on the grant date based on the participants election,
with the three forms of awards being risk-adjusted
upwards or downwards to reflect the varying degree of risk to
the participant with each form, as described above. PRS shares,
which are considered the most risky, carry a 120% weight, SSARs,
which are considered medium risk, carry a 100% weight and RSUs,
which are considered the least risky, carry a 60% weight. The
Committee approved these risk adjustments at the programs
inception with input from its independent compensation
consultant and did not change them in 2010. As an example of how
the risk adjustment works, if an ECP participants total
dollar-denominated award value is $100,000 and he or she elects
100% of the award in PRS, then the total award value used to
determine the number of PRS shares to be granted on the grant
date is $120,000 ($100,000 x 120% PRS adjustment factor). ECP
participants must make their elections prior to the grant date,
and once an election is made it may not be changed.
The following table shows the ECP dollar award value allocated
to each NEO during 2010 as well as the percentage and
risk-adjusted dollar value of each type of equity elected by
each NEO:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total ECP
|
|
|
PRS ($ amount
|
|
|
SSARs ($ amount
|
|
|
RSUs ($ amount
|
|
|
|
|
|
Dollar
|
|
|
reflects 120%
|
|
|
reflects 100%
|
|
|
reflects 60%
|
|
|
|
|
|
Award
|
|
|
risk
|
|
|
risk
|
|
|
risk
|
|
NEO Position
|
|
Name
|
|
Value
|
|
|
adjustment)
|
|
|
adjustment)
|
|
|
adjustment)
|
|
|
|
|
|
|
|
|
%
|
|
|
$
|
|
|
%
|
|
|
$
|
|
|
%
|
|
|
$
|
|
|
CEO & President
|
|
Douglas D. Tough(1)
|
|
$
|
1,500,000
|
|
|
|
30
|
%
|
|
$
|
540,000
|
|
|
|
20
|
%
|
|
$
|
300,000
|
|
|
|
50
|
%
|
|
$
|
450,000
|
|
|
|
|
|
$
|
750,000
|
|
|
|
100
|
%
|
|
$
|
900,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Vice President and Chief Financial Officer
|
|
Kevin C. Berryman
|
|
$
|
600,000
|
|
|
|
70
|
%
|
|
$
|
504,000
|
|
|
|
30
|
%
|
|
$
|
180,000
|
|
|
|
0
|
%
|
|
$
|
0
|
|
Group President, Fragrances
|
|
Nicolas Mirzayantz
|
|
$
|
600,000
|
|
|
|
80
|
%
|
|
$
|
576,000
|
|
|
|
20
|
%
|
|
$
|
120,000
|
|
|
|
0
|
%
|
|
$
|
0
|
|
Group President, Flavors
|
|
Hernan Vaisman
|
|
$
|
600,000
|
|
|
|
0
|
%
|
|
$
|
0
|
|
|
|
50
|
%
|
|
$
|
300,000
|
|
|
|
50
|
%
|
|
$
|
180,000
|
|
Executive Vice President, Head of Supply Chain
|
|
Beth E. Ford
|
|
$
|
450,000
|
|
|
|
0
|
%
|
|
$
|
0
|
|
|
|
100
|
%
|
|
$
|
450,000
|
|
|
|
0
|
%
|
|
$
|
0
|
|
Senior Vice President, General Counsel and Secretary
|
|
Dennis M. Meany
|
|
$
|
350,000
|
|
|
|
100
|
%
|
|
$
|
420,000
|
|
|
|
0
|
%
|
|
$
|
0
|
|
|
|
0
|
%
|
|
$
|
0
|
|
Senior Vice President, Human Resources
|
|
Angelica T. Cantlon
|
|
$
|
350,000
|
|
|
|
100
|
%
|
|
$
|
420,000
|
|
|
|
0
|
%
|
|
$
|
0
|
|
|
|
0
|
%
|
|
$
|
0
|
|
|
|
|
(1)
|
|
Includes a one-time Equity Choice
Award grant made to Mr. Tough under the ECP valued at
$750,000 as a sign-on grant. Mr. Tough elected for this
grant, which vests 100% on the first anniversary of the
effective date of his hire as CEO, to be made in PRS. The
Committee considered the initial ECP grant to be a reasonable
inducement to hire Mr. Tough as our Chairman and Chief
Executive Officer.
|
In 2010, in order to better reflect market practice, the
Committee increased the applicable range for ECP grants to our
Executive Vice Presidents and our Business Unit Presidents
from a range of
$200,000-$600,000
to a range of
$225,000-$675,000.
Except for Mr. Toughs one-time grant, all of the
above grants were within the ECP dollar value range for each
participants compensation grade level, as approved by the
Committee.
51
The Committee, as it did in 2009, allowed ECP participants who
choose to acquire PRS shares to fund their purchases either by
paying cash or by tendering previously owned unrestricted shares
of the Companys Common Stock. The Committee wanted to
encourage continued purchases of PRS shares by ECP participants.
However, the Committee recognized that certain ECP participants
might not have been able to pay more cash in 2010 to invest in
additional PRS shares or they would have needed to sell Company
shares they already owned to fund their additional PRS purchases.
The equity award grants to each NEO are identified in the Grants
of Plan-Based Awards Table.
Equity
Grant Practices
The Committee, at its meeting on April 26, 2010, approved
the 2010 ECP values allocated to each senior executive,
including our NEOs, and the grants that were made on
June 2, 2010. The period of time between approval of ECP
values and the actual grant date gives ECP participants time to
make their irrevocable ECP elections and to arrange finances for
the purchase of PRS if so elected. In addition, in order to
allow ECP participants to use vested PRS shares to purchase
additional PRS shares in 2010, the Committee decided to make the
ECP grants on June 2, 2010, rather than the date of the
2010 Annual Meeting of Shareholders. Thus, certain executives,
who received ECP grants on May 8, 2007 which grants vested
on May 8, 2010, were able to use those vested shares to
purchase additional PRS shares.
The Committee also determined that the 2010 ECP grants would
vest on April 2, 2013, which is less than three years from
the grant date. This decision was to enable participants to use
vested PRS shares to acquire new PRS shares in 2013. The
Committee expects to continue this grant process in 2011 and in
the future.
The one-time grant to our CEO has a shorter vesting period. As
an inducement for Mr. Tough to join our Company as our
Chairman and CEO, he was awarded a one-time grant on
March 24, 2010, which vests on March 1, 2011, the
first anniversary of his commencement as our CEO.
Stock
Ownership and Share Retention Policy
We encourage our executives to own Company stock so that they
share the same long term investment risk as our shareholders.
Under our Share Retention Policy, executives must retain a
portion of any shares of stock acquired under our equity award
plans. The percentage of net gain shares required to
be retained by each of our CEO and our other NEOs is 50%.
Net gain shares are the shares remaining from a
stock option or SSAR exercise after payment of the exercise
price and taxes, or the shares remaining after payment of taxes
on the vesting of PRS or RSUs. Any Company shares sold or traded
by an executive to fund PRS purchases under the ECP are not
subject to the share retention requirement.
Once an executive reaches a targeted ownership level of our
common stock, he or she is exempt from further share retention
requirements so long as he or she maintains that targeted
ownership level. The targeted ownership levels are the lesser of
five times base salary or 120,000 shares for the CEO, the
lesser of three times base salary or 35,000 shares for our
Business Unit Presidents and Executive Vice Presidents and the
lesser of two times base salary or 20,000 shares for our
Senior Vice Presidents. The dollar value of shares held is
calculated based on the Companys stock price and the value
of cash or shares used to acquire PRS. These ownership levels
provide executives flexibility in personal financial planning,
yet continue to maintain ongoing and substantial investment in
Company stock.
At year end 2010, all NEOs were subject to continued share
retention requirements, other than Mr. Mirzayantz and
Mr. Meany, who had satisfied the targeted ownership level.
Additional detail regarding ownership of our common stock by our
executives is included in the Beneficial Ownership Table.
Defined Benefit Pension Plan and Supplemental Retirement Plan
(SRP)
Certain senior executives, including Mr. Meany, a NEO, were
grandfathered under our defined benefit pension plan, which, as
of January 1, 2006, was closed to new employees and which,
as of December 31, 2007,
52
was frozen for all participants who did not meet a combined age
and years of service total of 70. Those employees who were not
grandfathered under the plan, including all of our other NEOs,
became eligible to participate in an enhanced 401(k) plan.
The retirement benefits under our tax-qualified defined benefit
pension plan for participants, including Mr. Meany, may be
limited under IRS rules covering tax-qualified retirement plans.
We have a non-qualified SRP to pay that part of an
executives retirement benefit that, because of the IRS
limitations, cannot be paid under the tax-qualified pension
plan. Benefits are calculated under the SRP in the same manner
as the tax-qualified pension plan. The Committee believes that
the full retirement benefit earned by an executive under our
retirement benefit formula should be paid without reduction and
that a supplemental plan is common in the industry and important
to retain our senior executives.
We do not have a policy regarding the crediting of additional
years of service under our SRP. However, as described under the
heading Termination of Employment and Change in Control
Arrangements, additional years of service may be credited to a
participant in connection with certain terminations within two
years following a change in control. Our rationale for granting
this additional credit is consistent with our rationale for
other enhanced severance benefits offered in connection with a
change in control as described under the heading Executive
Separation Policy below. In addition, on a
case-by-case
negotiated basis, from time to time, executives may be credited
with additional years of service.
Deferred
Compensation Plan (DCP)
We offer to
U.S.-based
executives an opportunity to participate in DCP, as a
cost-effective benefit that enhances the competitiveness of our
compensation program. The DCP provides participants with a way
to delay receipt of income and thus income taxation until a
future date. When deferred, the amount of compensation is not
reduced by income taxes, and the executive can choose to have
this pre-tax amount deemed invested in one or more
notional investments that generally track investment funds
offered under our 401(k) savings plan. Although the executive
will eventually owe income taxes on any amounts distributed from
the DCP, the ability to invest on a pre-tax basis
allows for a higher ultimate after-tax return. By providing a
wealth-building opportunity through the DCP, we are better able
to attract and retain executives to the Company.
Through the DCP, we also provide the same level of matching
contributions to executives that would be made under our 401(k)
savings plan but for limitations under U.S. tax law. We
also use the DCP to encourage executives to acquire deferred IFF
stock that is economically equivalent to ownership of our stock
but is on a tax-deferred basis. If an executive elects to defer
receipt of cash compensation and invests it in credits of
deferred Company stock under the DCP, we credit an additional
25% of the amount deferred in the executives deferred
Company stock account contingent on the executive remaining
employed by the Company (other than retirement) for the full
calendar year following the year when such credit is made. We do
this to encourage executives to be long term owners of a
significant equity stake in IFF, to foster an entrepreneurial
culture, a close alignment between the interests of executives
and those of shareholders and a deeper commitment to IFF.
IFFs costs in offering the DCP consist of the time-value
of money costs, the cost of the matching contribution that
supplement the 401(k) savings plan, the 25% premium for cash
deferrals into deferred Company stock and administrative costs.
The time-value of money cost results from the delay in the time
at which we can take tax deductions for compensation payable to
a participating executive. If notional investments within the
DCP increase in value, the amount of our payment obligation will
increase. This treatment limits our costs to the time-value of
money cost resulting from our paying income tax on the returns
of our direct investments earlier than the time at which we are
able to claim tax deductions by paying out the deferred
compensation. Our supplemental matching contributions and
premiums on cash deferrals into deferred stock for NEOs are
reflected in the Summary Compensation Table and in the All Other
Compensation Table.
53
Perquisite
Program
The perquisites program offers non-monetary benefits that are
competitive and consistent with the marketplace as determined
through a market study conducted by our independent compensation
consultant in 2010. Under the perquisites program, executives
are eligible to receive certain benefits including:
|
|
|
|
|
Company car or car allowance: The CEO and the other NEOs are
eligible to obtain a company-provided automobile once every
3 years. Other senior executives are eligible to be
provided a Company leased car (chosen from a selected list) or a
car allowance;
|
|
|
|
Annual physical exam (once every 12 months);
|
|
|
|
Financial planning (up to approximately $10,000 per year);
|
|
|
|
Tax preparation and estate planning (up to $4,000 over a
3 year period); and
|
|
|
|
Health club membership (up to $3,000 annually).
|
As part of his employment agreement our CEO is entitled to
receive a $25,000 annual allowance for financial planning, tax
preparation and estate planning services, rather than the above
limits. He is also entitled to have the Company pay for dues for
a luncheon club in Manhattan, but this perquisite was not
exercised in 2010. The personal value of all perquisites (other
than the annual physical examination) is reported as income to
the individual and accordingly is subject to tax. The Committee
believes that the total value of our perquisites program is
reasonable. Additional details concerning perquisites are
included in the footnotes to the All Other Compensation Table.
Executive
Separation Policy
We provide severance and other benefits under our ESP to senior
executives whose employment is terminated not for cause and not
due to a voluntary termination. This policy helps us in
competing with other companies in recruiting and retaining
qualified executives. When recruiting an executive from another
company, the executive in most cases will seek contract terms
that provide compensation if his or her employment is terminated
by us in cases in which the executive has not engaged in
misconduct. The level of separation pay under the ESP is based
on a tier system and each executives assigned tier is
based on the executives grade level. All our NEOs are in
Tier I. The specific separation pay by tier was determined
by the Committee and developed with the assistance of its
independent compensation consultant. We believe that the ESP
provides a level of separation pay and benefits that is within a
range of competitive practice of our peer group companies.
We provide separation pay and benefits under the ESP on the
condition that, for specified periods following termination, the
departed executive not compete with us, solicit our customers
and employees, or take other actions that harm our business. In
addition, having pre-set terms governing the executives
separation from service tends to reduce the time and effort
needed to negotiate individual termination agreements, and
promotes more uniform and fair treatment of executives.
Effective as of December 14, 2010, upon the recommendation
of the Committee, our Board amended the definition of
change in control included in our ESP to align it
with the definition in our shareholder-approved 2010 Stock Award
and Incentive Plan. As revised, a change in control is triggered
by ownership of 50% rather than 40% of the Companys voting
stock or by a merger if the pre-merger shareholders own less
than 50% rather than less than 60% of the voting stock.
In line with what the Committee (with the assistance of its
independent compensation consultant) understands is competitive
practice, we provide a higher level of severance payments and
benefits if the executive were to be terminated without cause or
elects to terminate employment with good reason within two years
after a change in control. These protections provide a number of
important benefits. If a change in control event is developing,
executives who lack these assurances may act to protect their
own interests by seeking employment elsewhere. Change in control
transactions take time to unfold, and a stable management team
will help to preserve our operations and shareholder value
either by preserving the sale value
54
of IFF or, if no transaction is consummated, by ensuring that
our business will continue without undue disruption. In
addition, having change in control protections in place
encourages management to consider, on an on-going basis, whether
a strategic transaction could be advantageous to our
shareholders even a transaction that would yield
control of IFF to a third party and result in job loss to the
executive. Effective as of December 14, 2010, our Board
amended the ESP to provide that any equity grants made after
that date will accelerate on a double-trigger basis,
i.e., if the executive is terminated without cause or terminates
with good reason within 2 years after the
change in control. Prior to the amendment, equity grants
provided for acceleration of vesting of equity awards for ESP
participants upon the occurrence of a change in control on a
single-trigger basis, without regard to whether the
executive will be terminated. These amended terms encourage
executives to consider and support transactions that could
benefit shareholders and do not provide an extra benefit to
executives simply due to a change in control.
Some aspects of change in control protections can be expensive,
particularly payments that offset the adverse tax consequences
to the executive if the U.S. golden parachute excise tax is
triggered. Effective as of December 14, 2010, our Board,
upon the recommendation of the Committee, amended the ESP to
eliminate a
gross-up
for this excise tax for new ESP participants after that date.
The ESP gross up provision was replaced by a
modified cut-back provision, where severance or
other payments to that participant would be reduced if this
reduction would produce a better after-tax result for the
participant, but there would be no reduction if, without the
reduction, the participant (who would be responsible for any
excise tax) would have a better after-tax result. Participants
in the ESP on or prior to March 8, 2010, remain eligible
for the excise tax
gross-up,
except in the limited case where a cut-back of 10% would avoid
the excise tax. Under Mr. Toughs negotiated letter
agreement, he is not entitled to a tax
gross-up for
severance in the event of a termination in connection with a
change in control.
In 2007, the Committee, on a prospective basis reduced the level
of severance under the ESP in situations of termination not for
cause and not involving a change in control. For Tier I
eligible executives hired after October 22, 2007, including
Mr. Berryman, Ms. Ford and Ms. Cantlon, severance
was reduced from 24 to 18 months. However, in order to
induce Mr. Tough to join the Company as CEO, his negotiated
letter agreement provides him with a Tier I severance
payment of 24 months. An executive receiving benefits under
the ESP must generally continue to be employed at the time of
payment of an LTIP award or vesting of an equity award, except
that an executive who is terminated during a three-year LTIP
cycle may receive a pro rata payout for service during each
segment in that cycle or an executive who has outstanding
unvested equity award(s) may be entitled to continued vesting of
a pro rata portion of those award(s).
In the event relevant performance measures on which incentive
payments are based are subsequently restated or otherwise
adjusted in a manner that would reduce the size of a payment,
the Committee would expect to seek recovery of or reduction in
these incentive payments, but only if the Committee determines
it appropriate under the particular circumstances, including
misconduct, failure to exercise oversight, or other appropriate
circumstances as may occur. In addition, any SEC or other rules
adopted by the New York Stock Exchange governing recoupment of
compensation under The Dodd-Frank Wall Street Reform and
Consumer Protection Act will automatically apply to the ESP.
Additional details regarding our ESP and our CEOs letter
agreement are included under the heading Termination of
Employment and Change in Control Arrangements.
