Exhibit 10.29





Exhibit 10.29




INTERNATIONAL
FLAVORS & FRAGRANCES INC.




Restated and Amended

Executive Separation Policy Document

(As Amended through and including December 14, 2010)





 


 









 







INTERNATIONAL
FLAVORS & FRAGRANCES INC.




Executive Separation Policy




	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	1. Purpose 
	 	 	1	 
	 
	 	 	 	 
	2. Definitions 
	 	 	1	 
	 
	 	 	 	 
	3. Eligibility 
	 	 	5	 
	 
	 
	4. Severance Payments and Benefits
	 	 	5	 
	 
	 	 	 	 
	5. Acceleration of Equity Awards Upon a Change in Control; Certain
Provisions Applicable to Equity Awards 
	 	 	5	 
	 
	 	 	 	 
	6. Effect of Federal Excise Tax 
	 	 	6	 
	 
	 	 	 	 
	7. Employee Obligations and Conditions to Receipt of Payments and Benefits 
	 	 	9	 
	 
	 	 	 	 
	8. Other Provisions Applicable to Severance Payments and Benefits 
	 	 	11	 
	 
	 	 	 	 
	9. Other Plans and Policies; Non-Duplication of Payments or Benefits 
	 	 	12	 
	 
	 	 	 	 
	10. Special Rules for Compliance with Code Section 409A 
	 	 	13	 
	 
	 	 	 	 
	11. Miscellaneous 
	 	 	19	 







 












 







INTERNATIONAL
FLAVORS & FRAGRANCES INC.




Executive Separation Policy




1. Purpose. The purpose of this International Flavors & Fragrances Inc. Executive
Separation Policy (the “Policy”) is to provide certain severance payments and benefits to
designated officers and other key executives and employees of the Company and its subsidiaries
(each, an “Employee”) in the event of termination of employment (i) prior to or more than two years
after a Change in Control or (ii) within two years after a Change in Control. This Policy shall
not affect the right of the Company or a subsidiary to terminate an Employee’s employment with or
without Cause.



2. Definitions. The following definitions are applicable for purposes of this Policy
(including in any Annex hereto), in addition to terms defined in Section 1 above:




(a) “Annual Compensation” means the sum of salary and annual incentive compensation,
calculated as follows:




(i) Salary shall be calculated as the Employee’s annual salary with the Company
and its subsidiaries at the highest rate in effect at any time during the five years
preceding termination of employment; and




(ii) Annual incentive shall be calculated as the greater of Employee’s average
annual incentive award paid for performance in the three years preceding the year of
termination under the AIP or the Employee’s target annual incentive for the year of
termination.




(b) “AIP” means any plan or arrangement of the Company providing cash-denominated
bonuses for annual performance.




(c) “Beneficiary” means any family member or members, including by marriage or
adoption, any trust in which the Employee or any family member or members have more than 50%
of the beneficial interest, and any other entity in which the Employee or any family member
or members own more than 50% of the voting interests, in each case designated by the
Employee in his most recent written Beneficiary designation filed with the Committee as
entitled to receive payments or benefits in connection with this Policy or, if there is no
surviving designated Beneficiary, then the person, persons, trust or trusts entitled by will
or the laws of descent and distribution to receive payments or benefits in connection with
this Policy on behalf or in lieu of such non-surviving designated Beneficiary.




(d) “Cause” means (i) the willful and continued failure by the Employee to
perform substantially his duties with the Company (other than any such failure resulting
from the Employee’s incapacity due to physical or mental illness) after a written demand for
substantial performance is delivered to the Employee by the Chairman of the Board of
Directors or the President of the Company which specifically identifies the manner in which
the Employee has not substantially performed his duties, (ii) the willful engagement by the
Employee in conduct which is not authorized by the Board of Directors of the Company or
within the normal course of the Employee’s business decisions and is known by the Employee
to be materially detrimental to the best interests of the Company or any of its
subsidiaries, including any misconduct that results in material noncompliance with any
financial reporting requirement under the Federal securities laws if such noncompliance
results in an accounting restatement (as these terms are used in


 












 






Section
304 of the Sarbanes-Oxley Act of 2002), or (iii) the willful engagement by the Employee
in illegal conduct or any act of serious dishonesty which adversely affects, or, in the
reasonable estimation of the Board of Directors of the Company, could in the future
adversely affect, the value, reliability or performance of the Employee to the Company in a
material manner. Any act, or failure to act, based upon authority given pursuant to a
resolution duly adopted by the Board of Directors of the Company or based upon the advice of
counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by
the Employee in good faith and in the best interests of the Company. Notwithstanding the
foregoing, an Employee shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to the Employee a copy of the resolution duly adopted
by the affirmative vote of not less than three-quarters of the entire membership of the
Board of Directors after reasonable notice to the Employee and an opportunity for him,
together with his counsel, to be heard before the Board of Directors, finding that, in the
good faith opinion of the Board of Directors, the Employee was guilty of the conduct set
forth above in (i), (ii) or (iii) of this Section 2(c) and specifying the particulars
thereof in detail.




(e) A “Change in Control” shall be deemed to have occurred if, after the Effective Date
and while the affected Employee is employed by the Company or a subsidiary, there shall have
occurred any of the following:




(i) Any “person,” as such term is used in Section 13(d) and 14(d) of the
Exchange Act (other than the Company, any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, or any company owned,
directly or indirectly, by the shareholders of the Company in substantially the same
proportions as their ownership of stock of the Company), acquires voting securities
of the Company and immediately thereafter is a “50% Beneficial Owner.” For purposes
of this provision, a “50% Beneficial Owner” shall mean a person who is the
“beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the combined
voting power of the Company’s then-outstanding voting securities; provided, however,
that the term “50% Beneficial Owner” shall not include any person who shall become
the beneficial owner of 50% or more of the combined voting power of the Company’s
then-outstanding voting securities solely as a result of an acquisition by the
Company of its voting securities, until such time thereafter as such person shall
become the beneficial owner (other than by means of a stock dividend or stock split)
of any additional voting securities and becomes a 50% Beneficial Owner in accordance
with this Section;




(ii) Individuals who on January 1, 2010 constitute the Board, and any new
director (other than a director whose initial assumption of office is in connection
with an actual or threatened election consent, including but not limited to a
consent solicitation, relating to the election of directors of the Company) whose
election by the Board or nomination for election by the Company’s shareholders was
approved by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors on January 1, 2010 or whose election or nomination
for election was previously so approved or recommended, cease for any reason to
constitute at least a majority thereof;




(iii) There is consummated a merger, consolidation, recapitalization, or
reorganization of the Company, or a reverse stock split of any class of voting
securities of the Company, if, immediately following consummation of any of the
foregoing, either (A) individuals who, immediately prior to such consummation,
constitute the Board do not constitute at least a majority of the members of the
board of directors of the Company or the surviving or parent entity, as the case may
be, or (B) the voting securities of the Company outstanding immediately prior to such recommendation do not represent
(either by remaining outstanding or by being converted into voting securities of a
surviving or parent entity) at least 50% or more of the combined voting power of the
outstanding voting securities of the Company or such surviving or parent entity; or


 


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(iv) The shareholders of the Company have approved a plan of complete
liquidation of the Company and there occurs a distribution or other substantive step
pursuant to such plan of complete liquidation, or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets (or any transaction have a similar effect), and in each case all
material contingencies to the completion of the transaction have been satisfied or
waived.




(f) “Committee” means the Compensation Committee of the Company’s Board of Directors or
such other committee as the Board may designate to perform administrative functions under
the Policy.




(g) “Company” means International Flavors & Fragrances Inc., a New York corporation, or
any successor corporation.




(h) “Designated Awards” means (i) options granted under the Company’s Employee
Stock Option Plan of 1988, Employee Stock Option Plan of 1992 and 1997 Employee Stock Option
Plan, (ii) any other options granted under a Plan, whether currently existing or hereafter
adopted by the Company, that, by its terms, does not permit such options to become vested
and exercisable upon occurrence of a Change in Control and to remain outstanding for the
periods provided in Section 5(a), and (iii) restricted stock and other equity-based awards
granted under a Plan or arrangement that, by its terms, does not permit such awards to
become vested and non-forfeitable upon occurrence of a Change in Control as provided in
Section 5(a) in each case if such options or other awards remain outstanding and held by the
Employee at the date of his termination of employment; provided, however, that only awards
that were both granted and vested before 2005 are Designated Awards.




(i) “Disability” means a disability entitling the Employee to long-term disability
benefits under the Company’s long-term disability policy as in effect at the date of
Employee’s termination of employment.




(j) “Effective Date” means the date the Policy became effective, as set forth in
Section 11(i) hereof.




(k) “Excess Benefit Plan” means the Company’s Supplemental Retirement Plan and any
supplemental pensions provided to the Employee under any resolutions adopted by the Board of
Directors of the Company or any subsidiary, and as the same may be modified, replaced or
added to by the Company and its subsidiaries from time to time.




(l) “Good Reason” means the occurrence of any of the following events, unless the
Employee has consented in writing thereto:




(i) a reduction by the Company and its subsidiaries in the Employee’s base
salary as in effect immediately prior to the Change in Control;



 


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(ii) the failure by the Company or a subsidiary to continue in effect any Plan
(as hereinafter defined) in which the Employee was participating at the time of the
Change in Control (i.e., with the effect of diminishing the Employee’s
compensation or benefits, or his or her opportunity to earn compensation through
service or through satisfaction of performance conditions), unless such Plan (x) is
replaced by a successor Plan providing to the Employee substantially similar
compensation and benefits (which replacement Plan shall continue to be subject to
this provision) or (y) terminates as a result of the normal expiration of such Plan
in accordance with its terms, as in effect immediately prior to the Change in
Control; or the taking of any other action, or the failure to act, by the Company or
a subsidiary which would materially adversely affect the Employee’s continued
participation in any of such Plans as compared to the terms of such participation on
the date of the Change in Control, including by materially reducing the Employee’s
benefits in the future under any such Plans;




(iii) effecting a change in the position of the Employee which does not
represent a position commensurate in level, authority and responsibilities with or a
promotion from Employee’s position with the Company or any of its subsidiaries
immediately prior to the date of the Change in Control, or assigning to the Employee
responsibilities which are materially inconsistent with such prior position;




(iv) the Company’s or a subsidiary’s requiring the Employee to be based
anywhere more than 45 miles from the location of Employee’s office immediately prior
to the Change in Control, except for required travel on the business of the Company
or subsidiaries to an extent substantially consistent with the business travel
obligations which the Employee undertook on behalf of the Company or subsidiaries
prior to the Change in Control; or




(v) the failure of the Company to obtain the binding agreement of any successor
to the Company expressly to assume and agree to fully perform the Company’s
obligations under this Policy, as contemplated in Section 11(f) hereof;




in each case after notice in writing from the Employee to the Company within 90 days after
the initial occurrence of the event or initial existence of the condition constituting Good
Reason, and after a period of 30 days after such notice has been given during which the
Company and its subsidiaries fail to correct such conduct or condition. Immaterial
diminutions in compensation or authority, duties or responsibilities (with materiality
determined under Treasury Regulation § 1.409A-1(n)(ii)) shall not constitute “Good Reason”;
unless otherwise required by Section 409A, a diminution of 1% of total direct compensation
shall be deemed material.




(m) “LTIP” means a long-term performance incentive plan of the Company.




(n) “Plan” means any compensation plan of the Company or a subsidiary such as an
incentive, stock option or restricted stock plan or any employee benefit plan of the Company
or a subsidiary such as a pension, profit sharing, medical, dental or life insurance plan.




(o) “Prior Executive Severance Agreement” means an Executive Severance Agreement
between the Employee and the Company in effect immediately prior to the Effective Date of
this Policy.




(p) “Retirement” means retirement at the election of the Employee after attaining age
62.




(q) “Retirement Plan” means the Company’s tax-qualified pension plan in which the
Employee participates, as the same may be modified, replaced or added to by the Company
or a subsidiary from time to time.



