UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM 8-K
Current
Report Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date
of
Report (Date of earliest event reported): April
3, 2006
INTERNATIONAL
FLAVORS & FRAGRANCES INC.
(Exact
Name of Registrant as Specified in its Charter)
____________________________
|
New
York
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1-4858
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13-1432060
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|
(State
or other jurisdiction
of
incorporation)
|
(Commission
file number)
|
(I.R.S.
employer
identification
no.)
|
|
521
West 57th Street
New
York, New York
|
10019
(Zip
Code)
|
|
|
(Address
of principal executive offices)
|
Registrant’s
telephone number, including area code: (212)
765-5500
Not
Applicable
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions (see General Instruction A.2 below):
|
¨
|
Written
communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
|
|
¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12)
|
|
¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR 240.14d-2(b))
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|
¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR 240.13e-4(c))
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Item
1.01. Entry
into a Material Definitive Agreement.
On
April
3, 2006, International Flavors & Fragrances Inc. (the “Company”) entered
into an agreement with Richard A. Goldstein, the Company’s Chairman of the Board
of Directors and Chief Executive Officer, in connection with his previously
announced retirement from the Company and his resignation as a director and
officer of the Company effective as of May 9, 2006 (which press release
announcing such retirement was filed as Exhibit 99.1 to the Company’s Current
Report on Form 8-K on January 17, 2006). The summary of the terms of the
agreement is qualified in its entirety by reference to the text of the
agreement, a copy of which is filed as Exhibit 10.1 hereto. The agreement
includes provisions that Mr. Goldstein will receive severance and other
benefits, including retirement treatment with respect to his outstanding
long-term incentive awards and other equity awards, which provisions are
consistent with the terms and conditions of the Company’s Restated and Amended
Executive Separation Policy (as amended through and including December 15,
2004), filed as Exhibit 10.3 to the Company’s Current Report on Form 8-K on
December 20, 2004. The agreement also provides for the payment of
supplemental pension benefits to Mr. Goldstein in accordance with the Memorandum
of Understanding governing Mr. Goldstein's initial employment with the Company
on June 1, 2000 (filed as Exhibit 10(a) to the Company's Report on Form 10-Q
dated August 14, 2000).
Item
9.01. Financial
Statements and Exhibits.
|
(c)
|
Exhibits
|
Exhibit
10.1
Retirement
Agreement dated as of April 3, 2006 between Richard A. Goldstein, Chairman
of
the Board of Directors and Chief Executive Officer, and the
Company.
Pursuant
to the requirements of the Securities Exchange Act of 1934, the Registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
| INTERNATIONAL FLAVORS & FRAGRANCES INC. | ||
| |
|
|
| Dated: April 3, 2006 | By: | /s/ Dennis M. Meany |
|
Dennis M. Meany
Senior Vice President, General Counsel and
Secretary
|
2
EXHIBITS
INDEX
|
Exhibit
|
|
|
10.1
|
Retirement
Agreement dated as of April 3, 2006 between Richard A. Goldstein,
Chairman of the Board of Directors and Chief Executive Officer, and
the
Company.
|
3
Exhibit
10.1
RETIREMENT
AGREEMENT
RETIREMENT
AGREEMENT
(“Agreement”),
dated
as of April 3, 2006 between International
Flavors & Fragrances Inc.,
a New
York corporation (the “Company”), and Richard
A. Goldstein
(“Executive”), a citizen of the State of New York.
WHEREAS
Executive and the Company have agreed that Executive will retire from the
Company as of May 9, 2006; and
WHEREAS
the
parties wish to document the terms and conditions pertaining to the
retirement;
NOW,
THEREFORE,
in
consideration of the mutual promises and agreements set forth herein, and other
good and valuable consideration, the receipt of which are hereby acknowledged,
the Company and Executive hereby agree as follows:
Section 1. Retirement.