Executive
Death Benefit Plan
The Companys Executive Death Benefit Plan provides
participants, including each of the NEOs, with a pre-retirement
death benefit equal to the excess of twice the
participants annual base salary (excluding bonus and other
forms of compensation) above the death benefit provided by the
Companys basic group term life insurance plan for
employees and retirees, less $50,000 of group coverage. The plan
also provides a death benefit post-retirement, or pre-retirement
after attainment of age 70, equal to twice the
participants base salary (excluding bonus and other forms
of compensation) for the year in which the participant retires
or reaches the age of 70, assuming the participant was an
executive officer, less $12,500 of group coverage
55
for retired participants and less $50,000 for senior
participants (those who have attained the age of 70 and remain
employed with the Company).
Tax
Deductibility
The Committee generally attempts to structure executive
compensation to be tax deductible. However, the Committee also
believes that under some circumstances, such as to attract or to
retain key executives, to recognize outstanding performance or
to take into account the external business environment, it may
be important to compensate one or more key executives above tax
deductible limits.
In 2010, all NEO compensation, except for certain amounts paid
to Mr. Tough in connection with his becoming our CEO, was
tax deductible.
2011
Compensation Actions
In July 2010, with the assistance of its independent
compensation consultant, the Committee reviewed the peer groups
to be used for 2011 compensation decisions. The general
selection, approach and criteria described above under
Benchmarking will not change for 2011 and there were no changes
made to the peer groups.
We expect that the compensation programs for our senior
executives will generally remain the same as described above in
2011.
56
COMPENSATION
COMMITTEE REPORT
The Compensation Committee has reviewed and discussed with
management the Compensation Discussion and Analysis included in
this Proxy Statement. Based on those reviews and discussions,
the Compensation Committee has recommended to the Board that the
Compensation Discussion and Analysis be included in this Proxy
Statement for filing with the SEC and incorporated by reference
into the Companys Annual Report on
Form 10-K
for the year ended December 31, 2010.
Compensation Committee
J. Michael Cook (Chairman)
Marcello Bottoli
Roger W. Ferguson, Jr.
Alexandra A. Herzan
57
Compensation
Committee Interlocks and Insider Participation
None of the members of the Compensation Committee was at any
time during 2010 or at any other time an officer or employee of
the Company. No executive officer of the Company serves as a
member of the board of directors or compensation committee of
any other entity that has one or more executive officers serving
as a member of our Board of Directors or Compensation Committee.
Summary
Compensation Table
The following Summary Compensation Table details compensation of
the Companys named executive officers during 2010 and,
where applicable, 2009 and 2008.
2010
Summary Compensation Table
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Value and
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonqualified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-Equity
|
|
Deferred
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock
|
|
Option
|
|
Incentive Plan
|
|
Compensation
|
|
All Other
|
|
|
Name and
|
|
|
|
Salary
|
|
Bonus
|
|
Awards
|
|
Awards
|
|
Compensation
|
|
Earnings
|
|
Compensation
|
|
Total
|
Principal Position
|
|
Year
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
|
($)
|
(a)
|
|
(b)
|
|
(c)(1)(2)
|
|
(d)
|
|
(e)(3)(4)
|
|
(f)(3)
|
|
(g)(5)(6)(7)
|
|
(h)(8)
|
|
(i)(9)
|
|
(j)
|
|
Douglas D. Tough (10)
|
|
|
2010
|
|
|
|
1,000,000
|
|
|
|
500,000(11
|
)
|
|
|
3,684,505
|
|
|
|
278,093
|
|
|
|
3,233,970
|
|
|
|
0
|
|
|
|
202,442
|
|
|
|
8,899,010
|
|
Non-Executive Chairman
(from October 1, 2009
until February 28, 2010)
and Chairman and Chief Executive
Officer (since March 1, 2010)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Berryman
|
|
|
2010
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
725,380
|
|
|
|
166,851
|
|
|
|
1,033,517
|
|
|
|
0
|
|
|
|
139,817
|
|
|
|
2,565,565
|
|
Member, Temporary Office
|
|
|
2009
|
|
|
|
314,423
|
|
|
|
100,000
|
|
|
|
947,584
|
|
|
|
279,275
|
|
|
|
415,683
|
|
|
|
0
|
|
|
|
182,795
|
|
|
|
2,239,760
|
|
of the Chief Executive Officer
(until February 28, 2010) and
Executive Vice President
and Chief Financial Officer(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicolas Mirzayantz
|
|
|
2010
|
|
|
|
493,750
|
|
|
|
0
|
|
|
|
797,387
|
|
|
|
111,231
|
|
|
|
1,054,285
|
|
|
|
119,399
|
|
|
|
119,439
|
|
|
|
2,695,491
|
|
Member, Temporary Office
|
|
|
2009
|
|
|
|
475,000
|
|
|
|
76,893
|
|
|
|
693,987
|
|
|
|
165,118
|
|
|
|
245,030
|
|
|
|
22,246
|
|
|
|
96,846
|
|
|
|
1,775,120
|
|
of the Chief Executive Officer
|
|
|
2008
|
|
|
|
475,000
|
|
|
|
0
|
|
|
|
589,581
|
|
|
|
110,144
|
|
|
|
253,073
|
|
|
|
49,489
|
|
|
|
99,539
|
|
|
|
1,576,826
|
|
(until February 28, 2010) and
Group President, Fragrances(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hernan Vaisman
|
|
|
2010
|
|
|
|
487,500
|
|
|
|
0
|
|
|
|
389,574
|
|
|
|
278,093
|
|
|
|
1,022,540
|
|
|
|
0
|
|
|
|
83,678
|
|
|
|
2,261,385
|
|
Member, Temporary Office
|
|
|
2009
|
|
|
|
450,000
|
|
|
|
0
|
|
|
|
742,045
|
|
|
|
0
|
|
|
|
473,625
|
|
|
|
0
|
|
|
|
89,213
|
|
|
|
1,754,883
|
|
of the Chief Executive Officer
|
|
|
2008
|
|
|
|
450,000
|
|
|
|
0
|
|
|
|
314,987
|
|
|
|
317,740
|
|
|
|
434,397
|
|
|
|
0
|
|
|
|
72,222
|
|
|
|
1,589,346
|
|
(until February 28, 2010) and
Group President, Flavors(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beth E. Ford
|
|
|
2010
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
221,400
|
|
|
|
417,139
|
|
|
|
1,019,622
|
|
|
|
0
|
|
|
|
104,433
|
|
|
|
2,262,594
|
|
Executive Vice President,
|
|
|
2009
|
|
|
|
500,000
|
|
|
|
0
|
|
|
|
415,997
|
|
|
|
247,677
|
|
|
|
437,682
|
(13)
|
|
|
0
|
|
|
|
77,362
|
|
|
|
1,678,717
|
|
Head of Supply Chain
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis M. Meany
|
|
|
2010
|
|
|
|
414,000
|
|
|
|
0
|
|
|
|
542,192
|
|
|
|
0
|
|
|
|
647,393
|
|
|
|
188,068
|
|
|
|
109,691
|
|
|
|
1,901,344
|
|
Former Senior Vice President,
|
|
|
2009
|
|
|
|
414,000
|
|
|
|
0
|
|
|
|
604,199
|
|
|
|
0
|
|
|
|
262,887
|
|
|
|
113,943
|
|
|
|
105,297
|
|
|
|
1,500,326
|
|
General Counsel and
|
|
|
2008
|
|
|
|
410,500
|
|
|
|
0
|
|
|
|
509,243
|
|
|
|
0
|
|
|
|
324,716
|
|
|
|
291,110
|
|
|
|
97,473
|
|
|
|
1,633,042
|
|
Secretary (until December 31, 2010)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Angelica Cantlon
|
|
|
2010
|
|
|
|
318,750
|
|
|
|
0
|
|
|
|
512,968
|
|
|
|
0
|
|
|
|
480,697
|
|
|
|
0
|
|
|
|
56,227
|
|
|
|
1,368,642
|
|
Senior Vice President,
|
|
|
2009
|
|
|
|
124,182
|
|
|
|
0
|
|
|
|
313,864
|
|
|
|
0
|
|
|
|
78,870
|
|
|
|
0
|
|
|
|
5,283
|
|
|
|
522,199
|
|
Human Resources
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
The amounts in this column related to 2010 include the following
amounts deferred under the DCP: Mr. Tough: $72,000;
Mr. Berryman: $55,000; Mr. Mirzayantz: $49,375;
Mr. Vaisman: $39,000; Ms. Ford: $40,000;
Mr. Meany: $82,800; Ms. Cantlon: $6,375. |
|
(2) |
|
The amounts in this column related to 2010 include the following
amounts deferred under the Retirement Investment Fund Plan
(401(k)): Mr. Tough: $17,348; Mr. Berryman: $22,000; |
58
|
|
|
|
|
Mr. Mirzayantz: $16,500; Mr. Vaisman: $22,000;
Ms. Ford: $16,500; Mr. Meany: $19,872;
Ms. Cantlon: $22,000. |
|
(3) |
|
The amounts in the Stock Awards and Option Awards columns
represent the aggregate grant date fair value of equity awards
granted during the fiscal year ended December 31, 2010,
calculated in accordance with FASB ASC Topic 718. Amounts in
these columns reported for 2008 have also been restated to
reflect the aggregate grant date fair value of equity awards
granted during that year. Details on and assumptions used in
calculating the grant date fair value of RSUs, PRS, SSARs,
options and LTIP equity incentive compensation may be found in
Note 11 to the Companys audited financial statements
for the fiscal year ended December 31, 2010 included in the
Companys Annual Report on
Form 10-K
filed with the SEC on February 24, 2011. |
|
|
|
The grant date fair value attributable to the
2010-2012
LTIP cycle awards reported in column (e) pertains to the
50% portion of those awards that will be payable in IFF stock if
the performance conditions are satisfied and is based on the
probable outcome of such conditions. The value of these awards
at the grant date if the maximum level of performance conditions
were to be achieved is as follows: Mr. Tough, $1,863,758;
Mr. Berryman, $442,800; Mr. Mirzayantz, $442,800;
Mr. Vaisman, $442,800; Ms. Ford, $442,800;
Mr. Meany, $244,426; Ms. Cantlon, $185,976. The actual
number of shares earned by the NEOs for the completed
2008-2010
LTIP cycle, for the 2010 segment of the
2009-2011
LTIP cycle, and for the 2010 segment of the
2010-2012
LTIP cycle can be found in the narrative following the Grants of
Plan Based Awards Table under the heading Long-Term
Incentive Plan (LTIP). |
|
(4) |
|
The following named executive officers paid the following
amounts for shares of PRS in fiscal year 2010, which in each
case was 50% of the closing stock price on the date of grant:
Mr. Tough: $539,983 for 24,042 shares and $899,993 for
39,301 shares as part of his 2010
sign-on-award;
Mr. Berryman: $503,980 for 22,439 shares;
Mr. Mirzayantz: $575,987 for 25,645 shares;
Mr. Meany: $419,980 for 18,699 shares;
Ms. Cantlon: $419,980 for 18,699 shares. As discussed
in the Compensation Discussion and Analysis, participants in our
Equity Choice Program are permitted to satisfy the purchase
price of PRS shares by tendering shares of IFF stock.
Mr. Mirzayantz and Mr. Meany tendered shares in full
or partial satisfaction of the purchase price for PRS shares
granted to them in fiscal 2010. |
|
(5) |
|
The amounts in this column related to 2010 include the following
amounts earned under the 2010 AIP: Mr. Tough: $2,129,559;
Mr. Berryman: $705,600; Mr. Mirzayantz: $717,080;
Mr. Vaisman: $697,280; Ms. Ford: $705,600;
Mr. Meany: $438,178; Ms. Cantlon: $337,397. The
amounts in this column related to 2010 include the following
amounts deferred under the DCP: Mr. Tough: $638,868;
Mr. Mirzayantz: $179,270. The AIP amount for Mr. Tough
was pro-rated based on the number of days he served as an
employee in 2010. |
|
(6) |
|
LTIP cycles that commenced in or after 2008 are comprised of
four performance segments related to each year in the LTIP cycle
and the cumulative results for the full three-year cycle. Any
amounts earned under a performance segment are credited on
behalf of the executive at the end of the relevant segment, but
such credited amounts are not paid until the completion of the
three-year LTIP cycle. Upon completion, one-half of any award
earned for a completed LTIP cycle is paid in cash and the
remaining half is paid in shares of our common stock. The cash
portion of the NEOs credited awards is reported in this
column for the year in which such amount was earned, rather than
in the year in which such award is actually paid. |
|
|
|
The amounts in this column related to 2010 include the following
amounts earned for the 2010 and cumulative segments under the
2008-2010
LTIP cycle: Mr. Tough: $340,100; Mr. Berryman:
$119,667; Mr. Mirzayantz: $133,855; Mr. Vaisman:
$126,810; Ms. Ford: $105,772; Mr. Meany: $87,499 and
Ms. Cantlon: $50,690. The foregoing LTIP amounts for each
of Mr. Tough, Mr. Berryman and Ms. Cantlon were
pro-rated based on the number of days served as an employee
during each segment within the LTIP cycle. |
|
(7) |
|
The amounts in this column related to 2010 include the following
cash amounts credited on behalf of the executive: (i) under
the
2009-2011
LTIP cycle based on the executives target cash amount for |
59
|
|
|
|
|
the 2010 segment of that LTIP cycle and based on the
Companys achievement of the corporate performance goals
for that segment: Mr. Tough: $300,265; Mr. Berryman:
$98,000; Mr. Mirzayantz: $93,100; Mr. Vaisman:
$88,200; Ms. Ford: $98,000; Mr. Meany: $60,858 and
Ms. Cantlon: $46,305; and (ii) under the
2010-2012
LTIP cycle based on the executives target cash amount for
the 2010 segment of that LTIP cycle and based on the
Companys achievement of the corporate performance goals
for that segment: Mr. Tough: $464,046; Mr. Berryman:
$110,250; Mr. Mirzayantz: $110,250; Mr. Vaisman:
$110,250; Ms. Ford: $110,250; Mr. Meany: $60,858 and
Ms. Cantlon: $46,305. The credited amounts for
Mr. Tough for the 2010 segment of the
2009-2011
and
2010-2012
LTIP cycles were pro-rated based on the number of days served as
an employee during the 2010 segment. |
|
(8) |
|
The amounts in this column represent the aggregate change in the
actuarial present value of the named executive officers
accumulated benefit under our U.S. Pension Plan (our qualified
defined benefit plan) and our Supplemental Retirement Plan (our
non-qualified defined benefit plan). Earnings in the interest
bearing account in the DCP were not above-market, and earnings
in other investment choices under the DCP were not preferential,
and are thus not included. |
|
(9) |
|
Details of the amounts set forth in this column related to 2010
are included in the All Other Compensation Table. |
|
(10) |
|
Prior to Mr. Toughs commencent of service as our CEO
on March 1, 2010, he served as a non-employee director of
the Company. Compensation paid to Mr. Tough in his capacity
as a non-employee director during 2010 is included in this table
as part of the amount reported in the All Other Compensation
column. |
|
(11) |
|
This amount represents a sign-on bonus paid to Mr. Tough on
July 1, 2010. |
|
(12) |
|
As discussed in the Compensation Discussion and Analysis,
Messrs. Berryman, Mirzayantz and Vaisman served as members
of the temporary Office of the CEO from October 1, 2009
until Mr. Toughs commencement of service as our CEO
on March 1, 2010. While serving in this temporary office,
and following such service, these NEOs continued also to serve
in their preexisting roles with IFF, and their 2010 compensation
was not adjusted to reflected their temporary additional
responsibilities. |
|
(13) |
|
Includes $20,853 paid in cash as part of a discretionary
make-whole payment relating to the pro-ration of the
2007-2009
LTIP cycle. |
60
2010
All Other Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Life
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
|
|
|
Financial/
|
|
Insurance/
|
|
|
|
Housing/
|
|
|
|
|
|
|
|
|
|
|
Match to
|
|
|
|
|
|
Estate
|
|
Executive
|
|
|
|
Relocation
|
|
|
|
|
|
|
|
|
Dividends
|
|
Defined
|
|
|
|
|
|
Planning and
|
|
Death
|
|
Annual
|
|
Expenses/
|
|
|
|
|
|
|
|
|
on stock
|
|
Contribution
|
|
|
|
Club
|
|
Tax
|
|
Benefit
|
|
Physical
|
|
Tax
|
|
Director
|
|
|
|
|
|
|
awards (1)
|
|
Plans(2)
|
|
Auto(3)
|
|
memberships
|
|
Preparation
|
|
Program(4)
|
|
Examination
|
|
Gross-ups
|
|
Compensation
|
|
Total
|
|
Douglas D. Tough
|
|
|
2010
|
|
|
$
|
42,764
|
|
|
$
|
85,817
|
|
|
$
|
16,938
|
|
|
$
|
0
|
|
|
$
|
25,000
|
|
|
$
|
18,283
|
|
|
$
|
0
|
|
|
$
|
1,517(5
|
)
|
|
$
|
12,123(6
|
)
|
|
$
|
202,442
|
|
Kevin C. Berryman
|
|
|
2010
|
|
|
$
|
17,097
|
|
|
$
|
53,212
|
|
|
$
|
15,285
|
|
|
$
|
3,000
|
|
|
$
|
12,080
|
|
|
$
|
3,259
|
|
|
$
|
0
|
|
|
$
|
35,884(7
|
)
|
|
$
|
0
|
|
|
$
|
139,817
|
|
Nicolas Mirzayantz
|
|
|
2010
|
|
|
$
|
59,950
|
|
|
$
|
34,563
|
|
|
$
|
10,658
|
|
|
$
|
0
|
|
|
$
|
12,131
|
|
|
$
|
2,137
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
119,439
|
|
Hernan Vaisman
|
|
|
2010
|
|
|
$
|
28,283
|
|
|
$
|
48,119
|
|
|
$
|
915
|
|
|
$
|
0
|
|
|
$
|
3,102
|
|
|
$
|
3,259
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
83,678
|
|
Beth E. Ford
|
|
|
2010
|
|
|
$
|
22,742
|
|
|
$
|
50,044
|
|
|
$
|
11,942
|
|
|
$
|
3,000
|
|
|
$
|
15,792
|
|
|
$
|
913
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
104,433
|
|
Dennis M. Meany
|
|
|
2010
|
|
|
$
|
48,113
|
|
|
$
|
23,404
|
|
|
$
|
13,567
|
|
|
$
|
3,000
|
|
|
$
|
12,138
|
|
|
$
|
7,519
|
|
|
$
|
1,950
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
109,691
|
|
Angelica Cantlon
|
|
|
2010
|
|
|
$
|
14,813
|
|
|
$
|
22,313
|
|
|
$
|
15,946
|
|
|
$
|
1,352
|
|
|
$
|
0
|
|
|
$
|
1,803
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
0
|
|
|
$
|
56,227
|
|
|
|
|
(1) |
|
The amounts in this column are the total dollar value of
dividends paid during 2010 on shares of PRS. |
|
(2) |
|
The amounts in this column include (i) amounts matched by
the Company under the Companys Retirement Investment
Fund Plan (401(k)), (ii) amounts matched or set aside
by the Company under the Companys DCP (which are matching
contributions that would otherwise be made under our 401(k) plan
but for limitations under U.S. tax law) and (iii) the
dollar value of premium shares credited to the accounts of
participants in the DCP who elect to defer their cash
compensation into the IFF Share Fund. The premium shares may be
forfeited if the executive does not remain employed by the
Company for the full calendar year following the year during
which such shares are credited. Dividend equivalents are
credited on shares (including premium shares) held in accounts
of participants who defer into the IFF Share Fund; dividend
equivalents are included in the Aggregate Earnings in Last
Fiscal Year column of the Non-Qualified Deferred Compensation
Table and are not included in the amounts represented in this
column. |
|
(3) |
|
The amounts in this column are amounts for the personal use of
automobiles provided by the Company. The value of personal use
of automobiles provided by the Company was determined by using
standard IRS vehicle value tables and multiplying that value by
the percent of personal use. The value of fuel was determined by
multiplying the overall fuel cost by the percent of personal
use. In both cases personal use percents were determined on a
mileage basis. The amounts in this column also include the cost
paid by the Company for a parking garage. |
|
(4) |
|
The amounts in this column are costs to the Company for the
corporate owned life insurance coverage it has purchased to
offset liabilities that may be incurred under the Companys
Executive Death Benefit Program. No participant in this Program
has or will have any direct interest in the cash surrender value
of the underlying insurance policy. |
|
(5) |
|
This amount is for Mr. Toughs use of a Company-owned
apartment in 2010. |
|
(6) |
|
This amount is a portion of the retainer paid to Mr. Tough
for his service as a non-employee director of the Company from
April 27, 2009 until February 28, 2010. The remainder of
the retainer was paid to him in 2009. |
|
(7) |
|
This amount is for relocation assistance in connection with
Mr. Berrymans commencement of employment with the
Company, including a one-time allowance in the amount of $13,123
to cover home acquisition expenses and $11,026 to cover moving
expenses associated with his relocation and a tax
gross-up on
the home acquisition expenses of $11,735. |
61
Employment Agreements or Arrangements
Mr. Tough
Our Board elected Douglas D. Tough as its non-executive Chairman
effective October 1, 2009 and, pursuant to the terms of a
letter agreement dated September 8, 2009 between the
Company and Mr. Tough, he became the Companys
executive Chairman and Chief Executive Officer effective
March 1, 2010, when his contract with his former employer
expired. Under this agreement, Mr. Toughs employment
is on an at-will basis until terminated by either party.
