Document:

EX-10.6.B

Exhibit 10.6(b)

SENSIENT TECHNOLOGIES SUPPLEMENTAL BENEFIT PLAN

(Effective as of January 1, 2005)

 

 

SENSIENT TECHNOLOGIES SUPPLEMENTAL BENEFIT PLAN

Section 1. Purpose.

     The Sensient Technologies Corporation Supplemental Benefit Plan (the “Original Plan”) was
initially established to reimburse certain employees for various reductions in qualified plan
benefits in the Sensient Technologies Retirement Employee Stock Ownership Plan, the Sensient
Technologies Transition Retirement Plan, the Sensient Technologies Corporation Saving Plan, and the
Retirement Plan, which reductions are caused by (i) restrictions in Section 401(a)(17), 410, or 415
of the Internal Revenue Code, (ii) the maximum limitation on employer and employee contributions
under Sections 401(k), 401(m), and 402(g), of the Internal Revenue Code and (iii) the deferral of a
portion of their cash compensation pursuant to nonqualified deferred compensation arrangements.

     Following the enactment of Section 409A of the Code: (1) the Original Plan was frozen to
maintain grandfathered benefits as of December 31, 2004 to the extent permitted under Section 409A
of the Code; and (2) this Sensient Technologies Supplemental Benefit Plan was established as an
ongoing plan subject to Section 409A of the Code with respect to benefits vesting and accruing on
and after January 1, 2005, together with earnings on such benefits. All benefits under this Plan
are subject to Section 409A of the Code and any guidance issued thereunder. If any decision by the
Internal Revenue Service, or issuance by the Internal Revenue Service or the Department of the
Treasury of interpretive authority, results in any benefits under the Original Plan not being
considered as grandfathered under Section 409A of the Code, such benefits under the Original Plan
shall be covered by and subject to all terms and conditions of this Plan.

Section 2. Definitions.

     (a) “Administrator” means the Vice President of Administration of the Company.

     (b) “Benefits Administrative Committee” means the Benefits Administrative Committee of the
Company appointed by the Chief Executive Officer of the Company.

     (c) “Board” means the Board of Directors of the Company.

     (d) “Company” means Sensient Technologies Corporation (formerly known as Universal Foods
Corporation), a Wisconsin corporation.

     (e) “Deferred Compensation Limit” means the limitations, if any, imposed under the Code on the
recognition by qualified retirement plans of the amount of any direct cash compensation deferred
pursuant to the Sensient Technologies Corporation Executive Income Deferral Plan and the Sensient
Technologies Corporation Management Income Deferral Plan.

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     (f) “Effective Date” means January 1, 2005.

     (g) “Employer” means the Company and any subsidiary or affiliate of the Company.

     (h) “ESOP” means the Sensient Technologies Retirement Employee Stock Ownership Plan as amended
from time to time.

     (i) “Executive” means an elected officer of an Employer who is specifically designated by the
Chief Executive Officer of the Company as participating in this Plan.

     (j) “415 Limit” means the limitations imposed by Code Section 415 on benefits and/or
contributions for qualified retirement plans.

     (k) “Plan Account” means a bookkeeping account maintained by the Administrator for each
Executive to reflect the supplements allocated to the Executive under the Plan.

     (l) “Rabbi Trust” means the trust established pursuant to the Trust Agreement dated January
18, 1988 between the Company and Marshall & Ilsley Trust Company which applies to various
nonqualified deferred compensation programs for employees of the Company.

     (m) “Savings Plan” means the Sensient Technologies Corporation Savings Plan as amended from
time to time.

     (n) “Transition Plan” means the Sensient Technologies Transition Retirement Plan as amended
from time to time.

     (o) “$200,000 Limit” means the limitation imposed by Code Section 401(a)(17), as adjusted, on
a participant’s annual compensation for purposes of calculating benefits under qualified retirement
plans.

     (p) “STC Stock” means common stock of the Company and/or noncallable preferred stock of the
Company which is convertible into common stock of -the Company.

Section 3. Savings Plan Matching Supplement.

