RETIREMENT AGREEMENT
This RETIREMENT AGREEMENT (this "Agreement") is entered into
as of the 31st day of March, 2003 between Xxxxxx X. Xxxxxx (the "Employee"), and
International Flavors & Fragrances Inc., a New York corporation (the "Company"
and together with its subsidiaries and affiliates, the "Company Group").
W I T N E S S E T H
WHEREAS, the Employee is currently employed by the Company as
Executive Vice President; and
WHEREAS, the Company and the Employee have agreed that the
Employee's employment with the Company shall terminate without cause and the
Employee shall resign and retire from the employ of the Company on March 31,
2006 (the "Retirement Date"); and
WHEREAS, the Employee and the Company now desire to enter into
an agreement concerning the duties and responsibilities and the compensation and
benefits of the Employee from the date hereof until the Retirement Date as
hereinafter set forth,
NOW, THEREFORE, in consideration of the mutual promises
contained in this Agreement, the Employee and the Company agree as follows:
1. CONTINUATION OF EMPLOYMENT; DUTIES. Until the Retirement
Date, the Employee shall remain a full-time employee of the Company. Effective
March 31, 2003, the Employee shall resign as Executive Vice President of the
Company, and as a director and/or officer of all entities controlled directly or
indirectly by the Company Group of which he is then serving as a director and/or
officer and as a member of each Administrative Committee of a Company Group
benefit plan of which he is then serving as a member. Thereafter, until the
Retirement Date (the period between April 1, 2003 and the Retirement Date is
hereinafter referred to as the "Pre-Retirement Period"), the Employee shall
perform such duties as Xxxxxxx X. Xxxxxxxxx, Chairman of the Board and Chief
Executive Officer of the Company, or any successor to Xx. Xxxxxxxxx may
reasonably assign to him. Such duties and responsibilities shall include, but
shall not necessarily be limited to, the Employee's continuing as the President
of the International Fragrance Association in
accordance with his agreement with the Company. In connection with services
performed for the Company during the Pre-Retirement Period, the Company shall
permit the Employee to use the visitor's office in the Company's New York Office
Executive Suite (or another office in the New York Office if such office is at
any time not available) and shall make reasonable secretarial services available
to him.
2. TERMINATION OF EMPLOYMENT RELATIONSHIP; RETIREMENT. On the
Retirement Date the Employee's employment with the Company and all members of
the Company Group shall terminate and the Employee shall resign and retire from
the employ of the Company.
3. CONSIDERATION TO THE EMPLOYEE. The Company shall make the
following payments and provide the following additional benefits and
consideration to the Employee, subject to Section 6 hereof:
(A) COMPENSATION AND BENEFITS THROUGH THE RETIREMENT DATE.
Through March 31, 2003 the Employee shall continue to be paid the sum of
$44,833.33 per month, which sum shall be paid in semi-monthly installments of
$22,416.67. Commencing on April 1, 2003 and continuing through and including the
Retirement Date, the Employee shall be paid the sum of $36,722.22 per month (a
total of $1,322,000 for the 36-month period commencing April 1, 2003), which sum
shall be paid in semi-monthly installments of $18,361.11, and which represents
the Employee's severance entitlement under the Company's Executive Separation
Policy ((the "ESP"), but paid over 36 months. Through and including the
Retirement Date, except as otherwise provided in this Section 3 the Employee
shall continue to be entitled to all of the benefits--including but not limited
to participation in the Company's medical, dental and group insurance plans,
including the Executive Death Benefit Plan--that he currently enjoys as an
executive officer of the Company. For such benefits the Employee shall make the
same contributory payments required to be made at any time by other exempt
United States employees of the Company generally. Should the Company change or
eliminate any of such benefits for United States employees of the Company
generally, the Employee's benefits will likewise be affected. Should the Company
institute new benefits for United States employees of the Company between April
1, 2003 and the Retirement Date, the Employee shall not be entitled, and the
Employee waives all rights, to participate in any of such new benefits unless
such participation is required by law and except that, should the Company, prior
to the Retirement Date, offer executive employees long-term care for them and/or
their spouses, the Employee shall
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be eligible to participate in such program to the same extent as such other
executive employees.