Executive hereby retires and resigns effective May 9, 2006 (the “Retirement
Date”), from all of his positions with the Company, the Board, any affiliate of
the Company and all boards of directors of such affiliates, and agrees to
execute and deliver any and all further documentation reasonably requested
by
the Company in order to evidence and effect the retirement.
Section 2. Separation
Payments.
Upon
Executive’s retirement, the Company shall provide Executive with the following
payments and benefits. Amounts and benefits described in Sections 2(a), (b),
(c), (d), (e) and f(ii) through (v) are expressly conditioned on Executive’s
execution of (and nonrevocation of) the General Release attached hereto as
Exhibit A and compliance with the provisions of Section 3 hereof.
(a) Cash
Severance.
Executive shall receive a cash payment in the gross amount of $1,533,933.33
which is equal to the sum of (i) his annual rate of salary immediately
prior to the Retirement Date plus (ii) the average Annual Incentive Plan
(“AIP”) award for 2003, 2004 and 2005 (the “Cash Severance Amount”). The
Company shall pay the Cash Severance Amount to Executive on November 10,
2006.
(b) 2006
AIP Bonus.
Executive shall be eligible to receive a 2006 AIP bonus based on the Company’s
fiscal 2006 actual results prorated based on the number of days from the
beginning of fiscal year through the Retirement Date divided by 365, to be
payable at the same time as other senior executives from the Company receive
their AIP bonuses.
(c) Stock
Options and Restricted Stock Units.
Executive is retiring after age 62 under the terms of his various stock option
and restricted stock unit agreements. Accordingly, Executive’s options shall be
exercisable, and restricted stock unit awards shall vest, as
follows:
|
Options
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||
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Grant
Date
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Number
of Shares
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Options
Exercisable Until
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June
1, 2000
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500,000
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June
1, 2010
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June
1, 2000
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200,000
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August
9, 2006
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May
16, 2001
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101,000
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May
16, 2011
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May
7, 2002
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140,000
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May
7, 2012
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March
11, 2003
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140,000
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March
11, 2013
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Restricted
Stock Units
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||
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Grant
Date
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Number
of Shares
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Vesting
Date
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May
11, 2004
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42,536
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May
11, 2007
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March
8, 2005
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9,450
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March
8, 2008
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(d) Long
Term Incentive (“LTI”) Awards.
Executive shall receive payment(s) (if any) under the 2004-2006 and 2005-2007
LTI cycles based on the number of days worked in each LTI cycle and based on
actual results for each LTI cycle, which payment(s) (if any) will be paid when
the LTI award for such cycle is otherwise payable to other participants in
the
cycle.
(e) Performance
Incentive Award.
Executive shall receive a payment (if any) under the August 1, 2002 Performance
Incentive Award (the “PIA Award”) based on performance of the PIA Award through
May 9, 2006. Such amount (if any) will be paid to Executive within five (5)
business days after such performance has been determined (but no earlier than
the date severance is payable under Section 2(a) above).
(f) Benefits.
(i) Executive
shall receive any and all benefits accrued under any deferred compensation
or
qualified or non-qualified pension plan in which he currently participates
(other than any severance plan) in accordance with, and subject to, the
terms thereof; provided that no such deferred compensation or non-qualified
pension benefits shall be paid prior to November 10, 2006 (the first
date on which they would not be subject to the tax imposed by Section 409A
of the Code); and provided further that no interest shall accrue on deferred
compensation or non-qualified pension amounts that otherwise would have been
payable prior to November 10, 2006. In accordance with Section V of the
Memorandum of Understanding that became effective as of June 1, 2000 (the
“MOU”), Executive will be paid a single lump sum of $3,016,014 on November 10,
2006. Executive shall also be covered by retiree life insurance coverage with
death benefits equal to $1,150,000.