 


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3. Eligibility. Each officer of the Company or other key executive or employee of the
Company or its subsidiaries who has been designated in writing by the Committee shall be eligible
for the severance payments and benefits and other provisions of this Policy if his termination of
employment qualifies hereunder. Eligible persons shall include persons employed outside the United
States, if designated by the Committee and subject to Section 11(h) of this Policy.



4. Severance Payments and Benefits. For each class or tier of Employees eligible to
participate under this Policy, the Committee shall specify the terms and conditions under which
severance payments and benefits will be paid and other terms and conditions of participation. Such
terms and conditions shall be set forth in an annex hereto that is specific to each such class or
tier. The foregoing and the provisions of any such annex notwithstanding, the Committee may vary
the terms or provide enhanced benefits in a document provided to a participant otherwise designated
as a participant in a specified tier, except that the Committee shall not vary such terms and
conditions in a way adverse to a previously designated participant without the written consent of
such participant.



5. Acceleration of Equity Awards Upon a Change in Control; Certain Provisions
Applicable to Equity Awards.




(a) Acceleration Upon Change in Control. In the event of a Change in Control, the
following provisions will apply to any stock options, restricted stock and other equity
awards based on stock then held by the Employee, other than Designated Awards and limited
stock appreciation rights relating thereto, provided that stock options, restricted stock
and other equity awards granted on or after December 14, 2010 will not be governed by this
Section 5(a), but instead will be governed by Section 5(b):




(i) Any such option or other award carrying a right to exercise that was not
previously vested and exercisable shall become fully vested and exercisable as of
the time of the Change in Control, except that if an option or other such award is
intended to be a deferral of compensation fully compliant with Code Section 409A,
the additional restrictions on the exercise of such award under the applicable plan
or award agreement shall also apply.




(ii) All forfeiture conditions, deferral of settlement conditions, and other
restrictions applicable to such restricted stock and other equity awards shall lapse
and such awards shall be fully payable or settleable as of the time of the Change in
Control without regard to deferral and vesting conditions, except to the extent of
any waiver by the Employee or other express Employee election to defer beyond a
Change in Control; provided, however, that, in the case of an award that constitutes
a deferral of compensation under Code Section 409A (excluding any “grandfathered”
award), the end of any deferral period and settlement of the award shall occur only
if, in connection with the Change in Control, there occurs a change in the ownership
of the Company, a change in effective control of the Company, or a change in the
ownership of a substantial portion of the assets of the Company (as defined in
Treasury Regulation § 1.409A-3(i)(5)) (but forfeiture conditions relating to such
award will lapse), and any waiver or express election to defer such an award subject
to Section 409A shall be subject to the requirements of Section 10(g)(ii).



 


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(iii) With respect to such an outstanding equity award subject to achievement
of performance goals and conditions, such award will be governed by the
applicable plan, award document(s), other agreement governing such award, or other
applicable terms of this Policy.




Notwithstanding the foregoing, Section 7 shall continue to apply to any such award in
accordance with its terms.




(b) Treatment of Equity Awards Granted On or After December 14, 2010. In the case of
any stock options, restricted stock or other equity award granted on or after December 14,
2010:




(i) If such award was granted to an Employee who had already been designated as
a participant under this Policy on December 14, 2010 and the Change in Control
occurred before December 31, 2011, the award will be subject to acceleration in
accordance with, and the other terms of, Section 5(a).




(ii) Any such award other than an award governed by Section 5(b)(i) will be
governed by the applicable plan, award document(s), other agreement governing such
award, or other applicable provision of this Policy.




(c) More Favorable Terms Apply. If and to the extent that the terms of an option,
restricted stock award, or other award based on stock are more favorable to the Employee, in
the event of a Change in Control, than those terms provided under this Section 5, those
terms shall apply, and this Section 5 shall not operate in any way to restrict or cut back
on the rights of the Employee with respect to such award.




6. Effect of Federal Excise Tax.




(a) Pre-Amendment Employees and New Employees Generally. This Section 6 specifies
certain adjustments to payments to an Employee who becomes entitled to one or more payments
in connection with a Change in Control or termination of employment during the two years
following a Change in Control (with a “payment” including, without limitation, the vesting
of an option or other non-cash benefit or property, including under Section 5 of this
Policy) pursuant to any plan, agreement or arrangement of the Company (together, “Severance
Payments”) if such Employee is or would be subject to the tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (or any similar tax that may be imposed) (the
“Excise Tax”). If such Employee (an “Affected Employee”) was designated as a Tier I or Tier
II level participant under this Policy on or before March 8, 2010 and the Affected Employee
has not been terminated for Cause (a “Pre-Amendment Employee”), the Company will pay to the
Employee an additional amount (the “Gross-Up Payment”) or reduce payments to the
Pre-Amendment Employee if and to the extent so provided in Section 6(b). If an Affected
Employee is not a Pre-Amendment Employee, the Company will reduce payments to such Affected
Employee (a “New Employee”) if and to the extent so provided in Section 6(c).




(b) Gross-Up or Cut-Back for Pre-Amendment Employee. In the case of a Pre-Amendment
Employee, the Company will pay to the Pre-Amendment Employee a Gross-Up Payment in an amount
such that, after the payment by the Employee of all taxes (including without limitation all
income and employment tax and Excise Tax, and treating as a tax the lost tax benefit
resulting from the disallowance of any deduction of the Employee by virtue of the inclusion
of the Gross-Up Payment in the Employee’s adjusted gross income), and interest and penalties
with respect to such taxes, imposed upon the Gross-Up Payment, the Employee retains an
amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Severance Payments. The
foregoing notwithstanding, if a reduction of any compensation under Section 4 or vesting of
equity awards under Section 5 by an amount not exceeding 10% of the Safe Harbor Amount would
avoid the imposition of the Excise Tax on the Employee, compensation pursuant to Section 4
and/or vesting of equity awards under Section 5 of this Agreement shall be reduced to the
extent necessary, but not more than 10% of the Safe Harbor Amount, to result in no
imposition of Excise Tax on the Employee. The “Safe Harbor Amount” shall mean one dollar
less than 300% of the Affected Employee’s “base amount” as determined in accordance with
Section 280G(b)(3) of the Code.



 


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(c) Cut-Back for New Employee to Maximize Retained After-Tax Amounts. In the case of a
New Employee, the Company will reduce Severance Payments to the Reduced Amount (as defined
below) if but only if reducing the Severance Payments would provide to the New Employee a
greater net after-tax amount of Severance Payments than would be the case if no such
reduction took place. The “Reduced Amount” shall be an amount expressed in present value
which maximizes the aggregate present value of the Severance Payments without causing any
Severance Payment to be subject to Excise Tax, determined in accordance with Section
280G(d)(4) of the Code. Any reduction in Severance Payments shall be implemented in
accordance with Section 6(d).




(d) Implementation Rules. Any reduction in payments under Section 6(b) or 6(c)shall
apply to cash payments and/or vesting of equity awards so as to minimize the amount of
compensation that is reduced (i.e., it applies to payments or vesting that to the greatest
extent represent parachute payments), with the amount of compensation based on vesting to be
measured (to be minimally reduced, for purposes of this provision) by the intrinsic value of
the equity award at the date of such vesting. The Employee shall be advised of the
determination as to which compensation will be reduced and the reasons therefor, and the
Employee and his or her advisors will be entitled to present information that may be
relevant to this determination. No reduction shall be applied to an amount that constitutes
a deferral of compensation under Code Section 409A except for amounts that have become
payable at the time of the reduction and as to which the reduction will not result in a
non-reduction in a corresponding amount that is a deferral of compensation under Code
Section 409A that is not currently payable.



For purposes of determining whether any of the Severance Payments will be subject to the
Excise Tax and the amount of such Excise Tax:




(i) The Severance Payments shall be treated as “parachute payments” within the meaning
of Section 280G(b)(2) of the Code, and all “excess parachute payments” within the meaning of
Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and
except to the extent that, in the written opinion of independent compensation consultants,
counsel or auditors of nationally recognized standing (“Independent Advisors”) selected by
the Company and reasonably acceptable to a majority of the Affected Employees, the Severance
Payments (in whole or in part) do not constitute parachute payments, or such excess
parachute payments (in whole or in part) represent reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4) of the Code in excess of the base
amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not subject to
the Excise Tax.




(ii) The value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Independent Advisors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code.


 


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For purposes of determining the amount of the Gross-Up Payment, the Pre-Amendment Employee
shall be deemed (A) to pay federal income taxes at the highest marginal rate of federal income
taxation for the calendar year in which the Gross-Up Payment is to be made; (B) to pay any
applicable state and local income taxes at the highest marginal rate of taxation for the calendar
year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and local taxes if paid in such year
(determined with regard to limitations on deductions based upon the amount of the Employee’s
adjusted gross income); and (C) to have otherwise allowable deductions for federal, state, and
local income tax purposes at least equal to those disallowed because of the inclusion of the
Gross-Up Payment in the Employee’s adjusted gross income. In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder at the time the
Gross-Up Payment is made, the Employee shall repay to the Company at the time that the amount of
such reduction in Excise Tax is finally determined (but, if previously paid to the taxing
authorities, not prior to the time the amount of such reduction is refunded to the Employee or
otherwise realized as a benefit by the Employee) the portion of the Gross-Up Payment that would not
have been paid if such Excise Tax had been applied in initially calculating the Gross-Up Payment,
plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed the amount taken into account
hereunder at the time the Gross-Up Payment is made (including by reason of any payment the
existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such excess (plus any interest and
penalties payable with respect to such excess) at the time that the amount of such excess is
finally determined.



For purposes of determining reductions in compensation under Section 6(b) or 6(c), the
Affected Employee shall be deemed (A) to pay federal income taxes at the applicable rates of
federal income taxation for the calendar year in which the compensation would be payable; and (B)
to pay any applicable state and local income taxes at the applicable rates of taxation for the
calendar year in which the compensation would be payable, taking into account any affect on federal
income taxes from payment of state and local income taxes. Compensation will be adjusted not later
than the applicable deadline under Code Section 409A to provide for accurate payments under the
cut-back provision of Section 6(b) and Section 6(c), but after any such deadline no further
adjustment will be made if it would result in a tax penalty under Section 409A.



(e) Other Terms Relating to Gross-Up Payment. Subject to Section 10(a)(iii), the Gross-Up
Payment provided for in Section 6(b) above shall be paid on the 30th day (or such earlier date
as the Excise Tax becomes due and payable to the taxing authorities) after it has been
determined that the Severance Payments (or any portion thereof) are subject to the Excise Tax;
provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be
finally determined on or before such day, the Company shall pay to the Employee on such day an
estimate, as determined by the Independent Advisors, of the minimum amount of such payments and
shall pay the remainder of such payments (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code), as soon as the amount thereof can be determined. In the event that
the amount of the estimated payments exceeds the amount subsequently determined to have been
due, such excess shall constitute a loan by the Company to the Employee, payable on the fifth
day after demand by the Company (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code). If more than one Gross-Up Payment is made, the amount of each
Gross-Up Payment shall be computed so as not to duplicate any prior Gross-Up Payment.



(f) Internal Revenue Service Proceedings. The Company shall have the right to control all
proceedings with the Internal Revenue Service (or relating thereto) that may arise in connection
with the determination and assessment of any Excise Tax and, at its sole option, the Company may
pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with
any taxing authority in
respect of such Excise Tax (including any interest or penalties thereon); provided, however,
that the Company’s control over any such proceedings shall be limited to issues with respect to
which a Gross-Up Payment would be payable or compensation reduced hereunder, and the Employee shall
be entitled to settle or contest any other issue raised by the Internal Revenue Service or any
other taxing authority. The Employee shall cooperate with the Company in any proceedings relating
to the determination and assessment of any Excise Tax and shall not take any position or action
that would materially increase the amount of any Gross-Up Payment hereunder.