     Subject to Section 6(e), an Executive’s Plan Account shall be allocated an amount as of each
December 31 equal to the difference between (A) and (B), where:

(A) is the amount of matching Employer contributions that would have been
allocated to the account of the Executive for each plan year under the
Savings Plan, assuming:

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	 	(1)	 	the Executive had made the maximum
pre-tax deposits for the plan year,
	 
	 	(2)	 	the 415 Limit and $200,000 Limit
were inapplicable, and
	 
	 	(3)	 	the limitations on employer and
employee contributions under Code Sections 401(k), 401(m),
and 402(g) were inapplicable, and

(B) is the actual matching Employer contribution allocable to the
Executive’s Savings Plan account for the plan year.

Section 4. ESOP Supplement.

               Subject to Section 6(e), an Executive’s Plan Account shall be allocated an amount as of each
December 31 equal to the difference between (A) and (B), where:

(A) is the amount of allocations that would have been made to the
account of the Executive for each plan year under Section 4.5 of
the ESOP, assuming the 415 Limit, the $200,000 Limit and the
Deferred Compensation Limit were inapplicable, and

(B) is the actual Section 4.5 allocation to the Executive’s ESOP
account for the year.

Section 5. Transition Supplement.

     Subject to Section 6(e), an Executive’s Plan Account shall be allocated an amount each
December 31 equal to the amount of allocations that would have been made to the account of the
Executive for each plan year under Section 4.1 of the Transition Plan, assuming the 415 Limit were
inapplicable and the Executive were a Participant in the Transition Plan with the benefit
determined by the Administrator. This Transition Supplement shall be the Executive’s applicable
dollar amount for such year as specified in Appendix A attached hereto.

Section 6. Valuation Adjustments to Plan Account.

     (a) The Administrator shall maintain a bookkeeping record of the Plan Account for each
Executive. The amount in each Account shall be adjusted from time to time by the allocations
provided in Sections 3, 4 and 5 above, the distributions provided in Section 7 below, and the
adjustments for valuation specified below.

     (b) The portions of a Plan Account attributable to any supplement with respect to the ESOP and
the Transition Plan shall reflect the actual investment performance of the Executive’s account
under the ESOP.

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     (c) The portion of a Plan Account attributable to the Savings Plan Matching Supplement shall
reflect the actual investment performance of the Executive’s Company matching contribution account
under the Savings Plan.

     (d) With respect to the Rabbi Trust pursuant to Section 8 below, the actual earnings of the
assets in the Rabbi Trust shall be irrelevant with respect to the value of an Executive’s Plan
Account except as described in (b) above. The adjustments to a portion of a Plan Account
attributable to a particular supplement, as required above shall be made on the same dates that the
valuations are conducted for the plan to which the particular supplement relates or more frequently
as determined by the Administrator.

     (e) An Executive’s Plan Account shall be allocated an amount under Section 3, 4 or 5 only if
the Executive: (i) was employed by the Employers on December 31 of the year in which the
allocation is made; or (ii) ceased employment due to the Executive’s death, retirement or
disability (as defined under the Company’s long-term disability plan).

Section 7. Benefit Payments.

     (a) An Executive shall only be vested in the Plan Account if such Executive is vested pursuant
to the terms of the ESOP. Consistent with Section 7.12 of the ESOP, the Plan Accounts shall be
fully vested and nonforfeitable in the event of a “change of control of the Company” which for this
purpose means:

	 	(i)	 	the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934 (the “Exchange Act”) (a “Person”) of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either (A) the then outstanding shares of common stock of the Company (the
“Outstanding Company Common Stock”) or (B) the combined voting power of the
then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control: (1) any acquisition
directly from the Company, (2) any acquisition by the Company, (3) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company or (4)
any acquisition pursuant to a transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this Section; or
	 
	 	(ii)	 	individuals who, as of September 10, 1998, constitute the
Board (the “Incumbent Board”) cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
director subsequent to September 10, 1998 whose

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	 	 	 	election, or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then comprising
the Incumbent Board shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies
or consents by or on behalf of a Person other than the Board; or
	 
	 	(iii)	 	consummation by the Company of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Company or the acquisition of assets of another entity (a
“Business Combination”), in each case, unless, following such Business
Combination, (A) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to such
business combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Company or all or
substantially all of the Company’s assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership
immediately prior to such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities, as the case may be,
(B) no Person (excluding any employee benefit plan (or related trust) of the
Company or of such corporation resulting from such Business Combination)
beneficially owns, directly or indirectly, 20% or more of, respectively, the
then outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (C) at least a majority of the
members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or the action of the Board, providing for
such Business Combination; or
	 
	 	(iv)	 	approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

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     (b) Subject to Section 11(b), distribution of the vested Plan Account of an Executive shall be
made in a lump sum cash payment within five (5) days after the end of the calendar quarter in which
occurs the Executive’s separation from service with the Employers, as determined under Section 409A
of the Code.

