SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to ss.240.14a-11(c) or ss.240.14a-12
INTERNATIONAL FLAVORS & FRAGRANCES INC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11:*
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting
fee was paid previously. Identify the previous filing by registration
statement number, or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
-------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
-------------------------------------------------------
3) Filing Party:
-------------------------------------------------------
4) Date Filed:
-------------------------------------------------------
<PAGE>
[logo]
International Flavors & Fragrances Inc.
521 West 57th Street
New York, N.Y. 10019
----------------
Notice of Annual Meeting of Shareholders
to be held May 20, 1999
The Annual Meeting of Shareholders of International Flavors & Fragrances
Inc., a New York corporation (hereinafter called the "Company"), will be held
at the office of the Company, 521 West 57th Street, New York, New York,
on Thursday, May 20, 1999, at 10 A.M., Eastern Daylight Saving Time, to elect 11
directors for the ensuing year, and to transact such other business as may
properly come before the meeting or any adjournments thereof.
Only shareholders of record at the close of business on March 25, 1999 will
be entitled to notice of and to vote at the meeting.
Admission to the meeting will be by ticket only. If you are a shareholder
of record and plan to attend, please complete and return the ticket request card
which is enclosed for such holders. If your shares are not registered in your
own name and you plan to attend, please request a ticket by writing to the
Office of the Secretary, International Flavors & Fragrances Inc., 521 West 57th
Street, New York, New York 10019. Evidence of your ownership, which you can
obtain from your bank or broker, must accompany your letter.
IF YOU DO NOT EXPECT TO ATTEND THE MEETING IN PERSON, YOU ARE REQUESTED TO
SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN THE ENCLOSED ADDRESSED
ENVELOPE, WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES.
By Order of the Board of Directors,
Stephen A. Block
Secretary
March 30, 1999
<PAGE>
PROXY STATEMENT
This Proxy Statement is furnished in connection with the solicitation by
the Company's Board of Directors (the "Board") of proxies to be used at the
Annual Meeting of Shareholders of the Company to be held on May 20, 1999 at the
principal executive office of the Company, 521 West 57th Street, New York, New
York 10019. This proxy statement and the form of proxy will be sent to
shareholders on or about March 30, 1999. In addition to solicitation by mail,
proxies may be solicited personally, by telephone or by telegram. The Company
has retained Corporate Investor Communications, Inc. to assist in such
solicitation for a fee of $5,500. The cost of soliciting proxies will be borne
by the Company.
Any shareholder who signs and returns the enclosed form of proxy may revoke
it at any time before it has been exercised, by a written instrument or by
personal attendance at the meeting.
The Company had outstanding at the close of business on December 31, 1998,
106,046,065 shares of Common Stock entitled to one vote per share. Only
shareholders of record at the close of business on March 25, 1999 will be
entitled to vote at the meeting.
ELECTION OF DIRECTORS
At the meeting 11 directors will be elected in accordance with the By-laws
of the Company, as amended, to serve for the ensuing year and until their
successors are elected and shall qualify. Except as stated below, the shares of
Common Stock represented by the proxies hereby solicited will be voted for the
election of the 11 nominees whose names are listed below, all of whom except Mr.
Georgescu are presently directors of the Company. Should any of such nominees be
unable for good cause to serve (which is not now anticipated), it is intended
that such shares will be voted for the balance of those named and for such
substitute nominees as the Board may recommend.
Where no qualifying note reference appears in the table below next to the
number of shares beneficially owned, as defined by Rule 13d-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), the named
director has sole voting and investment power over all such shares.