 


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7. Employee Obligations and Conditions to Receipt of Payments and Benefits.



(a) Obligations of the Employee. The following requirements must be met by the
Employee as a condition to his right to receive, continue to receive, or retain payments
and benefits under the Policy, as specified in Section 7(b), (c) and (d):




(i) The Employee, 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 Employee’s interest is insubstantial, engage in or become associated with
a “Competitive Activity.” For this purpose, (A) the “Non-competition Period” means
the period prior to a Change in Control and during Employee’s employment and within
two years (or such other period as the Committee may specify) following termination
of such employment with the Company and any subsidiary or for such shorter period
following such termination as may be provided by applicable law; 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 Employee, the
Company or subsidiary has covenanted in writing, in connection with the disposition
of such business, not to compete therewith. The Committee shall, in the reasonable
exercise of its discretion, determine which lines of business the Company and its
subsidiaries conduct on any particular date and which third parties may reasonably
be deemed to be in competition with the Company and its subsidiaries. For purposes
of this Section 7(a) (including clause (ii) below), the Employee’s interest as a
shareholder is insubstantial if it represents beneficial ownership of less than five
percent of the outstanding class of stock, and the Employee’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 percent of the outstanding equity
of the entity.




(ii) During the period prior to a Change in Control and during the Employee’s
employment and within two years (or such other period as the Committee may specify)
following termination of such employment with the Company or any subsidiary or for
such shorter period following termination as may be provided by applicable law, the
Employee, 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.


 


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(iii) The Employee shall not disclose, use, sell, or otherwise transfer,
except in the course of employment with or other service to the Company or any
subsidiary or affiliate, 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, and the Employee shall not
make statements or representations, or otherwise communicate, directly or
indirectly, in writing, orally, or otherwise, or take any other action which may,
directly or indirectly, disparage or be damaging to the Company or any of its
subsidiaries or affiliates or their respective officers, directors, employees,
advisors, businesses or reputations, except as required by law or pursuant to legal
process.




(iv) The Employee 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.




(v) The Employee shall deliver promptly to the Company on termination of the
Employee’s employment, or at any time the Company may so request, all documents,
memoranda, notes, records, files, reports, and other materials, and all copies
thereof, including digital versions, relating to the Company and its subsidiaries
and affiliates, and all other property of the Company and its subsidiaries and
affiliates, then in the possession of or under the Employee’s control.




(b) Effect of the Employee’s Failure to Comply with Obligations. The Company shall
have no obligations to make payments or provide benefits to the Employee under this Policy
if, in the case of an Employee whose employment terminates prior to a Change in Control, the
Employee has failed or fails to comply with the obligations set forth in Section 7(a), other
than inadvertent and inconsequential events constituting non-compliance, during the period
of two years prior to the Employee’s termination of employment or at any time following such
termination of employment.




(c) Employee Obligation to Execute Release and Termination Agreement. The Company’s
obligations under this Policy to make payments and provide benefits is conditioned upon the
Employee’s signing a release and termination agreement and the expiration of any revocation
period set forth therein. The Committee shall specify the form and content of such
agreement, and may modify such form and content from time to time; provided, however, that,
such agreement shall set forth the obligations in Section 7(a) and the Employee shall agree
to comply therewith, and the Employee shall agree to the terms of Section 7(d); and provided
further, that during the two years following a Change in Control, such agreement shall not
be modified in a manner that increases the obligations or decreases the rights of the
Employee as compared to the form of such agreement in use prior to the Change in Control.



 


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(d) Clawback Provision. In the case of any termination of the Employee’s
employment prior to a Change in Control, if the Employee has failed to comply with the
obligations under Section 7(a) (other than an inadvertent and inconsequential event
constituting non-compliance) during the two years prior to termination or during the period
following termination which is the lesser of two years or the period during which the
obligations under Section 7(a) continue to apply, 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 Employee will be obligated to repay to the Company, in cash, within
five business days after demand is made therefor by the Company,




(A) the total amount of any cash payments made to the Employee under
this Policy, other than (i) such Employee’s annual salary that had been
payable as of the date of termination of employment, 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
Employee and unreimbursed business expenses reimbursable under Company
policies then in effect, and (ii) cash payments under welfare benefit plans;




(B) other cash amounts paid to the Employee under any AIP and LTIP
awards since the date two years prior to the Employee’s termination of
employment; and




(C) the Award Gain (as defined below) realized by the Employee upon
each exercise of an option or settlement of a restricted stock or stock unit
award (regardless of any elective deferral) since the date two years prior
to Employee’s termination of employment. For purposes of this Section 7(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 (ii), in respect of any
other settlement of an award granted to the Employee, the fair market value
of the cash or stock paid or payable to the Employee (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 Employee to
the Company as a condition of or in connection such settlement.




Any policy of the Company providing for forfeiture or recoupment of compensation, including
Section 10 of the 2010 Stock Award and Incentive Plan and Section 10 of the 2000 Stock Award
and Incentive Plan, shall apply by its terms and shall not be deemed limited in any way by
this 7(d) or any other provision of this Policy. In addition, any clawback or recoupment
provisions required under the Dodd-Frank Wall Street Reform and Consumer Protection Act
shall apply to compensation payable under this Policy.




8. Other Provisions Applicable to Severance Payments and Benefits.




(a) Timing of Payments. Subject to Section 10, all payments required to be paid
as a lump sum under Section 4 and any Annex hereto implementing Section 4 shall be paid not
later than the 15th day following the date of termination of Employee’s employment (or the
date such lump sum otherwise became payable hereunder). Other payments shall be made
as promptly as practicable following the earliest date such payments are due, subject
to Section 10.



 


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(b) Limitation of Benefits In Case of Certain Business Dispositions. Notwithstanding
anything in this Policy to the contrary, an Employee shall not be entitled to any payments
or benefits upon a termination of employment prior to or more than two years after a Change
in Control under Section 4, and any Annex implementing Section 4, unless the Committee in
its sole discretion provides otherwise, in the event such termination of employment results
from the sale or spin-off of a subsidiary, the sale of a division, other business unit or
facility in which the Employee was employed immediately prior to such sale, and the Employee
has been offered employment with the purchaser of such subsidiary, division, other business
unit or facility or the spun-off entity on substantially the same terms and conditions under
which the Employee worked prior to the sale. Such terms and conditions must include an
agreement or plan binding on such purchaser or spun-off entity providing that, upon any
termination of the Employee’s employment with the purchaser or spun-off entity of the kinds
described in Section 4, and any Annex hereto applicable to the Employee, within two years
following such sale or spin-off (but not past the attainment of age 65 by the Employee), the
purchaser or spun-off entity shall pay to such Employee amounts comparable to the payments
that the Employee would have received under the applicable provision of Section 4 and such
Annex, and provide comparable benefits, as if the Employee had been terminated in like
circumstances at the time of such sale and provided payments and benefits under this Policy.




(c) Deferrals Included in Salary and Bonus. All references in this Policy to salary
and annual incentive amounts mean those amounts before reduction pursuant to any deferred
compensation plan or agreement.




(d) Payments and Benefits to Beneficiary Upon Employee’s Death. In the event of the
death of an Employee, all payments and benefits hereunder due to such Employee shall be paid
or provided to his Beneficiary.




(e) Transfers of Employment. Anything in this Policy to the contrary notwithstanding,
a transfer of employment from the Company to a subsidiary or vice versa shall not be
considered a termination of employment for purposes of this Policy.




(f) Calculation of Months. Provisions of this Policy which calculate the number of
months remaining until age 65 will treat, for example, the period from August 16 through
October 15 as two whole months, will treat any remaining partial month as one whole month,
and will treat any negative number resulting from termination after age 65 as zero.




9. Other Plans and Policies; Non-Duplication of Payments or Benefits.




(a) Rights Under Other Plans. Except to the extent that the terms of this
Policy confer rights to severance payments and benefits that are more favorable to the
Employee than are available under any other employee (including executive) benefit plan or
executive compensation plan of the Company or a subsidiary in which the Employee is a
participant, the Employee’s rights under any such employee (including executive) benefit
plan or executive compensation plan shall be determined in accordance with the terms of such
plan (as it may be modified or added to by the Company from time to time), except as
otherwise provided in Section 5.


 


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(b) Superseded Agreements and Rights. This Policy constitutes the entire understanding
between the Company and the Employee relating to severance payments and benefits to be paid
or provided to the Employee by the Company and its subsidiaries, and supersedes and cancels
all prior agreements and understandings with respect to the subject matter of this Policy,
except as otherwise provided in this Section 9(b). In order for the Employee to be entitled
to any payments or benefits under this Policy, Employee must agree, within such period after
the Committee has designated Employee as eligible to be covered by the Policy as the
Committee may specify, that the Employee shall not be entitled to benefits under any Prior
Executive Severance Agreement between the Company and the Employee. If, however, the
Employee has previously entered or after the Effective Date enters into an employment
agreement with the Company or a subsidiary, that employment agreement will not be superseded
by this Policy unless it specifically so provides.




(c) Non-Duplication of Payments and Benefits. The Employee shall not be entitled to
any payment or benefit under this Policy which duplicates a payment or benefit received or
receivable by the Employee under any other employment agreement, severance agreement, or
other agreement or understanding, or under any employee (including executive) compensation
or benefit plan, of the Company or a subsidiary.




(d) Proration Calculations. If a prorated portion of an AIP award, LTIP award or other
performance-based award remains earnable following termination of employment, the proration
calculation will apply to any designated target, threshold or maximum levels applicable to
such award. Thus, the final award earned and paid out based on performance over the entire
performance period (or target or other specified level of performance, if applicable) will
equal the award that would have been earned and paid out at that level multiplied by the
proration fraction. If any award is payable based on a proration calculation, the portion
not earnable or not earned under such calculation will be forfeited.



10. Special Rules for Compliance with Code Section 409A. This Section 10 serves to
ensure compliance with applicable requirements of Code Section 409A. Certain provisions of this
Section 10 modify other provisions of this Policy and the “Designations of Participants and Terms”
annexed to this Policy (the “Designations”). If the terms of this Section 10 conflict with other
terms of the Policy or the terms of the Designations, the terms of this Section 10 control. This
Section 10 is effective as of December 31, 2007, but the Company generally will apply these rules
before that date in connection with its good faith compliance with Code Section 409A and the
guidance thereunder.




(a) Timing of Certain Payments. Payments and benefits specified under this Policy shall be
paid at the times specified as follows:




	 	(i)	 	Accrued Payments at Termination. Certain provisions of this Policy require
payment of amounts accrued at the date of an Employee’s termination of employment,
specifically:






The Employee’s annual salary otherwise payable through the date of termination of
employment, together with salary, incentive compensation and benefits which have
been earned or become payable as of the date of termination but which have not yet
been paid to the Employee and unreimbursed business expenses reimbursable under
Company policies then in effect; provided, however, that the Company and its
subsidiaries may offset such amounts against obligations and liabilities of the
Employee to the Company and its subsidiaries.



 


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These amounts shall be payable at the date the amounts otherwise would have been
payable under Company policies if the Employee’s employment had not terminated, but in
no event more than 60 days after termination of employment.




	 	(ii)	 	Performance-Based Payments. Any amount payable at the time a performance-based
incentive award otherwise would be payable if employment had not terminated must be
paid within 60 days after the date such award becomes payable.






	 	(iii)	 	Gross-Up. Gross-up Payments will be made at the time specified in Section 6,
and in any event the gross-up must be paid no later than the end of Employee’s taxable
year next following Employee’s taxable year in which Employee remits the related taxes
to the taxing authorities.






	 	(iv)	 	Legal Fees and Expenses. Any legal fees and expenses of Employee payable by
the Company under Section 11(c) shall be paid within 30 days of the date the Company
receives the bill therefor, and in any event the fees and expenses must be paid or
reimbursed no later than the end of Employee’s taxable year next following Employee’s
taxable year in which the legal fee or expense was incurred.