     (c) In the event the Executive dies prior to receipt of the Executive’s Plan Account and
either (i) the Executive’s Account is vested pursuant to (a) above or (ii) the Executive dies while
employed with the Employers, the amount of such Account shall be paid to the beneficiary designated
by the Executive in a lump sum cash payment within five (5) days after the end of the calendar
quarter in which the Executive’s death occurs or in which any needed resolution as to beneficiary
status is finalized. A beneficiary may be designated by the Executive by a written statement to
such effect filed with the Administrator. In the event no beneficiary is validly designated or the
designated beneficiary predeceased the Executive, the Executive’s estate shall be the beneficiary
hereunder.

     (d) In the event the Rabbi Trust invests in STC Stock as an asset attributable to the Plan, an
Executive or beneficiary eligible for a cash lump sum payment may elect to receive such
distribution in STC Stock in lieu of cash, but not in excess of the portion of the STC Stock owned
by the Rabbi Trust attributable to the Executive’s Plan Account.

Section 8. Rabbi Trust.

     (a) The Plan Account is utilized solely for recordkeeping purposes to measure and determine of
the amount to be paid to an Executive hereunder. Neither the Plan Accounts nor any other reserve
established on the Company’s books to reflect the liabilities under this Plan shall constitute or
be treated as a trust fund of any kind.

     (b) Notwithstanding (a) above, the Company shall periodically fund the Rabbi Trust in order to
maintain sufficient assets therein to equal the value from time to time of the Plan Accounts.

     (c) In the event the Rabbi Trust invests in STC Stock as an asset attributable to the Plan,
prior to an occasion for the exercise of STC Stock voting rights, the Administrator shall provide
or cause to be provided to each Executive notification of such occasion together with any other
information being provided by the Company to its shareholders with respect to such occasion. Each
Executive is entitled to direct the manner in which the portion of the STC Stock owned by the Rabbi
Trust attributable to his Plan Account is to be voted on such occasion. Any fractional share of
STC Stock attributable to an Executive’s Plan Account or any STC Stock for which no voting
direction is received shall not be voted.

     (d) In the event of any tender offer for shares of STC Stock held in the Rabbi Trust
attributable to the Plan, the Administrator shall provide each Executive with notification of such
tender offer together with any other information being provided to Company shareholders in
connection with the tender offer. Each Executive is entitled to

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direct whether or not and, if so, to what extent the portion of the STC Stock held by the
Rabbi Trust attributable to his Plan Account is to be tendered in response to such tender offer.
With respect to any STC Stock for which no direction is received, no action shall be taken.

Section 9. Inter-Employer Reimbursements.

     Although any benefit payments or contributions to the Rabbi Trust hereunder shall be made by
the Company, it shall be determined by the Administrator whether any portion thereof is allocable
to any other Employer on account of its employment of the applicable Executive. In any such case,
the Company shall be reimbursed by such other Employer in the amount and manner determined by the
Administrator pursuant to uniformly applicable procedures.

Section 10. Non-Alienation of Benefits.

     Neither an Executive nor his designated beneficiaries shall have the power to transfer,
assign, anticipate or otherwise encumber in advance any of the payments provided in this Plan; nor
shall any of said payments, nor any assets or funds of the Company or any Employer be subject to
seizure for the payment of any of the Executive’s or his beneficiaries’ judgments, alimony or
separate maintenance or be reached or transferred by operation of law in the event of the
bankruptcy or insolvency of the Executive or any beneficiary. Notwithstanding the preceding
sentence, pursuant to rules comparable to those applicable to qualified domestic relations orders
(“QDROs”), as determined by the Administrator, the Administrator may direct a distribution, prior
to any distribution date otherwise described in the Plan, to an alternate payee (as defined under
the rules applicable to QDROs).