INFORMATION ABOUT NOMINEES
<TABLE>
<CAPTION>
Shares of Per-
Company Stock centage
Beneficially of
Principal Occupation During Year First Owned as of Shares
Last Five Years and Became December 31, Out-
Name Age Other Directorships Held Director 1998 (1) standing
----- ----- --------------------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Margaret Hayes Adame ......... 59 President, Fashion Group 1993 9,000 (2)
International, an
international trade
organization; Director,
North American Watch
Corporation
Robert G. Corbett ............ 44 Vice-President of the Company 1998 18,583 (2)
since May 1997; Area Manager,
North America Flavors January
1995-April 1997; Sales
Manager, North America Flavors
prior thereto
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Shares of Per-
Company Stock centage
Beneficially of
Principal Occupation During Year First Owned as of Shares
Last Five Years and Became December 31, Out-
Name Age Other Directorships Held Director 1998 (1) standing
----- ----- --------------------------- ---------- ------------- ---------
<S> <C> <C> <C> <C> <C>
Robin Chandler Duke(3) ..... 75 Chairman, Population Action 1975 17,000 (2)
International, a
not-for-profit organization;
Director, American Home
Products Corp. and River Bank
Richard M. Furlaud ........ 75 Chairman of the Board of 1990 60,250 (2)
Trustees, The Rockefeller
University, an institution of
higher learning; Retired
President, Bristol-Myers
Squibb Company
Peter A. Georgescu ......... 60 Chairman of the Board and Chief (4) 0 (2)
Executive Officer, Young &
Rubicam, Inc., advertising
agency; Director, Briggs &
Stratton, Inc.
Eugene P. Grisanti(5) ...... 69 Chairman of the Board, President 1979 1,797,180(6) 1.7%
and Chief Executive Officer of
the Company
Stuart R. Maconochie ....... 59 Vice-President of the Company 1998 28,666 (2)
George Rowe, Jr.(3) ........ 77 Attorney; member of the law firm 1994 7,663,011(6) 7.2%
of Fulton, Rowe, Hart & Coon
Henry P. van Ameringen ..... 68 President, van Ameringen 1961 8,043,876(6) 7.6%
Foundation, Inc., a charitable
foundation; formerly
Vice-President, International
Flavors & Fragrances (Europe)
William D. Van Dyke, III (3) 67 Senior Vice-President, Salomon 1973 7,292,493(7) 6.9%
Smith Barney, Inc.,
stock-brokers
Douglas J. Wetmore ........ 41 Vice-President and Chief 1998 13,500 (2)
Financial Officer of the
Company since April 1998;
Controller of the Company
prior thereto
</TABLE>
- --------------
(1) Pursuant to Rule 13d-3 under the Exchange Act the number of shares of
Common Stock of the Company beneficially owned by each director includes (where
applicable) shares which he or she has (or will have 60 days after such date)
the right to acquire under stock options granted by the Company. The respective
numbers of such shares are 265,254 for Mr. Grisanti, 17,583 for Mr. Corbett,
28,666 for Mr. Maconochie, 13,500 for Mr. Wetmore, 18,000 for each of Messrs.
Furlaud, van Ameringen and Van Dyke, 12,000 for Mrs. Duke, and 6,000 for each of
Ms. Adame and Mr. Rowe.
3
<PAGE>
(2) Less than .1%.
(3) Member of Executive Committee.
(4) Mr. Georgescu is not presently a member of the Board of Directors.
(5) Chairman of the Executive Committee.
(6) The numbers of shares of Common Stock of the Company beneficially owned
by Messrs. Rowe, Grisanti and van Ameringen listed above, and the numbers of
shares beneficially owned by Messrs. Rowe, van Ameringen and Henry G. Walter,
Jr. listed in the table on page 17, include holdings of the following trusts and
foundations. Messrs. Rowe, van Ameringen and Walter are the trustees of three
trusts, and Messrs. Rowe and Walter are trustees under another trust established
under the will of A. L. van Ameringen which hold 1,714,725 shares and 173,398
shares, respectively. Messrs. Rowe and van Ameringen are officers of the van
Ameringen Foundation, Inc., which owns 2,110,064 shares. Messrs. Rowe, Walter
and van Ameringen are three of the eight directors of that foundation. Messrs.