Mr. Tough is entitled to the following compensation under
the agreement:
|
|
|
|
|
Annual base salary of $1,200,000 per annum.
|
|
|
|
A target AIP bonus of 120% of his base salary and a potential
maximum annual bonus of 240% of his base salary.
|
|
|
|
An LTIP target of $2,000,000. Mr. Tough is only entitled to
a pro-rated award under the
2008-2010,
2009-2011
and 2010-2012 LTIP cycles.
|
|
|
|
In conjunction with his employment, an equity award was made on
March 24, 2010 under the Equity Choice Program at a value
of $750,000. This award was generally subject to continued
employment (except as described under the heading
Termination of Employment and Change in Control
Arrangements Other Separation Arrangements)
and vested on March 1, 2011. This$750,000 value was
allocated by Mr. Tough to Purchased Restricted Stock under
the program.
|
|
|
|
A special bonus in the amount of $500,000, which was paid on
July 1, 2010.
|
Mr. Tough participates in all of the Companys
employee and executive benefit plans and programs for its senior
executives, including being eligible for annual awards under the
Equity Choice Program, AIP and LTIP, and is entitled to annual
paid vacation and Company-provided senior executive perquisites
or as otherwise approved for him by our Board or Compensation
Committee. Mr. Tough participates in the Companys
Executive Death Benefit Plan described in the Compensation
Discussion and Analysis above, pursuant to which the Company has
purchased, and pays the entire cost on, a corporate owned life
insurance policy on the life of Mr. Tough. The plan
provides a pre-retirement death benefit equal to twice his
annual base salary (excluding bonus and other forms of
compensation), less $50,000 of group coverage, or a
post-retirement death benefit equal to twice his final base
salary (excluding bonus and other forms of compensation), less
$12,500 of group coverage.
Mr. Toughs letter agreement grants him certain rights
upon termination of his employment. These rights are described
under the heading Termination of Employment and Change in
Control Arrangements Other Separation
Arrangements.
Other
NEOs
None of our other NEOs is a party to a written employment
agreement. Their compensation is generally determined by the
terms of the various compensation plans in which they are
participants and which are described more fully above in the
Compensation Discussion and Analysis, in the narrative following
the Grants of Plan-Based Awards Table and under the heading
Termination of Employment and Change in Control
Arrangements. In addition, their salary is reviewed,
determined and approved on an annual basis by our Compensation
Committee. Executives may be entitled to certain compensation
arrangements provided or negotiated in connection with their
commencement of employment with the Company.
Grants of
Plan-Based Awards
The following table provides information regarding grants of
plan-based awards to our named executive officers during 2010.
The amounts reported in the table under Estimated Future
Payouts Under Non-Equity Incentive Plan Awards and
Estimated Future Payouts Under Equity Incentive Plan
Awards represent the threshold, target and maximum awards
under our AIP and LTIP programs. The
62
performance conditions applicable to the AIP and LTIP are
described in the Compensation Discussion and Analysis.
With regard to the AIP, the percentage of each NEOs target
award that was actually achieved based on satisfaction of the
AIP performance conditions is discussed in the narrative
following the Grants of Plan-Based Awards Table. The amount
actually paid to each named executive officer in 2011 based on
2010 performance under the AIP is included in the Non-Equity
Incentive Plan Compensation column of the Summary Compensation
Table.
With regard to the LTIP, the amount of each NEOs award
that was actually achieved based on satisfaction of the
performance conditions for the
2008-2010
LTIP and the 2010 segment of each of the
2009-2011
LTIP and
2010-2012
LTIP cycles is discussed in the narrative following the Grants
of Plan-Based Awards Table. In addition, cash amounts earned by
each named executive officer for the cumulative and 2010
segments of the
2008-2010
LTIP cycle and the 2010 segment of the
2009-2011
LTIP and
2010-2012
LTIP cycles are included in the Non-Equity Incentive Plan
Compensation column of the Summary Compensation Table. However,
any cash or shares credited to a NEO based on achievement of
performance conditions during a segment will not be paid until
completion of the full LTIP cycle.
Grants
of Plan-Based Awards in 2010
|
|
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|
|
|
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|
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|
|
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|
|
|
|
|
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|
|
|
|
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|
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|
|
|
|
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|
All Other
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
All Other
|
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|
Option
|
|
|
|
|
|
Grant Date
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
|
Stock
|
|
|
Awards:
|
|
|
Exercise
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Awards:
|
|
|
Number of
|
|
|
or Base
|
|
|
of Stock
|
|
|
|
|
|
|
|
|
|
Date of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
Securities
|
|
|
Price of
|
|
|
and
|
|
|
|
Type of
|
|
|
Grant
|
|
|
Compensation
|
|
|
Estimated Future Payouts
|
|
|
Estimated Future Payouts
|
|
|
Shares
|
|
|
Underlying
|
|
|
Option
|
|
|
Option
|
|
|
|
Award
|
|
|
Date
|
|
|
Committee
|
|
|
Under Non-Equity
|
|
|
Under Equity
|
|
|
of Stock or
|
|
|
Options
|
|
|
Awards
|
|
|
Awards
|
|
Name
|
|
(1)
|
|
|
(2)
|
|
|
Approval
|
|
|
Incentive Plan Awards
|
|
|
Incentive Plan Awards
|
|
|
Units (#)(3)
|
|
|
(#)(4)
|
|
|
($/Sh) (#)(5)
|
|
|
($)(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
Threshold
|
|
|
Target
|
|
|
Maximum
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
($)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)
|
|
|
|
|
(b)
|
|
|
|
|
|
(c)
|
|
|
(d)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
(k)
|
|
|
(l)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Douglas D. Tough
|
|
|
AIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
301,808
|
|
|
|
1,207,233
|
|
|
|
2,414,466
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 LTIP
|
|
|
|
3/8/2010
|
(8)
|
|
|
3/8/2010
|
|
|
|
69,863
|
|
|
|
279,452
|
|
|
|
558,904
|
(8)
|
|
|
69,863
|
|
|
|
279,452
|
|
|
|
558,904
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
279,452
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 LTIP
|
|
|
|
3/8/2010
|
(8)
|
|
|
3/8/2010
|
|
|
|
153,196
|
|
|
|
612,785
|
|
|
|
1,225,570
|
(8)
|
|
|
153,196
|
|
|
|
612,785
|
|
|
|
1,225,570
|
(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
612,785
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 LTIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
236,758
|
|
|
|
947,032
|
|
|
|
1,894,064
|
(10)
|
|
|
236,758
|
|
|
|
947,032
|
|
|
|
1,894,064
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
931,879
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
|
|
|
3/24/2010
|
|
|
|
3/8/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,301
|
(12)
|
|
|
|
|
|
|
|
|
|
|
899,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSU
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,017
|
(13)
|
|
|
|
|
|
|
|
|
|
|
420,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,042
|
(14)
|
|
|
|
|
|
|
|
|
|
|
539,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,714
|
|
|
|
44.92
|
|
|
|
278,092
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Berryman
|
|
|
AIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
100,000
|
|
|
|
400,000
|
|
|
|
800,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 LTIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
56,250
|
|
|
|
225,000
|
|
|
|
450,000
|
(10)
|
|
|
56,250
|
|
|
|
225,000
|
|
|
|
450,000
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
221,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,439
|
(14)
|
|
|
|
|
|
|
|
|
|
|
503,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16,028
|
|
|
|
44.92
|
|
|
|
166,851
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicolas Mirzayantz
|
|
|
AIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
100,000
|
|
|
|
400,000
|
|
|
|
800,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 LTIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
56,250
|
|
|
|
225,000
|
|
|
|
450,000
|
(10)
|
|
|
56,250
|
|
|
|
225,000
|
|
|
|
450,000
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
221,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,645
|
(14)
|
|
|
|
|
|
|
|
|
|
|
575,987
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,685
|
|
|
|
44.92
|
|
|
|
111,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hernan Vaisman
|
|
|
AIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
100,000
|
|
|
|
400,000
|
|
|
|
800,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 LTIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
56,250
|
|
|
|
225,000
|
|
|
|
450,000
|
(10)
|
|
|
56,250
|
|
|
|
225,000
|
|
|
|
450,000
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
221,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSU
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,007
|
(13)
|
|
|
|
|
|
|
|
|
|
|
168,174
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
26,714
|
|
|
|
44.92
|
|
|
|
278,093
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beth E. Ford
|
|
|
AIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
100,000
|
|
|
|
400,000
|
|
|
|
800,000
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 LTIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
56,250
|
|
|
|
225,000
|
|
|
|
450,000
|
(10)
|
|
|
56,250
|
|
|
|
225,000
|
|
|
|
450,000
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
221,400
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SSAR
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
40,071
|
|
|
|
44.92
|
|
|
|
417,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis M. Meany
|
|
|
AIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
62,100
|
|
|
|
248,400
|
|
|
|
496,800
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 LTIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
31,050
|
|
|
|
124,200
|
|
|
|
248,400
|
(10)
|
|
|
31,050
|
|
|
|
124,200
|
|
|
|
248,400
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
122,212
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,699
|
(14)
|
|
|
|
|
|
|
|
|
|
|
419,980
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Angelica Cantlon
|
|
|
AIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
47,817
|
|
|
|
191,269
|
|
|
|
382,538
|
(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2010 LTIP
|
|
|
|
3/8/2010
|
|
|
|
3/8/2010
|
|
|
|
23,625
|
|
|
|
94,500
|
|
|
|
189,000
|
(11)
|
|
|
23,625
|
|
|
|
94,500
|
|
|
|
189,000
|
(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
92,988
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
|
|
|
6/2/2010
|
|
|
|
4/26/2010
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,699
|
(14)
|
|
|
|
|
|
|
|
|
|
|
419,980
|
|
|
|
|
(1) |
|
AIP = 2010 AIP |
|
|
2008 LTIP =
2008-2010
Long-Term Incentive Plan Cycle |
|
|
2009 LTIP =
2009-2011
Long-Term Incentive Plan Cycle |
|
|
2010 LTIP =
2010-2012
Long-Term Incentive Plan Cycle |
63
|
|
|
|
|
RSU = Restricted Stock Unit |
|
|
PRS = Purchased Restricted Stock |
|
|
SSAR = Stock Settled Appreciation Right |
|
(2) |
|
All equity-based grants below were made under our 2000 Stock
Award and Incentive Plan (if the grant date was before
April 27, 2010) or under our 2010 Stock Award and
Incentive Plan (if the grant date was on or after April 27,
2010). The material terms of these types of awards are described
in the Compensation Discussion and Analysis. |
|
(3) |
|
The amounts in this column represent the number of RSUs and the
number of PRS shares granted in 2010 on the applicable grant
date. |
|
(4) |
|
The amounts in this column represent the number of SSARs granted
in 2010 on the applicable grant date. We did not grant any
options to our named executive officers in 2010. |
|
(5) |
|
The amounts in this column represent the exercise price of each
SSAR granted, which, for each SSAR, is the closing market price
of a share of our common stock on the grant date. |
|
(6) |
|
The amounts in this column represent the aggregate grant date
fair value of equity awards granted to our named executive
officers during the fiscal year ended December 31, 2010,
calculated in accordance with FASB ASC Topic 718. The grant date
fair value of LTIP awards pertains to the 50% portion of those
awards that will be payable in shares of our common stock if the
performance conditions are satisfied, and is based on the
probable outcome of such conditions. |
|
(7) |
|
The amounts in this row in columns (c), (d) and
(e) are the threshold, target and maximum dollar values
under our 2010 AIP. |
|
(8) |
|
The amounts in these rows in columns (c), (d) and
(e) are the pro-rated threshold, target and maximum dollar
values of the 50% portion of our
2008-2010
LTIP and
2009-2011
LTIP cycles that would be payable to Mr. Tough in cash if
the performance conditions are satisfied. Pursuant to the terms
of his employment letter agreement, Mr. Tough is entitled
only to a pro-rated amount under each such LTIP cycle based on
the number of days he serves as an employee during that LTIP
cycle. |
|
(9) |
|
The amounts in these rows in columns (f), (g) and
(h) are the pro-rated threshold, target and maximum dollar
values of the 50% portion of our
2008-2010
LTIP and
2009-2011
LTIP cycles that would be payable to Mr. Tough in stock if
the performance conditions are satisfied. The number of shares
of Company stock for the 50% portion payable in stock was
determined at the beginning of each cycle based on the closing
market price of a share of our common stock on the first stock
trading day of the cycle, which for the
2008-2010
cycle was $47.20, the closing market price of a share of our
common stock on January 2, 2008; and for the
2009-2011
cycle was $30.60, the closing market price of a share of our
common stock on January 2, 2009. Pursuant to the terms of
his employment letter agreement, Mr. Tough is entitled only
to a pro-rated amount under each such LTIP cycle based on the
number of days he actually serves as an employee during that
LTIP cycle. |
|
(10) |
|
The amounts in this row in columns (c), (d) and
(e) are the threshold, target and maximum dollar values of
the 50% portion of our
2010-2012
LTIP cycle that would be payable in cash if the performance
conditions are satisfied. Mr. Tough is entitled only to a
pro-rated amount for this LTIP cycle based on the number of days
he actually serves as an employee during that LTIP cycle. |
|
(11) |
|
The amounts in this row in columns (f), (g) and
(h) are the threshold, target and maximum dollar values of
the 50% portion of our
2010-2012
LTIP cycle that would be payable in stock if the performance
conditions are satisfied. The number of shares of Company stock
for the 50% portion payable in stock was determined at the
beginning of the cycle, based on $42.01 per share, the closing
market price of a share of our common stock on January 4,
2010, the first stock trading day of the cycle. Mr. Tough
is entitled only to a pro-rated amount for this LTIP cycle based
on the number of days he actually serves as an employee during
that LTIP cycle. |
64
|
|
|
(12) |
|
This grant was approved by our Board of Directors in connection
with Mr. Toughs commencement of employment as our CEO
on March 1, 2010. |
|
(13) |
|
This amount represents the number of RSUs granted under the
Equity Choice Program or otherwise, as described in the
Compensation Discussion and Analysis. Dividends are not paid on
RSUs. |
|
(14) |
|
This amount represents the number of shares of PRS granted under
the Equity Choice Program, as described in the Compensation
Discussion and Analysis. Non-preferential dividends are paid on
PRS. Footnote 4 to the Summary Compensation Table lists the
dollar amount of consideration paid by our NEOs for these PRS
awards. |
65
Equity
Choice Program and Other Equity Awards
In 2006, following the Compensation Committees
recommendation and with the assistance of the Committees
independent compensation consultant, our Board approved our
Equity Choice Program as a long term incentive program for our
senior management. During 2010, the Compensation Committee
approved PRS, SSAR and RSU grants under this program, based on
individual elections, to all of our named executive officers
(other than our CEO, whose grants were approved by the our Board
in accordance with his employment letter agreement). Under this
Equity Choice Program, dividends are paid on shares of PRS at
the same rate paid to our shareholders. During 2010, we did not
grant any awards to named executive officers other than pursuant
to the Equity Choice Program.