(B) ANNUAL INCENTIVE COMPENSATION. The Employee shall not be
entitled to any annual incentive compensation award in respect of any of 2003,
2004, 2005 and 2006, whether under the Company's Annual Incentive Plan (the
"AIP") promulgated under the Company's 2000 Stock Award and Incentive Plan (the
"SAIP") or otherwise.
(C) LONG-TERM INCENTIVE COMPENSATION. The Employee shall be
entitled to the same incentive compensation awards that are paid to others with
the same target awards as the Employee in respect of Cycle I (covering the years
2001-2003) and Cycle II (covering the years 2002-2004) under the Company's
Long-Term Incentive Plan (the "LTIP") promulgated under the SAIP. Any earned
Cycle I and Cycle II awards under the LTIP shall be paid to the Employee in
early 2004 and 2005, respectively, at the same time as awards under such Cycles
are paid to executive employees of the Company generally. The Employee shall not
be entitled to participate in any LTIP cycle commencing in any year after 2002.
(D) UNUSED VACATION. On or before April 30, 2003, the Company
shall pay the Employee for any accrued and unused days of vacation in respect of
2003 through March 31, 2003. The Employee agrees that he shall neither accrue
vacation days in respect of the remainder of 2003 or in respect of 2004, 2005 or
2006 nor be entitled to vacation pay in respect of any year other than that
portion of 2003 for which he is being paid pursuant to this Section 3(d).
(E) STOCK OPTIONS. The Employee has received a stock option
award for 50,000 shares in respect of 2003. The Employee shall not be entitled
to any stock option awards in respect of 2004, 2005 and 2006. The
exercisability, lapsing and forfeiture of the Employee's stock options shall be
governed by the provisions of various Stock Option Agreements between the
Employee and the Company. For purposes of all such Stock Option Agreements, the
Employee shall be deemed to have retired from the employ of the Company at or
after age 62 as of March 31, 2006.
(F) PENSION BENEFIT. The Employee shall be vested in the
benefits that he accrues through the Retirement Date pursuant to the Company's
Pension Plan and Supplemental Retirement Plan.
(G) OTHER BENEFITS. To the same extent as all executive
officers of the Company, the Employee shall be eligible to continue to
participate in each of the Company's Retirement
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Investment Fund Plan and Deferred Compensation Plan and, except as provided in
Section 3(h), to continue to receive all perquisites that he is currently
receiving (including club membership, annual executive physical examination,
Company-provided automobile and financial, tax and estate planning from The Ayco
Company or such different provider as may be selected by the Company for
executive officers generally), in each case through the Retirement Date; shall
be entitled to participate in the Company's Global Employee Stock Purchase Plan
(the "GESPP") through December 31, 2005; shall be vested in the benefits he
accrues under any and all of such plans through the Retirement Date for the
purpose of which the Employee shall be deemed to have retired from the employ of
the Company at or after age 62 as of March 31, 2006; and shall be entitled to
payments from all such plans in accordance with the terms of such plans. The
Employee shall not be eligible to participate in the GESPP for any year after
2005 or in any other of such plans or to receive any of such perquisites from
the Company from and after the Retirement Date. After the date of this
Agreement, except with respect to benefits specifically provided for in this
Agreement the Employee shall no longer be a participant in the ESP.
(H) COMPANY CAR. The Employee shall continue to have the use
through the Retirement Date of the Company-provided Mercedes Benz S 500
automobile that he is currently using (the "Company Car") on the same terms and
conditions as executive officers of the Company. On the Retirement Date the
Company arrange to have title to the Company Car transferred to the Employee at
no cost to him. The Employee shall be solely responsible for any and all income
taxes attributable to any income that the Employee may be required to recognize
as a result of the transfer to him of the Company Car. From and after the date
on which title to the Company Car is transferred to the Employee, the Employee
shall be solely responsible for all costs associated with the ownership,
operation and/or maintenance of the Company Car. The Employee shall not be
entitled to a new Company Car between the date of this Agreement and the
Retirement Date irrespective of whether, under Company policy, he would have
otherwise been so entitled.
