EX-10.3







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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