A discussion of the terms and the total dollar value of awards
granted in 2010 to our named executive officers is included in
the Compensation Discussion and Analysis. The number of shares
under those awards and the date those awards were granted are
included in the Grants of Plan-Based Awards Table and the
Outstanding Equity Awards at Fiscal Year-End Table.
Annual
Incentive Plan
The Compensation Committee established all performance goals
under our AIP at the beginning of 2010. Under the AIP, each
executive officer, had an annual incentive award target for 2010
based on the achievement of specific quantitative financial
corporate goals and, in the case of our two Group Presidents,
derivative business unit financial performance goals. The
corporate objectives and the derivative business unit objectives
for 2010 under the AIP related to local currency sales growth,
an increase in operating profit, gross margin improvements and
improvements in working capital. The actual achievement against
the corporate and business unit goals under the AIP, as well as
the actual AIP payouts to each of our NEOs, are set forth in the
Compensation Discussion and Analysis. The AIP payout to
Mr. Tough was prorated based on the number of days employed
in 2010.
Long Term
Incentive Plan
Under our LTIP, each executive officer had an award target for
the
2008-2010
LTIP cycle based on achieving specific quantitative corporate
performance goals which the Compensation Committee established
at the beginning of the cycle or at the beginning of each year
during the cycle. The
2008-2010
LTIP cycle was administered in four equal performance segments
related to each of the three years in the LTIP cycle and the
cumulative results for the full three-year cycle. For this LTIP
cycle, the goals related to improvements in earnings per share
and total shareholder return (TSR) relative to the
S&P 500. In addition, in early 2010, the Committee approved
a one-year supplemental performance metric for the
Companys
2008-2010
LTIP cycle. The supplemental metric related to improvement in
operating profit (EBIT) margin measured over the fiscal 2010
period as compared to 2009.
For the
2008-2010
LTIP cycle, on an overall basis, we achieved 121.7% of the
corporate performance goals, as set forth in the Compensation
Discussion and Analysis. Therefore, Mr. Mirzayantz,
Mr. Vaisman and Mr. Meany who were each employed by
the Company during the entire three-year cycle, each received
121.7% of his target incentive compensation for the cycle.
Executive officers who were not employed by the Company for the
entire three-year
2008-2010
LTIP cycle are entitled only to a pro-rated amount for the LTIP
cycle based on the number of days served as an employee during
the relevant LTIP segment or cycle. Accordingly, Mr. Tough
and Ms. Ford each received 121.7%, Mr. Berryman
received 113.2% and Ms. Cantlon received 127.4% of his or
her target incentive compensation for the cycle. As determined
by the Compensation Committee, for the
2008-2010
LTIP cycle, 50% of the LTIP payout was paid in cash and 50% was
paid in Company stock based on the closing market price on the
first stock trading day of the cycle. These payouts were made in
early 2011.
The following chart illustrates the total amount earned by each
NEO based on achievement of the corporate performance goals for
each segment under the
2008-2010
LTIP cycle and based on each executives target amount (or
reduced target amount for those executives who were not employed
for
66
the entire three-year cycle). The amount reported in the
Total column is the amount that was paid out to the
executive officers in early 2011 upon completion of the
2008-2010
LTIP cycle.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment 1
|
|
Segment 2
|
|
Segment 3
|
|
Segment 4
|
|
|
|
|
2008
|
|
2009
|
|
2010
|
|
2008 2010
|
|
Total
|
|
|
Cash
|
|
Shares
|
|
Cash
|
|
Shares
|
|
Cash
|
|
Shares
|
|
Cash
|
|
Shares
|
|
Cash
|
|
Shares
|
|
|
($)
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
(#)
|
|
($)
|
|
(#)
|
|
Mr. Tough
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
107,875
|
|
|
|
2,285
|
|
|
|
232,225
|
|
|
|
4,921
|
|
|
|
340,100
|
|
|
|
7,206
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Berryman
|
|
|
|
|
|
|
|
|
|
|
31,250
|
|
|
|
662
|
|
|
|
77,200
|
|
|
|
1,635
|
|
|
|
42,467
|
|
|
|
901
|
|
|
|
150,917
|
|
|
|
3,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Mirzayantz
|
|
|
67,688
|
|
|
|
1,434
|
|
|
|
29,687
|
|
|
|
629
|
|
|
|
73,340
|
|
|
|
1,553
|
|
|
|
60,515
|
|
|
|
1,283
|
|
|
|
231,230
|
|
|
|
4,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Vaisman
|
|
|
64,125
|
|
|
|
1,358
|
|
|
|
28,125
|
|
|
|
596
|
|
|
|
69,480
|
|
|
|
1,473
|
|
|
|
57,330
|
|
|
|
1,215
|
|
|
|
219,060
|
|
|
|
4,642
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Ford
|
|
|
53,486
|
|
|
|
1,133
|
|
|
|
23,459
|
|
|
|
497
|
|
|
|
57,953
|
|
|
|
1,227
|
|
|
|
47,819
|
|
|
|
1,014
|
|
|
|
182,717
|
|
|
|
3,871
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mr. Meany
|
|
|
44,246
|
|
|
|
938
|
|
|
|
19,406
|
|
|
|
411
|
|
|
|
47,941
|
|
|
|
1,016
|
|
|
|
39,558
|
|
|
|
837
|
|
|
|
151,151
|
|
|
|
3,202
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Ms. Cantlon
|
|
|
|
|
|
|
|
|
|
|
6,152
|
|
|
|
131
|
|
|
|
36,477
|
|
|
|
774
|
|
|
|
14,213
|
|
|
|
299
|
|
|
|
56,842
|
|
|
|
1,204
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Under our LTIP, each executive officer also has an award target
for each of the
2009-2011
and
2010-2012
performance cycles based on achieving specific quantitative
corporate performance goals which the Committee established at
the beginning of the respective cycle. Like the
2008-2010
LTIP cycle, each of the
2009-2011
and
2010-2012
LTIP cycles is administered in four equal performance segments
related to each year in the LTIP cycle and the cumulative
results for the full cycle. Depending on the extent to which the
Company achieves the corporate performance goals for each
segment, a portion of the executives LTIP award may be
credited on behalf of the executive, but any credited portion
will not be paid until the completion of the full LTIP cycle.
Amounts credited for future payout under the
2009-2011
and
2010-2012
LTIP cycles will be paid 50% in cash and 50% in Company stock,
based on the closing market price on the first trading day of
the respective cycle.
Based on the Companys achievement of the corporate
performance goals for the 2010 segment of the
2009-2011
LTIP cycle and the executives target amount, the following
cash amounts and number of shares of our stock have been
credited on behalf of the executive: Mr. Tough
$300,265 and 9,812 shares (based on a pro-rated target
amount), Mr. Berryman $98,000 and
3,203 shares, Mr. Mirzayantz $93,100 and
3,042 shares, Mr. Vaisman $88,200 and
2,883 shares, Ms. Ford $98,000 and
3,203 shares, Mr. Meany $60,858 and
1,989 shares and Ms. Cantlon $46,305 and
1,513 shares (based on a pro-rated target amount). Based on
the Companys achievement of the corporate performance
goals for the 2010 segment of the
2010-2012
LTIP cycle and the executives target amount, the following
cash amounts and number of shares of our stock have been
credited on behalf of the executive: Mr. Tough
$464,046 and 11,047 shares (based on a pro-rated target
amount), Mr. Berryman $110,250 and
2,624 shares, Mr. Mirzayantz $110,250 and
2,624 shares, Mr. Vaisman $110,250 and
2,624 shares, Ms. Ford $110,250 and
2,624 shares, Mr. Meany $60,858 and
1,448 shares and Ms. Cantlon $46,305 and
1,102 shares. Pursuant to his offer of employment,
Mr. Berryman was deemed to have been employed by the
Company for the entire 2009 segment of each of the
2008-2010
and
2009-2011
LTIP cycles.
Additional details regarding our Annual Incentive Plan and Long
Term Incentive Plan are included in the Compensation Discussion
and Analysis.
67
Equity
Compensation Plan Information
The following table provides information regarding our common
stock which may be issued under our equity compensation plans as
of December 31, 2010.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
|
|
|
|
securities to be
|
|
|
|
|
|
Number of securities
|
|
|
|
issued upon
|
|
|
|
|
|
remaining available for
|
|
|
|
exercise of
|
|
|
|
|
|
future issuance under
|
|
|
|
outstanding
|
|
|
Weighted-average
|
|
|
equity compensation
|
|
|
|
options,
|
|
|
exercise price of
|
|
|
plans (excluding
|
|
|
|
warrants and
|
|
|
outstanding options,
|
|
|
securities reflected in
|
|
|
|
rights
|
|
|
warrants and rights
|
|
|
column (a))
|
|
Plan Category
|
|
(a)
|
|
|
(b)
|
|
|
(c)
|
|
|
Equity compensation plans approved by security holders (1)
|
|
|
2,010,848
|
(2)
|
|
$
|
38.17
|
(3)
|
|
|
1,870,589
|
(4)
|
Equity compensation plans not approved by security
holders (5)
|
|
|
548,510
|
|
|
|
30.24
|
(3)
|
|
|
361,546
|
(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,559,358
|
|
|
|
37.46
|
(3)
|
|
|
2,232,135
|
|
|
|
|
(1) |
|
Represents the 2010 Stock Award and Incentive Plan, the 2000
Stock Award and Incentive Plan and the 2000 Stock Option Plan
for Non-Employee Directors. The 2000 Stock Award and Incentive
Plan provides for the award of stock options, RSUs and other
equity-based awards. |
|
(2) |
|
Includes options, RSUs, SSARs and the maximum number of shares
that may be issued under the
2009-2011
and
2010-2012
LTIP cycles if the performance conditions for each of those
cycles are satisfied at the maximum level. The number of SSARs
that may be issued upon exercise was calculated by dividing
(i) the product of (a) the excess of the closing
market price of the Companys Common Stock on the last
trading day of 2010 over the exercise price and (b) the
number of SSARs outstanding by (ii) the closing market
price on the last trading day of 2010. Excludes outstanding
shares of PRS under the 2010 and 2000 Stock Award and Incentive
Plans. |
|
(3) |
|
Weighted average exercise price of outstanding options and
SSARs. Excludes restricted stock units, shares credited to
accounts of participants in the DCP and shares that may be
issued under the
2009-2011
and
2010-2012
LTIP cycles. |
|
(4) |
|
Does not include 2,013,063 equity awards outstanding as of
December 31, 2010 under the 2000 Stock Award and Incentive
Plan (2000 SAIP) or 266,162 equity awards
outstanding as of December 31, 2010 under the 2000
Supplemental Stock Award Plan (2000 Supplemental
Plan). As approved by shareholders at the Annual Meeting
held on April 27, 2010, shares authorized under the 2000
SAIP and 2000 Supplemental Plan, but not used under those plans
for any reason, are added to shares available for awards under
the 2010 Stock Award and Incentive Plan. As a result, any
outstanding grants under either of those plans that are
cancelled will become available for grant under the 2010 Stock
Award and Incentive Plan. |
|
5) |
|
Represents the 2000 Supplemental Stock Award Plan, the DCP and a
pool of shares that may be used for annual awards of
1,000 shares to each non-employee director. (Although we
are no longer granting these annual 1,000 share stock
awards to directors, the pool of shares remains authorized.) |
|
(6) |
|
Includes 317,796 shares remaining available for issuance
under the DCP and 43,750 shares remaining available for
issuance from a pool of shares that may be used for annual
awards of 1,000 shares to each non-employee director.
(Although we are no longer granting these annual
1,000 share stock awards to directors, the pool of shares
remains authorized.) |
68
2000
Supplemental Stock Award Plan and Directors Annual Stock
Award Pool
On November 14, 2000, our Board approved the 2000
Supplemental Stock Award Plan. Under applicable NYSE rules, this
plan did not require approval by shareholders. The 2000
Supplemental Stock Award Plan is a stock-based incentive plan
designed to attract, retain, motivate and reward employees and
certain other persons who provide services to the Company. This
plan excludes all of our executive officers and directors. Under
this plan, eligible participants could be granted nonqualified
stock options, stock appreciation rights, restricted stock,
deferred stock, and other stock-based awards under terms and
conditions identical to those under our shareholder-approved
2000 Stock Award and Incentive Plan. The total number of shares
originally reserved for awards under the 2000 Supplemental Stock
Award Plan was 4,500,000. A total of 128,022 options and 137,745
RSUs were outstanding under that plan as of December 31,
2010. As of April 27, 2010, no new awards will be granted
under this plan.
In September 2000, our Board authorized and reserved a pool of
100,000 shares of our common stock to be used for annual
awards of 1,000 shares to each non-employee director each
year. The shares could be issued out of authorized but unissued
shares or treasury shares. Under applicable NYSE rules, this
pool did not require approval by shareholders. Effective as of
the 2007 Annual Meeting, directors no longer receive this annual
award of 1,000 shares. The last award of shares made to
directors from this pool was in October 2006.
69
Outstanding
Equity Awards at Fiscal Year-End
The following table provides information regarding outstanding
equity awards held by our named executive officers at
December 31, 2010.