	 	(v)	 	Other Prompt Payments. Any payment or benefit required under Section 8(a) of
the Policy to be paid promptly following a date or event shall be paid within 30 days
after such date or event.






	 	(vi)	 	No Employee Influence on Year of Payment. In the case of any payment under the
Policy payable during a specified period of time following a termination or other
event, if such permitted payment period begins in one calendar year and ends in a
subsequent calendar year, the Employee shall have no right to elect in which year the
payment will be made, and the Company’s determination of when to make the payment shall
not be influenced in any way the Employee.






(b) Special Rules for Severance Payments. In the case of severance payments payable solely
due to a termination by the Company not for Cause or, within two years after a Change in
Control, by the Employee for Good Reason (“Severance”), the following rules will apply:




	 	(i)	 	Separate Payments. Any lump-sum payment and each installment payment of
Severance shall be deemed a separate payment for all purposes, including for purposes
of Section 409A. The portion of a lump-sum payment of Severance payable for specified
terminations in the period of two years following a Change in Control that exceeds the
present value of the installment payments of Severance that would be payable for a
specified termination not within two years following a Change in Control will be deemed
to be a separate payment for all purposes, including for purposes of Section 409A (the
“Separate Lump Sum”).






	 	(ii)	 	Installment Payment Rules. Installment payments shall be made at the dates
specified in the applicable provision of the Designation, except that, in the case of
any payment of installments in which the third monthly installment would be in March of
the year following termination, such payment will be made between March 1 and March 15
of that March. Accordingly, three or more of the installments of Severance payable in
installments shall constitute a short-term deferral under Treasury Regulation §
1.409A-1(b)(4). Severance payments payable in installments within six months after the
Employee’s termination of employment, other than those deemed to be short-term
deferrals, shall be deemed to be paid under the “two-year/two-times” exclusion from
being a deferral of compensation under
Treasury Regulation § 1.409A-1(b)(9)(iii), up to the limit applicable under that
Treasury Regulation. To the extent any portion of the amount excludable under the
“two-year/two-times” exclusion remains after application in accordance with the
preceding sentence, such amount shall apply to the other installments in reverse order
of the payment date of such installments (i.e., the latest installments that can be
covered by the exclusion will be so covered, to the extent of the exclusion). Any
payments not excluded from being deferrals of compensation subject to Section 409A shall
be payable at the applicable payment date, subject to Section 6(c).





 


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	 	(iii)	 	Lump-Sum Severance Payment Rules. If Severance is payable as a lump-sum
payment, the amount of Severance payable at the date specified in Section 8(a) of the
Policy (i.e., without the six-month delay) shall equal (A) the present value of the
amount of Severance payments that would have been payable assuming Severance were
instead payable due to a termination not for Cause prior to a Change in Control to the
extent such amount qualifies as a short-term deferral under Code Section 409A, plus (B)
the maximum amount of Severance payable under the “two-year/two-times” exclusion from
being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii), plus
(C) the Separate Lump Sum identified in Section 10(b)(i) above (if this amount
qualifies as a short-term deferral under Code Section 409A), plus (D), if the six-month
delay rule in Section 10(c) does not apply, all remaining amounts of the Severance
(subject to Section 10(b)(iv)). Any other amounts of such Severance (i.e., amounts
subject to the six-month delay rule) shall be paid at the date six months after the
date of Employee’s termination, together with applicable interest, subject to Section
10(b)(iv).






	 	(iv)	 	Special Rule if Change in Control Is Not a 409A Change in Control. If Severance is
payable as a lump-sum governed by Section 10(b)(iii), and any separate payment corresponding
to an installment payment that would have been payable upon a qualifying termination prior
to a Change in Control constitutes a deferral of compensation under Code Section 409A, and
the termination of employment triggering such payments is not a separation from service that
occurred within two years following a change in the ownership of the Company, a change in
effective control of the Company, or a change in the ownership of a substantial portion of
the assets of the Company as defined in Treasury Regulation § 1.409A-3(i)(5) (a “409A Change
in Control”), then, notwithstanding Section 10(b)(iii), any payment of such amounts shall be
made at the applicable date under Section 10(b)(ii) and Section 10(c).





(c) Six-Month Delay Rule.



	 	(i)	 	General Rule. The six-month delay rule will apply to certain payments and
benefits under the Policy if all of the following conditions are met:






	 	(A)	 	The Employee is a “key employee” (as defined in Code Section 416(i)
without regard to paragraph (5) thereof) for the year in which the separation from
service occurs. The Company will determine status of “key employees” annually,
under administrative procedures applicable to all Section 409A plans and applied in
accordance with Treasury Regulation § 1.409A-1(i).






	 	(B)	 	The Company’s stock is publicly traded on an established securities
market or otherwise.






	 	(C)	 	The payment or benefit in question is a deferral of compensation and
not excepted or excluded from being such by the short-term deferral rule, or the
“two-years/two-times” rule in Treasury Regulation § 1.409A-1(b)(9)(iii), or any
other exception or exclusion; provided, however, that the exclusion under Treasury
Regulation § 1.409A- 1(b)(9)(v)(D) shall apply in the case of Severance only if and to the extent that it
is not necessary to apply to any other payment or benefit payable within six months
after the Employee’s separation from service.




 


15









 








	 	(ii)	 	Effect of Rule. If it applies, the six-month delay rule will delay a payment
or benefit which otherwise would be payable under this Policy within six months after
the Employee’s separation from service.






	 	(A)	 	Any delayed payment or benefit shall be paid on the date six months
after the Employee’s separation from service.






	 	(B)	 	During the six-month delay period, accelerated payment will occur in
the event of the Employee’s death but not for any other reason (including no
acceleration upon a Change in Control), except as otherwise permitted under Section
409A.






	 	(C)	 	Any payment that is not triggered by a separation from service, or is
triggered by a separation from service but would be made more than six months after
separation (without applying this six-month delay rule), shall be unaffected by the
six-month delay rule.






	 	(iii)	 	Limit to Application of Six-Month Delay Rule. If the terms of any agreement
or other document relating to this Policy impose this six-month delay rule in
circumstances in which it is not required for compliance with Section 409A, those terms
shall not be given effect.






(d) “Termination of Employment” Defined. For purposes of this Policy, a “termination of
employment” means a separation from service within the meaning of Treasury Regulation §
1.409A-1(h), except for a termination of employment providing for payments or benefits that are
“grandfathered” or excluded from being a deferral of compensation under Code Section 409A.




(e) Performance-Goal Applies to AIP and LTIP Awards in Certain Cases. In the case of an
Employee’s termination of employment within two years after a Change in Control, if such
termination is a Retirement or a termination due to Disability in which the Employee has elected
voluntarily to terminate (but not a termination due to Disability if the Company has elected
such termination), the payment of any amount (prorated or otherwise) based on the target annual
incentive under any AIP (as under Section II(f)(ii) of each of the Designations) or based on the
target LTIP award for a performance period (as under Section II(f)(vi) of each of the
Designations) shall be made to the Employee only if one of the following performance conditions,
related to the financial success of the Company, have been satisfied:




	 	(i)	 	The minimum performance that is a condition for payment of the incentive award
at the level that would authorize any positive payment under the incentive award is
achieved over the entire performance period; or






	 	(ii)	 	For financial reporting purposes, the Company has determined for any quarterly
reporting period ending at or after the date of termination through the end of the
performance period that achievement of the minimum level of performance specified in
(i) is probable (so that accounting expense is accrued relating to the award); or






	 	(iii)	 	The Company’s earnings before taxes reportable in its financial statements for
any quarterly reporting period ending at or after the date of termination through the
end of the year of termination or the later end of the performance period, or for the
full year of termination, are positive.




 


16









 








The payment of any such amount shall be made within 30 days after the Committee has determined
that any of the performance conditions hereunder has been achieved.




(f) Settlement of Stock Units. Any provision of the Designations (including Sections
II(c)(iv), II(d)(vi), and II(f)(iv)) providing for accelerated settlement of restricted stock
units or stock units (including performance-based awards in the nature of stock units), other
than stock units “grandfathered” under Code Section 409A, shall have no effect. However, those
provisions will continue to apply by their terms with respect to the lapse of the risk of
forfeiture of such awards. The timing of settlement of such awards shall be governed by
specific documents governing the compliance of such stock units with Code Section 409A.




(g) Other Provisions.




	 	(i)	 	Good Reason. The definition of “Good Reason” in Section 2(l) of the Policy is
intended to constitute an “involuntary separation” within the meaning of Treasury
Regulation § 1.409A-1(n), and shall be so construed and interpreted.






	 	(ii)	 	Deferrals and Waivers of Settlement. Certain provisions of the Policy and
Designations, specifically Policy Section 5(a)(ii) and Designations Section II(d)(vi)
and Section II(f)(iv), refer to deferrals and waivers of settlement of awards. Any
such deferral or waiver relating to an award that is a deferral of compensation subject
to Section 409A (i.e., is not a “grandfathered” award or excluded from Section 409A)
will be permitted only in accordance with the provisions specified in Section 5(b) of
the Company’s Deferred Compensation Plan, as amended and restated October 8, 2007,
subject to any additional limitations as may be necessary for compliance with Code
Section 409A.






	 	(iii)	 	Continued Benefits. Medical, dental and group life and disability benefits
shall be continued as specified in Designation Sections II(a)(vi) and II(d)(ix),
subject to any applicable requirements under Treasury Regulation § 1.409A-1. If any of
these benefits are not excluded from being deferrals of compensation under Code Section
409A, in addition to any other requirement regarding the timing of payment, the
benefits or any payments in lieu of the benefits shall be made no later than the end of
Employee’s taxable year next following Employee’s taxable year in which the benefit or
expense was due to be paid.






	 	(iv)	 	Excess Benefit Plan. The Company shall have no authority to elect to pay the
present value of accrued obligations to the Employee under the Excess Benefit Plan as a
lump sum except for “grandfathered” accrued obligations and except as permitted in
compliance with Code Section 409A (including transition rules and as permitted under
Treasury Regulation § 1.409A-3(j)(4)). In addition, the terms of any “rabbi trust”
required or permitted to be established under the Policy in connection with the Excess
Benefit Plan or otherwise shall be limited as required by Code Section 409A.






	 	(v)	 	Other Separate Payments. In addition to the provisions of Section 10(b)(i),
each other payment or benefit payable under this Policy shall be deemed a separate
payment for all purposes, including for purposes of Section 409A.






	 	(vi)	 	Non-transferability. No right of an Employee to any payment or benefit under
this Policy shall be subject to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors of the Employee or of any
beneficiary of the Employee.




 


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	 	(vii)	 	No Acceleration. The timing of payments and benefits under the Policy may not
be accelerated to occur before the time specified for payment hereunder, except to the
extent permitted under Treasury Regulation § 1.409A-3(j)(4) or as otherwise permitted
under Code Section 409A without the Employee incurring a tax penalty.






	 	(viii)	 	Limitation on Offsets. If the Company has a right of offset that could apply to a
payment that constitutes a deferral of compensation under Section 409A, such right may
only be exercised at the time the payment would have been made to the Employee and may
be exercised only as an offset against an obligation that arose within 30 days before
and within the same year as the payment date if application of such offset right against
an earlier obligation would not be permitted under Section 409A.






	 	(ix)	 	Release and Termination Agreement. The Company will supply to an Employee a
form of the release and termination agreement specified in Section 7(c) not later than
the date of Employee’s termination, which must be returned within the time period
required by law and must not be revoked by Employee within the applicable time period
(if any) in order for Employee to satisfy Section 7(c), such that it becomes legally
effective. If any amount payable during a fixed period following Employee’s
termination is subject to the requirement or condition that Employee has executed and
not revoked such agreement (including any case in which such fixed period would begin
in one year and end in the next), the Company, in determining the time of payment of
any such amount, will not be influenced by Employee or the timing of any action by
Employee, including Employee’s execution of such a release agreement and expiration of
any revocation period. In particular, the Company retains discretion to deposit any
payment hereunder in escrow at any time during such fixed period, so that such
deposited amount is constructively received and taxable income to Employee upon deposit
(it may be constructively received even in the absence of such deposit) but with
distribution from such escrow remaining subject to Employee’s execution and
non-revocation of such release and termination agreement.