Rowe and van Ameringen are co-executors of an estate holding 78,633 shares and
Mr. Rowe is the executor of another estate holding 183,879 shares. Mr. Rowe is
an officer of two other charitable foundations which own 1,267,614 shares.
Messrs. Rowe, Grisanti and Walter are the directors of each of those two
foundations. Messrs. Rowe and Walter are also trustees of eight trusts holding
an aggregate of 436,364 shares. Messrs. Rowe and Walter are the trustees of one
trust and two of three trustees of another trust holding an aggregate of 50,391
shares for the benefit of certain family members of Mr. Walter. Mr. Walter is
one of two trustees of another trust for the benefit of a family member holding
3,744 shares. Mr. Rowe is a trustee of a charitable foundation holding 1,500
shares, is one of three trustees of another trust holding 4,000 shares and a
co-trustee of two trusts holding 57,000 shares. Mr. Walter is one of two
trustees of another trust holding 2,907 shares. Messrs. Rowe, Walter and van
Ameringen are trustees of three additional trusts each holding 276,981 shares.
Mr. van Ameringen is also a trustee of a charitable trust holding 673,474
shares. Messrs. Rowe and van Ameringen are trustees of six trusts established
under the will of Hedwig van Ameringen which hold 745,500 shares. The number of
shares beneficially owned by Mr. Grisanti listed above includes 329,566 shares
with respect to which he has sole voting and investment power, 200,000 shares as
to which he has sole voting power but no investment power (see "Employment
Contracts and Termination of Employment and Change-In-Control Arrangements" at
page 8) and 1,267,614 shares with respect to which he has shared voting and
investment power. The number of shares with respect to which Messrs. Rowe and
van Ameringen have sole voting and investment power and shared voting and
investment power is set forth in the table on page 17.
(7) The number of shares beneficially owned by Mr. Van Dyke listed above
includes 18,957 shares with respect to which he has sole voting and investment
power and 7,273,536 shares over which he has shared voting and investment power,
including the holdings of the trust referred to in footnote 2 on page 18, three
other trusts and a foundation. Such number does not include the beneficial
interest of Mr. Van Dyke's wife in 129,426 shares owned directly by her. Mr. Van
Dyke disclaims any beneficial interest in any such shares.
All of the above nominees except Messrs. Corbett, Georgescu, Maconochie and
Wetmore were elected by the shareholders at the 1998 annual meeting. Mr.
Maconochie was elected a director September 8, 1998, Messrs. Corbett and Wetmore
were elected directors November 10, 1998. During 1998 the Board of Directors
held six meetings. The Company has an Audit Committee which held two meetings
and a Stock Option and Compensation Committee which held four meetings in 1998.
The Audit Committee, consisting of Messrs. Furlaud, Rowe and Van Dyke, oversees
the financial operations of the Company and the Company's relationship with its
independent accountants. The Stock Option and Compensation Committee, consisting
of Messrs. Furlaud, Stanley M. Rumbough, Jr. and Van Dyke, oversees the
Company's various compensation arrangements, determines the stock options to be
granted to employees under the Company's stock option plans and the executive
bonuses to be granted under the Company's
4
<PAGE>
executive bonus plans, and makes recommendations to the Board as to the salaries
to be paid to the executive officers of the Company. The Company does not have a
nominating committee.
The Company's By-laws provide that each director whose service on the Board
begins on or after January 1, 1997 must retire effective as of the Annual
Meeting of Shareholders following the year in which his or her 72nd birthday
occurs. Each director serving on December 31, 1996 must retire effective as of
the Annual Meeting of Shareholders following the year in which his or her 78th
birthday occurs. During 1998 Mr. Rumbough, presently a director of the Company,
reached his 78th birthday and as a result will not stand for election as a
director at the 1999 Annual Meeting of Shareholders.
I. SUMMARY COMPENSATION
The following table sets forth information in respect of the compensation
of the Chairman and President and each of the other four most highly compensated
executive officers of the Company for 1996, 1997 and 1998.