2010
Outstanding Equity Awards at Fiscal Year End
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Incentive
|
|
|
Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Plan Awards;
|
|
|
Awards; Market
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
|
|
|
or Payout
|
|
|
|
|
|
|
|
Number of
|
|
|
Number of
|
|
|
|
|
|
|
|
|
Number of
|
|
|
|
|
|
Unearned
|
|
|
Value of
|
|
|
|
|
|
|
|
Securities
|
|
|
Securities
|
|
|
|
|
|
|
|
|
Shares or
|
|
|
Market Value
|
|
|
Shares,
|
|
|
Unearned
|
|
|
|
|
|
|
|
Underlying
|
|
|
Underlying
|
|
|
|
|
|
|
|
|
Units of
|
|
|
of Shares or
|
|
|
Units Or Other
|
|
|
Shares,
|
|
|
|
|
|
|
|
Unexercised
|
|
|
Unexercised
|
|
|
Option
|
|
|
Option
|
|
|
Stock That
|
|
|
Units of Stock
|
|
|
Rights That
|
|
|
Units or Other
|
|
|
|
|
|
|
|
Options(#)
|
|
|
Options (#)
|
|
|
Exercise
|
|
|
Expiration
|
|
|
Have Not
|
|
|
That Have Not
|
|
|
Have Not
|
|
|
Rights That Have
|
|
Name
|
|
Grant
|
|
Grant
|
|
Exercisable
|
|
|
Unexercisable
|
|
|
Price ($)
|
|
|
Date
|
|
|
Vested ($)
|
|
|
Vested ($)
|
|
|
Vested (#)
|
|
|
Not Vested ($)
|
|
(a)
|
|
Date
|
|
Type(1)
|
|
(b)
|
|
|
(c)
|
|
|
(e)
|
|
|
(f)
|
|
|
(g)
|
|
|
(h)
|
|
|
(i)
|
|
|
(j)
|
|
|
Douglas Tough
|
|
10/1/2008
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,467
|
(2)
|
|
$
|
81,551
|
|
|
|
|
|
|
|
|
|
|
|
4/28/2009
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,115
|
(2)
|
|
$
|
173,163
|
|
|
|
|
|
|
|
|
|
|
|
3/8/2010
|
|
2009 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
15,882
|
(3)
|
|
$
|
882,880
|
|
|
|
20,028
|
(4)
|
|
$
|
1,113,357
|
|
|
|
3/8/2010
|
|
2010 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,047
|
(5)
|
|
$
|
614,103
|
|
|
|
33,814
|
(6)
|
|
$
|
1,879,720
|
|
|
|
3/24/2010
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39,301
|
(7)
|
|
$
|
2,184,743
|
|
|
|
|
|
|
|
|
|
|
|
6/2/2010
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24,042
|
(8)
|
|
$
|
1,336,495
|
|
|
|
|
|
|
|
|
|
|
|
6/2/2010
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
10,017
|
(8)
|
|
$
|
556,845
|
|
|
|
|
|
|
|
|
|
|
|
6/2/2010
|
|
SSAR
|
|
|
0
|
|
|
|
26,714
|
(8)
|
|
$
|
44.92
|
|
|
|
6/2/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Berryman
|
|
5/27/2009
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,124
|
(9)
|
|
$
|
729,563
|
|
|
|
|
|
|
|
|
|
|
|
5/15/2009
|
|
2009 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,184
|
(3)
|
|
$
|
288,179
|
|
|
|
6,536
|
(4)
|
|
$
|
363,336
|
|
|
|
8/27/2009
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,322
|
(10)
|
|
$
|
295,850
|
|
|
|
|
|
|
|
|
|
|
|
8/27/2009
|
|
SSAR
|
|
|
0
|
|
|
|
35,486
|
(10)
|
|
$
|
36.07
|
|
|
|
8/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/8/2010
|
|
2010 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,624
|
(5)
|
|
$
|
145,868
|
|
|
|
8,034
|
(6)
|
|
$
|
446,610
|
|
|
|
6/2/2010
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
22,439
|
(8)
|
|
$
|
1,247,384
|
|
|
|
|
|
|
|
|
|
|
|
6/2/2010
|
|
SSAR
|
|
|
|
|
|
|
16,028
|
(8)
|
|
|
44.92
|
|
|
|
6/2/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicolas Mirzayantz
|
|
5/6/2008
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,942
|
(11)
|
|
$
|
1,052,986
|
|
|
|
|
|
|
|
|
|
|
|
5/6/2008
|
|
SSAR
|
|
|
0
|
|
|
|
11,092
|
(11)
|
|
$
|
42.19
|
|
|
|
5/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/9/2009
|
|
2009 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,923
|
(3)
|
|
$
|
273,670
|
|
|
|
6,210
|
(4)
|
|
$
|
345,214
|
|
|
|
5/27/2009
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,070
|
(10)
|
|
$
|
1,838,361
|
|
|
|
|
|
|
|
|
|
|
|
5/27/2009
|
|
SSAR
|
|
|
0
|
|
|
|
23,622
|
(10)
|
|
$
|
30.48
|
|
|
|
5/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/8/2010
|
|
2010 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,624
|
(5)
|
|
$
|
145,868
|
|
|
|
8,034
|
(6)
|
|
$
|
446,610
|
|
|
|
6/2/2010
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
25,645
|
(8)
|
|
$
|
1,425,606
|
|
|
|
|
|
|
|
|
|
|
|
6/2/2010
|
|
SSAR
|
|
|
|
|
|
|
10,685
|
(8)
|
|
$
|
44.92
|
|
|
|
6/2/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hernan Vaisman
|
|
5/6/2008
|
|
SSAR
|
|
|
0
|
|
|
|
31,998
|
(11)
|
|
$
|
42.19
|
|
|
|
5/6/2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5/6/2008
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6,399
|
(11)
|
|
$
|
355,720
|
|
|
|
|
|
|
|
|
|
|
|
3/9/2009
|
|
2009 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,665
|
(3)
|
|
$
|
259,327
|
|
|
|
5,880
|
(4)
|
|
$
|
326,869
|
|
|
|
5/27/2009
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,346
|
(10)
|
|
$
|
1,575,754
|
|
|
|
|
|
|
|
|
|
|
|
5/27/2009
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,724
|
(10)
|
|
$
|
262,607
|
|
|
|
|
|
|
|
|
|
|
|
3/8/2010
|
|
2010 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,624
|
(5)
|
|
$
|
145,868
|
|
|
|
8,034
|
(6)
|
|
$
|
446,610
|
|
|
|
6/2/2010
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,007
|
(8)
|
|
|
222,749
|
|
|
|
|
|
|
|
|
|
|
|
6/2/2010
|
|
SSAR
|
|
|
|
|
|
|
26,714
|
(8)
|
|
$
|
44.92
|
|
|
|
6/2/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beth E. Ford
|
|
10/7/2008
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,634
|
(11)
|
|
$
|
257,604
|
|
|
|
|
|
|
|
|
|
|
|
11/4/2008
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,123
|
(11)
|
|
$
|
451,558
|
|
|
|
|
|
|
|
|
|
|
|
11/4/2008
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,030
|
(11)
|
|
$
|
112,848
|
|
|
|
|
|
|
|
|
|
|
|
3/9/2009
|
|
2009 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,184
|
(3)
|
|
$
|
288,179
|
|
|
|
6,536
|
(4)
|
|
$
|
363,336
|
|
|
|
5/27/2009
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,173
|
(10)
|
|
$
|
787,877
|
|
|
|
|
|
|
|
|
|
|
|
5/27/2009
|
|
SSAR
|
|
|
0
|
|
|
|
35,433
|
(10)
|
|
$
|
30.48
|
|
|
|
5/27/2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6/2/2010
|
|
SSAR
|
|
|
0
|
|
|
|
40,071
|
(8)
|
|
$
|
44.92
|
|
|
|
6/2/2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3/8/2010
|
|
2010 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,624
|
(5)
|
|
|
145,868
|
|
|
|
8,034
|
(6)
|
|
|
446,610
|
|
Dennis M. Meany
|
|
5/6/2008
|
|
RSU
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
(11)
|
|
$
|
111,180
|
|
|
|
|
|
|
|
|
|
|
|
5/6/2008
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,505
|
(11)
|
|
$
|
806,333
|
|
|
|
|
|
|
|
|
|
|
|
3/9/2009
|
|
2009 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,219
|
(3)
|
|
$
|
178,944
|
|
|
|
4,058
|
(4)
|
|
$
|
225,584
|
|
|
|
5/27/2009
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
31,496
|
(10)
|
|
$
|
1,750,863
|
|
|
|
|
|
|
|
|
|
|
|
3/8/2010
|
|
2010 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,448
|
(5)
|
|
$
|
80,494
|
|
|
|
4,434
|
(6)
|
|
$
|
246,486
|
|
|
|
6/2/2010
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,699
|
(8)
|
|
$
|
1,039,477
|
|
|
|
|
|
|
|
|
|
Angelica T. Cantlon
|
|
8/27/2009
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9,980
|
(10)
|
|
$
|
554,788
|
|
|
|
|
|
|
|
|
|
|
|
8/10/2009
|
|
2009 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,903
|
(3)
|
|
$
|
105,788
|
|
|
|
2,788
|
(4)
|
|
$
|
154,985
|
|
|
|
3/8/2010
|
|
2010 LTIP
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,102
|
(5)
|
|
$
|
61,260
|
|
|
|
3,374
|
(6)
|
|
$
|
187,561
|
|
|
|
6/2/2010
|
|
PRS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,699
|
(8)
|
|
$
|
1,039,477
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
2009 LTIP =
2009-2011
Long-Term Incentive Plan Cycle
2010 LTIP =
2010-2012
Long-Term Incentive Plan Cycle
PRS = Purchased Restricted Stock
RSU = Restricted Stock Unit
SSAR = Stock Settled Appreciation Right |
70
|
|
|
(2) |
|
This grant was made for Mr. Toughs service as a
non-executive member of the Companys Board of Directors,
and vests on the third anniversary of the grant date. This grant
must be automatically deferred upon vesting. |
|
(3) |
|
This amount represents the total number of shares of stock that
have been credited for the 2009 and 2010 segments of the
2009-2011
LTIP cycle. These shares will remain unvested until the
completion of the full three-year LTIP cycle. The number of
shares credited for Ms. Cantlon for the 2009 segment and
for Mr. Tough for the 2010 segment of the
2009-2011
LTIP cycle was pro-rated based on the number of days served as
an employee during the applicable segment. Because he commenced
employment with the Company in 2010, Mr. Tough was not
credited with any shares for the 2009 segment of the
2009-2011
LTIP cycle. Pursuant to the terms of his offer of employment,
Mr. Berryman is deemed to have been an employee for the
entire 2009 segment of this LTIP cycle. |
|
(4) |
|
This amount represents the maximum number of shares of stock
that remain subject to the achievement of specified performance
objectives over the remaining two open segments of the
2009-2011
LTIP cycle. Shares earned during any segment of the
2009-2011
LTIP cycle will remain unvested until the completion of the full
three-year cycle. |
|
(5) |
|
This amount represents the number of shares of stock that have
been credited for the 2010 segment of the
2010-2012
LTIP cycle. These shares will remain unvested until the
completion of the full three-year LTIP cycle. The number of
shares credited for Mr. Tough for the 2010 segment of the
2010-2012
LTIP cycle was pro-rated based on the number of days served as
an employee during the segment. |
|
(6) |
|
This amount represents the maximum number of shares of stock
that remain subject to the achievement of specified performance
objectives over the remaining three open segments of the
2010-2012
LTIP cycle. Shares earned during any segment of the
2010-2012
LTIP cycle will remain unvested until the completion of the full
three-year cycle. |
|
(7) |
|
This grant vested on March 1, 2011. |
|
(8) |
|
This grant vests on April 2, 2013. |
|
(9) |
|
20% of this grant vests (or vested) on each of the first,
second, third, fourth and fifth anniversaries of the grant date. |
|
(10) |
|
This grant vests on March 27, 2012. |
|
(11) |
|
This grant vests on the third anniversary of the grant date. |
71
Option
Exercises and Stock Vested
The following table provides information regarding exercises of
options and SSARs and stock vested during 2010 for each of our
named executive officers.
2010
Option Exercises and Stock Vested
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Option Awards
|
|
|
Stock Awards
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
Number of Shares
|
|
|
|
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized on
|
|
|
|
|
|
Acquired on
|
|
|
Value Realized on
|
|
Name
|
|
Type of
|
|
|
Exercise (#)
|
|
|
Exercise ($)
|
|
|
Type of
|
|
|
Vesting (#)
|
|
|
Vesting ($)
|
|
(a)
|
|
Award(1)
|
|
|
(b)
|
|
|
(c)
|
|
|
Award(1)
|
|
|
(d)
|
|
|
(e)
|
|
|
Douglas Tough
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 LTIP
|
(4)
|
|
|
7,206
|
|
|
$
|
400,582
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
400,582
|
|
Kevin C. Berryman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSU
|
(2)
|
|
|
3,280
|
(3)
|
|
$
|
148,190
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 LTIP
|
(4)
|
|
|
3,198
|
|
|
$
|
177,777
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
325,967
|
|
Nicolas Mirzayantz
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
(5)(6)
|
|
|
20,857
|
|
|
$
|
400,663
|
|
|
|
|
SSAR
|
|
|
|
25,000
|
(7)
|
|
$
|
412,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 LTIP
|
(4)
|
|
|
4,899
|
|
|
$
|
272,335
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
672,998
|
|
Hernan Vaisman
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RSU
|
(5)
|
|
|
1,564
|
|
|
$
|
70,536
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
(5)(6)
|
|
|
14,600
|
|
|
$
|
280,466
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 LTIP
|
(4)
|
|
|
4,642
|
|
|
$
|
258,049
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
609,051
|
|
Beth E. Ford
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 LTIP
|
(4)
|
|
|
3,871
|
|
|
$
|
215,189
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
215,189
|
|
Dennis M. Meany
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PRS
|
(5)(6)
|
|
|
15,063
|
|
|
$
|
289,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 LTIP
|
(4)
|
|
|
3,202
|
|
|
$
|
177,999
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
467,359
|
|
Angelica Cantlon
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2008 LTIP
|
(4)
|
|
|
1,204
|
|
|
$
|
66,930
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
$
|
66,930
|
|
|
|
|
(1) |
|
RSU = Restricted Stock Unit
PRS = Purchased Restricted Stock
2008 LTIP = 2008-2010 Long-Term Incentive Plan Cycle
SSAR = Stock Settled Appreciation Right |
|
(2) |
|
The award represented in this row was granted in 2009 and vested
on May 27, 2010. The value is based on the closing stock
price of $45.18 on the vesting date. |
|
(3) |
|
Of this amount, the executive deferred, under our DCP described
under the heading Non-Qualified Deferred
Compensation, 3,280 shares. Dividend equivalents are
credited on vested deferred LTIP shares. The actual realized
value will depend upon the closing price of our common stock on
the date the shares are issued to the executive. |
72
|
|
|
(4) |
|
The award represented in this row is the equity portion of the
2008-2010
LTIP award, for which performance was completed on
December 31, 2010. The number of shares represents the
actual number of shares that will be issued to the participant
in March 2011, as determined by the Board of Directors in
January 2011. The value realized is based on the set number of
shares and the closing market price of a share of our common
stock on December 31, 2010, which was $55.59; however, the
actual value realized may vary depending on the closing market
price of a share of our common stock on the payout date. |
|
|
|
With respect to the equity portion of the
2007-2009
LTIP award, for which performance was completed on
December 31, 2009 (but which was not previously reported as
vested), and was paid out to executives on February 1,
2010, Mr. Berryman received 732 shares with a realized
value of $29,580; Mr. Mirzayantz received 2,445 shares
with a realized value of $98,811; Mr. Vaisman received
2,223 shares with a realized value of $89,827 shares;
Ms. Ford received 1,547 shares with a realized value
of $62,514; Mr. Meany received 2,223 shares with a
realized value of $89,827; and Ms. Cantlon received
144 shares with a realized value of $5,819. In each case,
the realized value is based on the closing market price of a
share of our common stock, which was $40.41, on the payout date.
Ms. Ford deferred all of the 1,547 shares allocated to
her, including 427 shares of IFF Common Stock issued as
part of a discretionary make-whole payment relating to the
pro-ration of the
2007-2009
LTIP cycle, under the DCP described under the heading
Non-Qualified Deferred Compensation. Dividend
equivalents are credited on vested deferred LTIP shares. The
actual realized value for Ms. Ford will depend upon the
closing market price of a share of our common stock on the date
the shares are issued to her. |
|
(5) |
|
The award represented in this row was granted in 2007 under the
Equity Choice Program and vested on May 8, 2010. The value
realized is based on the closing price of our common stock,
which was $45.10, on the vesting date. |
|
(6) |
|
The value realized attributable to vested PRS is the product of
(a) the number of vested shares of PRS and (b) the
closing price of our common stock on the vesting date, less the
aggregate amount paid by the executive to purchase the PRS.
Without taking into account the consideration paid by the
respective executive for his or her PRS shares, the value
realized on vesting in column (e) attributable to PRS would
be: Mr. Mirzayantz: $940,651; Mr. Vaisman: $658,460;
Mr. Meany: $679,341. |
|
(7) |
|
The award represented in this row was granted in 2006 under the
Equity Choice Program and vested on May 9, 2009. The value
realized is based on the difference between the exercise price
of $36.00 and the closing price of our common stock, which was
$52.48, on the exercise date of November 24, 2010, and was
paid in the form of 7,850 shares of common stock being
issued to the executive. |
73
Pension
Benefits
We provide a defined benefit pension plan (the
U.S. Pension Plan) to eligible United
States-based employees hired before January 1, 2006. Of our
named executive officers, only Mr. Mirzayantz and
Mr. Meany, who retired on December 31, 2010, currently
participate in the U.S. Pension Plan. Mr. Meany began
receiving benefits in January 2011. U.S. employees hired on
or after January 1, 2006, including all of our other named
executive officers, are not eligible to participate in the
U.S. Pension Plan.
Compensation and service earned after December 31, 2007 are
not taken into account in determining an employees benefit
under the U.S. Pension Plan; however, this provision does
not apply to any employee whose combined age and years of
service equaled or exceeded 70 as of December 31, 2007.
Mr. Meanys benefits were not frozen because his age
and years of service as of December 31, 2007 equaled or
exceeded 70. Mr. Mirzayantz had his benefit frozen as
of December 31, 2007.
We pay the full cost of providing benefits under the
U.S. Pension Plan.
The monthly pension benefit is equal to the number of years of
credited service as of December 31, 2010 times the
difference between (a) 1.7% times final average
compensation, and (b) 1.25% times the social security
amount. Final average compensation for purposes of the
U.S. Pension Plan is the average of the five consecutive
years of compensation during the last ten years before
December 31, 2010 that produce the highest average. The
term compensation means the basic rate of monthly
salary (as of April 1 each year) plus 1/12 of any Annual
Incentive Plan cash award received for the preceding year,
reduced by any compensation deferred under our Deferred
Compensation Plan. The normal retirement age under the
U.S. Pension Plan is age 65.
Various provisions of the Internal Revenue Code
(IRC) limit the amount of compensation used in
determining benefits payable under our U.S. Pension Plan.
We established a non-qualified Supplemental Retirement Plan to
pay that part of the pension benefit that, because of these IRC
limitations, cannot be paid under the U.S. Pension Plan to
our U.S. senior executives. For purposes of the
Supplemental Retirement Plan, compensation includes
any salary and Annual Incentive Plan amounts, including amounts
deferred under our Deferred Compensation Plan. A description of
our practices with regard to crediting additional years of
service under our Supplemental Retirement Plan is included in
the Compensation Discussion and Analysis.
Employees with at least 10 years of service are eligible
for early retirement under the U.S. Pension Plan and the
Supplemental Retirement Plan beginning at age 55. The
benefit at early retirement is an unreduced benefit payable at
age 62 or a reduced benefit (4% per year) if payable prior
to age 62. At December 31, 2010, Mr. Meany was
age 63 with more than 10 years of service (including
service with Bush Boake Allen Inc. (BBA)) and
therefore he was eligible for early retirement with unreduced
benefits as of December 31, 2010.
We acquired BBA in 2000, and the Bush Boake Allen Inc.
Retirement Plan (the BBA Plan) was merged into our
U.S. Pension Plan on December 31, 2000. Benefit
accruals under the BBA Plan were frozen as of that date. Benefit
service under our U.S. Pension Plan for former BBA
employees, including Mr. Meany, starts after
December 1, 2000. The BBA pension benefit is payable in
addition to the benefit participants earn under our
U.S. Pension Plan for service after December 1, 2000
The total benefit under the U.S. Pension Plan for former
BBA employees, including Mr. Meany, will be equal to
(a) the frozen BBA Plan benefit as of December 31,
2000, plus (b) the benefit accrued under the
U.S. Pension Plan after December 1, 2000. The value of
the frozen accrued benefit under the BBA Plan is included in the
Present Value of Accumulated Benefits columns in the Pension
Benefits Table.
