Exhibit 10.3
SENSIENT TECHNOLOGIES CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN
As Amended and Restated January 1, 2005
1. Establishment.
The Sensient Technologies Corporation (the “Company”) established the Directors’
Deferred Compensation Plan (the “Plan”) effective February 1, 1984 to provide
members of the Company’s Board of Directors (the “Board”) with the ability to
defer receipt of compensation for services on the Board until after they resign
or retire from the Board. On November 11, 1999, subject to shareholder approval,
the Board adopted an Amended and Restated Plan, which provided that only
directors who are entitled to compensation from the Company for services as a
Board member or any committee are eligible to participate in the Plan. Effective
as of January 1, 2005, the Plan was again amended and restated to comply with
the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended (the “Code”). As a result all benefits under this Plan are subject to
Section 409A of the Code and any guidance issued thereunder. The Plan is
administered by the Company, and the plan year is a calendar year.
2. Eligibility.
Pursuant to the Plan, any non-employee Director of the Company entitled to
“Director Fees” (that is, compensation from the Company by reason of his/her
being a member of the Board, or any committee thereof) (“Eligible Director”) may
elect to defer receipt of all or a specified portion of such Director Fees and
thereby become a participant in the Plan.
3. Initial Election.
An Eligible Director’s initial election to participate in the Plan (“Initial
Election”) shall be evidenced by a writing filed with the Company as provided in
Paragraph 5 and Paragraph 7(a). Such Initial Election shall be effective upon
its receipt by the Company. The deferral pursuant to such Initial Election shall
continue until: (i) changed by a Subsequent Election (as provided in
Paragraph 5(b)); (ii) the last day of the plan year in which the Eligible
Director files a Subsequent Election terminating his/her participation in the
Plan under Paragraph 17; or (iii) the date the Eligible Director ceases being a
member of the Board (“Cessation of Service”), whichever occurs first.
4. Director’s Deferred Compensation Account.
A Director’s Deferred Compensation Account (the “Account”) shall be established
for each Eligible Director electing to participate in the Plan. Except as
provided in Paragraph 6, all Director Fees deferred pursuant to Paragraph 3
shall be credited to the Account on the date on which such fees otherwise would
have been payable to a Director had they not been deferred hereunder. Each
Eligible Director’s Account shall be subdivided, as applicable, into a “Cash
Subaccount” and a “Stock Subaccount.”
5. Initial Election and Subsequent Elections.

  (a)   An Initial Election shall be in the form of Exhibit A hereto and shall
specify:

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  (i)   the portion of the subsequent Director Fees payable to such Eligible
Director which the Eligible Director elects to have deferred under the Plan (the
“Deferral Portion”);     (ii)   the allocation of the Deferral Portion between
the Cash Subaccount and the Stock Subaccount (“Plan Allocation”);     (iii)  
the manner in which the Eligible Director wishes to have amounts deferred under
the Plan distributed to him/her as provided in Paragraph 10 (“Distribution
Election”); and     (iv)   the “Designation of Beneficiary” under Paragraph 13.

  (b)   Once an Initial Election has been filed with the Company, the election
as to the Deferral Portion shall apply to all Director Fees payable during the
following plan year (except as provided in Paragraph 7(a)). An Eligible Director
may (subject to Paragraph 7) file a later-dated election (such later-dated
election being referred to herein as a “Subsequent Election”), to change the
elections contained in his/her Initial Election or in a previously-filed
Subsequent Election: (i) as to the Deferral Portion, which shall be effective
the following plan year; (ii) as to the Plan Allocation which shall be effective
as soon as practicable upon its receipt by the Company; (iii) the Designation of
Beneficiary, which shall be effective upon its receipt by the Company; or
(iv) to terminate his/her participation in the Plan, which shall be effective as
of the last day of the plan year in which such election to terminate
participation is received by the Company.

6. Crediting Stock to Stock Subaccount.
If, pursuant to an Initial Election or Subsequent Election, an Eligible Director
makes a Plan Allocation into the Stock Subaccount, such Eligible Director’s
Stock Subaccount shall be credited with that number of shares (including any
fractional share) of the Company’s common stock, $.10 par value (“Common Stock”)
which have a market value equal to the amount of the Deferral Portion allocated
to his/her Stock Account. Shares shall be credited to a Stock Subaccount as of
the last day of the fiscal quarter in which any Director Fees would have been
payable (the “Credit Date”). For purposes of this Paragraph 6, the market value
of a share of Common Stock shall equal the closing sale price of a share of
Common Stock on the New York Stock Exchange on the Credit Date (or if no sale
took place on such exchange on such date, the closing sale price on such
exchange on the most recent preceding date on which a sale took place).
7. Times When Elections and Subsequent Elections May Be Made.