(h) General Compliance. In addition to the foregoing provisions, the terms of this Policy,
including any authority of the Company and rights of the Employee which constitute a deferral of
compensation subject to 409A (and which is not grandfathered or excluded from being deemed such a
deferral), shall be limited to those terms permitted under 409A without resulting in a tax penalty
to Employee, and any terms not so permitted under 409A shall be modified and limited to the extent
necessary to conform with Section 409A but only to the extent that such modification or limitation
is permitted under Section 409A and the regulations and guidance issued thereunder. The Company
and its employees and agents make no representation and are providing no advice regarding the
taxation of the payments and benefits under this Policy, including with respect to taxes, interest
and penalties under Section 409A and similar liabilities under state and local tax laws. No
indemnification or gross-up is payable under this Policy with respect to any such tax, interest, or
penalty under Section 409A or similar liability under state or local tax laws applicable to any
employee, except that this provision does not limit the gross-up payable under Section 6 or affect
the methodology for determining the gross-up payable under Section 6.



 


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11. Miscellaneous




(a) Withholding. The Company shall have the right to deduct from all payments
hereunder any taxes required by law to be withheld therefrom.




(b) No Right To Employment. Nothing in this Policy shall be construed as giving any
person the right to be retained in the employment of the Company or any subsidiary, nor
shall it affect the right of the Company or any subsidiary to dismiss an Employee without
any liability except as provided in this Policy.




(c) Legal Fees. The Company shall pay all legal fees and related expenses
incurred by an Employee in seeking to obtain or enforce any payment, benefit or right
provided by this Policy; provided; however, that the Employee shall be required to repay any
such amounts to the Company to the extent that an arbitrator or a court of competent
jurisdiction issues a final, unappealable order setting forth a determination that the
position taken by the Employee was frivolous or advanced in bad faith. The timing of
payments under this Section 11(c) shall be subject to Section 10(a)(iv).




(d) Amendment and Termination. The Board of Directors of the Company may amend or
terminate this Policy at any time, provided, however, that, without the written consent of
an affected Employee, (i), during the two years following a Change in Control, this Policy
may not be amended or terminated in any manner materially adverse to an Employee, and (ii),
at any other time, this Policy may not be amended or terminated in any manner materially
adverse to an Employee except with 90 day’s advance notice to the affected Employee, and no
such amendment or termination shall be effective to limit any right or benefit relating to a
termination during the two years after a Change in Control under Section 4 and any Annex
implementing Section 4, Section 5 or Section 6 if a Change in Control has occurred prior to
the lapse of such one-year period.




(e) Governing Law; Arbitration. THE VALIDITY, CONSTRUCTION, AND EFFECT OF THIS POLICY
AND ANY RULES AND REGULATIONS RELATING TO THIS POLICY SHALL BE DETERMINED IN ACCORDANCE WITH
THE LAWS (INCLUDING THOSE GOVERNING CONTRACTS) OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS, AND APPLICABLE FEDERAL LAW. If any provision
hereof shall be held by a court or arbitrator of competent jurisdiction to be invalid and
unenforceable, the remaining provisions hall continue to be fully effective. Any dispute or
controversy arising under or in connection with this Policy shall be settled exclusively by
arbitration in New York, New York by three arbitrators in accordance with the rules of the
American Arbitration Association in effect at the time of submission to arbitration.
Judgment may be entered on the arbitrators’ award in any court having jurisdiction. For
purposes of settling any dispute or controversy arising hereunder or for the purpose of
entering any judgment upon an award rendered by the arbitrators, the Company and the
Employee hereby consent to the jurisdiction of any or all of the following courts: (i) the
United States District Court for the Southern District of New York, (ii) any of the courts
of the State of New York, or (iii) any other court having jurisdiction. The Company and the
Employee hereby waive, to the fullest extent permitted by applicable law, any objection
which it may now or hereafter have to such jurisdiction and any defense of inconvenient
forum. The Company and the Employee hereby agree that a judgment upon an award rendered by
the arbitrators may be enforced in other jurisdictions by suit on the judgment or in any
other manner provided by law.




(f) Nonassignability. Payments and benefits under this Policy may not be assigned by
the Employee. The terms and conditions of this Policy shall be binding on the successors
and assigns of the Company.


 


19









 






(g) No Duty to Mitigate. No employee shall be required to mitigate, by seeking
employment or otherwise, the amount of any payment that the Company becomes obligated to
make under this Policy, and, except as expressly provided in this Policy, amounts or other
benefits to be paid or provided to an Employee pursuant to this Policy shall not be reduced
by reason of the Employee’s obtaining other employment or receiving similar payments or
benefits from another employer.




(h) Foreign Participants. The terms and conditions of participation of any Employee
whose employment is subject to the laws or customs of any jurisdiction other than the United
States or a state thereof may be modified by the Committee to conform to or otherwise take
into account such laws and customs. In no event shall payments or benefits be payable
hereunder if and to the extent that such benefits would duplicate severance payments or
benefits payable in accordance with such laws and customs, although severance payments and
benefits payable hereunder may supplement those payable under such laws and customs. This
Policy will be of no force or effect to the extent superseded by foreign law.




(i) Effective Date. This Policy became effective as of April 13, 2000. An amendment
and restatement of the Policy became effective as of December 11, 2007 and applies to
executives hired after October 22, 2007. This amendment and restatement of the Policy is
effective as of December 14, 2010 and shall apply in full to an Employee who first becomes
designated as a participant under the Policy after that date, and shall apply as follows to
an Employee who was already designated as a participant under the Policy at that date:




	 	(i)	 	Until December 31, 2011, if a given provision of this Policy as in
effect immediately prior to December 14, 2010 would be materially more favorable
to the Employee than under this amendment and restatement of the Policy, then the
Employee shall have the benefit of such provision (except an Employee who was
first designated as a participant under the Policy after March 8, 2010 shall be
subject to Section 6 of the amendment and restatement of the Policy effective
December 14, 2010);






	 	(ii)	 	If a Change in Control occurs between December 14, 2010 and December
31, 2011, and if a given provision of this Policy as in effect immediately prior
to December 14, 2010 would provide the Employee with a right or benefit relating
to a termination of employment more favorable to the Employee than under this
amendment and restatement of the Policy, then the Employee shall have the benefit
of such provision for a period of two years after the Change in Control, after
which date this amendment and restatement of the Policy shall apply in full to the
Employee; and






	 	(iii)	 	If no Change in Control has occurred between December 14, 2010 and
December 31, 2011, after December 31, 2011 this amendment and restatement of the
Policy shall apply in full to the Employee.






 


20









 







Annex I




Executive
Separation Policy




TIER I




Designation of Participants and Terms




This documents sets forth the participants designated in the Tier I participation level under
the International Flavors & Fragrances Inc. Executive Separation Policy (the “Policy”). All of the
terms of the Policy are incorporated into this Annex, and capitalized terms defined in the Policy
have the same meaning in this Annex.




	I.	 	Designation of Participants in Tier I.






The Committee and/or the Board shall designate the Tier I participants under the Policy.




	II.	 	Terms of Participation in Tier I





Subject to all of the terms and conditions of the Policy, including Section 10 (modifying
certain terms hereof to comply with Code Section 409A), the terms and conditions set forth below
apply to Employees designated as Tier I participants. This Annex shall have no application to
Employees designated as participants at a level other than Tier I, unless the Committee shall adopt
such terms and conditions and so specify in a separate Annex to the Policy.




(a) Termination by the Company Not for Cause Prior to or More than Two Years After a
Change in Control. An Employee who is eligible for Tier I severance payments and benefits
under the Policy pursuant to Part I of this Annex shall be entitled to receive the payments
and benefits from the Company upon termination of employment at any time prior to a Change
in Control or more than two years following a Change in Control, if such termination is by
the Company (or its subsidiaries) other than for Cause and such termination is not due to
death, Disability or Retirement, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) A lump-sum cash payment of a prorated portion of the Employee’s
annual incentive under any AIP that would have become payable for performance in the
year of termination had Employee’s employment continued, with such award prorated
based on the number of days during the year of termination which preceded the
Employee’s termination. This amount will be payable at such time as annual
incentives for performance in the year of termination otherwise become payable.



 


 









 






(iii) For a period terminating on the earlier of 18 months (24 months for
executives hired prior to October 22, 2007 and having continuous service)
following the date of termination of employment or the Employee’s attaining age 65,
severance payments, paid periodically at the date annual salary payments would
otherwise have been made, at a monthly rate equal to one-twelfth of the sum of the
Employee’s annual salary at the date of termination plus the Employee’s average
annual incentive award paid for performance in the three years preceding the year of
termination under any AIP (or averaged over the lesser number of years during which
the Employee was eligible for AIP awards or, if not eligible before the year of
termination, the Employee’s target annual incentive under the AIP for the year of
termination).




(iv) Unless otherwise determined by the Committee, the Employee’s options, both
those vested and not vested at the time of the Employee’s termination of employment,
shall be governed by the terms of the option agreements in respect of such options.




(v) (A) The Employee’s restricted stock and stock unit grants, including
vesting and settlement terms, shall be governed by the terms of the plan and award
agreements in respect of such awards, and (B), unless otherwise provided in the
applicable plan or agreement evidencing the affected award, a prorated portion of
the Employee’s LTIP awards will not be forfeited but will remain outstanding, based
on the number of days during the performance period preceding Employee’s termination
(divided by the total number of days in the performance period), with such prorated
portion to be earned and payable at such time as the LTIP awards for the applicable
performance period otherwise become earned and payable based on actual performance,
except that the Committee may, within 30 days after termination, instead make a good
faith estimate of the actual performance achieved through the date of termination
and rely on this estimate to determine the prorated portion payable in settlement of
such LTIP award, in which case such payment will constitute full settlement of such
LTIP award, with settlement to occur within 30 days after termination if the LTIP
award did not constitute a deferral of compensation under Code Section 409A (the
settlement date otherwise applicable under the award will apply if the award did
constitute a deferral of compensation under Code Section 409A). Any portion of the
Employee’s LTIP awards in excess of such prorated portion will be forfeited.




(vi) For a period terminating on the earliest of 18 months (24 months for
executives hired prior to October 22, 2007 and having continuous service) following
the date of termination of employment, the commencement of eligibility for benefits
under a new employer’s welfare benefits plan, or the Employee’s attaining age 65,
the maintenance in effect for the continued benefit of the Employee and his
dependents of:




(A) all insured and self-insured medical and dental benefit Plans of
the Company and subsidiaries in which the Employee was participating
immediately prior to termination, provided that the Employee’s continued
participation is possible under the general terms and conditions of such
Plans (and any applicable funding media) and the Employee continues to pay
an amount equal to the Employee’s regular contribution for such
participation; and



 


2









 







(B) the group life insurance, group accident insurance, and group
disability insurance policies of the Company and subsidiaries then in
effect and covering the Employee immediately prior to termination;




provided, however, that if the Company so elects, or if such continued participation
is not possible under the general terms and conditions of such plans or under such
policies, the Company, in lieu of the foregoing, shall arrange to have issued for
the benefit of the Employee and the Employee’s dependents individual policies of
insurance providing benefits substantially similar (on an after-tax basis) to those
described in this Part II(a)(vi), or, if such insurance is not available at a
reasonable cost to the Company, shall otherwise provide to the Employee and the
Employee’s dependents substantially equivalent benefits (on an after-tax basis);
provided further that, in no event shall the Employee be required to pay any
premiums or other charges in an amount greater than that which the Employee would
have paid in order to participate in the Company’s Plans and policies.




(vii) The Employee’s benefits and rights under the Retirement Plan and any
Excess Benefit Plan shall be determined under the applicable provisions of such
Plans.




