[IFF LETTERHEAD]
Exhibit 10 (o)
As of October 1, 1999
Xx. Xxxxxx X. Xxxxxxxx
Thorney Court Apartments
Palace Gate
Kensington
London X0 0XX
Xxxxxxx
Dear Xxxxxx,
This letter will outline the understandings you and International Flavors &
Fragrances Inc. ("IFF" or the "Company") have reached in respect of your
assignment, effective October 1, 1999, as President, Fragrance Division (the
"Assignment"). This letter supersedes the letter agreement between you and IFF
dated June 23, 1998.
We have agreed as follows:
1. Effective October 1, 1999, your annual base salary will be US$500,000.
Your salary will be reviewed annually, commencing at the end of 2000,
in accordance with IFF policy for officers of the Company.
2. IFF will cause to be leased for your use during the Assignment, in the
name of IFF, an apartment in New York City, New York, for your
business and personal use (the "Apartment"). IFF will cause the rent
and utilities (other than telephone) to be paid on the Apartment. The
initial monthly rent for the Apartment may not exceed US$10,000
without the prior written approval of the Chairman and Chief Executive
Officer of the Company. Any taxable income that you are required to
recognize as a result of the Company's leasing the Apartment for your
use will be considered "Other Assignment Income", as defined in
Xx. Xxxxxx X. Xxxxxxxx
As of October 1, 1999
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Section 5 below. You will be responsible for all costs related to any
housing that you continue to maintain in Argentina during the
Assignment.
3. During the Assignment you will continue to participate in the IFF
Management Incentive Compensation Plan ("MICP") on the same terms as
you currently participate in the MICP. Your MICP award will continue
to be based on a combination of the performance of IFF as well as your
own performance.
4. I will recommend to the Stock Option and Compensation Committee of the
Board of Directors that, at its meeting on November 9, 1999, you be
granted a stock option award of 25,000 shares of IFF Common Stock
under, and subject to the terms and conditions of, the IFF 1997
Employee Stock Option Plan.
5. To the extent that the effective aggregate income tax rate on your
annual base salary and MICP during the relating to the Assignment
("Assignment Salary and Bonus") exceeds 30%, IFF will reimburse you,
on a fully "grossed up" basis, for all income taxes in excess of 30%
in respect of such taxable Assignment Salary and Bonus. IFF will also
fully "gross up" any other taxable income relating to the Assignment
that you are required to recognize ("Other Assignment Income").
Assignment Salary and Bonus and Other Assignment Income are sometimes
collectively referred to as "Assignment Compensation." The effective
aggregate income tax rate on your Assignment Salary and Bonus, and
the income tax due on Other Assignment Income, will be determined by
considering income taxes owed on the Assignment Salary and Bonus and
Other Assignment Income in any country in which such taxes are
required to be paid, and will be calculated by PricewaterhouseCoopers
LLP or such other independent public accountants whom IFF may elect to
retain to prepare your income tax returns related to the Assignment
Compensation (the "Accountant"). IFF will pay that percentage of the
cost of having your taxes prepared by the Accountant that Assignment
Compensation bears to total taxable income reported in returns
prepared for you by the Accountant (the "Assignment Compensation
Percentage"). The
Xx. Xxxxxx X. Xxxxxxxx
As of October 1, 1999
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determination by the Accountant of (a) the effective aggregate
income tax rate in respect of Assignment Salary and Bonus, (b) income
taxes owed on Other Assignment Income, and (c) the Assignment
Compensation Percentage will be binding on both you and IFF. You will
be fully and solely responsible for all income and other taxes due in
any country in respect of any income (whether or not compensation from
IFF) other than Assignment Compensation. Any taxable income that you
are required to recognize as a result of the Company's payment of the
Assignment Compensation Percentage will be considered Other Assignment
Income.
6. During the Assignment you will continue to participate in the IFF TCN
Pension Plan, (the "TCN Plan"). IFF agrees to assure that, upon your
retirement from the Company, you will receive an aggregate minimum
monthly pension, expressed as a 60-month annuity certain (the
"Pension"), of at least the amount in respect of the various
retirement dates set forth in the schedule below (the "Pension
Schedule"). The Pension will be paid in US Dollars. If your actual
retirement date (the "Retirement Date") falls between any two dates in
the Pension Schedule, the Pension will be adjusted accordingly.
The amount of the Pension will first be calculated by aggregating the
retirement benefits that you have or will have earned at your actual
retirement date from all sources in which you currently participate or
have participated during your IFF service, including but not limited
to the TCN Plan, pension plans of other IFF entities, and the
Argentina social security/retirement system (collectively the
"Applicable Sources"). The amount of the Pension will be calculated in
accordance with the terms of the TCN Plan. If for any reason the
Pension as calculated under the TCN Plan does not provide the minimum
Pension required by the Pension Schedule, IFF will pay you a monthly
supplemental amount so that your aggregate retirement benefit from all
Applicable Sources equals the Pension required by the Pension Schedule
for the applicable retirement date. You will have the right to elect
to receive the Pension
Xx. Xxxxxx X. Xxxxxxxx
As of October 1, 1999
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in such a way that, rather than receiving a 60-month annuity certain
(which provides no benefit for your surviving spouse beyond the fifth
anniversary after the Retirement Date), your surviving spouse, upon
your death, will continue to receive a benefit equal to 50% of the
benefit you were receiving at your death. You acknowledge, however,
that should you elect such a "joint and 50%" option, the amount to be
paid to you at your retirement will be reduced actuarially from that
set forth in the Pension Schedule.