  (a)   An Initial Election or Subsequent Election as to the Deferral Portion
must be made prior to the plan year in which such compensation is earned,
provided, however, that an Initial Election may be made within 30 days after
first becoming an Eligible Director for Director Fees earned thereafter. Except
as provided in

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      Paragraphs 5(b) and 10, an Initial Election or Subsequent Election as to
the Deferral Portion shall be irrevocable upon its receipt by the Company.    
(b)   Notwithstanding anything in Paragraph 7(a) to the contrary, prior to an
Eligible Director’s Cessation of Service, any (i) Initial Election or
(ii) Subsequent Election which (A) changes the Plan Allocation or (B) changes
the Deferral Portion (unless the Eligible Director has elected only the Cash
Subaccount) may only be made and shall only be effective at such time and upon
such conditions as an Eligible Director would be permitted to effect an open
-market acquisition or disposition of Common Stock under the provisions of the
Company’s Code of Conduct covering acquisitions or dispositions of Common Stock
by officers, directors and employees of the Company, as such Code of Conduct may
be amended from time to time.     (c)   After an Eligible Director’s Cessation
of Service no further Subsequent Elections may be made, except to change the
Designation of Beneficiary.

8. Earnings.
Until the balance of an Eligible Director’s Account has been fully
paid/distributed to him/her in accordance with Paragraph 10:

  (a)   The balance from time to time, accruing in the Cash Subaccount, shall
bear interest at the rate of 8% per annum. Such interest income shall be
credited to the Account as of each December 31 on which there is such a balance
in a Director’s Account.     (b)   From time to time at such times as the
Company pays a cash dividend with respect to its Common Stock, the Stock
Subaccount of each Eligible Director who has shares of Common Stock credited to
his/her Stock Subaccount on the record date for such dividend shall be credited
with additional shares of Common Stock (including any fractional share) with a
market value (as determined under Paragraph 6) equal to the dividend per share
paid by the Company with respect to its Common Stock times the number of shares
in the Stock Subaccount on the record date for such dividend.

9. Nature of Account.
The Account (and the Subaccounts) shall be utilized solely as a device for the
measurement and determination of the amount of deferred compensation
payable/distributable under the Plan. The Account shall not constitute or be
treated as a trust fund of any kind. Director Fees deferred hereunder and
credited to a Director’s Account shall at all times, remain the property of the
Company, and no Eligible Director shall acquire any property interest in the
Account, his/her right being limited to receiving from the Company, deferred
payments/distributions as calculated by the Plan, such right being further
conditioned upon continued compliance with the terms and conditions of the Plan.
The Company shall be under no obligation to issue, or acquire, shares of Common
Stock in connection with the crediting of shares to the Stock Subaccount. Shares
credited to the Stock Subaccount shall have no voting rights or be entitled to
dividends or

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distributions of any kind except as provided in Paragraphs 8(b) and 11 hereof.
The right of an Eligible Director to receive benefits under the Plan is no
greater than the right of any unsecured general creditor of the Company.
10. Distribution of Director Fees Deferred Under the Plan.

  (a)   An Eligible Director shall elect in his/her Initial Election to have
his/her Account paid to him/her in either of the following ways (with such
Distribution Election irrevocable once made, except as provided in Paragraphs
10(b) and 12):

  (i)   in a lump sum on January 31 of the first calendar year after the
Eligible Director’s Cessation of Service, or on January 31 of any calendar year
thereafter;     (ii)   in five (5) consecutive annual installments commencing on
January 31 of the first calendar year after the Eligible Director’s Cessation of
Service.         If an Eligible Director makes no such written election, the
balance in his/her Account shall be paid in a lump sum on January 31 of the
first calendar year after the Eligible Director’s Cessation of Service. In the
event of the death of an Eligible Director, the balance in his/her Account shall
be paid in a lump sum to the Eligible Director’s designated beneficiary (or to
his/her estate in the absence of any beneficiary designation), on January 31 of
the first calendar year following the date of death.