The normal retirement benefit under the BBA Plan is payable at
age 65. For participants in the BBA Plan on
December 31, 2000, including Mr. Meany, the following
provisions apply in calculating the pension benefit earned as of
December 31, 2000:
The benefit from the BBA Plan is the sum of (A) the benefit
earned under the BBA Plan as of December 31, 1999, plus
(B) the benefit earned under the BBA Plan during 2000. The
formula for
74
determining each of these components of the BBA Plan benefit is
described below. For purposes of the BBA Plan, final average
earnings means the five highest consecutive calendar years
earnings out of the last ten calendar years of earnings prior to
December 31, 2000.
|
|
|
|
A.
|
For service prior to January 1, 2000, the
participants BBA Plan pension benefit is the greatest of
the amounts determined under subparagraphs (i), (ii) or
(iii) below:
|
|
|
(i)
|
the sum of:
|
|
|
|
|
(A)
|
1.05% of that portion of the participants final average
earnings as of December 31, 2000 not in excess of the
social security average wage base plus 1.5% of that portion of
his or her final average earnings as of December 31, 2000
in excess of the social security average wage base, multiplied
by the participants number of years of service as of
December 31, 1999, not in excess of the service limitation
applicable to the participant, plus
|
|
|
(B)
|
1.5% of the participants final average earnings as of
December 31, 2000 multiplied by the participants
number of years of service as of December 31, 1999 in
excess of the service limitation applicable to the participant,
|
|
|
|
|
(ii)
|
1.1% of the participants final average earnings as of
December 31, 2000 multiplied by the participants
number of years of service as of December 31, 1999;
|
|
|
(iii)
|
the sum of:
|
|
|
|
|
(A)
|
the participants accrued benefit on June 30, 1987,
determined under the terms of the BBA Plan or a prior BBA
pension plan in effect from time to time prior to July 1,
1987 (BBA Prior Plan), including any minimum benefit
provided thereunder, and
|
|
|
(B)
|
the benefit determined under paragraph (i) or
(ii) above but based solely on the participants years
of service from June 30, 1987 to December 31, 1999;
|
provided, that in no event will the BBA Plan benefit accrued as
of December 31, 1999 be less than (x) such
participants benefit as of December 31, 1988 under
the terms of the BBA Plan or BBA Prior Plan then in effect, or
(y) the benefit accrued by the participant as of
December 31, 1999 under the terms of the BBA Plan then in
effect.
|
|
|
|
B.
|
For service during calendar year 2000, the participants
BBA Plan pension benefit is the following result:
|
|
|
(i)
|
1.67% of the participants final average earnings as of
December 31, 2000, minus
|
|
|
(ii)
|
1.67% of the participants primary social security benefit
multiplied by the number of the participants years of
service between January 1, 2000 and the date the
participant would attain age 65 (up to a maximum of 50% of
the participants primary social security benefit),
multiplied by a fraction, the numerator of which is the
participants years of service as of December 31, 2000
and the denominator of which is the participants years of
service projected to age 65.
|
Early
Retirement BBA Plan Benefit
Participants may retire with a full, unreduced frozen BBA Plan
benefit commencing at age 62, if (i) they are at least
55 years old and have at least ten years of eligibility
service, or (ii) the sum of their age at their last
birthday plus the full years of benefit service at the time of
termination of employment from IFF is at least 65.
Mr. Meany is eligible for a full, unreduced frozen BBA Plan
benefit commencing at age 62 and is currently receiving
benefits.
The following table provides information for our named executive
officers regarding the Companys defined benefit retirement
plans. The present value of accumulated benefits payable to the
named executive officers under each of our retirement plans was
determined using the following assumptions: an interest rate of
5.6%; the RP-2000 Combined Healthy Participant Male/Female
Mortality Table; 80% of participants are married with a spouse
four years younger and are receiving a 50% joint and survivor
75
annuity and 20% of participants are unmarried and are receiving
a straight life annuity with a five year guarantee. Additional
information regarding the valuation method and material
assumptions used to determine the accumulated benefits reported
in the table is presented in Note 13 to the Companys
consolidated financial statements included in the Companys
Annual Report on
Form 10-K
for the fiscal year ended December 31, 2010. The
information provided in columns (c), (d1) and (d2) is presented
as of December 31, 2010, the measurement date used for
financial statement reporting purposes with respect to our
audited financial statements for the fiscal year ended
December 31, 2010.
2010
Pension Benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Present
|
|
Present
|
|
|
|
|
|
|
|
|
Value of
|
|
Value of
|
|
|
|
|
|
|
|
|
Accumulated
|
|
Accumulated
|
|
Payments
|
|
|
|
|
Number
|
|
Benefits
|
|
Benefits
|
|
During
|
|
|
|
|
of Years
|
|
Assuming
|
|
Assuming
|
|
Last
|
|
|
|
|
Credited
|
|
Retirement
|
|
Retirement
|
|
Fiscal
|
|
|
|
|
Service
|
|
Age of 62
|
|
Age of 65
|
|
Year
|
Name
|
|
Plan Name
|
|
(#)
|
|
($)
|
|
($)
|
|
($)
|
(a)
|
|
(b)
|
|
(c)
|
|
(d1)(1)
|
|
(d2)(2)
|
|
(e)
|
|
Douglas D. Tough(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Berryman(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicolas Mirzayantz(4)
|
|
U.S. Pension Plan
|
|
16.23
|
|
$
|
293,712
|
|
|
$
|
232,345
|
|
|
|
|
|
|
|
Supplemental Retirement Plan
|
|
16.23
|
|
$
|
468,003
|
|
|
$
|
370,220
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
761,715
|
|
|
$
|
602,565
|
|
|
|
|
|
Hernan Vaisman(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beth E. Ford(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dennis M. Meany
|
|
U.S. Pension Plan
|
|
33.64
|
|
$
|
1,001,335
|
(5)
|
|
$
|
925,344
|
(5)
|
|
|
|
|
|
|
Supplemental Retirement Plan
|
|
10.23
|
|
$
|
679,307
|
|
|
$
|
627,754
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
1,680,642
|
|
|
$
|
1,553,098
|
|
|
|
|
|
Angelica Cantlon(3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
For participants in the U.S. Pension Plan and the Supplemental
Retirement Plan as of December 31, 2010
(Mr. Mirzayantz and Mr. Meany), the amounts in this
column assume benefit commencement at unreduced early retirement
at age 62 (with at least 10 years of credited service)
and otherwise were determined using interest rate, mortality and
payment distribution assumptions consistent with those used in
the Companys financial statements. |
|
(2) |
|
For participants in the U.S. Pension Plan and the Supplemental
Retirement Plan as of December 31, 2010
(Mr. Mirzayantz and Mr. Meany), the amounts in this
column assume benefit commencement at normal retirement at
age 65 and otherwise were determined using interest rate,
mortality and payment distribution assumptions consistent with
those used in the Companys financial statements. |
|
(3) |
|
This executive is not eligible to participate in the U.S.
Pension Plan, the Supplemental Retirement Plan or any other
defined benefit plan because he or she commenced U.S. employment
with the Company after January 1, 2006. |
|
(4) |
|
Benefits for this executive under the U.S. Pension Plan and
Supplemental Retirement Plan were frozen as of December 31,
2007 because his age and service as of December 31, 2007
did not equal or exceed 70. |
|
(5) |
|
Amounts under the U.S. Pension Plan for this executive include
frozen accumulated benefits under the BBA Plan. Mr. Meany
retired, at age 63, on December 31, 2010 and began
receiving benefits in 2011. |
76
Non-Qualified
Deferred Compensation
We offer to our executive officers and other senior employees
based in the United States an opportunity to defer compensation
under our Deferred Compensation Plan (DCP), which is
our non-qualified deferred compensation plan. The DCP allows
these employees to defer salary, annual and long term incentive
awards and receipt of stock under some equity awards. There is
no limit on the amount of compensation that a participant may
elect to defer. The deferral period can extend for a specified
number of years or until retirement or employment termination,
and participants may elect to extend deferrals, subject to
applicable tax laws. Subject to certain limitations on the
number of installments and periods over which installments will
be paid, participants in the DCP elect the timing and number of
installments as to which the participants DCP account will
be settled. Deferred cash compensation may be treated at the
election of the participant as invested in (i) a variety of
equity and debt mutual funds offered by The Vanguard Group,
which administers the DCP, or (ii) a fund valued by
reference to the value of IFFs common stock with dividends
reinvested, or (iii) an interest-bearing account. Except
for deferrals into the IFF stock fund, the participant may
generally change his or her choice of funds at any time. For the
interest-bearing account, our Compensation Committee establishes
an interest rate each year which we intend to be equal to 120%
of the applicable federal long term interest rate. For 2010 this
interest rate was 4.93% and for 2011 this interest rate is 4.24%.
We make matching contributions under the DCP to make up for tax
limitations on our matching contributions under our 401(k) plan,
which is called our Retirement Investment Fund Plan. Until
December 31, 2007, for employees hired prior to
January 1, 2006, including Mr. Mirzayantz and
Mr. Meany, the 401(k) plan provided for matching
contributions at a rate of $0.50 for each dollar of contribution
up to 6% of a participants salary. This matching
contribution rate continued to apply to Mr. Meany after
December 31, 2007 until his retirement since his benefits
have not been frozen under the U.S. Pension Plan. For
U.S. employees hired on or after January 1, 2006,
including all of our other named executive officers and,
effective January 1, 2008 for participants whose benefits
have been frozen under the U.S. Pension Plan, including
Mr. Mirzayantz, the 401(k) plan provides for matching
contributions at a rate of $1.00 for each dollar of contribution
up to 4% of a participants salary plus $0.75 for each
dollar of contribution above 4% up to 8% of a participants
salary. Additional details regarding the U.S. Pension Plan
freeze are included above under Pension Benefits.
Tax rules limit the amount of the Company match under the 401(k)
plan for our senior executives. The DCP matching contribution
reflects the amount of the matching contribution which is
limited by the tax laws. The same requirements under the 401(k)
plan for matching, including vesting, apply to matching
contributions under the DCP. Currently, matching contributions
are automatically vested once a participant completes three
years of service with the Company.
The DCP gives employees who are participants an incentive to
defer compensation into the IFF common stock fund by granting a
25% premium, credited in additional deferred stock, on all cash
compensation deferred into the stock fund. The shares
representing the premium generally are forfeited if employment
ends prior to December 31 of the calendar year following the
year during which the deferral was made or if the participant
withdraws any deferred stock within one year of deferral.
Vesting of the premium deferred stock accelerates upon a change
in control. RSUs granted under our equity compensation plans may
also be deferred upon vesting, but no premium is added.
77
The following table provides information for our named executive
officers regarding our DCP, the plan that provides for the
deferral of compensation on a basis that is not tax-qualified.
2010
Non-Qualified Deferred Compensation
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive
|
|
Registrant
|
|
Aggregate
|
|
Aggregate
|
|
Aggregate
|
|
|
Contributions in
|
|
Contributions in
|
|
Earnings in
|
|
Withdrawals/
|
|
Balance at
|
Name
|
|
Last FY ($)
|
|
Last FY ($)
|
|
Last FY ($)
|
|
Distributions ($)
|
|
Last FYE ($)
|
(a)
|
|
(b)
|
|
(c)(1)
|
|
(d)
|
|
(e)
|
|
(f)(2)
|
|
Doug Tough
|
|
$
|
72,000
|
(3)
|
|
$
|
64,125
|
|
|
$
|
16,139
|
|
|
$
|
0
|
|
|
$
|
152,264
|
|
Kevin C. Berryman
|
|
$
|
207,553
|
(4)
|
|
$
|
43,501
|
|
|
$
|
67,776
|
|
|
$
|
0
|
|
|
$
|
365,273
|
|
Nicolas Mirzayantz
|
|
$
|
49,375
|
(3)
|
|
$
|
14,583
|
|
|
$
|
68,833
|
|
|
$
|
0
|
|
|
$
|
660,108
|
|
Hernan Vaisman
|
|
$
|
39,000
|
(3)
|
|
$
|
29,816
|
|
|
$
|
61,039
|
|
|
$
|
0
|
|
|
$
|
259,040
|
|
Beth E. Ford
|
|
$
|
105,884
|
(5)
|
|
$
|
34,914
|
|
|
$
|
66,409
|
|
|
$
|
0
|
|
|
$
|
342,737
|
|
Dennis M. Meany
|
|
$
|
82,800
|
(3)
|
|
$
|
16,054
|
|
|
$
|
376,705
|
|
|
$
|
0
|
|
|
$
|
1,683,892
|
|
Angelica Cantlon
|
|
$
|
6,375
|
(3)
|
|
$
|
1,375
|
|
|
$
|
876
|
|
|
$
|
0
|
|
|
$
|
8,626
|
|
|
|
|
(1) |
|
The amounts in this column are included in the All Other
Compensation column for 2010 in the Summary Compensation Table,
and represent employer contributions credited to the
participants account during 2010, as well as certain
contributions credited in the first quarter of 2011 related to
compensation earned in 2010. |
|
(2) |
|
If a person was a named executive officer in previous
years proxy statements, this amount includes amounts that
were included as compensation previously reported for that
person in the Summary Compensation Table for those previous
years. Of the totals in this column, the following amounts were
reported as compensation in the Summary Compensation Table for
2006: Mr. Mirzayantz $87,985;
Mr. Meany$92,267; for 2007:
Mr. Mirzayantz$160,010; Mr. Meany$96,188;
for 2008: Mr. Mirzayantz$63,269;
Mr. Vaisman$40,371; Mr. Meany$96,728; and
for 2009: Mr. Berryman$52,186;
Mr. Mirzayantz$31,228; Mr. Vaisman$69,574;
Mr. Meany$100,335; Ms. Ford$110,449 |
|
(3) |
|
This amount is included in the Salary column for 2010 in the
Summary Compensation Table. |
|
(4) |
|
Of this amount, $55,000 is included in the Salary column for
2010 in the Summary Compensation Table. The executive deferred
RSUs with a value of $152,553, based on the market price of a
share of our common stock on the date the shares were deposited
into the executives deferral account. These deferred RSUs
are included in the 2010 Option Exercises and Stock Vested Table
with a value of $148,190 based on the closing market price of a
share of our common stock on the vesting date. |
|
(5) |
|
Of this amount, $40,000 is included in the Salary column for
2010 in the Summary Compensation Table. The executive deferred
shares issued for the
2007-2009
LTIP cycle with a value of $65,884, based on the closing market
price of a share of our common stock on the date the shares were
deposited into the executives deferral account. These
deferred LTIP shares are included in the 2010 Option Exercises
and Stock Vested Table with a value of $62,514 based on the
closing market price of a share of our common stock on the
vesting date. |
Termination
of Employment and Change in Control Arrangements
Executive Separation Policy and Other Termination Benefits
We provide severance payments and benefits to our named
executive officers and other senior officers of the Company
under our Executive Separation Policy (ESP). The ESP
covers an executives separation from service, with
different benefit levels (Tiers) for separations unrelated to a
change in control (CiC) and for separations within
two years following a CiC. The following describes the
ESPs level of payments and benefits for
Tier I employees hired on or before
October 22, 2007, including the following named executive
officers who are still employees of the Company:
Mr. Mirzayantz and Mr. Vaisman. Pursuant to his
employment agreement, Mr. Tough would also receive
Tier I benefits, except as provided below. Our
78
other named executive officers who are still employees,
Mr. Berryman, Ms. Ford and Ms. Cantlon, were each
hired after October 22, 2007 and would thus be entitled to
reduced Tier I severance benefits, as described
below. As Mr. Meany retired effective as of
December 31, 2010, he is no longer entitled to severance
and benefits under the ESP.
During 2010, the Compensation Committee amended the ESP to make
the policy more restrictive with regard to certain payments and
benefits resulting from a CiC or termination of employment
following a CiC. The principal changes were as follows:
|
|
|
|
|
Executives designated for ESP participation after March 2010
will not be entitled to a tax
gross-up
offsetting so-called golden parachute taxes and
related income taxes. For such executives, in certain cases
payments under the ESP will be reduced if such reduction would
result in the executive retaining a greater amount of payments
and benefits on an after-tax basis.
|
|
|
|
The notice period required for us to change the ESP was reduced
from one year to 90 days. For executives already
participating in the ESP, due to the existing one-year notice
requirement, this change will apply to ESP modifications
beginning in 2012.
|
|
|
|
Equity awards granted after December 2010 will not automatically
vest upon a CiC, but will vest if we terminate the executive not
for cause or the executive terminates for good reason within two
years after the CiC (for current ESP participants, this change
is effective for a CiC occurring in 2012 or later).
|
|
|
|
The definition of CiC was modified so that a CiC will be
triggered only if 50% of the outstanding voting power were
acquired, rather than 40%, and only if a merger would result in
our pre-merger shareholders holding less than 50% of the
resulting companys stock rather than less than 60% (for
current ESP participants, this change is effective for a CiC
occurring in 2012 or later).
|
Terminations without cause and not within the two years after
a CiC. If we terminate a participants
employment without cause and not within two years following a
CiC, we will pay a monthly severance for 24 months, or if a
shorter period, until age 65. As approved by our
Compensation Committee, Tier I executives hired
after October 22, 2007 would receive severance benefits for
18 months, rather than 24 months, or if a shorter
period, until age 65. The monthly payment will equal the
sum of (A) the participants monthly base salary at
the date of termination plus (B) 1/12th of the
participants average AIP bonus for the three most recent
years. We also pay a prorated AIP bonus for the year of
termination based on actual performance for the full year and we
will also pay a prorated LTIP bonus for the then ongoing LTIP
cycles based on actual performance for those cycles. The
prorated portion of the LTIP award that will remain outstanding
is based on the number of days during the performance period
preceding the participants termination (divided by the
total number of days in the performance period), with such
prorated portion to be earned and payable at such time as the
LTIP awards for the applicable performance period otherwise
become earned and payable based on actual performance, except
that the Committee may instead, in good faith, estimate of the
actual performance achieved through the date of termination and
the resulting prorated portion payable in settlement of such
LTIP award. Any portion of the Employees LTIP awards in
excess of such prorated portion will be forfeited. Equity awards
will continue to be governed by the terms of the equity plan and
award agreements. We also continue medical, dental and insurance
benefits during the severance period. In our discussion of
payments upon a separation from service, to prorate
an award, such as AIP, means to pay a fraction of the award
equal to the number of days in the period that the participant
worked divided by the total number of days in the period (which
would be 365 in the case of an AIP award). For this type of
termination, the ESP does not provide additional pension credit
or, subject to Committee discretion, alter the terms of stock
options or other equity awards.