Pension Schedule
----------------
Retirement Data Minimum Guaranteed
------------------ Monthly Pension
------------------
(US$)
July 1, 2000 13,400
----------------------------------------------------------------------
July 1, 2001 17,100
----------------------------------------------------------------------
July 1, 2002 21,100
----------------------------------------------------------------------
On or After July 1, 25,000
2003
----------------------------------------------------------------------
7. It is currently anticipated that the Assignment will expire as of July
1, 2001. IFF or you may elect to cause the Assignment to terminate
earlier, and the Assignment may be extended upon mutual agreement
between you and IFF. In the event IFF terminates the Assignment, or in
the event, as a result of the serious physical or mental illness of
either your wife or one of your children (a "Medical Emergency"), you
elect to terminate the Assignment, in either case before July 1, 2001,
from such expiration or earlier termination of the Assignment until
the Retirement Date, which, subject to the last sentence of this
Section 7 and to Section 12 below, will be July 1, 2003, you will
remain an employee of IFF, based in Buenos Aires, Argentina, and will
perform such services for IFF as the Chief Executive Officer of
Xx. Xxxxxx X. Xxxxxxxx
As of October 1, 1999
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the Company may request. During this period your base salary will not
be lower than that in effect at the end of the Assignment, and you
will continue to participate in the TCN Plan and have the same other
benefits from IFF as you had in Argentina prior to the Assignment.
Should you elect to terminate the Assignment before July 1, 2001 for
any reason other than a Medical Emergency, the date on which you
terminate the Assignment will be deemed the Retirement Date.
8. During the Assignment, you will be eligible, as part of your paid
vacation, for annual home leave to Argentina. IFF will pay for up to
eight round trip business class airfares between Argentina and New
York, which may be used by you and members of your family. Any taxable
income that you are required to recognize as a result of the Company's
payment of any of such airfares will not be considered Assignment
Compensation, and will be your sole responsibility.
9. Until the Retirement Date, (a) you will be covered for life,
disability and travel insurance under those programs--including but
not limited to life insurance under IFF's basic and supplemental
programs of US$1,000,000--maintained by IFF for its employees in the
United States; (b) you and your family will continue to be covered by
the IFF Argentina medical scheme; and (c) you will also continue to be
included in the IFF global medical and dental program, currently
administered by CIGNA.
10. IFF Argentina will continue to pay your annual membership fees, up to
a maximum of the equivalent in Argentine Pesos of US$9,000 per year
(the "Club Fees"), in the Argentine Club in Buenos Aires. Should you
elect to join a social/sport club in New York, all fees and expenses
of joining and/or maintaining your membership in such club will be
your sole responsibility.
11. IFF will pay on your behalf the out-of-pocket expenses associated with
the shipment of your personal goods from London to New York at the
commencement, and from New York to Argentina at the
Xx. Xxxxxx X. Xxxxxxxx
As of October 1, 1999
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termination, of the Assignment, in each case in accordance with the
IFF Corporate Relocation Policy then in effect. The Company will also
pay or reimburse you for all fees and expenses needed to obtain any
visa, other travel documents and/or work permits that may be required.
You acknowledge that the effectiveness and continuing enforceability
of this Agreement is conditioned upon your obtaining all
authorizations necessary to enable you to undertake and to continue
the Assignment. IFF will assist you in obtaining and keeping all such
authorizations. Finally, in accordance with the IFF Corporate
Relocation Policy IFF will pay or reimburse you for your temporary
living expenses in New York until you move into your permanent
residence, which you intend to occur by March 31, 2000. Any taxable
income that you are required to recognize as a result of IFF's payment
or reimbursement of any cost or expense contemplated by this Section
11 will be considered Other Assignment Income.
12. In the event your employment with IFF is terminated by IFF for any
reason other than for "cause" prior to July 1, 2003, and in connection
with such termination you are not entitled to the benefits under the
Executive Severance Agreement between you and the Company dated
December 14, 1993, you will retire from IFF employment as of the
termination date, which will be deemed the Retirement Date. In such
event, you may elect (a) to commence receiving the Pension immediately
after the Retirement Date, or (b) in lieu of commencing to receive the
Pension at the Retirement Date, to receive "Salary Continuation
Payments" equal to your monthly base salary at the Retirement Date,
for the shorter of (i) twenty-four (24) months or (ii) if the
Retirement Date occurs on or after July 1, 2001, the number of months
between the Retirement Date and July 1, 2003, after which the Pension
will commence (with the amount of the Pension--including the
guaranteed minimum--computed based on your years of service through
the Retirement Date but with a commencement date based on your age on
the actual date on which the Pension commences). After the Retirement
Date, you will be entitled to all other benefits then granted by IFF
to retired
Xx. Xxxxxx X. Xxxxxxxx
As of October 1, 1999
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employees of IFF Argentina. "Cause" will have the same meaning in this
Agreement as in the Executive Severance Agreement.
13. Should you die during the Assignment, IFF will assist your family in
arranging for, and will pay all reasonable costs of, the repatriation
of your remains and personal effects to Argentina.
Xxxxxx, if the terms set forth above accurately reflect our understanding,
please sign the extra copy of this letter and return it to Xxxxx Xxxxx. If you
have any questions, please feel free to contact Xxxxx Xxxxx, Xxxx Xxxx or me.
Sincerely,
INTERNATIONAL FLAVORS &
FRAGRANCES INC.
By: /s/ XXXXXX X. XXXXXXXX
----------------------------
Xxxxxx X. Xxxxxxxx
Chairman, President &
Chief Executive Officer
AGREED AND ACCEPTED:
/s/ XXXXXX X. XXXXXXXX
----------------------------
Xxxxxx X. Xxxxxxxx