(b) Termination by the Company for Cause or Voluntary Termination by the Employee Prior
to or More than Two Years After a Change in Control. An Employee who is eligible for Tier I
severance payments and benefits under the Policy pursuant to Part I of this Annex shall be
entitled to receive the payments and benefits from the Company upon termination of
employment at any time prior to a Change in Control or more than two years following a
Change in Control, if such termination is by the Company (or its subsidiaries) for Cause or
is voluntary by the Employee and such termination is not due to death, Disability or
Retirement, and shall be subject to other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) No portion of the Employee’s annual incentive under any AIP for the year
of termination shall be or become payable.




(iii) Unless otherwise determined by the Committee, the Employee’s
options which have not vested at the time of the Employee’s termination of
employment shall be immediately forfeited and the Employee’s options which have
vested at or before the Employee’s termination of employment (A), if termination is
by the Company (or its subsidiaries) for Cause, such options shall be immediately
canceled, and (B), if termination is voluntary by the Employee, such options shall
remain outstanding and exercisable only for 90 days after such termination (but in
no event past the stated expiration date of the option), and at the end of such
period such options shall be canceled.




(iv) The Employee’s restricted stock and stock unit grants and LTIP awards
which have not vested at the time of the Employee’s termination of employment shall
be immediately forfeited.



 


3









 






(v) The Employee’s benefits and rights under any welfare benefit Plan,
the Retirement Plan and any Excess Benefit Plan shall be determined under the
applicable provisions of such Plans.




(c) Termination Due to Death, Disability or Retirement Prior to or More than Two Years
After a Change in Control. An Employee who is eligible for Tier I severance payments and
benefits under the Policy pursuant to Part I of this Annex shall be entitled to receive the
payments and benefits from the Company upon termination of employment at any time prior to a
Change in Control or more than two years following a Change in Control, if such termination
is due to death, Disability or Retirement and is not for Cause, and shall be subject to
other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) A cash payment of a prorated portion of the Employee’s annual incentive
under any AIP that would have become payable for performance in the year of
termination had Employee’s employment continued, with such award prorated based on
the number of days during the year of termination which preceded the Employee’s
termination. This amount will be payable at such time as annual incentives for
performance in the year of termination otherwise become payable.




(iii) Unless otherwise determined by the Committee, the Employee’s options,
both those vested and not vested at the time of the Employee’s termination of
employment, shall be governed by the terms of the option agreements in respect of
such options.




(iv) The Employee’s restricted stock and stock unit awards which have not
vested at the time of the Employee’s termination of employment shall be immediately
fully vested and, unless deferred by the Employee in the case of termination due to
Disability or Retirement, stock unit awards shall be settled as promptly as
practicable following termination (subject to Sections 10(f) and 10(g)(ii)).




(v) A cash payment of a prorated portion of each of the Employee’s LTIP
awards that would have become payable for each performance period on-going at the
time of termination had Employee’s employment continued through the end of such
performance period, with such LTIP award prorated based on the number of days during
the performance period preceding the Employee’s termination (divided by the total
number of days in the performance period). This amount will be payable at such time
as the LTIP awards for the applicable performance period otherwise become payable,
except the Committee may, within 30 days after termination, instead make a good
faith estimate of the actual performance achieved through the date of termination
and rely on this estimate to determine the amount payable in settlement of such LTIP
award, in which case such payment will constitute full settlement of such LTIP
award, with settlement to occur within 30 days after termination if the LTIP award
did not constitute a deferral of compensation under Code Section 409A (the
settlement date otherwise applicable under the award will apply if the award did
constitute a deferral of
compensation under Code Section 409A). The foregoing notwithstanding, the
payment provided by this Section II(c)(v) will be in shares rather than in cash for
any portion of the LTIP award that is intended to be classified as “equity” under
FASB ASC Topic 718 if a right to receive cash for such portion of the LTIP award
under this provision would cause such portion to instead be classified as a
“liability” under ASC Topic 718.


 


4









 







(vi) The Employee’s benefits and rights under any welfare benefit Plan, the
Retirement Plan and any Excess Benefit Plan shall be determined under the applicable
provisions of such Plans.




(d) Termination by the Company Not for Cause or by Employee for Good Reason Within Two
Years After a Change in Control. An Employee who is eligible for Tier I severance payments
and benefits under the Policy pursuant to Part I of this Annex shall be entitled to receive
the payments and benefits from the Company upon termination of employment within two years
following a Change in Control, if such termination is by the Company (or its subsidiaries)
not for Cause or is by the Employee for Good Reason and such termination is not due to
death, Disability or Retirement, and shall be subject to other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) A cash payment of a prorated portion of the Employee’s annual incentive
under any AIP, determined as the target annual incentive for the year of
termination, with the award so determined then prorated based on the number of days
during the year of termination which preceded the Employee’s termination. This
amount will be payable as a lump sum.




(iii) A lump-sum cash severance payment equal to the product of the Employee’s
Annual Compensation, multiplied by 3.




(iv) A cash payment of a prorated portion of each of the Employee’s LTIP awards
for each performance period on-going at the time of termination, determined as the
target LTIP award for that performance period, with each LTIP award prorated based
on the number of days during the performance period preceding the Employee’s
termination (divided by the total number of days in the performance period). This
amount will be payable as a lump sum.




(v) Except for Designated Awards, the Employee’s options which have not vested
at the time of the Employee’s termination of employment shall be immediately fully
vested and exercisable, and the Employee’s options shall remain outstanding and
exercisable for the remaining period until the stated expiration date of the option.




 


5









 






(vi) The Employee’s restricted stock and stock unit awards which have not
vested at the time of the Employee’s termination of employment shall be immediately
fully vested and, unless waived or deferred by the Employee, stock unit awards shall be settled as promptly as practicable following termination (subject to
Sections 10(f) and 10(g)(ii)).




(vii) The Employee’s Designated Awards, if any, will be subject to the terms of
the Plan and/or stock option agreement under which they were granted, except that,
in the case of options which are Designated Awards, and irrespective of such Plan
and/or stock option agreement, Employee will be entitled to a payment equal to the
following: for each share of the Company’s Common Stock subject to any option which
is a Designated Award that remains outstanding at the date of Employee’s termination
subject to this Part II(d), whether or not such option is then exercisable, the
Company shall pay to Employee the amount determined by subtracting the exercise
price thereof from the highest of (A) the market price per share of Common Stock on
the New York Stock Exchange at the close of business on the effective day of
termination, (B) the price per share contained in any published tender offer made
within one year before or after the date of the Change in Control, (C) the price
contained in any merger or acquisition agreement entered into by the Company and any
third party within one year before or after the date of the Change in Control, or
(D) the market price per share of Common Stock on the New York Stock Exchange on the
date of the Change in Control, and, upon such payment, such option shall be deemed
canceled and annulled.


 


6









 






(viii) The Employee will be credited with additional age and years of
service under any Excess Benefit Plan as though the Employee continued to be
employed for a period of 36 months after termination at a rate of compensation equal
to his or her Annual Compensation, and the Employee will be deemed to be fully
vested under any such Excess Benefit Plan, with the time or times at which benefits
are payable under any such Plan unchanged; provided, however, that if an Excess
Benefit Plan does not permit such additional crediting of age and years of service,
then Employee will be paid in a lump sum the present value of the additional
benefits he would have received under such Plan had Employee’s employment continued
to the third anniversary of his termination at an annual rate of compensation equal
to his or her Annual Compensation; provided further, that, subject to Section
10(g)(iv), the Company’s obligations under any such Excess Benefit Plan shall be
fully funded by deposits into a “rabbi trust” the trustee of which shall be
independent of the Company and the terms of which shall preclude access by the
Company to any of the trust assets, except for attachments by creditors of the
Company upon insolvency or bankruptcy of the Company, until all obligations to the
Employee and his beneficiaries have been satisfied; and provided further, that,
subject to Section 10(g)(iv), the Company may elect to satisfy all obligations to
the Employee and his beneficiaries by payment, as a lump sum, of the present value
of the accrued benefit under any Excess Plan.




(ix) For a period terminating on the earlier of 36 months following the date of
termination of employment or the commencement of eligibility for benefits under a
new employer’s welfare benefits plan, the maintenance in effect for the continued
benefit of the Employee and his dependents of:




(A) all insured and self-insured medical and dental benefit plans of
the Company and subsidiaries in which the Employee was participating
immediately prior to termination, provided that the Employee’s continued
participation is possible under the general terms and conditions of such
plans (and any applicable funding media) and the Employee continues to pay
an amount equal to the Employee’s regular contribution for such
participation; and




(B) the group life insurance and group disability insurance policies of
the Company and subsidiaries then in effect for Employee;




provided, however, that if the Company so elects, or if such continued
participation is not possible under the general terms and conditions of such plans
or under such policies, the Company, in lieu of the foregoing, shall arrange to have
issued for the benefit of the Employee and the Employee’s dependents individual
policies of insurance providing benefits substantially similar (on an after-tax
basis) to those described in this Part II(d)(ix), or, if such insurance is not
available at a reasonable cost to the Company, shall otherwise provide the Employee
and the Employee’s dependents substantially equivalent benefits (on an after-tax
basis); provided further that, in no event shall the Employee be required to pay any
premiums or other charges in an amount greater than that which the Employee would
have paid in order to participate in the Company’s plans and policies.
Notwithstanding anything to the contrary contained herein, in the event the Employee
becomes eligible for benefits under a new employer’s welfare benefit plan during the
36 month period following the date of termination, the benefits required to be
provided to the employee pursuant to this Part II(d)(iv) shall be reduced by the
amount of substantially similar benefits provided to the Employee at no additional cost by such new employer.


 


7









 







(e) Termination by the Company for Cause or Voluntary Termination by the Employee
Within Two Years After a Change in Control. An Employee who is eligible for Tier I
severance payments and benefits under the Policy pursuant to Part I of this Annex shall be
entitled to receive the payments and benefits from the Company upon termination of
employment at any time within two years following a Change in Control, if such termination
is by the Company (or its subsidiaries) for Cause or is voluntary by the Employee not for
Good Reason and such termination is not due to death, Disability or Retirement, and shall be
subject to other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) No portion of the Employee’s annual incentive under any AIP for the year
of termination shall be or become payable.




(iii) Unless otherwise determined by the Committee, if termination is by the
Company (or its subsidiaries) for Cause all of the Employee’s options (vested and
unvested) shall be immediately forfeited and canceled, and if termination is
voluntary by the Employee, all of the Employee’s options which have not vested at
the time of his termination shall be immediately fully vested and exercisable, and
all of the Employee’s options which have vested at or before his termination shall
remain outstanding and exercisable for 90 days after such termination (but in no
event past the stated expiration date of the option), and at the end of such period
such options shall be canceled.




(iv) The Employee’s restricted stock and stock unit grants and LTIP awards
which have not vested at the time of the Employee’s termination of employment shall
be immediately forfeited.




(v) The Employee’s benefits and rights under any welfare benefit Plan, the
Retirement Plan and any Excess Benefit Plan shall be determined under the applicable
provisions of such Plans.




(f) Termination Due to Death, Disability or Retirement Within Two Years After a Change
in Control. An Employee who is eligible for Tier I severance payments and benefits under
the Policy pursuant to Part I of this Annex shall be entitled to receive the payments and
benefits from the Company upon termination of employment at any time within two years
following a Change in Control, if such termination is due to death, Disability or Retirement
and is not for Cause or voluntary by the Employee for Good Reason, and shall be subject to
other terms, as follows:



(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) A cash payment of a prorated portion of the Employee’s annual incentive
under any AIP, determined as the target annual incentive for the year of
termination, with the award so determined then prorated based on the number of days
during the year of termination which preceded the Employee’s termination, subject to
Section 10(e) in applicable cases. This amount will be payable as a lump sum.