  (b)   Notwithstanding anything in Paragraph 10(a) to the contrary, prior to
December 31, 2008 an Eligible Director may change an Initial Election or
Subsequent Election as to his/her Distribution Election in accordance with
transitional guidance under Section 409A of the Code.     (c)   In the event
that (i) an Eligible Director elects to have his/her Account distributed to
him/her in annual installments, and (ii) at the time of his/her Cessation of
Service there are shares of Common Stock credited to such Eligible Director’s
Stock Subaccount, each annual installment shall consist of: (A) the dollar
amount in his/her Cash Subaccount (including accruals of interest from time to
time after such Cessation of Service pursuant to Paragraph 8(a)) divided by the
number of remaining installments; plus (B) the number of shares of Common Stock
in his/her Stock Subaccount (including any increases therein pursuant to
crediting of dividends from time to time after such Cessation of Service
pursuant to Paragraph 8(b)) divided by the number of remaining installments,
rounded to the nearest whole share.     (d)   Distributions from the Stock
Subaccount shall be made in-kind and consist of one or more certificates
representing the number of shares of Common Stock then being distributed. Any
shares so distributed may consist of newly-issued shares, treasury shares, or a
combination thereof. In the case of any lump-sum

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      distribution of Common Stock from an Eligible Director’s Stock Subaccount,
and in the case of the final installment distribution of Common Stock from an
Eligible Director’s Stock Subaccount, there remains any fractional share of
Common Stock in such Stock Subaccount, then cash shall be distributed in lieu of
such fractional share, determined with reference to the market value (as
determined under Paragraph 6) of a whole share of Common Stock on the date of
such distribution.

11. Change in Shares.
In the event of any change in the outstanding shares of Common Stock that occurs
by reason of a stock dividend or split, recapitalization, merger, consolidation,
combination, spin-off, split-up, exchange of shares or other similar corporate
change, the number of shares of Common Stock in each Stock Subaccount, and the
maximum number of shares issuable under the Plan as provided in Paragraph 20,
shall be adjusted accordingly.
12. Disability.
In the event of the Disability of an Eligible Director, the balance in his/her
Account shall be paid in a lump sum on January 31 of the first calendar year
following the date of Disability. For purposes of the Plan, “Disability” shall
mean (i) the Eligible Director is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a
continuous period of not less than 12 months; (ii) the Eligible Director is, by
reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period
of not less than 12 months, receiving income replacement benefits for a period
of not less than 3 months under an accident and health plan covering the
Eligible Director; or (iii) the Eligible Director is determined to be totally
disabled by the Social Security Administration.
13. Designation of Beneficiary.
An Eligible Director may designate one or more beneficiaries who are to receive
all of the funds/shares in the Eligible Director’s Account which remain
unpaid/undistributed at the Eligible
Director’s death. Such designation shall be effective by filing an Initial
Election, and such beneficiary designation may be changed at any time by filing
a Subsequent Election. If no beneficiary designation is made by an Eligible
Director, any Account balance shall be paid/distributed to the Eligible
Director’s estate.
14. Nonassignment.
Neither an Eligible Director, nor his duly designated beneficiary, shall have
any right to assign, transfer or pledge or otherwise convey the right to receive
any amount of compensation which may be due hereunder, and any such attempt at
assignment, transfer, pledge or other conveyance shall not be recognized by the
Company.

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15. Amendment of the Plan.
This Plan may be amended from time to time by resolution of the Board of
Directors of the Company, but no such amendment shall permit amounts accumulated
pursuant to the Plan, prior to the amendment, to be paid to an Eligible Director
prior to the time that he/she would otherwise be entitled thereto.
16. Termination of the Plan.
The Plan will continue in effect until termination by resolution of the Board of
Directors of the Company, but in the event of such termination, the amounts
accumulated pursuant to the Plan, prior to termination, shall continue to be
subject to the provisions of the Plan, as if the Plan had not been terminated.
17. Termination of Active Participation.
An Eligible Director who has previously elected to participate in the Plan may
file a Subsequent Election terminating his/her active participation in the Plan,
which shall become effective as of the last day of the plan year in which the
Eligible Director terminates his/her active participation in the Plan. Such
termination shall be effective with respect to all Director Fees earned by the
Eligible Director after the last day of the plan year in which the Company
receives such Subsequent Election, which fees shall then be payable to such
Eligible Director in accordance with Company policy but otherwise than under the
Plan, and such Eligible Director shall only be entitled to receive Director Fees
previously deferred under the Plan as provided in Paragraph 10.
A termination of active participation pursuant to this Paragraph 17 shall not in
any way preclude an Eligible Director from thereafter filing an Initial Election
and thereby re-elect to actively participate in the Plan, provided such election
complies with the provisions of Paragraphs 7 and 10.
18. Maximum Number of Shares.
The maximum number of shares of Common Stock that may be issued hereunder is
200,000, subject to adjustment as provided in Paragraph 11.
19. Tax Matters.