<TABLE>
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
(a) (b) (c) (d) (e) (f) (g) (h)
Other All Other
Name and Annual Securities LTIP Compen-
Principal Salary Bonus Compensation Underlying Payouts sation
Position Year ($) ($)(1) ($) Options ($)(6) ($)(7)(8)
--------- ---- ------- ------ ------------ ---------- ------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Eugene P. Grisanti ....... 1998 $975,000 $390,000 -- 40,000 2,247,000 42,126
Chairman of the Board, 1997 930,000 465,000 -- 60,000 -- 39,218
President and Chief 1996 890,000 222,500 -- 40,000 -- 36,636
Executive Officer
Stuart R. Maconochie ..... 1998 412,893 190,000 87,045(3) 50,000 -- 300
Vice-President 1997 306,900 153,667 -- 20,000 -- --
and Director 1996 279,900 76,600 -- 15,000 -- --
Carlos A. Lobbosco ....... 1998 375,026 154,000 73,663(4) 50,000 -- --
Vice-President 1997 337,948 122,500 -- 12,500 -- --
1996 320,658 58,750 -- 7,500 -- --
Rudolf Merz 1998 303,021 125,767 -- 15,000 -- --
Vice-President .......... 1997 294,800 116,200 -- 15,000 -- --
1996 348,100 77,180 -- 10,000 -- --
Timothy Schaffner ........ 1998 305,000 122,000 8,579(5) 15,000 -- 209,798(9)
Vice-President 1997 285,000 85,500(2) 7,781(5) 10,000 -- 9,189
1996 245,000 36,750(2) 7,680(5) 5,000 -- 7,795
</TABLE>
(1) Under the Company's Management Incentive Compensation Plan, except where
indicated.
(2) Under the Company's Special Executive Bonus Plan.
(3) Housing allowance pursuant to an agreement dated July 27, 1998, in
connection with Mr. Maconochie's transfer to the United States and his
assumption of duties as the President, Fragrance Division. See "Employment
Contracts and Termination of Employment and Change-in-Control Arrangements"
at page 8 for the terms of Mr. Maconochie's agreement.
(4) Housing allowance pursuant to an agreement dated June 23, 1998 in
connection with Mr. Lobbosco's transfer to Europe and his assumption of
duties as Area Manager, Europe, Africa and Middle East Fragrances. See
5
<PAGE>
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements" at page 8 for the terms of Mr. Lobbosco's agreement.
(5) Amount imputed under the tax law as compensation to Mr. Schaffner in
respect of his personal use of the automobile provided to him by the
Company.
(6) Under an employment contract dated as of January 1, 1997, Mr. Grisanti was
granted an award of 250,000 restricted shares of the Company's Common
Stock. See "Employment Contracts and Termination of Employment and
Change-In-Control Arrangements" at page 8 for the terms of Mr. Grisanti's
contract. At December 31, 1998, the 200,000 shares of restricted stock
subject to restriction had a market value of $8,837,500, based on the
closing price of the Company's Common Stock on that date. The Company has
made no other restricted stock awards to any named executive officers.
(7) For the year 1998, the following amounts were paid or set aside by the
Company in respect of individual officers listed in the above compensation
table under the Company's Retirement Investment Fund Plan, a defined
contribution plan, and the Company's unfunded Supplemental Retirement
Investment Plan: Mr. Grisanti, $29,282, and Mr. Schaffner, $9,182.
(8) For the year 1998, the following amounts were imputed under the tax law as
compensation to the executive officers listed in the above compensation
table in consideration of life insurance coverage of such persons under the
Company's Executive Death Benefit Program: Mr. Grisanti, $12,844, Mr.
Maconochie $300, and Mr. Schaffner, $616. No participant in such Program
has or will have any interest in the cash surrender value of the underlying
insurance policies.
(9) Includes $199,653 in reimbursed moving expenses.
6
<PAGE>
II. OPTION GRANTS IN 1998
The following table shows all grants of options in 1998 to the executive
officers named in the Summary Compensation table. The Company's option plans do
not provide for the grant of stock appreciation rights (SARs).