 


8









 







(iii) Except for Designated Awards, the Employee’s options which have not
vested at the time of the Employee’s termination of employment shall be immediately
fully vested and exercisable, and the Employee’s options shall remain outstanding
and exercisable after termination for the following periods (but in no event past
the stated expiration date of the option): (A) for one year if termination resulted
from the Employee’s death, (B) three years if termination resulted from the
Employee’s Disability, or (C) for the remaining period until the stated expiration
date of the option if termination resulted from Retirement. At the end of the
applicable post-termination exercise period, such options shall be canceled.




(iv) The Employee’s restricted stock and stock unit awards which have not
vested at the time of the Employee’s termination of employment shall be immediately
fully vested and, unless waived or deferred by the Employee in the case of
termination due to Disability or Retirement, stock unit awards shall be settled as
promptly as practicable following termination (subject to Sections 10(f) and
10(g)(ii)).




(v) The Employee’s Designated Awards, if any, will be subject to the terms of
the Plan and/or stock option agreement under which they were granted, except that,
in the case of options which are Designated Awards, and irrespective of such Plan or
stock option agreement, Employee will be entitled to a payment equal to the
following: for each share of the Company’s Common Stock subject to any option which
is a Designated Award that remains outstanding at the date of Employee’s termination
subject to this Part II(f), whether or not such option is then exercisable, the
Company shall pay to Employee the amount determined by subtracting the exercise
price thereof from the highest of (A) the market price per share of Common Stock on
the New York Stock Exchange at the close of business on the effective day of
termination, (B) the price per share contained in any published tender offer made
within one year before or after the date of the Change in Control, (C) the price
contained in any merger or acquisition agreement entered into by the Company and any
third party within one year before or after the date of the Change in Control, or
(D) the market price per share of Common Stock on the New York Stock Exchange on the
date of the Change in Control, and, upon such payment, such option shall be deemed
canceled and annulled.)




(vi) A cash payment of a prorated portion of each of the Employee’s LTIP awards
that would have become payable for each performance period on-going at the time of
termination, determined as the target LTIP award for that performance period, with
each LTIP award prorated based on the number of days during the performance period
preceding the Employee’s termination (divided by the total number of days in the
performance period), subject to Section 10(e) in applicable cases. This amount will be payable as a lump sum.




(vii) The Employee’s benefits and rights under any welfare benefit Plan, the
Retirement Plan and any Excess Benefit Plan shall be determined under the applicable
provisions of such Plans, except that the Employee will be deemed to be fully vested
under any such Excess Benefit Plan.




(g) Entitlement to Gross-Up; Applicability of Cut-Back Provisions. Tier I level
participants who qualify as Pre-Amendment Employees as defined in Section 6(a) of the Policy
shall be entitled to the Gross-Up Payment (or, in limited circumstances, the cut-back of
compensation) if and to the extent so provided in Section 6(b) of the Policy. Tier I level
participants who qualify as New Employees as defined in Section 6(a) of the Policy shall be
subject to the reduction in compensation if and to the extent so provided in Section 6(c) of
the Policy.



 


9









 






Annex II




Executive
Separation Policy




TIER
II




Designation
of Participants and Terms




This documents sets forth the participants designated in the Tier II participation level under
the International Flavors & Fragrances Inc. Executive Separation Policy (the “Policy”). All of the
terms of the Policy are incorporated into this Annex, and capitalized terms defined in the Policy
have the same meaning in this Annex.



I.
Designation of Participants in Tier II.





The Committee and/or the Board shall designate the Tier II participants under the Policy.



II.
Terms of Participation in Tier II




Subject to all of the terms and conditions of the Policy, including Section 10 (modifying
certain terms hereof to comply with Code Section 409A), the terms and conditions set forth below
apply to Employees designated as Tier II participants. This Annex shall have no application to
Employees designated as participants at a level other than Tier II, unless the Committee shall
adopt such terms and conditions and so specify in a separate Annex to the Policy.




(a) Termination by the Company Not for Cause Prior to or More than Two Years After a
Change in Control. An Employee who is eligible for Tier II severance payments and benefits
under the Policy pursuant to Part I of this Annex shall be entitled to receive the payments
and benefits from the Company upon termination of employment at any time prior to a Change
in Control or more than two years following a Change in Control, if such termination is by
the Company (or its subsidiaries) other than for Cause and such termination is not due to
death, Disability or Retirement, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and
benefits which have been earned or become payable as of the date of termination but
which have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.



 












 






(ii) A lump-sum cash payment of a prorated portion of the Employee’s
annual incentive under any AIP that would have become payable for performance in the
year of termination had Employee’s employment continued, with such award prorated
based on the number of days during the year of termination which preceded the
Employee’s termination. This amount will be payable at such time as annual
incentives for performance in the year of termination otherwise become payable.




(iii) For a period terminating on the earlier of 12 months (18 months for
executives hired prior to October 22, 2007 and having continuous service) following
the date of termination of employment or the Employee’s attaining age 65, severance
payments, paid periodically at the date annual salary payments would otherwise have
been made, at a monthly rate equal to one-twelfth of the sum of the Employee’s
annual salary at the date of termination plus the Employee’s average annual
incentive award paid for performance in the three years preceding the year of
termination under any AIP (or averaged over the lesser number of years during which
the Employee was eligible for AIP awards or, if not eligible before the year of
termination, the Employee’s target annual incentive under the AIP for the year of
termination).




(iv) Unless otherwise determined by the Committee, the Employee’s options, both
those vested and not vested at the time of the Employee’s termination of employment,
shall be governed by the terms of the option agreements in respect of such options.




(v) (A) The Employee’s restricted stock and stock unit grants, including
vesting and settlement terms, shall be governed by the terms of the plan and award
agreements in respect of such awards, and (B), unless otherwise provided in the
applicable plan or the agreement evidencing the affected award, a prorated portion
of the Employee’s LTIP awards will not be forfeited but will remain outstanding,
based on the number of days during the performance period preceding Employee’s
termination (divided by the total number of days in the performance period), with
such prorated portion to be earned and payable at such time as the LTIP awards for
the applicable performance period otherwise become earned and payable based on
actual performance, except that the Committee may, within 30 days after termination,
instead make a good faith estimate of the actual performance achieved through the
date of termination and rely on this estimate to determine the prorated portion
payable in settlement of such LTIP award, in which case such payment will constitute
full settlement of such LTIP award, with settlement to occur within 30 days after
termination if the LTIP award did not constitute a deferral of compensation under
Code Section 409A (the settlement date otherwise applicable under the award will
apply if the award did constitute a deferral of compensation under Code Section
409A). Any portion of the Employee’s LTIP awards in excess of such prorated portion
will be forfeited.



 


 









 






(vi) For a period terminating on the earliest of 12 months (18 months for
executives hired prior to October 22, 2007 and having continuous service) following
the
date of termination of employment, the commencement of eligibility for benefits
under a new employer’s welfare benefits plan, or the Employee’s attaining age 65,
the maintenance in effect for the continued benefit of the Employee and his
dependents of:




(A) all insured and self-insured medical and dental benefit Plans of
the Company and subsidiaries in which the Employee was participating
immediately prior to termination, provided that the Employee’s continued
participation is possible under the general terms and conditions of such
Plans (and any applicable funding media) and the Employee continues to pay
an amount equal to the Employee’s regular contribution for such
participation; and




(B) the group life insurance, group accident insurance, and group
disability insurance policies of the Company and subsidiaries then in
effect and covering the Employee immediately prior to termination;




provided, however, that if the Company so elects, or if such continued
participation is not possible under the general terms and conditions of such plans
or under such policies, the Company, in lieu of the foregoing, shall arrange to have
issued for the benefit of the Employee and the Employee’s dependents individual
policies of insurance providing benefits substantially similar (on an after-tax
basis) to those described in this Part II(a)(vi), or, if such insurance is not
available at a reasonable cost to the Company, shall otherwise provide to the
Employee and the Employee’s dependents substantially equivalent benefits (on an
after-tax basis); provided further that, in no event shall the Employee be required
to pay any premiums or other charges in an amount greater than that which the
Employee would have paid in order to participate in the Company’s Plans and
policies.




(vii) The Employee’s benefits and rights under the Retirement Plan and any
Excess Benefit Plan shall be determined under the applicable provisions of such
Plans.




(b) Termination by the Company for Cause or Voluntary Termination by the Employee Prior
to or More than Two Years After a Change in Control. An Employee who is eligible for Tier
II severance payments and benefits under the Policy pursuant to Part I of this Annex shall
be entitled to receive the payments and benefits from the Company upon termination of
employment at any time prior to a Change in Control or more than two years following a
Change in Control, if such termination is by the Company (or its subsidiaries) for Cause or
is voluntary by the Employee and such termination is not due to death, Disability or
Retirement, and shall be subject to other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) No portion of the Employee’s annual incentive under any AIP for the year
of termination shall be or become payable.


 


3









 






(iii) Unless otherwise determined by the Committee, the Employee’s options
which have not vested at the time of the Employee’s termination of employment shall
be immediately forfeited and the Employee’s options which have vested at or before
the Employee’s termination of employment (A), if termination is by the Company (or
its subsidiaries) for Cause, such options shall be immediately canceled, and (B), if
termination is voluntary by the Employee, such options shall remain outstanding and
exercisable only for 90 days after such termination (but in no event past the stated
expiration date of the option), and at the end of such period such options shall be
canceled.




(iv) The Employee’s restricted stock and stock unit grants and LTIP awards
which have not vested at the time of the Employee’s termination of employment shall
be immediately forfeited.




(v) The Employee’s benefits and rights under any welfare benefit Plan, the
Retirement Plan and any Excess Benefit Plan shall be determined under the applicable
provisions of such Plans.




(c) Termination Due to Death, Disability or Retirement Prior to or More than Two Years
After a Change in Control. An Employee who is eligible for Tier II severance payments and
benefits under the Policy pursuant to Part I of this Annex shall be entitled to receive the
payments and benefits from the Company upon termination of employment at any time prior to a
Change in Control or more than two years following a Change in Control, if such termination
is due to death, Disability or Retirement and is not for Cause, and shall be subject to
other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) A cash payment of a prorated portion of the Employee’s annual incentive
under any AIP that would have become payable for performance in the year of
termination had Employee’s employment continued, with such award prorated based on
the number of days during the year of termination which preceded the Employee’s
termination. This amount will be payable at such time as annual incentives for
performance in the year of termination otherwise become payable.




(iii) Unless otherwise determined by the Committee, the Employee’s options,
both those vested and not vested at the time of the Employee’s termination of
employment, shall be governed by the terms of the option agreements in respect of
such options.




(iv) The Employee’s restricted stock and stock unit awards which have not
vested at the time of the Employee’s termination of employment shall be immediately
fully vested and, unless deferred by the Employee in the case of termination due to
Disability or Retirement, stock unit awards shall be settled as promptly as
practicable following termination (subject to Sections 10(f) and 10(g)(ii)).


 


4









 






(v) A cash payment of a prorated portion of each of the Employee’s LTIP
awards that would have become payable for each performance period on-going at the
time of termination had Employee’s employment continued through the end of such
performance period, with such LTIP award prorated based on the number of days during
the performance period preceding the Employee’s termination (divided by the total
number of days in the performance period). This amount will be payable at such time
as the LTIP awards for the applicable performance period otherwise become payable,
except the Committee may, within 30 days after termination, instead make a good
faith estimate of the actual performance achieved through the date of termination
and rely on this estimate to determine the amount payable in settlement of such LTIP
award, in which case such payment will constitute full settlement of such LTIP
award, with settlement to occur within 30 days after termination if the LTIP award
did not constitute a deferral of compensation under Code Section 409A (the
settlement date otherwise applicable under the award will apply if the award did
constitute a deferral of compensation under Code Section 409A). The foregoing
notwithstanding, the payment provided by this Section II(c)(v) will be in shares
rather than in cash for any portion of the LTIP award that is intended to be
classified as “equity” under FASB ASC Topic 718 if a right to receive cash for such
portion of the LTIP award under this provision would cause such portion to instead
be classified as a “liability” under ASC Topic 718.