Section 11. Tax Matters:

     (a) All distributions, payments and benefits under this Plan shall be subject to all income
and employment tax withholdings as required under applicable federal, state or local tax laws and
regulations.

     (b) It is the intention of the Company that this Plan comply with the requirements of Section
409A of the Code and any guidance issued thereunder, and the Plan shall be interpreted, operated
and administered accordingly. If an Executive is a “specified employee” or “key employee” within
the meaning of Section 409A of the Code and the Company continues to be or is publicly traded at
the time of the Executive’s separation from service with the Company within the meaning of Section
409A of the Code, payments under this Plan will not be made until the earlier of the date that is
six months following the Executive’s separation from service or, the Executive’s date of death, at
which time all delayed payments will be paid as if the six month delay had not occurred.
Notwithstanding anything in this Plan to the contrary, the Company does not guarantee the tax
treatment of any payments or benefits under this Plan, whether pursuant to the Code or federal,
state or local tax laws or regulations.

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

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

Any distribution under this Section shall affect and reduce the amount to be paid to the Executive
under this Plan.

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

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

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

Section 12. Administration.

     (a) The Administrator shall have all such powers that may be necessary to carry out the
provisions of the Plan, including without limitation, the power to delegate administrative matters
to other persons, to construe and interpret the Plan, to adopt and revise rules, regulations and
forms relating to and consistent with the Plan’s terms, and to make any other determination which
he or she deems necessary or advisable for the implementation and administration of the Plan.

     (b) All decisions and determinations by the Administrator shall be final, binding and
conclusive as to all parties, including without limitation any Executive and all other employees
and persons. The Administrator shall calculate the supplements in Sections 3, 4 and 5 hereof in a
manner which avoids duplicative benefits.

Section 13. Claims Procedures: 

     (a) Any claimant believing him/herself to be entitled to benefits under this Plan may file a
written claim for benefits with the Administrator setting forth the benefits to which he/she feels
entitled and the reasons therefor. Within 90 days after receipt of a claim for benefits, the
Administrator shall determine the claimant’s right, if any, to the benefits claimed, shall give the
claimant written notice of its decision unless the Administrator determines that special
circumstances require an extension of time to process the claim. If such an extension is required,
the claimant will receive a written notice from the Administrator indicating the reason for the
delay and the date the claimant may expect a final decision, which shall be no more than 180 days
from the date the claim was filed. If the claim is denied in whole or in part, the written notice
shall set forth in a manner calculated to be understood by the claimant (i) the specific reason or

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reasons for the denial; (ii) specific reference to pertinent Plan provisions on which the
denial is based; (iii) a description of any additional material or information necessary for the
claimant to perfect the claim and an explanation of why such material or information is necessary;
and (iv) an explanation of the Plan’s appeal procedure and a statement of the claimant’s right to
bring an action under the Employee Retirement Income Security Act of 1974, as it may be amended,
and regulations thereunder (“ERISA”) Section 502(a) following an adverse determination on appeal.

     (b) Any claimant whose claim for benefits has been denied by the Administrator may appeal to
the Benefits Administrative Committee (or its delegate) for a review of the denial by making a
written request therefore within 60 days of receipt of a notification of denial. Any such request
may include any written comments, documents, records and other information relating to the claim
and may include a request for “relevant” documents to be provided free of charge. The claimant
may, if he or she chooses, request a representative to make such written submissions on his or her
behalf.

(A) Within 60 days after receipt of a request for an appeal, the Benefits
Administrative Committee (or its delegate) shall notify the claimant in writing of
its final decision. If the Benefits Administrative Committee (or its delegate)
determines that special circumstances require additional time for processing, the
Benefits Administrative Committee (or its delegate) may extend such 60 day period,
but not by more than an additional 60 days, and shall notify the claimant in
writing of such extension. If the period of time is extended due to a claimant’s
failure to submit information necessary to decide a claim, the period for making
the benefit determination on appeal shall be tolled from the date on which the
notification of the extension is sent to the claimant until the date on which the
claimant responds to the request for additional information.