<TABLE>
<CAPTION>
Individual Grants
-----------------------------------------------------------------------------------------
(a) (b) (c) (d) (e) (f)
Number % of Total
of Shares Options
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Expiration Grant Date Present
Name (#) (1) Year ($/Sh)(2) Date Value ($)(3)
---- ---------- ---------- ---------- ---------- -------------------
<S> <C> <C> <C> <C> <C>
E. P. Grisanti ............ 40,000 4.25 49.69 5/14/08 452,753
S. R. Maconochie .......... 20,000 2.13 49.69 5/14/08 226,377
30,000 3.19 44.69 6/15/08 267,290
C. A. Lobbosco ............ 15,000 1.59 49.69 5/14/08 169,782
35,000 3.72 44.69 6/15/08 311,838
R. Merz ................... 15,000 1.59 49.69 5/14/08 169,782
T. Schaffner .............. 15,000 1.59 49.69 5/14/08 169,782
- -----------
</TABLE>
(1) All options were granted on May 14, 1998 and June 15, 1998. Such options
become exercisable in three equal installments 24, 36 and 48 months,
respectively, after the date of grant.
(2) All options were granted at the market price on the date of grant.
(3) The Company used the Black-Scholes model of option valuation to determine
grant date present value. The actual value, if any, an executive may
realize will depend on the excess of the stock price over the exercise
price on the date the option is exercised, so that there is no assurance
the value realized by an executive will be at or near the value estimated
by the Black-Scholes model. The estimated values under that model are based
on arbitrary assumptions as to variables such as interest rates, stock
price volatility, future dividend yield and the time of exercise. For these
reasons, the Company does not agree that the Black-Scholes model can
properly determine the value of an option. The assumptions used by the
Company are as follows: grant date stock prices and exercise prices of
$49.69 per share and 44.69 per share, for the options granted on May 14,
1998 and June 15, 1998, respectively; an option term of 10 years; a stock
price volatility based on the calendar year closing prices of the Company's
Common Stock (plus dividends) for the period December 31, 1988 through
December 31, 1998; dividend yields of 2.94% and 3.27%, for the options
granted on May 14, 1998 and June 15, 1998, respectively (the average
dividend yield for the 12-month period ending May 31, 1998, calculated by
dividing the dividends paid during the one-year period prior to the option
grant by the grant date stock price); and risk-free interest rates of 5.70%
and 5.43%, for the options granted on May 14, 1998 and June 15, 1998,
respectively (the yield on the date of grant on the U.S. Government Zero
Coupon Bond with a maturity closest to the option term).
7
<PAGE>
III. OPTIONS EXERCISED IN 1998 AND OPTION VALUES AT DECEMBER 31, 1998
The following table provides information as to options exercised in 1998 by
each of the executive officers named in the Summary Compensation table and the
value of options held by such executive officers at December 31, 1998 measured
in terms of the closing price of the Common Stock in consolidated trading on
December 31, 1998.
<TABLE>
<CAPTION>
(a) (b) (c) (d) (e)
Number of Value of Unexercised
Securities In-the-Money
Underlying Options at
Unexercised FY-End($)
Options at
FY-End (#)
Shares Acquired Value Realized Exercisable/ Exercisable/
Name on Exercise (#) ($) Unexercisable Unexercisable
---- --------------- -------------- ------------- ---------------------
<S> <C> <C> <C> <C>
E. P. Grisanti ................. -- -- 265,254/151,667 2,354,250/46,875
S. R. Maconochie ............... -- -- 28,666/88,334 57,313/18,750
C. A. Lobbosco ................. -- -- 41,500/71,500 264,793/11,719
R. Merz ........................ 10,500 111,125 44,333/41,667 250,453/14,063
T. Schaffner ................... 1,684 22,945 5,666/30,334 0/9,375
</TABLE>
DIRECTORS' COMPENSATION
Directors who are not employees of the Company receive an annual retainer
of $15,000 and a fee of $750 for each meeting of the Board or committee
attended, except that when a committee meeting is held on the date of a Board
meeting a fee of only $500 is paid. Through 1999, on the date of the annual
meeting of shareholders, such directors also receive automatic annual stock
option grants of 3,000 shares of Common Stock under the Company's 1990 Stock
Option Plan for Non-Employee Directors. On May 14, 1998, each non-employee
director received an option for 3,000 shares at $49.69 per share.