(I) CONTINUED MEDICAL COVERAGE. Until the Retirement Date the
Employee and his eligible dependents shall continue to be covered under the
Company's medical and dental plans and group life insurance plan under the same
terms and conditions, and at the same contribution levels, as are applicable to
active employees of the Company. On the Retirement Date the Employee may at his
option either continue coverage under the Company's medical plan for up to 18
months under the Consolidated Omnibus Budget Reconciliation Act of 1986
("COBRA") by paying the
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applicable COBRA monthly premiums or commence coverage under the Company's
retiree medical plan as it may then exist (the "Retiree Plan"). The Employee's
retiree medical coverage shall always be subject to the terms and conditions,
including premium contributions, of the Retiree Plan applicable to retired
employees of the Company generally.
(J) FUNDING OF BENEFITS UNDER THIS AGREEMENT. The Company's
obligations under this Section 3 shall be added to those covered by the Rabbi
Trust evidenced by the Trust Agreement dated October 4, 2000 between IFF and The
First Union National Bank, as Trustee (or to any successor Rabbi Trust) and, to
the extent that any Company obligations are funded under the Rabbi Trust, the
Company's obligations under this Agreement shall also be funded.
4. NONCOMPETITION; NONSOLICITATION. During the Pre-Retirement
Period and for one year after the Retirement Date, the Employee agrees that he
shall not engage directly or indirectly anywhere in the world in any business
that is competitive to that of the Company Group, except that the Employee shall
not be prohibited from owning a beneficial ownership of less than five percent
(5%) of the outstanding capital stock of any publicly traded competitive
company. Additionally, during the Pre-Retirement Period, the Employee agrees
that he shall not solicit, induce, or attempt to influence any individual who is
an employee of the Company Group to terminate his or her employment relationship
with the Company Group, or to become employed by him or his affiliates or any
person by which he is employed, or interfere in any other way with the
employment, or other relationship, of the Company Group and any employee
thereof. Notwithstanding the foregoing, the response by any employee of the
Company to a published advertisement or other general solicitation, whether or
not concluding with the offer of a position to such employee, shall not
constitute a breach of this Section 4.
5. ENTIRE CONSIDERATION. The Employee understands and agrees
that the payments and benefits provided for in this Agreement (a) are the only
ones to which he is entitled relating to his employment and/or in connection
with his retirement from the Company; (b) are in excess of those to which he
otherwise would be entitled; and (c) are being provided to him in consideration
for his signing of this Agreement and the "Release," as defined in Section 6,
which consideration he agrees is adequate and satisfactory to him.
6. RELEASE. As a condition to the Employee's entitlement to
the compensation, payments and benefits provided
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for in Sections 1 and 3 hereof, the Employee shall have executed and delivered
to the Company a release in the form attached hereto as Schedule I (the
"Release"), and such Release shall have become irrevocable. If the Employee
exercises his right to revoke the Release in accordance with the terms thereof,
then this Agreement shall become null and void ab initio. The Employee agrees to
execute another release, identical in form to the Release, as of the Retirement
Date, and shall not be entitled to receive the final $10,000 of Severance until
such release has been executed and delivered to the Company.
7. NON-DISPARAGEMENT. Each of the Employee and the Company (on
behalf of the Company Group) agrees that at no time will either the Employee or
any officer, director, employee or other representative of the Company in any
way denigrate, demean or otherwise say or do anything, whether in oral
discussions or in writing, that would cause any third party, including but not
limited to suppliers, customers and competitors of the Company, to lower its
perception about the integrity, public or private image, professional
competence, or quality of products or service, of the other or, in the case of
the Company, of any officer, director, employee or other representative of the
Company. If the Company is asked by a prospective employer for a reference with
respect to a new position for which the Employee is being considered, without
the Employee's prior written consent the Company will do no more than confirm
the Employee's dates of employment and salary history.