(ii) For
the
period of time between the Retirement Date and Executive’s 65th birthday,
Executive and his spouse and eligible dependents shall continue to be covered
by
medical plans in which he participated immediately prior to the Retirement
Date,
as if he had continued to be an active employee of the Company, and the Company
shall continue to pay the costs of such coverage under such plans on the same
basis as is applicable to active employees covered thereunder; provided that,
if
participation in any one or more of such plans is not possible under the terms
thereof, the Company shall provide substantially identical benefits or, at
Executive’s election, reimburse Executive for his cost of obtaining comparable
coverage from a third-party insurer. Such coverage shall cease if and when
Executive obtains employment with another employer during such period and
becomes eligible for medical coverage provided by his new employer. Executive’s
Retirement Date shall be considered a “qualifying event” as defined in Title I,
part 6 of the Employee Retirement Income Security Act of 1974
(“COBRA”).
(iii) Prior
to
Executive’s 65th birthday, Executive and his eligible dependents shall be
entitled to retiree medical coverage on the same basis as retiree medical
coverage is made available generally to senior executives of the Company, with
such coverage being secondary to any medical coverage at Executive’s prior
employer and Section 2(f)(ii) above. Upon attainment of Executive’s or a
dependent’s 65th birthday, such retiree medical coverage shall be secondary to
Medicare and shall also continue to be secondary to any retiree medical coverage
maintained by a prior employer.
2
(iv) Executive
shall be reimbursed for up to $25,000 of expenses incurred by him for financial
and tax planning between his Retirement Date and the first anniversary of his
Retirement Date.
(v) Executive
shall be reimbursed for up to $40,000 of reasonable legal and professional
fees
incurred by him for the negotiation and documentation of this
Agreement.
(vi) Executive
shall be entitled to payment for 0 days of accrued but unused vacation.
Executive shall not be entitled to receive any payments or other compensation
attributable to vacation he would have earned had his employment continued
beyond his Retirement Date, and Executive waives any right to receive such
compensation.
(vii) Executive
shall be entitled to reimbursement for reasonable business and fringe benefit
expenses incurred by him prior to the Retirement Date in accordance with Company
policy in effect on the Retirement Date.
Section 3. Confidentiality,
Non-Competition and Non-Solicitation.
(a) Obligations
of the Executive.
The
following requirements must be met by the Executive as a condition to his right
to receive, continue to receive, or retain certain payments and benefits under
Section 2 of this Agreement:
(i) The
Executive, acting alone or with others, directly or indirectly, shall not,
during the Non-competition Period, either as employee, employer, consultant,
advisor, or director, or as an owner, investor, partner, or shareholder unless
the Executive’s interest is insubstantial, engage in or become associated with a
“Competitive Activity.” For this purpose, (A) the “Non-competition Period”
means the period of time during which Executive is employed by the Company
and
the one-year period following Executive’s Retirement Date; and (B) the term
“Competitive Activity” means any business or other endeavor that engages in a
line of business in any geographic location that is substantially the same
as
either (1) any line of operating business which the Company or a subsidiary
engages in, conducts, or to the knowledge of the Executive, has definitive
plans
to engage in or conduct, or (2) any operating business that has been
engaged in or conducted by the Company or a subsidiary and as to which, to
the
knowledge of the Executive, the Company or subsidiary has covenanted in writing,
in connection with the disposition of such business, not to compete therewith.
The Compensation Committee of the Board (the “Committee”) shall, in the
reasonable exercise of its discretion, determine which lines of business the
Company and its subsidiaries conduct as of the Retirement Date and which third
parties may reasonably be deemed to be in competition with the Company and
its
subsidiaries. For purposes of this Section 3(a) (including clause
(ii) below), the Executive’s interest as a shareholder is insubstantial if
it represents beneficial ownership of less than five (5%) percent of the
outstanding stock, and the Executive’s interest as an owner, investor, or
partner is insubstantial if it represents ownership, as determined by the
Committee in its discretion, of less than five (5%) percent of the outstanding
equity of the entity. In addition, the phrase “become associated with” shall not
include Executive’s mere affiliation (as a partner, director, consultant or
otherwise) with (i) a venture capital fund, hedge fund or other private equity
fund or firm, or (ii) a law, accounting, investment banking, consulting or
other
professional service firm that engages in or becomes associated with a
Competitive Activity; provided that Executive is not otherwise directly or
indirectly engaged in the acquisition or operation of an entity that engages
in
or becomes associated with a Competitive Activity.