(B) In the case of an adverse benefit determination on appeal, the Benefits
Administrative Committee (or its delegate) will provide written notification to the
claimant, set forth in a manner calculated to be understood by the claimant, of:
(A) the specific reason or reasons for the adverse determination on appeal; (B) the
specific Plan provisions on which the denial of the appeal is based; (C) a
statement that the claimant is entitled to receive, upon request and free of
charge, reasonable access to, and copies of all documents, records, and other
information “relevant” to the claimant’s claim for benefits; and (D) a statement of
the claimant’s right to bring a civil action under ERISA Section 502(a).

     (c) In the event the claimant is the Administrator, the Benefits Administrative Committee (or
its delegate) shall conduct both the review of the initial claim for benefits under Section 13(a),
as well as the appeal under Section 13(b).

     (d) For purposes of this Section, a document, record or other information shall be considered
“relevant” to a claimant’s claim if such document, record or other information: (i) was relied upon
in making the benefit determination; (ii) was

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submitted, considered, or generated in the course of making the benefit determination, without
regard to whether such document, record, or other information was relied upon in making the benefit
determination; or (iii) demonstrates compliance with the administrative processes and safeguards
required in making the benefit determination.

Section 14. Limitation of Rights Against the Employers.

     Participation in this Plan, or any modifications thereof, or the payments of any benefits
hereunder, shall not be construed as giving to any Executive any right to be retained in the
service of the Employers, limiting in any way the right of the Employers to terminate such
Executive’s employment at any time, evidencing any agreement or understanding express or implied,
that the Employers will employ such Executive in any particular position or at any particular rate
of compensation and/or guaranteeing such Executive any right to receive any other form or amount of
remuneration from the Employers.

Section 15. Construction.

     The Plan shall be construed, administered and governed in all respects under and by the laws
of the State of Wisconsin, except as preempted by ERISA. Wherever any words are used herein in the
masculine, they shall be construed as though they were used in the feminine for all cases where
they would so apply; and wherever any words are used herein in the singular or the plural, they
shall be construed as though they were used in the plural or the singular, as the case may be, in
all cases where they would so apply. The words “hereof”, “herein”, “hereunder” and other similar
compounds of the word “here” shall mean and refer to this entire document and not to any particular
paragraph.

Section 16. Amendment or Termination of the Plan.

     The Board shall have the right to amend, modify, terminate or discontinue the Plan at any
time; and such action shall be final, binding and conclusive as to all parties, including any
Executive, any beneficiary thereof and all other Employers’ employees and persons, provided that
any such termination shall comply with Treas. Reg. §1.409A-3(j)(4)(ix). Notwithstanding the
foregoing, any such Board action to terminate or discontinue the Plan or to change the payment
amounts or the time and manner of payment thereof as then provided in the Plan shall not be
effective and operative with respect to benefits accrued as of such date, unless and until written
consent thereto is obtained from each Executive affected by such action or, if any such Executive
is not then living, from the beneficiary thereof.

Section 17. Relationship to Employment Agreements.

     Except as otherwise expressly provided herein, this Plan does not affect the rights of any
Executive under any employment or other compensation agreement with an Employer covering such
Executive.

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Section 18. Successors and Assigns.

     The terms and conditions of the Plan, as amended and in effect from time to time, shall be
binding upon the successors and assigns of the Employer, including without limitation any entity
into which an Employer may be merged or with which an Employer may be consolidated.

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     IN WITNESS WHEREOF, the Company has caused this instrument to be executed this 24th day of
October, 2008.

	 	 	 	 	 
	 	SENSIENT TECHNOLOGIES CORPORATION

 	 
	 	By /s/ Douglas S. Pepper
 	 
	 	Douglas S. Pepper 	 
	 	Vice President-Administration 	 
	 

	 	 	 	 	 
	 

	 	 	 	 
	ATTEST:
	 	 	 	 
	By:

	 	/s/ John L. Hammond	 	 
	 

	 	 	 	 

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Sensient Technologies Supplemental Benefit Plan

Transition Supplement – Applicable Dollar Amount

APPENDIX A

	 	 	 	 	 
	Executive	 	Applicable Dollar Amount
	 

	 	$	1,722.43EX-10.7

Exhibit 10.7

SENSIENT TECHNOLOGIES CORPORATION

MANAGEMENT INCENTIVE PLAN

FOR CORPORATE MANAGEMENT

	I.	 	THE PLAN
	 
	 	 	The name of this Plan is the Sensient Technologies Corporation Management Incentive Plan for
Corporate Management. The purpose of this Plan is to promote the interests of the
shareholders and to provide incentive to those corporate management employees who can
contribute most to the profitability of the Company. It is separate and distinct from other
Company incentive plans currently in effect.
	 