79
Terminations not for cause or by the executive for good
reason and within the two years after a CiC. We
provide severance and related benefits under the ESP to a
participant terminated by us without cause, or who terminates
for good reason, during the two years following a
CiC. These are:
|
|
|
|
|
A lump-sum payment equal to three times the sum of (i) the
participants highest annual salary during the five years
preceding termination and (ii) the higher of his or her
average AIP bonus for the three most recent years or his or her
target AIP bonus for the year of termination;
|
|
|
|
A prorated portion of the target LTIP for the cycles then in
progress;
|
|
|
|
A prorated portion of the target AIP bonus for the year of
termination;
|
|
|
|
Vesting of any stock options or SSARs not already vested upon
the CiC with the remainder of the option or SSAR term to
exercise the participants options or SSARs;
|
|
|
|
Vesting of restricted stock and RSU awards not already vested
upon the CiC and, unless deferred by the participant, settlement
of restricted stock and RSU awards;
|
|
|
|
For participants in our Supplemental Retirement Plan, an
additional three years credit of age and compensation for
pension calculation purposes, with the assumption that annual
compensation would have continued at current rates during the
additional period, and full funding of any supplemental pension
obligation through a rabbi trust. (Of our NEOs who are still
employed by the Company, this provision applies only to
Mr. Mirzayantz, as our other NEOs are not eligible to
participate in our defined benefit pension plans); and
|
|
|
|
Continuation of medical, dental and life insurance coverage for
three years, or until the participant obtains new employment
providing similar benefits.
|
If payments to a participant would trigger the golden parachute
excise tax, we will, in certain cases, pay an additional amount,
commonly called a
gross-up
payment, so that the after-tax value of the
participants payments and benefits under the ESP and other
compensation paid by us would be the same as though no excise
taxes applied. For a participant in the policy on or before
March 8, 2010 who has not been terminated for
cause (a
Pre-Amendment
Employee), the Company will pay a
gross-up
payment that would include the additional income taxes and other
adverse tax effects to the participant resulting from our paying
the gross-up
payment. If, however, a limited reduction of severance payments
or in the vesting of equity awards would avoid the golden
parachute excise tax, then the severance amount or such vesting
will be reduced in order to eliminate the need for a
gross-up
payment. We would reduce payments for this purpose only if the
reduction would not exceed 10% of the amount of payments that
could be received by the participant without triggering the
excise tax. Executives designated for ESP participation after
March 8, 2010 will not be entitled to such a tax
gross-up
relating to golden parachute taxes. For such executives, in
certain cases payments under the ESP will be reduced if such
reduction would result in the executive retaining a greater
amount of payments and benefits on an after-tax basis.
Accelerated vesting of awards upon a CiC without regard to
termination. The ESP provides that, upon a CiC,
options and SSARs become fully vested and exercisable, and
forfeiture and deferral conditions and other restrictions on
restricted stock and other equity awards will end, except to the
extent waived by the participant and subject to applicable tax
rules. For the NEOs, this acceleration will not apply to awards
granted after 2010 if the CiC occurs in 2012 or later; in such
case, the equity awards instead will become vested and
exercisable if we terminate the executives employment not
for cause or the executive terminates for good reason within two
years after the CiC.
Death, disability or retirement. The ESP
provides for payments and benefits upon death, disability or
retirement at or after age 62. If one of these events
occurs before a CiC, the participant or the participants
estate will receive a prorated portion of the AIP and LTIP
awards that would have become payable had he or she continued
employment for the full performance period, based on actual
performance achieved. In this case, we do not alter the terms of
stock options. If one of these events occurs, restricted stock
and restricted stock unit awards fully vest and are settled
unless deferred. In addition, if one of these events occurs
within two years after a CiC, the participant would receive the
same AIP and LTIP awards (subject to
80
achievement of certain minimum performance requirements) and
vesting of equity awards as for a termination not for cause
within two years after a CiC, except that options will remain
outstanding for no more than one year following death and three
years following termination due to disability.
In addition to the amounts paid under the ESP, in the event of
death, our NEOs would be entitled to payments under the
Companys Executive Death Benefit Plan as described in the
Compensation Discussion and Analysis under the heading Executive
Death Benefit Plan. In the event of disability, our NEOs would
be entitled to payments under the Companys Disability
Insurance Program that applies to salaried employees generally
(60% of monthly salary up to a maximum of $15,000 per month).
Definitions of Key Terms under the ESP. A CiC
occurs if any of these events happen:
|
|
|
|
|
A person or group acquires our stock and so becomes a beneficial
owner of 50% or more of the voting power in IFF;
|
|
|
|
Board members at January 1, 2010 (as well as generally any
new director approved by at least two-thirds of the incumbent
directors), cease to be at least a majority of the Board;
|
|
|
|
Immediately following a merger, consolidation, recapitalization
or reorganization of IFF, either new members constitute a
majority of the Board of, or our voting securities outstanding
before the event do not represent at least 50% of the voting
power in, the surviving entity; or
|
|
|
|
Our shareholders approve a plan of complete liquidation and the
liquidation commences, or a sale or disposition of substantially
all of our assets (or similar transaction) is completed.
|
Good reason means any of the following, unless the
participant consents in writing to the event:
|
|
|
|
|
A material reduction in the participants base salary as in
effect before the CiC;
|
|
|
|
Our failure to continue a compensation or benefit plan for the
participant, unless the plan is replaced by a comparable plan or
it ends due to its normal expiration, or other action that
materially adversely affects participation in one of these plans;
|
|
|
|
A material change in the participants position, level,
authority or responsibilities in a way that adversely impacts
the participant;
|
|
|
|
Relocation of the participants work assignment by more
than 45 miles; or
|
|
|
|
The failure of a successor to assume our obligations under the
ESP.
|
However, good reason will exist only if the
participant gives us notice within 90 days after occurrence
of one of the foregoing events and we fail to correct the matter
within 30 days after receipt of such notice.
Cause means an executives:
|
|
|
|
|
Willful and continued failure to perform substantially his or
her duties after demand for performance has been made;
|
|
|
|
Willfully engaging in unauthorized conduct which is materially
detrimental to us, including misconduct that results in material
noncompliance with financial reporting requirements; or
|
|
|
|
Willfully engaging in illegal conduct or acts of serious
dishonesty which materially adversely affects us.
|
Participant Obligations for the Protection of Our
Business. As a condition of the
participants right to receive severance payments and
benefits, the ESP requires that he or she not compete with us,
or induce customers, suppliers or others to curtail their
business with us, or induce employees or others to terminate
employment or service with us. These restrictions apply while a
participant is employed before a CiC and following a termination
of employment before a CiC during any period in which the
participant is receiving severance benefits. The ESP also
conditions severance payments and benefits on the participant
meeting commitments relating to confidentiality, cooperation in
litigation and return of our property. A clawback
81
provision requires that a participant forfeit some of the gains
realized from option exercises and settlements of other equity
awards if the participant fails to meet these commitments.
Effect of IRC Section 409A. The timing of
our payment of some payments and benefits may be restricted
under Internal Revenue Code Section 409A, which regulates
deferred compensation. Some amounts payable to any of our named
executive officers or other participants in the ESP upon
termination may be delayed until six months after termination.
Other Separation Arrangements
Mr. Tough
Details regarding Mr. Toughs letter agreement dated
September 8, 2009 are included under the heading
Employment Agreements or Arrangements following the
Summary Compensation Table. In addition, under the terms of his
letter agreement, Mr. Tough is a participant in the
Companys ESP and is entitled to certain payments upon
termination as set forth in his letter agreement and in the ESP,
as applicable. If Mr. Toughs employment is terminated
by us without Cause or by Mr. Tough for Good Reason (each
as defined in his letter agreement), separation benefits due
Mr. Tough under the ESP will not be less than (i) a
pro rata AIP bonus for the year of termination based on actual
performance and paid when AIP bonuses are paid generally,
(ii) payroll installments of severance for 2 years in
the aggregate amount equal to 2 times the sum of
Mr. Toughs annual base salary and target AIP amount
(a reduced amount and payment period applies for a termination
after attaining age 63), and (iii) continued
participation in the Companys welfare benefit plans during
the severance pay period at active employee rates. If such
termination had occurred prior to July 1, 2010,
Mr. Tough would have been paid his special bonus, and if
such termination had occurred prior to March 1, 2011 the
first anniversary of the effective date of Mr. Toughs
employment, his sign-on award under the Equity Choice Program
would have become vested on a pro rata basis. If such
termination occurs in contemplation of or within 2 years
after a CiC (as defined in the ESP and as described above), the
above separation benefits are modified to provide a severance
payment multiple of 3 and
36-month
payment period, instead of 2 and 24 months (and
a reduced amount and payment period for a termination after
attaining age 63). If Mr. Toughs employment
terminates on account of death or disability, he would be
entitled to the benefits provided under the ESP, and if such
termination event had occurred prior to July 1, 2010, he
would have been entitled to his special bonus. Mr. Tough
will not be entitled to any payment (including any tax
gross-up)
respecting taxes he may owe under Internal Revenue Code
Section 4999 (so-called golden parachute
taxes). The separation benefits payments are subject to
Mr. Toughs delivery to the Company of an executed
general release, resignation from all offices, directorships and
fiduciary positions with the Company and continued compliance
with the restrictive covenants below.
Under his letter agreement, Mr. Tough is subject to
restrictive covenants regarding non-competition,
non-solicitation, confidentiality, cooperation and
non-disparagement. Upon a termination of Mr. Toughs
employment for any reason, the non-competition and
non-solicitation covenants continue to apply for 2 years
(or a shorter period if he had attained age 63). If
Mr. Toughs employment terminates prior to a CiC and
he fails to comply with the restrictive covenants,
Mr. Toughs unexercised options and SSARs, and any
other unvested award will be immediately forfeited and canceled,
no further separation benefits will be provided and
Mr. Tough may be subject to a claw-back with respect to any
paid separation benefits and certain other amounts.
Payments and Benefits Upon a CiC and Various Types of
Terminations.
The following table shows the estimated payments and value of
benefits that we would provide to each of our NEOs who are still
employees of the Company if the triggering events described in
the heading of the table had occurred on December 31, 2010.
Although Mr. Meany was eligible for retirement at that date
under our U.S. Pension Plan, as described under Pension
Benefits, none of our other NEOs is currently eligible for any
additional benefits upon early retirement. The Company also does
not provide any additional benefits to our NEOs upon a voluntary
resignation or termination for cause. Certain assumptions made
for purposes of presenting this information and certain amounts
not reflected in the table are
82
explained below. For all cases, the per share market price of
our common stock is assumed to be $55.59, the actual closing
price per share on the last trading day of the year,
December 31, 2010. In preparing the estimates in this
table, we have assumed that any CiC would also constitute a
change in ownership and control for purposes of the
golden parachute excise tax rules. We have also assumed that any
vesting
and/or
performance period under our annual and long term incentive
plans that would occur at the end of our 2010 fiscal year would
occur upon completion of the last business day of the year, so
that such vesting or performance period would have occurred
immediately after the assumed time of termination. All amounts
included in the table are stated in the aggregate, even if the
payments will be made on a monthly basis.
The amounts set forth in the table below reflect the additional
amounts of compensation that would be payable as a result of the
indicated triggering event. Except as noted in footnote (6)
of the table, these amounts do not include payments and benefits
to the extent that they are provided on a non-discriminatory
basis to salaried employees generally upon termination of
employment. The salary, Annual Incentive Plan award and Long
Term Incentive Plan award otherwise payable to each NEO through
December 31, 2010 is included in the Summary Compensation
Table. In addition to the amounts set forth in the table below,
in the event of a CiC, the aggregate balance held in the
Companys Deferred Compensation Plan for each of our NEOs
who participate in that plan will be automatically accelerated
and settled within five business days of the CiC, as opposed to
the participants original deferral election. The amounts
that would have been accelerated in the event of a CiC as well
as, in all other cases, the amounts each of our NEOs who
participate in that plan would have received according to the
participants original deferral election, are shown in the
Aggregate Balance at Fiscal Year-End column of the Non-Qualified
Deferred Compensation Plan Table. The timing and form of
payments which may be made under that plan in events other than
a CiC are described in the accompanying narrative to that table.
The regular pension benefits that each of our eligible NEOs
would receive under the normal terms of the Companys
U.S. Pension Plan and Supplemental Retirement Plan are
shown in the Present Value of Accumulated Benefit Assuming
Retirement Age of 65 column of the Pension Benefits Table. The
timing and form of payments which may be made under these plans
are described in the accompanying narrative to that table. The
amounts shown in the table below as Incremental Non-Qualified
Pension are explained in footnote (11) in the table
presented below.
83
POTENTIAL
PAYMENTS UPON TERMINATION AND CHANGE IN CONTROL
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Not for
|
|
|
|
|
|
Separation Due to
|
|
|
Involuntary or Good
|
|
|
|
|
|
|
|
|
|
|
|
Cause Prior to or
|
|
|
Death Prior to or
|
|
|
Disability Prior to
|
|
|
Reason Termination
|
|
|
|
|
|
Separation Due to
|
|
|
|
|
|
More Than 2 Years
|
|
|
More Than 2 Years
|
|
|
or More Than 2
|
|
|
Within 2 Years
|
|
|
Death Within 2
|
|
|
Disability Within 2
|
|
|
|
|
|
After a Change in
|
|
|
After a Change in
|
|
|
Years After a
|
|
|
After a Change in
|
|
|
Years After a
|
|
|
Years After a
|
|
Name
|
|
Benefit
|
|
Control
|
|
|
Control(1)
|
|
|
Change in Control
|
|
|
Control
|
|
|
Change in Control
|
|
|
Change in Control
|
|
|
Douglas Tough
|
|
Salary
|
|
$
|
2,400,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
3,600,000
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Annual Incentive Plan
|
|
|
2,160,000
|
(2)
|
|
|
|
|
|
|
|
|
|
|
4,320,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Plan(4)
|
|
|
|
|
|
|
2,207,281
|
|
|
|
2,207,281
|
|
|
|
2,207,281
|
|
|
|
2,207,281
|
|
|
|
2,207,281
|
|
|
|
Equity Award Acceleration(5)
|
|
|
|
|
|
|
2,923,145
|
|
|
|
2,638,106
|
|
|
|
2,709,020
|
|
|
|
2,923,145
|
|
|
|
2,923,145
|
|
|
|
Incremental Non-Qualified Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Benefits(6)
|
|
|
20,900
|
|
|
|
|
|
|
|
|
|
|
|
31,351
|
|
|
|
|
|
|
|
|
|
|
|
Executive Death Benefit Proceeds(7)
|
|
|
|
|
|
|
2,400,000
|
|
|
|
|
|
|
|
|
|
|
|
2,400,000
|
|
|
|
|
|
|
|
Executive Death Benefit Premium(8)
|
|
|
36,565
|
|
|
|
|
|
|
|
|
|
|
|
54,848
|
|
|
|
|
|
|
|
|
|
|
|
Disability Insurance Proceeds(9)
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
Excise Tax and Tax
Gross-up(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,617,465
|
|
|
|
7,530,426
|
|
|
|
5,025,387
|
|
|
|
12,922,500
|
|
|
|
7,530,426
|
|
|
|
5,310,426
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Kevin C. Berryman
|
|
Salary
|
|
$
|
750,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,500,000
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Annual Incentive Plan
|
|
|
425,400
|
(2)
|
|
|
|
|
|
|
|
|
|
|
1,200,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Plan(4)
|
|
|
|
|
|
|
642,167
|
|
|
|
642,167
|
|
|
|
642,167
|
|
|
|
642,167
|
|
|
|
642,167
|
|
|
|
Equity Award Acceleration(5)
|
|
|
|
|
|
|
2,536,540
|
|
|
|
1,672,835
|
|
|
|
2,536,540
|
|
|
|
2,536,540
|
|
|
|
2,536,540
|
|
|
|
Incremental Non-Qualified Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Benefits(6)
|
|
|
31,458
|
|
|
|
|
|
|
|
|
|
|
|
62,917
|
|
|
|
|
|
|
|
|
|
|
|
Executive Death Benefit Proceeds(7)
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
Executive Death Benefit Premium(8)
|
|
|
4,888
|
|
|
|
|
|
|
|
|
|
|
|
9,776
|
|
|
|
|
|
|
|
|
|
|
|
Disability Insurance Proceeds(9)
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
Excise Tax and Tax
Gross-up(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,856,121
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,211,747
|
|
|
|
4,178,707
|
|
|
|
2,495,002
|
|
|
|
7,807,521
|
|
|
|
4,178,707
|
|
|
|
3,358,707
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nicolas Mirzayantz
|
|
Salary
|
|
$
|
1,000,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,500,000
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Annual Incentive Plan
|
|
|
279,937
|
(2)
|
|
|
|
|
|
|
|
|
|
|
1,200,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Plan(4)
|
|
|
|
|
|
|
622,958
|
|
|
|
622,958
|
|
|
|
622,958
|
|
|
|
622,958
|
|
|
|
622,958
|
|
|
|
Equity Award Acceleration(5)
|
|
|
|
|
|
|
3,693,188
|
|
|
|
2,837,398
|
|
|
|
3,693,188
|
|
|
|
3,693,188
|
|
|
|
3,693,188
|
|
|
|
Incremental Non-Qualified Pension(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
630,101
|
|
|
|
|
|
|
|
|
|
|
|
Medical Benefits(6)
|
|
|
41,945
|
|
|
|
|
|
|
|
|
|
|
|
62,917
|
|
|
|
|
|
|
|
|
|
|
|
Executive Death Benefit Proceeds(7)
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
Executive Death Benefit Premium(8)
|
|
|
4,273
|
|
|
|
|
|
|
|
|
|
|
|
6,410
|
|
|
|
|
|
|
|
|
|
|
|
Disability Insurance Proceeds(9)
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
Excise Tax and Tax