3
(ii) During
Executive’s employment with the Company and during the one-year period following
Executive’s Retirement Date, the Executive, acting alone or with others,
directly or indirectly, shall not (A) induce any customer or supplier of
the Company or a subsidiary
or affiliate, or other company with which the Company or a subsidiary or
affiliate has a business relationship, to curtail, cancel, not renew, or not
continue his or her or its business with the Company or any subsidiary or
affiliate; or (B) induce, or attempt to influence, any employee of or
service provider to the Company or a subsidiary or affiliate to terminate such
employment or service.
(iii) The
Executive shall not disclose, use, sell, or otherwise transfer any confidential
or proprietary information of the Company or any subsidiary or affiliate,
including but not limited to information regarding the Company’s current and
potential customers, organization, employees, finances, and methods of operation
and investments, so long as such information has not otherwise been disclosed
to
the public or is not otherwise in the public domain, except as required by
law
or pursuant to legal process.
(iv) The
Executive shall cooperate with the Company or any subsidiary or affiliate by
making himself available to testify on behalf of the Company or such subsidiary
or affiliate in any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, and otherwise to assist the Company or any
subsidiary or affiliate in any such action, suit, or proceeding by providing
information and meeting and consulting with members of management of, other
representatives of, or counsel to, the Company or such subsidiary or affiliate,
as reasonably requested. The Company shall reimburse the Executive for any
out-of-pocket expenses including the reasonable fees of the Executive’s personal
attorney, which he incurs in connection with such cooperation.
(b) Non-Disparagement.
Each of the Executive and the Company agrees that at no time will either the
Executive 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.
(c)
Effect
of the Executive’s Failure to Comply with Obligations.
The
Company shall have no obligations to make payments or provide benefits to the
Executive under this Agreement if the Executive has failed or fails to comply
with the obligations set forth in Sections 3(a) or 3(b) during the relevant
time periods set forth therein, other than inadvertent and inconsequential
events constituting non-compliance, at any time during Executive’s employment
with the Company or following Executive’s Retirement Date.
(d) Clawback
Provision.
If the
Executive has failed to comply with the obligations under Sections 3(a) or
3(b) (other than an inadvertent and inconsequential event constituting
non-compliance) during Executive’s employment with the Company or the one-year
period following Executive’s Retirement Date, all of the following forfeitures
will result:
(i) The
unexercised portion of any option, whether or not vested, and any other award
not then vested will be immediately forfeited and canceled.
(ii) The
Executive will be obligated to repay to the Company, in cash, within five (5)
business days after demand is made therefor by the Company,
4
(A) the
total
amount of any cash payments made to the Executive under this Agreement, other
than (1) such Executive’s annual salary that had been payable as of the date of
his Retirement Date, together with salary, incentive compensation and benefits
which had been earned or become payable as of the date of termination but
which
had not yet been paid to the Executive and unreimbursed business expenses
reimbursable under Company policies then in effect, and (2) cash payments
under
welfare benefit plans;
(B) other
cash amounts paid to the Executive under any AIP and LTIP awards since the
date
two years prior to the Executive’s Retirement Date; and
(C) the
Award
Gain (as defined below) realized by the Executive upon each exercise of an
option or settlement of a restricted stock unit award (regardless of any
elective deferral) since the date two years prior to Executive’s Retirement
Date. For purposes of this Section 3(d), the term “Award Gain” shall mean (1),
in respect of a given option exercise, the product of (X) the fair market value
per share of stock at the date of such exercise (without regard to any
subsequent change in the market price of shares) minus the exercise price times
(Y) the number of shares as to which the option was exercised at that date,
and
(2), in respect of any other settlement of an award granted to the Executive,
the fair market value of the cash or stock paid or payable to the Executive
(regardless of any elective deferral) less any cash or the fair market value
of
any stock or property (excluding any payment of tax withholding) paid by the
Executive to the Company as a condition of or in connection with such
settlement.