  (a)   All distributions, payments and benefits under this Plan shall be
subject to all income and employment tax withholdings as required under
applicable federal, state or local tax laws and regulations.     (b)   It is the
intention of the Company that this Plan comply with the requirements of
Section 409A of the Code and any guidance issued thereunder, and the Plan shall
be interpreted, construed, operated and administered in accordance with
Section 409A of the Code. Notwithstanding anything in this Plan to the contrary,
the Company does not guarantee the tax treatment of any payments or benefits
under this Plan, whether pursuant to the Code, federal, state or local tax laws
or regulations.

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  (c)   If, for any reason, all or any portion of an Eligible Director’s Account
balance under this Plan becomes taxable to the Eligible Director prior to
receipt, the Administrator may distribute to such Eligible Director a portion of
his/her Account balance:

  (i)   for payment of state, local or foreign taxes and the income tax
withholding related to such state, local and foreign tax amount;     (ii)   for
payment of employment taxes (to the extent necessary to pay the Federal
Insurance Contributions Act tax amount (the “FICA Amount”) and any Federal,
state, local or foreign income tax withholding on the FICA Amount); and/or    
(iii)   required to be included in income as result of Section 409A of the Code.

Any distributions under this Paragraph shall affect and reduce the Account
balance to be paid to the Eligible Director under this Plan.

  (d)   The Company shall indemnify the Eligible Director if the Eligible
Director incurs additional tax under Section 409A of the Code as a result of a
violation of Section 409A of the Code under this Plan (an “Indemnified
Section 409A Violation”) that occurs as a result of (1) the Company’s clerical
error (other than an error cause by erroneous information provided to the
Company by the Eligible Director), (2) the Company’s failure to administer this
Plan in accordance with its written terms (such written terms, the “Plan
Document”), or (3) following December 31, 2008, the Company’s failure to
maintain the Plan Document in compliance with Section 409A of the Code;
provided, that the indemnification set forth in clause (3) shall not be
available to the Eligible Director if (x) the Company has made a reasonable,
good faith attempt to maintain the Plan Document in compliance with Code
Section 409A but has failed to do so or (y) the Company has maintained the Plan
Document in compliance with Section 409A of the Code but subsequent issuance by
the Internal Revenue Service or the Department of the Treasury of interpretive
authority results in the Plan Document not (or no longer) complying with
Section 409A of the Code (except that, if the Company is permitted by such
authority or other authority to amend the Plan Document to bring the Plan
Document into compliance with Section 409A of the Code and fails to do so, then
such indemnification shall be provided).

  (i)   In the event of an Indemnified Section 409A Violation, the Company shall
reimburse the Eligible Director for (1) the 20% additional income tax described
in Section 409A(a)(1)(B)(i)(II) of the Code (to the extent that the Eligible
Director incurs the 20% additional income tax as a result of the Indemnified
Section 409A Violation), and (2) any interest or penalty that is assessed with
respect to the Eligible Director’s failure to make a timely payment of the 20%
additional income tax described in clause (1), provided that the Eligible
Director pays the 20% additional income tax

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      promptly upon being notified that the tax is due (the amounts described in
clause (1) and clause (2) are referred to collectively as the “Section 409A
Tax”).     (ii)   In addition, in the event of an Indemnified Section 409A
Violation, the Company shall make a payment (the “Section 409A Gross-Up
Payment”) to the Eligible Director such that the net amount the Eligible
Director retains, after paying any federal, state, or local income tax or FICA
tax on the Section 409A Gross-Up Payment, shall be equal to the Section 409A
Tax. The Eligible Director shall reasonably cooperate with measures identified
by the Company that are intended to mitigate the Section 409A Tax to the extent
that such measures do not materially reduce or delay the payments and benefits
to the Eligible Director hereunder.