8. COOPERATION AND ASSISTANCE. The Employee acknowledges that
he may have historical information or knowledge that may be useful to the
Company in connection with current or future legal, regulatory or administrative
proceedings. The Employee will reasonably cooperate with the Company, both
during the Pre-Retirement Period and thereafter, in the defense or prosecution
of any such claims that relate to events or occurrences that transpired during
the Employee's employment with the Company. The Employee's cooperation in
connection with such claims or actions shall include being reasonably available,
subject to his other business and personal commitments, to meet with counsel to
prepare for discovery or trial and to testify truthfully as a witness when
reasonably requested by the Company at reasonable times and with reasonable
advance notice to the Employee. The Company shall reimburse the Employee for any
out-of-pocket expenses, including the reasonable fees of the Employee's personal
attorney, which he incurs in connection with such cooperation.
9. RETURN OF PROPERTY. Except as otherwise provided in this
Section 9, on the Retirement Date the Employee expressly
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agrees that he shall return to the Company all property of the Company Group
including, but not limited to, any and all files, computers, computer equipment
and software and diskettes, documents, papers, records, accords, notes, agenda,
memoranda, plans, calendars and other books and records of any kind and nature
whatsoever containing information concerning the Company Group or their
customers or operations. The Employee affirms that he will not retain copies of
any such property or other materials. Notwithstanding the foregoing, the
Employee shall not be required to return his laptop computer, mobile cellular
telephone(s), rolodexes, personal diaries and correspondence; however, the
Company may require the Employee to provide such laptop computer to the Company
so that any proprietary Company information and/or programs may be purged from
such laptop computer. The Company shall provide the Employee with a written
receipt for all property returned to the Company.
10. NON-DISCLOSURE. Under Company policy and under applicable
trade secret law, the Employee is obliged to keep in confidence all trade
secrets and proprietary and confidential information of the Company Group,
whether patentable or not which he learned or of which he became aware or
informed during his employment by the Company (except to the extent disclosure
is or may be required by a statute, by a court of law, by any governmental
agency having supervisory authority over the business of the Company or by any
administrative or legislative body (including a committee thereof) with apparent
jurisdiction to order him to divulge, disclose or make accessible such
information, and not to directly or indirectly publish, disclose, market or use,
or authorize, advise, hire, counsel or otherwise procure any other person or
entity, directly or indirectly, to publish, disclose, market or use, any such
information. Both under such Company policy and under applicable law, such
obligations continue not only while the Employee is employed by the Company, but
after cessation of that employment. In amplification and not in limitation of
the foregoing, the Employee acknowledges that during his employment with the
Company, he has or may have acquired proprietary and confidential knowledge and
information of the Company Group, including, but not limited to, information
about the business, legal and financial strategies of the Company, the
positions, compensation and benefits and performance of employees of the Company
Group, fragrance and flavor formulae, secret processes and products, qualities
and grades of flavor and fragrance ingredients and raw materials, including but
not limited to aroma chemicals, perfumery and flavor and fragrance compounding
"know-how" and other technical data belonging to or relating to the Company
Group, and the identity of customers and suppliers of the Company Group and the
quantities of products ordered by
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or from and the prices paid by or to those customers and suppliers. In addition,
the Employee has or may have also acquired similar confidential knowledge and
information belonging to customers of the Company Group and provided to the
Company Group in confidence under written and oral secrecy agreements. The
Employee agrees to abide by the terms and conditions of this Section 10 both
during the Pre-Retirement Period and thereafter.