Section 4. Setoff.
No
payments or benefits payable to or with respect to Executive pursuant to this
Agreement shall be reduced by any amount Executive may earn or receive from
employment with another employer or from any other source, except as expressly
provided in Section 2(f)(ii).
Section 5. Indemnification;
D&O Coverage.
The
Company shall continue to indemnify Executive and provide directors’ and
officers’ liability insurance coverage (including, where required, legal
defense) for actions prior to Executive’s Retirement Date to the same extent it
indemnifies and provides liability insurance coverage to then-current officers
and directors of the Company.
Section 6. Successors
and Assigns.
This
Agreement shall be binding upon Executive and upon Executive’s heirs,
administrators, representatives, executors and successors and shall inure to
the
benefit of the Releasees (as defined in Exhibit A) and to their heirs,
administrators, representatives, executors, successors, and assigns. No interest
of Executive, his spouse or any other beneficiary under this Agreement, or
any
right to receive any payment or distribution thereunder, shall be subject to
any
sale, transfer, assignment, pledge, attachment, garnishment or other alienation
or encumbrance of any kind.
Section 7. Binding
Effect; Revocation; Modification.
The
parties understand and agree that this Agreement is final and binding and
constitutes the complete and exclusive statement of the terms and conditions
relating to Executive’s retirement, that this Agreement supersedes all prior
agreements and understandings (oral or written) between Executive and the
Releasees relating to Executive’s employment, Retirement Date, or otherwise,
including but not limited to the MOU, that no representations or commitments
were made by the parties to induce this Agreement other than as expressly set
forth herein and that this Agreement is fully understood by the parties.
Executive further represents that Executive has had the opportunity and time
to
consult with legal counsel and other personal or financial advisors of his
own
choosing concerning the provisions of the General Release and that Executive
has
been given twenty-one (21) days within which to execute the General Release
and
5
seven
(7) days following that execution to revoke the General Release. To be
effective, any such revocation must be in writing and actually delivered no
later than the close of business on the 7th day following Executive’s execution
of the General Release to the office of the Company’s General Counsel. No
obligation upon the Company set forth herein shall be effective, and no payment
or other benefit shall be required to be made or provided to Executive
hereunder, any earlier than the 8th day following Executive’s execution of the
General Release. This Agreement may not be modified or supplemented except
by a
subsequent written agreement signed by the party against whom enforcement of
the
modification is sought.
Section 8. Governing
Law.
The
validity, construction and enforceability of this Agreement shall be governed
in
all respects by the laws of the State of New York, without regard to its
conflicts of laws rules.
Section 9. Resolution
of Disputes.
Any
disputes under or in connection with this Agreement shall, at the election
of
either party, 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. Each party shall bear its own costs,
including but not limited to attorneys’ fees, of the arbitration or of any
litigation arising out of this Agreement. 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.
Section 10. Waiver;
Severability.
No
waiver by any party at any time of any breach by any other party of, or
compliance with, any condition or provision of this Agreement to be performed
by
any other party shall be deemed a waiver of any other provision of this
Agreement, or of any subsequent breach by such party of a provision of this
Agreement. If any of the provisions of this Agreement shall otherwise contravene
or be invalid under the laws of any state or other jurisdiction where it is
applicable but for such contravention or invalidity, such contravention or
invalidity shall not invalidate all of the provisions of this Agreement, but
rather this Agreement shall be reformed and construed, insofar as the laws
of
that state or jurisdiction are concerned, as not containing the provision or
provisions, but only to the extent that they are contravening or are invalid
under the laws of that state or jurisdiction, and the rights and obligations
created hereby shall be reformed and construed and enforced
accordingly.
Section 11. Return
of Property to the Company.