	II.	 	DEFINITIONS
	 
	 	 	In this Plan, the terms used will have the following definitions:

	 	A.	 	“Board of Directors” means the Board of Directors of the Company.
	 
	 	B.	 	“Bonus Award” means a lump-sum cash award paid no later than March
15th of the Fiscal Year following the Fiscal Year during which the Bonus
Award was earned.
	 
	 	C.	 	“Bonus Provision” means monies available for distribution as a Bonus Award as
the result of the operation of this Plan.
	 
	 	D.	 	“Company” means Sensient Technologies Corporation.
	 
	 	E.	 	“Employee” means any employee regularly employed by the Company, and paid on a
salary basis.
	 
	 	F.	 	“Fiscal Year” means each twelve (12) consecutive month period beginning on
January 1 and ending on December 31.
	 
	 	G.	 	“Fiscal Year Salary” means the base pay earned by a participant during the
relevant Fiscal Year, exclusive of any incentive compensation or supplemental payments
by the Company.
	 
	 	H.	 	“Independent Auditors” means with respect to any Fiscal Year, the independent
public accountants appointed by the Board of Directors to certify to the Board of
Directors the financial statements of the Company.
	 
	 	I.	 	“Earnings per share” is defined as net basis earnings per share, as shown in
the Company’s Statement of Consolidated Earnings as certified by the Company’s
Independent Auditors. Earnings per share shall be further adjusted for extraordinary
items of income or expense if, in the opinion of the Chairman and Chief Executive
Officer, it is appropriate to do so.

 

 

	 	J.	 	“Plan” means this Sensient Technologies Corporation Management Incentive Plan
for Corporate Management.
	 
	 	K.	 	“Subsidiary” means with respect to any year, any corporation in which the
Company owns a stock interest of more than 50%, and the financial results of whose
operations are consolidated with those of the Company in the financial statements
included in the annual report to shareholders for that year.

	III.	 	PLAN ADMINISTRATION
	 
	 	 	The Board of Directors of the Company has delegated to the Chairman and Chief Executive
Officer the authority to adopt eligibility and other rules not inconsistent with the
provisions of the Plan (hereinafter referred to as the “Regulations” and attached hereto as
“Exhibit A”) for the administration thereof and to alter, amend, or revoke any Regulations
so adopted.
	 
	IV.	 	PLAN PARTICIPATION

	 	A.	 	At the beginning of the Fiscal Year, the Chairman and Chief Executive Officer
shall determine who should participate in the Plan for that Fiscal Year.
	 
	 	B.	 	Not all management employees need be selected as participants, and selection as
a participant one year does not automatically ensure selection in future years, if such
Plans should be implemented.
	 
	 	C.	 	At the end of each Fiscal Year, the Chairman and Chief Executive Officer shall
determine the amount of Bonus Award each participant in the Plan should receive for
that Fiscal Year.
	 
	 	D.	 	The Chairman and Chief Executive Officer’s selection of the Employees to whom a
Bonus Award shall be made and his determination of the amount of each such Bonus Award
shall be final.
	 
	 	E.	 	This Plan is not a part of the Company’s regular compensation plan nor is it
part of the Employee’s regular compensation.

	V.	 	BONUS AWARDS
	 
	 	 	The performance measurement upon which the Bonus Award is based is determined in accordance
with the Regulations for each Fiscal Year.
	 
	VI.	 	SUCCESSORS AND ASSIGNS
	 
	 	 	If the Company sells, assigns or transfers all or substantially all of its business and
assets to any person, excluding affiliates of the Company, or if the Company merges into or
consolidates or otherwise combines with any person which is a continuing or successor
entity, then the Company shall assign all of its right, title and interest in this Plan as
of the date of such event to the person which is either the acquiring or successor
corporation,

 

 

	 	 	and such person(s) shall assume and perform from and after the date of such assignment all
of the terms, conditions and provisions imposed by this Plan upon the Company.
	 