11. TAX AND WITHHOLDING. Any Federal, State and/or local
income, personal property, franchise, excise or other taxes owed by the Employee
as a result of the payments or benefits provided under the terms of this
Agreement shall be the sole responsibility and obligation of the Employee. The
parties hereto agree and acknowledge that Company shall have the right to
withhold from any payments made or benefits provided to the Employee any and all
amounts that are necessary to enable the Company to satisfy any withholding or
other tax obligation that arises in connection with such payments or benefits,
and the Company shall report any such amounts that it determines are
compensation income on a Form W-2, including but not limited to the value of the
Company Car.
12. NO ORAL MODIFICATION. This Agreement may not be changed
orally and no modification, amendment or waiver of any provision contained in
this Agreement, or any future representation, promise or condition in connection
with the subject matter of this Agreement shall be binding upon any party hereto
unless made in writing and signed by such party.
13. RESOLUTION OF DISPUTES. Any disputes under or in
connection with this Agreement shall be adjudicated in the courts of the State
of New York. Notwithstanding the foregoing, if the parties consent in writing,
such dispute shall be resolved by arbitration, to be held in New York, New York
in accordance with the rules and procedures of the American Arbitration
Association then in effect. Judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction. In any litigation
or arbitration, each party shall bear its own costs, including but not limited
to attorneys' fees, unless the judge or arbitrator(s) otherwise determine.
Pending the resolution of any arbitration or litigation, the Company shall
continue payment of all amounts due the Employee under this Agreement and all
benefits to which the Employee is entitled at the time the dispute arises.
14. SEVERABILITY. In the event that any provision of this
Agreement or the application thereof should be held to be
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void, voidable, unlawful or, for any reason, unenforceable, the remaining
portion and application shall remain in full force and effect, and to that end
the provisions of this Agreement are declared to be severable.
15. GOVERNING LAW. This Agreement is made and entered into,
and shall be subject to, governed by, and interpreted in accordance with the
laws of the State of New York and shall be fully enforceable in the courts of
that state, without regard to principles of conflict of laws.
16. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and shall be binding upon the parties hereto and their respective
heirs, administrators, representatives, executors, successors and assigns,
including but not limited to (i) with respect to the Company, any entity with
which the Company may merge or consolidate or to which the Company may sell all
or substantially all of its assets, and (ii) with respect to the Employee, his
executors, administrators, heirs and legal representatives.
17. NOTICES. All notices required pursuant to this Agreement
shall be in writing and shall be deemed given if mailed, postage prepaid, or if
delivered by fax or by hand, to a party at the address set forth below:
If to the Employee:
Xx. Xxxxxx X. Xxxxxx
000 Xxxxxx Xxxx
Xxxxxxxx Xxxxx, Xxx Xxxxxx 00000
If to the Company:
International Flavors & Fragrances Inc.
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Secretary
Any change in address by either party shall be effective when notified to the
other party as aforesaid.
18. COUNTERPARTS. This Agreement may be executed in
counterparts, and each counterpart, when executed, shall have the effect of a
signed original.
19. ACKNOWLEDGMENT OF KNOWING AND VOLUNTARY RELEASE;
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REVOCATION RIGHT. The Employee certifies that he has read the terms of this
Agreement. The execution hereof by the Employee shall indicate that this
Agreement conforms to the Employee's understandings and is acceptable to him as
a final agreement. It is further understood and agreed that the Employee has had
the opportunity to consult with counsel of his choice, that he has in fact
consulted with his own counsel with respect to this Agreement, and that he has
been given a reasonable and sufficient period of time of no less than 45 days in
which to consider and return this Agreement.
WHEREFORE, intending to be legally bound, the parties have agreed to
the aforesaid terms and indicate their agreement by signing below.
XXXXXX X. XXXXXX
/S/XXXXXX X. XXXXXX AS OF MARCH 31, 2003
-------------------- --------------------
Xxxxxx X. Xxxxxx Date
INTERNATIONAL FLAVORS & FRAGRANCES INC.
By: /S/ XXXXXXX X. XXXXXXXXX AS OF MARCH 31, 2003
------------------------- --------------------
Xxxxxxx X. Xxxxxxxxx Date
Chairman of the Board and
Chief Executive Officer