(vi) The Employee’s benefits and rights under any welfare benefit Plan, the
Retirement Plan and any Excess Benefit Plan shall be determined under the applicable
provisions of such Plans.




(d) Termination by the Company Not for Cause or by Employee for Good Reason Within Two
Years After a Change in Control. An Employee who is eligible for Tier II severance payments
and benefits under the Policy pursuant to Part I of this Annex shall be entitled to receive
the payments and benefits from the Company upon termination of employment within two years
following a Change in Control, if such termination is by the Company (or its subsidiaries)
not for Cause or is by the Employee for Good Reason and such termination is not due to
death, Disability or Retirement, and shall be subject to other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) A cash payment of a prorated portion of the Employee’s annual incentive
under any AIP, determined as the target annual incentive for the year of
termination, with the award so determined then prorated based on the number of days
during the year of termination which preceded the Employee’s termination. This
amount will be payable as a lump sum.




(iii) A lump-sum cash severance payment equal to the product of the Employee’s
Annual Compensation, multiplied by 2.



 


5









 






(iv) A cash payment of a prorated portion of each of the Employee’s LTIP
awards for each performance period on-going at the time of termination,
determined as the target LTIP award for that performance period, with each LTIP
award prorated based on the number of days during the performance period preceding
the Employee’s termination (divided by the total number of days in the performance
period). This amount will be payable as a lump sum.




(v) Except for Designated Awards, the Employee’s options which have not vested
at the time of the Employee’s termination of employment shall be immediately fully
vested and exercisable, and the Employee’s options shall remain outstanding and
exercisable for the remaining period until the stated expiration date of the option.




(vi) The Employee’s restricted stock and stock unit awards which have not
vested at the time of the Employee’s termination of employment shall be immediately
fully vested and, unless waived or deferred by the Employee, stock unit awards shall
be settled as promptly as practicable following termination (subject to Sections
10(f) and 10(g)(ii)).




(vii) The Employee’s Designated Awards, if any, will be subject to the terms of
the Plan and/or stock option agreement under which they were granted, except that,
in the case of options which are Designated Awards, and irrespective of such Plan
and/or stock option agreement, Employee will be entitled to a payment equal to the
following: for each share of the Company’s Common Stock subject to any option which
is a Designated Award that remains outstanding at the date of Employee’s termination
subject to this Part II(d), whether or not such option is then exercisable, the
Company shall pay to Employee the amount determined by subtracting the exercise
price thereof from the highest of (A) the market price per share of Common Stock on
the New York Stock Exchange at the close of business on the effective day of
termination, (B) the price per share contained in any published tender offer made
within one year before or after the date of the Change in Control, (C) the price
contained in any merger or acquisition agreement entered into by the Company and any
third party within one year before or after the date of the Change in Control, or
(D) the market price per share of Common Stock on the New York Stock Exchange on the
date of the Change in Control, and, upon such payment, such option shall be deemed
canceled and annulled.


 


6









 






(viii) The Employee will be credited with additional age and years of
service under any Excess Benefit Plan as though the Employee continued to be
employed for a period of 36 months after termination at a rate of compensation equal
to his or her Annual Compensation, and the Employee will be deemed to be fully
vested under any such Excess Benefit Plan, with the time or times at which benefits
are payable under any such Plan unchanged; provided, however, that if an Excess
Benefit Plan does not permit such additional crediting of age and years of service,
then Employee will be paid in a lump sum the present value of the additional
benefits he would have received under such Plan had Employee’s employment continued
to the third anniversary of his termination at an annual rate of compensation equal
to his or her Annual Compensation; provided further, that, subject to Section
10(g)(iv), the Company’s obligations under any such Excess Benefit Plan shall be
fully funded by deposits into a “rabbi trust” the trustee of which shall be
independent of the Company and the terms of which shall preclude access by the
Company to any of the trust assets, except for attachments by creditors of the
Company upon insolvency or bankruptcy of the Company, until all obligations to the
Employee and his beneficiaries have been satisfied; and provided further, that,
subject to Section 10(g)(iv), the Company may elect to satisfy all obligations to
the Employee and his beneficiaries by payment, as a lump sum, of the present value
of the accrued benefit under any Excess Plan.




(ix) For a period terminating on the earlier of 24 months following the date of
termination of employment or the commencement of eligibility for benefits under a
new employer’s welfare benefits plan, the maintenance in effect for the continued
benefit of the Employee and his dependents of:




(A) all insured and self-insured medical and dental benefit plans of
the Company and subsidiaries in which the Employee was participating
immediately prior to termination, provided that the Employee’s continued
participation is possible under the general terms and conditions of such
plans (and any applicable funding media) and the Employee continues to pay
an amount equal to the Employee’s regular contribution for such
participation; and




(B) the group life insurance and group disability insurance policies of
the Company and subsidiaries then in effect for Employee;




provided, however, that if the Company so elects, or if such continued
participation is not possible under the general terms and conditions of such plans
or under such policies, the Company, in lieu of the foregoing, shall arrange to have
issued for the benefit of the Employee and the Employee’s dependents individual
policies of insurance providing benefits substantially similar (on an after-tax
basis) to those described in this Part II(d)(ix), or, if such insurance is not
available at a reasonable cost to the Company, shall otherwise provide the Employee
and the Employee’s dependents substantially equivalent benefits (on an after-tax
basis); provided further that, in no event shall the Employee be required to pay any
premiums or other charges in an amount greater than that which the Employee would
have paid in order to participate in the Company’s plans and policies.
Notwithstanding anything to the contrary contained herein, in the event the Employee
becomes eligible for benefits under a new employer’s welfare benefit plan during the
24 month period following the date of termination, the benefits required to be
provided to the employee pursuant to this Part II(d)(iv) shall be reduced by the
amount of substantially similar benefits provided to the Employee at no additional cost by such new employer.


 


7









 






(e) Termination by the Company for Cause or Voluntary Termination by the Employee
Within Two Years After a Change in Control. An Employee who is eligible for Tier II
severance payments and benefits under the Policy pursuant to Part I of this Annex shall be
entitled to receive the payments and benefits from the Company upon termination of
employment at any time within two years following a Change in Control, if such termination
is by the Company (or its subsidiaries) for Cause or is voluntary by the Employee not for
Good Reason and such termination is not due to death, Disability or Retirement, and shall be
subject to other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.




(ii) No portion of the Employee’s annual incentive under any AIP for the year
of termination shall be or become payable.




(iii) Unless otherwise determined by the Committee, if termination is by the
Company (or its subsidiaries) for Cause all of the Employee’s options (vested and
unvested) shall be immediately forfeited and canceled, and if termination is
voluntary by the Employee, all of the Employee’s options which have not vested at
the time of his termination shall be immediately fully vested and exercisable, and
all of the Employee’s options which have vested at or before his termination shall
remain outstanding and exercisable for 90 days after such termination (but in no
event past the stated expiration date of the option), and at the end of such period
such options shall be canceled.




(iv) The Employee’s restricted stock and stock unit grants and LTIP awards
which have not vested at the time of the Employee’s termination of employment shall
be immediately forfeited.




(v) The Employee’s benefits and rights under any welfare benefit Plan, the
Retirement Plan and any Excess Benefit Plan shall be determined under the applicable
provisions of such Plans.




(f) Termination Due to Death, Disability or Retirement Within Two Years After a Change
in Control. An Employee who is eligible for Tier II severance payments and benefits under
the Policy pursuant to Part I of this Annex shall be entitled to receive the payments and
benefits from the Company upon termination of employment at any time within two years
following a Change in Control, if such termination is due to death, Disability or Retirement
and is not for Cause or voluntary by the Employee for Good Reason, and shall be subject to
other terms, as follows:




(i) Such Employee’s annual salary otherwise payable through the date of
termination of employment, together with salary, incentive compensation and benefits
which have been earned or become payable as of the date of termination but which
have
not yet been paid to the Employee and unreimbursed business expenses
reimbursable under Company policies then in effect; provided, however, that the
Company and its subsidiaries may offset such amounts against obligations and
liabilities of the Employee to the Company and its subsidiaries.



 


8









 






(ii) A cash payment of a prorated portion of the Employee’s annual incentive
under any AIP, determined as the target annual incentive for the year of
termination, with the award so determined then prorated based on the number of days
during the year of termination which preceded the Employee’s termination, subject to
Section 10(e) in applicable cases. This amount will be payable as a lump sum.




(iii) Except for Designated Awards, the Employee’s options which have not
vested at the time of the Employee’s termination of employment shall be immediately
fully vested and exercisable, and the Employee’s options shall remain outstanding
and exercisable after termination for the following periods (but in no event past
the stated expiration date of the option): (A) for one year if termination resulted
from the Employee’s death, (B) three years if termination resulted from the
Employee’s Disability, or (C) for the remaining period until the stated expiration
date of the option if termination resulted from Retirement. At the end of the
applicable post-termination exercise period, such options shall be canceled.




(iv) The Employee’s restricted stock and stock unit awards which have not
vested at the time of the Employee’s termination of employment shall be immediately
fully vested and, unless waived or deferred by the Employee in the case of
termination due to Disability or Retirement, stock unit awards shall be settled as
promptly as practicable following termination (subject to Sections 10(f) and
10(g)(ii)).




(v) The Employee’s Designated Awards, if any, will be subject to the terms of
the Plan and/or stock option agreement under which they were granted, except that,
in the case of options which are Designated Awards, and irrespective of such Plan or
stock option agreement, Employee will be entitled to a payment equal to the
following: for each share of the Company’s Common Stock subject to any option which
is a Designated Award that remains outstanding at the date of Employee’s termination
subject to this Part II(f), whether or not such option is then exercisable, the
Company shall pay to Employee the amount determined by subtracting the exercise
price thereof from the highest of (A) the market price per share of Common Stock on
the New York Stock Exchange at the close of business on the effective day of
termination, (B) the price per share contained in any published tender offer made
within one year before or after the date of the Change in Control, (C) the price
contained in any merger or acquisition agreement entered into by the Company and any
third party within one year before or after the date of the Change in Control, or
(D) the market price per share of Common Stock on the New York Stock Exchange on the
date of the Change in Control, and, upon such payment, such option shall be deemed
canceled and annulled.)




(vi) A cash payment of a prorated portion of each of the Employee’s LTIP awards
that would have become payable for each performance period on-going at the time of
termination, determined as the target LTIP award for that performance period, with
each LTIP award prorated based on the number of days during the performance period
preceding the Employee’s termination (divided by the total number of days in the
performance period), subject to Section 10(e) in applicable cases. This amount will
be payable as a lump sum.


 


9









 






(vii) The Employee’s benefits and rights under any welfare benefit Plan, the
Retirement Plan and any Excess Benefit Plan shall be determined under the applicable
provisions of such Plans, except that the Employee will be deemed to be fully vested
under any such Excess Benefit Plan.




(g) Entitlement to Gross-Up; Applicability of Cut-Back Provisions. Tier II level
participants who qualify as Pre-Amendment Employees as defined in Section 6(a) of the Policy
shall be entitled to the Gross-Up Payment (or, in limited circumstances, the cut-back of
compensation) if and to the extent so provided in Section 6(b) of the Policy. Tier II
level participants who qualify as New Employees as defined in Section 6(a) of the Policy
shall be subject to the reduction in compensation if and to the extent so provided in
Section 6(c) of the Policy.




(h) Period During Which Restrictions Under Section 7(a)(i) and (ii) Apply. Tier II
level participants shall be subject to the Non-competition Period under Section 7(a)(i) of
this Policy for 18 months following termination of employment rather than two years, and
shall be subject to the restrictions under Section 7(a)(ii) of this Policy for 18 months
following termination of employment rather than two years. Except for this limitation,
Sections 7(a)(i) and 7(a)(ii) apply to each such participant in accordance with their terms.


 


10









 





[Tier III deleted but deletion not marked.]





 


11