	 	 	In case of such assignment by the Company and of such assumption and agreement by the
Company and of such person(s), all further rights as well as all other obligations of the
Company under this Agreement thenceforth shall cease and terminate and thereafter the
expression “the Company” wherever used herein shall be deemed to mean such person(s).

	VII.	 	PLAN AMENDMENTS
	 
	 	 	The Chairman and Chief Executive Officer may suspend or discontinue the Plan at any time.

 

 

Exhibit A – Regulations

SENSIENT TECHNOLOGIES CORPORATION

MANAGEMENT INCENTIVE PLAN FOR CORPORATE MANAGEMENT

REGULATIONS Fiscal Year 2008

These Regulations apply to the Management Incentive Plan for Corporate Management for the Fiscal
Year January 1, 2008 through December 31, 2008.

	1.	 	Participants will be notified of their selection and be provided with a copy of the Plan with
specific provisions related to their level of participation.
	 
	2.	 	An Employee may be selected as a participant after the beginning of a Fiscal Year and, if
eligible, may receive a Bonus Award prorated to reflect duration of Plan participation, paid
at the same time as all other Bonus Awards under the Plan.
	 
	3.	 	A participant may receive a Bonus Award based on prorated participation in more than one plan
if eligible to do so under provisions of the plan(s).
	 
	4.	 	The Bonus Award granted to individual participants shall be based upon achievement of defined
EPS objectives.
	 
	5.	 	The bonus award amount may, at the sole discretion of the Chairman and Chief Executive
Officer, be adjusted up or down by five to twenty percent (5% to 20%) to recognize individual
performance.
	 
	6.	 	If an Employee ceases to be a Plan participant during the Fiscal Year, but remains in the
Company’s service, the Employee may, at the discretion of the Chairman and Chief Executive
Officer, receive a pro-rata Bonus Award based upon the number of months spent as a
participant, paid at the same time as all other Bonus Awards under the Plan.
	 
	7.	 	The Bonus Award shall not be paid to participants who resigned or were discharged for cause
prior to their receiving the Bonus award unless the Chairman and Chief Executive Officer
decides otherwise.
	 
	8.	 	If an Employee ceases to be a Plan participant during the Fiscal Year as a result of death,
disability, or retirement under the Company’s ESOP, the Employee or his/her estate may, at the
discretion of the Chairman and Chief Executive Officer, receive a pro-rata Bonus Award based
upon the number of months spent as a participant, paid at the same time as all other Bonus
Awards under the Plan.
	 
	 	 	In such cases, the Chairman and Chief Executive Officer may increase the Bonus Award up to,
but not in excess of, the amount that would have been earned for a full year of
participation.

 

 

Exhibit B – Performance Measures

CORPORATE MANAGEMENT

SENSIENT TECHNOLOGIES CORPORATION

MANAGEMENT INCENTIVE PLAN FOR CORPORATE MANAGEMENT

PERFORMANCE MEASURES Fiscal Year 2008

	 	 	 
	NAME:

	 	TITLE:

Maximum Bonus Award as Percentage

of Fiscal Year Salary

 

	 	 	 	 	 
	TARGET
	 	 	%	 
	 
	 	 	 	 
	MAXIMUM
	 	 	%	 

 

 

Exhibit C – Performance Measures — Schedule

SENSIENT TECHNOLOGIES CORPORATION

MANAGEMENT INCENTIVE PLAN FOR CORPORATE MANAGEMENT

PERFORMANCE MEASURES-SCHEDULE Fiscal Year 2008

GUIDELINES

Upon the determination of the amount of the Bonus Provision for the Fiscal Year, an amount may be
awarded by the Chairman and Chief Executive Officer as a Bonus Award to selected Plan participants
according to the following guidelines:

	 	1.	 	Formula Award
	 
	 	 	 	The Fiscal Year 2008 objective is to attain a Corporate Earnings Per Share of $1.73
(Target).