Gross-up(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,839,744
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,326,155
|
|
|
|
5,316,146
|
|
|
|
3,640,356
|
|
|
|
9,555,318
|
|
|
|
5,316,146
|
|
|
|
4,496,146
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hernan Vaisman
|
|
Salary
|
|
$
|
1,000,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,500,000
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Annual Incentive Plan
|
|
|
648,001
|
(2)
|
|
|
|
|
|
|
|
|
|
|
1,200,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Plan(4)
|
|
|
|
|
|
|
603,750
|
|
|
|
603,750
|
|
|
|
603,750
|
|
|
|
603,750
|
|
|
|
603,750
|
|
|
|
Equity Award Acceleration(5)
|
|
|
|
|
|
|
2,563,662
|
|
|
|
1,849,851
|
|
|
|
2,563,662
|
|
|
|
2,563,662
|
|
|
|
2,563,662
|
|
|
|
Incremental Non-Qualified Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Benefits(6)
|
|
|
65,917
|
|
|
|
|
|
|
|
|
|
|
|
98,875
|
|
|
|
|
|
|
|
|
|
|
|
Executive Death Benefit Proceeds(7)
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
Executive Death Benefit Premium(8)
|
|
|
6,517
|
|
|
|
|
|
|
|
|
|
|
|
9,776
|
|
|
|
|
|
|
|
|
|
|
|
Disability Insurance Proceeds(9)
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
Excise Tax and Tax
Gross-up(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,773,886
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,720,435
|
|
|
|
4,167,412
|
|
|
|
2,633,601
|
|
|
|
7,749,949
|
|
|
|
4,167,412
|
|
|
|
3,347,412
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beth E. Ford
|
|
Salary
|
|
$
|
750,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
1,500,000
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Annual Incentive Plan
|
|
|
388,583
|
(2)
|
|
|
|
|
|
|
|
|
|
|
1,200,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Plan(4)
|
|
|
|
|
|
|
642,167
|
|
|
|
642,167
|
|
|
|
642,167
|
|
|
|
642,167
|
|
|
|
642,167
|
|
|
|
Equity Award Acceleration(5)
|
|
|
|
|
|
|
2,579,171
|
|
|
|
1,261,891
|
|
|
|
2,579,171
|
|
|
|
2,579,171
|
|
|
|
2,579,171
|
|
|
|
Incremental Non-Qualified Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Benefits(6)
|
|
|
31,458
|
|
|
|
|
|
|
|
|
|
|
|
62,917
|
|
|
|
|
|
|
|
|
|
|
|
Executive Death Benefit Proceeds(7)
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
|
|
|
|
1,000,000
|
|
|
|
|
|
|
|
Executive Death Benefit Premium(8)
|
|
|
1,370
|
|
|
|
|
|
|
|
|
|
|
|
2,739
|
|
|
|
|
|
|
|
|
|
|
|
Disability Insurance Proceeds(9)
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
Excise Tax and Tax
Gross-up(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,624,007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,171,411
|
|
|
|
4,221,338
|
|
|
|
2,084,058
|
|
|
|
7,611,001
|
|
|
|
4,221,338
|
|
|
|
3,401,338
|
|
84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Involuntary
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Termination Not for
|
|
|
|
|
|
Separation Due to
|
|
|
Involuntary or Good
|
|
|
|
|
|
|
|
|
|
|
|
Cause Prior to or
|
|
|
Death Prior to or
|
|
|
Disability Prior to
|
|
|
Reason Termination
|
|
|
|
|
|
Separation Due to
|
|
|
|
|
|
More Than 2 Years
|
|
|
More Than 2 Years
|
|
|
or More Than 2
|
|
|
Within 2 Years
|
|
|
Death Within 2
|
|
|
Disability Within 2
|
|
|
|
|
|
After a Change in
|
|
|
After a Change in
|
|
|
Years After a
|
|
|
After a Change in
|
|
|
Years After a
|
|
|
Years After a
|
|
Name
|
|
Benefit
|
|
Control
|
|
|
Control(1)
|
|
|
Change in Control
|
|
|
Control
|
|
|
Change in Control
|
|
|
Change in Control
|
|
|
Dennis M. Meany(12)
|
|
Salary
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Annual Incentive Plan
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Plan(4)
|
|
|
|
|
|
|
267,030
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Award Acceleration(5)
|
|
|
|
|
|
|
2,949,263
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Incremental Non-Qualified Pension(11)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Benefits(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Death Benefit Proceeds(7)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Death Benefit Premium(8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Disability Insurance Proceeds(9)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Excise Tax and Tax
Gross-up(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
|
|
3,216,293
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Angelica T. Cantlon
|
|
Salary
|
|
$
|
495,000
|
|
|
$
|
|
|
|
$
|
|
|
|
$
|
990,000
|
|
|
$
|
|
|
|
$
|
|
|
|
|
Annual Incentive Plan
|
|
|
201,185
|
(2)
|
|
|
|
|
|
|
|
|
|
|
594,000
|
(3)
|
|
|
|
|
|
|
|
|
|
|
Long-Term Incentive Plan(4)
|
|
|
|
|
|
|
220,206
|
|
|
|
220,206
|
|
|
|
220,206
|
|
|
|
220,206
|
|
|
|
220,206
|
|
|
|
Equity Award Acceleration(5)
|
|
|
|
|
|
|
994,297
|
|
|
|
994,297
|
|
|
|
994,297
|
|
|
|
994,297
|
|
|
|
994,297
|
|
|
|
Incremental Non-Qualified Pension
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Medical Benefits(6)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Executive Death Benefit Proceeds(7)
|
|
|
|
|
|
|
630,000
|
|
|
|
|
|
|
|
|
|
|
|
630,000
|
|
|
|
|
|
|
|
Executive Death Benefit Premium(8)
|
|
|
2,704
|
|
|
|
|
|
|
|
|
|
|
|
3,606
|
|
|
|
|
|
|
|
|
|
|
|
Disability Insurance Proceeds(9)
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
|
|
|
|
|
|
|
|
180,000
|
|
|
|
Excise Tax and Tax
Gross-up(10)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
901,955
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
698,889
|
|
|
|
1,844,503
|
|
|
|
1,394,503
|
|
|
|
3,704,064
|
|
|
|
1,844,503
|
|
|
|
1,394,503
|
|
|
|
|
(1) |
|
Amounts in this column for Mr. Meany are amounts that are
payable to him following his actual retirement on
December 31, 2010. Amounts for all other named executives
are amounts that would be payable upon death prior to or more
than two years after a CiC. |
|
(2) |
|
This amount is based on the average annual incentive award paid
for performance in the three years preceding the year of the
presumed December 31, 2010 termination (i.e., the three
years ending December 31, 2009) under the AIP (or
averaged over the lesser number of years during which the
executive was eligible for AIP awards or, if not eligible for an
AIP award before 2010 (the presumed year of termination), the
Executives target annual incentive under the AIP for
2010). This amount does not take into account any actual AIP
amounts paid for 2010, which are set forth in the Non-Equity
Incentive Plan Compensation column of the Summary Compensation
Table. |
|
(3) |
|
This amount represents three times the greater of (i) the
executives average annual incentive award paid for
performance in the three years preceding the year of the
presumed December 31, 2010 termination (i.e., the three
years ending December 31, 2009) under the AIP (or
averaged over the lesser number of years during which the
executive was eligible for AIP awards) or (ii) the
executives target annual incentive for the presumed year
of termination (2010). This amount does not take into account
any actual AIP amounts paid for 2010, which are set forth in the
Non-Equity Incentive Plan Compensation column of the Summary
Compensation Table. |
|
(4) |
|
The amounts in this row are the additional LTIP amounts that
would be payable as severance (or, in the case of
Mr. Meany, following retirement), which, with respect to
the
2008-2010,
2009-2011
LTIP and
2010-2012
cycles and pursuant to the ESP, would be paid in cash. If death
or disability does not take place within two years after a CiC,
then this amount is based on actual performance of the relevant
LTIP cycle. If death, disability, involuntary termination not
for cause or termination by the executive for good reason takes
place within two years after a CiC, then this amount is based on
target LTIP for the relevant LTIP cycle. |
|
|
|
The amounts reported in this row represent: the actual amounts
previously earned and banked under the 2009 segment of the
2009-2011
LTIP cycle; actual amounts earned and banked under the 2010
segment of the
2009-2011
and
2010-2012
LTIP cycles, and pro-rated target amounts for the cumulative
segment of each of the
2009-2011
and
2010-2012
LTIP cycles. This amount does not take |
85
|
|
|
|
|
into account the actual amounts paid out under the completed
2008-2010
LTIP cycle, which are discussed in the narrative following the
Grants of Plan Based Award Table under the heading
Long-Term Incentive Plan. |
|
(5) |
|
For termination due to death or disability more than two years
prior to a CiC, the amounts in this row represent the aggregate
value of RSU and PRS awards which would immediately vest upon
occurrence of the termination event. For termination events
within two years after a CiC, the amounts in this row represent
the aggregate
in-the-money
value of the options, SSARs, RSUs, PRS and other equity awards
which would become vested as a direct result of the CiC before
the stated vesting date specified in the applicable equity award
document. These amounts would be payable upon a CiC, even if the
executives employment is not terminated. The stated
vesting date in the equity award document is the date at which
an award would have been vested if there were not a CiC and if
there were not any termination of the executives
employment. The calculation of these amounts does not attribute
any additional value to options based on their remaining
exercise term and does not discount the value of awards based on
the portion of the vesting period elapsed at the date of the
CiC. These amounts also do not include any value for equity
awards that, by their terms, are not accelerated and continue to
vest. |
|
(6) |
|
Amounts in this row are the COBRA costs of medical and dental
benefits for the covered period based on assumptions used for
financial reporting purposes. Although our medical and dental
insurance is generally available to our employees, only
participants in our ESP, including our named executive officers,
would be entitled to have the benefits paid for by the Company.
Ms. Cantlon was not a participant in our medical and dental
insurance plans as of December 31, 2010 and therefore no
amount is included for her. |
|
(7) |
|
The amounts in this row are the amounts that would be payable
under our Executive Death Benefit Plan upon the death of the
named executive officer. |
|
(8) |
|
The amounts in this row are the total dollar value of the
additional premiums that would be payable to continue the
Executive Death Benefit Plan for the named executive officer. |
|
(9) |
|
The amounts in this row are the amounts that would be payable
under our disability insurance program upon the named executive
officers separation from employment due to long-term
disability. This program is generally available to salaried
employees. |
|
(10) |
|
This amount represents the payment of a
gross-up
to offset the estimated amount of the golden parachute excise
tax that would apply to each executive, and the amount of
additional income and other taxes payable by the executive as a
result of the
gross-up
payment. For purposes of computing this
gross-up
we include the present value of all accelerated equity awards.
No excise tax or
gross-up
payment would be triggered by the accelerated vesting of equity
upon the occurrence of a CiC without a termination event. We
would not be entitled to claim tax deductions for a portion of
the compensation paid in this circumstance; we estimate our
federal income tax payable on the non-deductible portion of
compensation to these executive officers would be, in the
aggregate, $11,129,966. |
|
(11) |
|
The amounts in this row represent the incremental increase in
the present value of the executives pension benefit
reflecting an additional 3 years of age and credited
service under our Supplemental Retirement Plan without regard to
whether the executives benefits under the Supplemental
Retirement Plan have been frozen. The incremental increase also
reflects the value of subsidized early commencement of pension
benefits under our Supplemental Retirement Plan prior to
age 62 for Mr. Mirzayantz, who would have at least
10 years of service after crediting the additional
3 years of service. |
|
|
|
Mr. Mirzayantz, who is the only named executive officer who
currently participates in the Supplemental Retirement Plan,
would have at least 10 years of service as a result of a
CiC. The amounts in this row would be payable upon termination
in a lump sum amount, except that our ability to make this lump
sum payment instead of the Supplemental Retirement Plans
usual form of benefit may be limited under Internal Revenue Code
Section 409A. In addition, the Company may elect to pay the
executive other benefits accrued under the Supplemental
Retirement Plan in a lump sum |
86
|
|
|
|
|
amount upon termination of employment. Information regarding the
pension benefits accrued under that plan is included in the
Pension Benefits Table. |
|
(12) |
|
Since Mr. Meany was 63 at December 31, 2010 and had
more than ten years of service, he was eligible for retirement
at an unreduced benefit. The present value of accumulated
benefits that is payable to Mr. Meany based on his
retirement date of December 31, 2010 (including the frozen
accumulated benefits under the BBA Plan and using the same
valuation method and material assumptions as under the 2010
Pension Benefits Table) is $1,680,642 including $1,001,335 under
the U.S. Pension Plan and $679,307 under the Supplemental
Retirement Plan). Additional details regarding our pension
benefits are included under the heading Pension
Benefits. Mr Meany was our only named executive officer
who would be entitled to receive these benefits upon voluntary
retirement. |
OTHER
MATTERS
As of the date of this Proxy Statement, we do not know of any
matters to be presented at the 2011 Annual Meeting other than
those described in this Proxy Statement. If any other matters
should properly come before the meeting, proxies in the enclosed
form will be voted on those matters in accordance with the
judgment of the person or persons voting the proxies, unless
otherwise specified.
For the date, time, location and information on how to obtain
directions to attend the 2011 Annual Meeting of Shareholders and
for information on how to vote in person at the meeting as well
as identification of the matters to be voted upon at the
meeting, please see Questions and Answers about the Proxy
Materials and the Annual Meeting.
87
VOTE BY INTERNET www.proxyvote.com Use the Internet to transmit your voting instructions and
for electronic delivery of information up until 11:59 P.M. Eastern Time the day before the cut-off
date or meeting date. Have your proxy card in hand when you access the web INTERNATIONAL
FLAVORS & FRAGRANCES INC. site and follow the instructions to obtain your records and to create
an 521 WEST 57TH STREET electronic voting instruction form. NEW YORK, NY 10019
ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by
our company in mailing proxy materials, you can consent to receiving all future proxy statements,
proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic
delivery, please follow the instructions above to vote using the Internet and, when prompted,
indicate that you agree to receive or access proxy materials electronically in future years. VOTE
BY PHONE 1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up
until 11:59 P.M. Eastern Time the day before the cut-off date or meeting date. Have your proxy card
in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy
card and return it in the postage-paid envelope we have provided or return it to Vote Processing,
c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK
INK AS FOLLOWS: M30720-P09080 KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY
WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY INTERNATIONAL FLAVORS & FRAGRANCES
INC. The Board of Directors recommends you vote FOR Proposals 1, 2 and 3. 1. Election of
Directors Nominees: For Against Abstain 1a. Margaret Hayes Adame 0 0 0 1b. Marcello
Bottoli 0 0 0 For Against Abstain 1c. Linda B. Buck 0 0 0 1j. Arthur C. Martinez
0 0 0 1d. J. Michael Cook 0 0 0 1k. Dale F. Morrison 0 0 0 1e. Roger W.
Ferguson, Jr. 0 0 0 1l. Douglas D. Tough 0 0 0 2. To ratify the
selection of PricewaterhouseCoopers LLP 1f. Andreas Fibig 0 0 0 as the Companys
independent registered public 0 0 0 accounting firm for 2011. 1g. Alexandra A. Herzan
0 0 0 3. Advisory vote on the compensation paid to the 0 0 0 Companys executive
officers in 2010. 1h. Henry W. Howell, Jr. 0 0 0 The Board of Directors recommends you
vote for 1 year on the following proposal: 1 Year 2 Years 3 Years Abstain 1i. Katherine M. Hudson
0 0 0 4. Advisory vote on the frequency of future 0 0 0 0 executive compensation
votes. For address changes and/or comments, please check this 0 box and write them on the
back where indicated. NOTE: Such other business as may properly come before the meeting or any
adjournment or postponement thereof. Please indicate if you plan to attend this meeting. 0 0
Yes No Please sign exactly as your name(s) appear(s) hereon. When signing as attorney,
executor, administrator, trustee or guardian, please add your title as such. When signing as joint
tenants, all parties in the joint tenancy must sign. If signer is a corporation or partnership,
please sign in full corporate or partnership name, by duly authorized officer. Signature [PLEASE
SIGN WITHIN BOX] Date Signature (Joint Owners) Date |
ADMISSION TICKET INTERNATIONAL FLAVORS & FRAGRANCES INC. ANNUAL MEETING OF SHAREHOLDERS MAY 3,
2011 AT 10:00 A.M. INTERNATIONAL FLAVORS & FRAGRANCES INC. 521 WEST 57TH STREET NEW YORK, NY 10019
(Attendees are requested to enter at 533 West 57th Street.) ADMITS ONE SHAREHOLDER Important
Notice Regarding the Availability of Proxy Materials for the Annual Meeting: The Notice and Proxy
Statement and Annual Report are available at www.proxyvote.com. M30721-P09080
INTERNATIONAL FLAVORS & FRAGRANCES INC. THIS PROXY CARD/VOTING INSTRUCTION FORM IS
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS ANNUAL MEETING OF SHAREHOLDERS MAY 3, 2011 The
undersigned hereby appoint(s) each of Douglas D. Tough, Kevin C. Berryman and Jodie Simon Friedman
as the attorney and proxy of the undersigned, with full power of substitution, to vote the number
of shares of stock the undersigned is entitled to vote at the Annual Meeting of Shareholders of
International Flavors & Fragrances Inc. to be held at the headquarters of the Company on Tuesday,
May 3, 2011 at 10:00 A.M. Eastern Time, and any adjournment(s) or postponement(s) thereof (the
Meeting). IF YOU ARE A SHAREHOLDER OF RECORD, THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED
AS DIRECTED BY THE UNDERSIGNED ON THE REVERSE SIDE. IF NO SUCH DIRECTION IS MADE, THIS PROXY WILL
BE VOTED FOR THE ELECTION OF ALL NOMINEES FOR DIRECTOR, FOR ITEMS 2 AND 3, FOR 1 YEAR IN ITEM 4 AND
ACCORDING TO THE DISCRETION OF THE PROXY HOLDERS ON ANY OTHER MATTER THAT MAY PROPERLY COME BEFORE
THE MEETING. VOTING INSTRUCTIONS MUST BE RECEIVED BY 11:59 P.M. EASTERN TIME ON MAY 2, 2011. If you
are a participant in the International Flavors & Fragrances Inc. Retirement Investment Fund Plans
(the 401(k) Plans), this proxy covers all shares for which the undersigned has the right to give
voting instructions to Vanguard Fiduciary Trust Company, the trustee of the 401(k) Plans. This
proxy, when properly executed, will be voted as directed by the undersigned on the reverse side.
Shares in the 401(k) Plans for which voting instructions are not received by 11:59 P.M. Eastern
Time on April 28, 2011, or if no choice is specified, will be voted by the trustee in the same
proportion as the shares for which voting instructions are received from other participants in the
applicable 401(k) Plan. PLEASE MARK, SIGN, DATE AND RETURN THIS PROXY CARD/VOTING INSTRUCTION FORM
PROMPTLY USING THE ENCLOSED REPLY ENVELOPE Address Changes/Comments: (If you noted any Address
Changes/Comments above, please mark corresponding box on the reverse side.) CONTINUED AND TO
BE SIGNED ON REVERSE SIDE |