All
Company property, including but not limited to any Company-owned automobile,
BlackBerry, cell phone, computer, printer, fax machine, and all memoranda,
notes, lists, records and other documents or papers (and all copies thereof),
including items stored in computer memories or by other means, made or compiled
by Executive or made available to Executive relating to the Company or its
affiliates or its business, are and shall remain the property of the Company,
and either have been or shall be delivered to the Company promptly upon the
Executive’s Retirement Date. Executive may purchase the Company-owned automobile
or other Company-owned equipment in accordance with Company policy and
instructions.
Section 12. Withholding.
The
Company may withhold from any amounts payable under this Agreement such federal,
state and local taxes as may be required to be withheld pursuant to applicable
laws or regulations.
Section 13. Counterparts.
This
Agreement may be executed by either of the parties hereto in counterparts,
each
of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument.
6
IN
WITNESS WHEREOF,
the
parties hereto have executed this Agreement on the date appearing next to their
signatures.
|
International
Flavors & Fragrances Inc.
|
||
| Date: April 3, 2006 | By: | /s/ Dennis M. Meany |
| Name: | Dennis M. Meany | |
| Title: | Senior Vice President, General Counsel and Secretary |
|
Date:
April 3, 2006
|
/s/ Richard A. Goldstein
|
|
Richard A. Goldstein
|
7
May
Not Be Executed
Before
May 9, 2006
EXHIBIT
A
GENERAL
RELEASE
As
a
material inducement to the Company to enter into the Retirement Agreement to
which this General Release is an Exhibit, Executive hereby irrevocably and
unconditionally releases, acquits and forever discharges the Company, its
successors, assigns, agents, directors, officers, executives, representatives,
subsidiaries, divisions, parent corporations and affiliates, and all other
persons acting by, through or in concert with any of them (collectively, the
“Releasees”)
from
any and all charges, complaints, claims, liabilities, obligations, promises,
agreements, actions, damages, expenses (including attorneys’ fees and costs
actually incurred), or any rights of any and every kind or nature, accrued
or
unaccrued, known or unknown, which Executive has or claims to have arising
out
of facts and circumstances which have occurred or existed prior to, or which
are
occurring and do exist as of, the date of Executive’s execution of this
Agreement against each or any of the Releasees. This release (the
“Release”) pertains to but is in no way limited to all matters relating to
or arising out of Executive’s employment and the cessation of his employment by
the Company and all claims for severance benefits or other payments which are
not express obligations of the Company under this Agreement, or otherwise.
The
Release further pertains to, but is in no way limited to, rights and claims
under the Age Discrimination in Employment Act of 1967, Title VII of the
Civil Rights Act, as amended, the Americans With Disabilities Act, the Family
Medical Leave Act, and all other state, local or municipal fair employment
and
discrimination laws, and all claims under common law, whether based in tort
or
contract, law or equity.
Notwithstanding
anything herein to the contrary, this General Release does not apply to: (i)
claims that arise after the Executive’s Retirement Date; (ii) the Executive’s
rights under any tax-qualified pension or claims for accrued vested benefits
under any other employee benefit plan, policy or arrangements maintained by
the
Company or under COBRA; (iii) worker’s compensation claims and any other claims
that cannot be waived by law; (iv) the Executive’s rights to enforce this
Agreement; or (v) the Executive’s rights as a stockholder.
This
Agreement is not intended to and does not interfere with the Equal Employment
Opportunity Commission’s right to enforce anti-discrimination laws or to seek
relief that will benefit the public and any victim of unlawful employment
practices who have not waived their claims. Therefore, by signing this
Agreement, Executive waives any right to personally recover against the Company,
but Executive is not prevented from filing a charge with, or testifying,
assisting, or participating in any proceeding brought by the EEOC, concerning
an
alleged discriminatory practice of the Company.
IN
WITNESS WHEREOF, I have executed this General Release this ____ day of May,
2006.
|
|
|
|
Richard
A. Goldstein
|
A-1