	 	 	 
	Diluted Earnings Per Share	 	 
	(EPS) Target	 	% of Formula Award Earned
	1.56
	 	30%
	1.57
	 	32%
	1.58
	 	34%
	1.59
	 	36%
	1.60
	 	38%
	1.61
	 	40%
	1.62
	 	42%
	1.63
	 	45%
	1.64
	 	50%
	1.65
	 	55%
	1.66
	 	60%
	1.67
	 	65%
	1.68
	 	70%
	1.69
	 	75%
	1.70
	 	80%
	1.71
	 	85%
	1.72
	 	90%
	1.73
	 	100%
	1.74
	 	110%
	1.75
	 	120%
	1.76
	 	130%
	1.77
	 	140%
	1.78
	 	150%
	1.79
	 	160%
	1.80
	 	170%
	1.81
	 	180%
	1.82
	 	190%
	1.83
	 	200%

 

 

	2.	 	Special Adjustments

Upon the recommendations of the Senior Corporate Officers, the Chairman and Chief Executive Officer
may approve special adjustments to Earnings Per Share necessary to give consideration to unbudgeted
and/or unplanned situations which developed after finalization of the operating budget. Such
adjustments will be submitted for consideration only if required to correct major inequities.

 

 

Exhibit D —  Additional Incentive Components

SENSIENT TECHNOLOGIES CORPORATION

MANAGEMENT INCENTIVE PLAN FOR CORPORATE MANAGEMENT

ADDITIONAL INCENTIVE COMPONENTS — Fiscal Year 2008

	I.	 	Background: The addition of four incentive components. There will be an incremental 15%
of a participant’s target given for each additional incentive component if the established
targets are achieved. This allows participants to achieve an incremental incentive of 15%
of target for each additional incentive component.
	 
	II.	 	Definitions:

	 	A.	 	“Selling, General and Administrative (SGA)” means selling and administrative
costs as reported in the Company’s quarterly and annual SEC filings.
	 
	 	B.	 	“Cash Flow” means net cash provided by operating activities as reported in the
Company’s quarterly and annual SEC filings.
	 
	 	C.	 	“Working Capital” means the quarterly average of the sum of net trade accounts
receivable and inventories less the sum of trade accounts payable and other accrued
expenses as reported in the Company’s quarterly and annual SEC filings.
	 
	 	D.	 	“Return on Invested Capital” means the operating income on an after-tax basis,
using actual effective tax rate for the year, divided by the sum of the quarterly
average of the total debt and equity balances for the year. For the purposes of this
calculation, debt will be net of any cash or marketable securities.

	III.	 	Additional Incentive Components include:

	 	•	 	SG&A Expense Reduction: If the Corporation achieves the approved minimum
SG&A threshold percentage (SG&A as a percentage of revenue), then Corporate
participants will receive the 15% addition to their Target.
	 
	 	•	 	Cash Flow Improvement: If the Corporation achieves the approved Targeted
Average Cash Flow, then Corporate participants will receive the 15% addition to
their Target.
	 
	 	•	 	Working Capital: If the Corporation achieves the approved minimum Working
Capital amount, then Corporate participants will receive the 15% addition to
their Target.
	 
	 	•	 	Return on Invested Capital: If the Corporation achieves the approved
minimum Return on Invested Capital amount, then Corporate participants will
receive the 15% addition to their Target.

	IV.	 	Each additional incentive component is an all or nothing arrangement. If the
additional incentive component is exceeded, then 15% is the maximum that is awarded. A
cumulative maximum payout for a participant is 200%.

 

 

Exhibit D – Additional Incentive Components

SENSIENT TECHNOLOGIES CORPORATION

MANAGEMENT INCENTIVE PLAN FOR CORPORATE MANAGEMENT

ADDITIONAL INCENTIVE COMPONENTS — Fiscal Year 2008

	 	 	 	 	 	 	 	 	 
	 	V.	 	 	Approved Group/Division/Business Unit/Unit
	 	Corporate
	 	 	 	 	Weighted Target Percentage
	 	 	100	%
	 	 	 	 	Targeted SG&A Threshold
	 	 	17.9	%
	 	 	 	 	Targeted Average Cash Flow
	 	$	110,465,000	 
	 	 	 	 	Targeted Average Working Capital Threshold
	 	 	*	 
	 	 	 	 	Targeted Return on Invested Capital Threshold
	 	 	8.4	%

 

			
	*	 	The increase in Average Working Capital over the prior year must be 150 basis points less than
the percentage increase in sales over the prior year. Prior year Sales and Average Working Capital
balances are $1,184,778,000 and $398,076,000, respectively.

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