                  SENSIENT TECHNOLOGIES CORPORATION    
 
           
 
  By

Name:   /s/ Douglas S. Pepper
 

Douglas S. Pepper      
 
  Title:   Vice President-Administration    

         
ATTEST:
       
 
       
By:
  /s/ John L. Hammond
 
   

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EXHIBIT A
SENSIENT TECHNOLOGIES CORPORATION
DIRECTORS’ DEFERRED COMPENSATION PLAN
PLAN ELECTION FORM
Sensient Technologies Corporation
777 E. Wisconsin Avenue
Milwaukee, WI 53202
Attention: John L. Hammond
Gentlemen:
      I understand that as a director of Sensient Technologies Corporation (the
“Company”) I am eligible to participate in the Sensient Technologies Corporation
Directors’ Deferred Compensation Plan, as amended and restated (the “Plan”) a
copy of which has been furnished to me.
      This document constitutes:
ELECTION

     
[_]
  An Initial Election under Paragraph 5(a) of the Plan. By checking this box I
hereby elect to participate in the Plan, and to be bound by the terms and
conditions of the Plan. I hereby elect to defer receipt of the Director Fees to
which I become entitled in the future as set forth under “PLAN ELECTIONS” on
page 2.

      Complete all items under “PLAN ELECTIONS” on page 2 and sign and date this
form on page 3.

     
[_]
  A Subsequent Election under Paragraph 5(b) of the Plan (in which case this
Subsequent Election amends and supersedes my Initial Election and any prior
Subsequent Elections I may have made, but only with respect to the Deferral
Portion, Plan Allocation or Designation of Beneficiary). I hereby elect to defer
receipt of the Director Fees to which I become entitled in the future as set
forth under “PLAN ELECTIONS” on page 2.

      Complete all items under “PLAN ELECTIONS” on page 2 (even if some of the
information has not changed) and sign and date this form on page 3.
OR
TERMINATION OF PARTICIPATION

     
[_]
  I hereby terminate my participation in the Plan, effective as of the last day
of the calendar year, as provided in Paragraph 17 of the Plan.
 
   
 
  Sign and date this form on page 3.

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PLAN ELECTIONS

     
A.
  Deferral Portion (Plan Paragraph 5(a)(i)):
 
   
 
  I hereby elect to defer (circle one)

                                                                               
 
 
    10 %     20 %     30 %     40 %     50 %     60 %     70 %     80 %     90 %
    100 %

     
 
  of the Director Fees to which I become entitled in the future.
 
   
B.
  Plan Allocation (Plan Paragraph 5(a)(ii)):
 
   
 
  I hereby elect to allocate the amount deferred above as follows (circle one in
each row; total must equal 100%):

                                                                               
         
Cash Subaccount
    0 %     10 %     20 %     30 %     40 %     50 %     60 %     70 %     80 %
    90 %     100 %
 
                                                                               
       
Stock Subaccount
    0 %     10 %     20 %     30 %     40 %     50 %     60 %     70 %     80 %
    90 %     100 %

C.   Distribution Election (Plan Paragraph 10):

      I hereby elect to have the balance in my Account paid to me in accordance
with the following payment election:

     
[_]
  In a lump sum on January 31 of the first calendar year after my Cessation of
Service (as defined in the Plan),
 
   
[_]
  In a lump sum on January 31, 20___(after my Cessation of Service as defined in
the Plan),
 
   
[_]
  In five (5) consecutive annual installments commencing on January 31 of the
first calendar year after my Cessation of Service (as defined in the Plan).

      I understand that if I do not elect any payment option the balance in my
Account will be paid in a lump sum on January 31 of the first calendar year
after my Cessation of Service (as defined in the Plan).
      I further understand that once made, my Distribution Election is
irrevocable and may not be changed by a Subsequent Election.

D.   Beneficiary Designation (Plan Paragraph 13):

      I hereby designate the following named beneficiaries to receive all the
funds in my Deferred Compensation Account which may remain unpaid at my death:

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                                              Percent (must   Name of
Beneficiary   Address     Relationship     total 100%)  
 
                         
 
                         

                                              Percent (must   Name of Contingent
Beneficiary   Address     Relationship     total 100%)  
 
                         
 
                         

(attach additional sheet if necessary)
If no beneficiary designation is made, I understand that the balance in my
Account will be paid to my estate.
     I understand that the elections and directions contained herein supersede
any prior elections and directions I may have made in the past and shall remain
effective until I file a Subsequent Election changing any of the elections or
directions contained herein or terminating my participation in the Plan.
Dated

                  Very truly yours,    
 
                          Director    
 
                SENSIENT TECHNOLOGIES CORPORATION    
 
           
 
  By:        
 
                Secretary    

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