The Company has established a Directors' Deferred Compensation Plan under
which directors may defer all or a portion of their cash compensation until
retirement or another specified date. Deferred amounts credited to a director's
plan account earn interest at the interest rates applicable from time to time to
deferred compensation awards under the Company's Management Incentive
Compensation Plan.
As part of its overall program of charitable contributions, the Company has
established the Director Charitable Contribution Program. Under the Program, the
Company has purchased life insurance policies on the lives of participating
directors and is the owner and sole beneficiary of the policies. After the death
of a covered director, the Company will donate $500,000 to one or more
qualifying charitable organizations designated by the director and $500,000 to
The IFF Foundation. Individual directors derive no financial benefit from the
Program since all deductions relating to the contributions accrue solely to the
Company. The Program should have no long-term cost to the Company.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS
Mr. Grisanti is employed under a contract dated as of January 1, 1997 as an
executive at a salary of $930,000 per annum unless the Board shall have fixed a
higher salary, for the period (the "executive period") which commenced on
January 1, 1997 and which may be terminated at any time thereafter with or
without cause, by either the Company or Mr. Grisanti on written notice to the
other. Effective as of January 1, 1999, the Board fixed his annual salary at
8
<PAGE>
$975,000, no increase over 1998. If the contract is not terminated on or before
December 31, 2001, it will expire on that date. Under the contract Mr. Grisanti
may share, as determined by the Board, in any incentive compensation, bonus,
stock option or other employee benefit plans, programs or policies of the
Company. The contract provides that, after termination of the executive period,
Mr. Grisanti will serve part-time in a consulting capacity for a period of ten
years. During that consulting period, Mr. Grisanti will receive an annual fee of
$150,000 per year.
Under the contract, Mr. Grisanti was granted an award of 250,000 shares of
restricted stock of the Company's Common Stock. Because the shares are
"restricted", they may not be sold, pledged or otherwise transferred until the
applicable restriction period on a given installment of the award has lapsed.
The restriction period extends to February 28, 1998 with respect to one-fifth of
the shares covered by the award and to each succeeding February 28 through and
including February 28, 2002 with respect to each additional one-fifth of such
shares. Mr. Grisanti has the right to vote, and receive dividends on, the
restricted stock. All or a portion of the shares are subject to forfeiture under
certain circumstances, including termination by either party, with or without
cause, of Mr. Grisanti's employment, and the failure of the Company to attain
either of the alternative performance goals either for an installment period or
subsequently during the term of the contract.
Each installment of the award is subject to the attainment of one of two
alternative performance goals, one based on the Company's net income and the
other on its return on equity. If a performance goal is not attained for an
installment period under either alternative, the shares awarded with respect to
that installment period will remain held in custody until the end of a
succeeding installment period, and the performance goal for the former
installment period or periods as well as for the latter installment period will
be deemed attained if either performance goal is attained for the combined
former and any later installment period or periods. Notwithstanding the
foregoing, a performance goal for any installment period will be deemed attained
if the performance goal is attained for the combined first installment period
and all subsequent installment periods. If a performance goal for any
installment period is not attained as provided above, that installment of the
award will be forfeited. This provision has been satisfied with respect to the
first two years of the contract, and, accordingly, the restrictions on the first
two installments of 50,000 shares each of the award lapsed on February 28, 1998
and February 28, 1999, respectively. In order to maintain the deductibility
under Section 162(m) of the Internal Revenue Code of the amount of the award,
any amendment which would change either alternative performance goal, or the
maximum award payable, is subject to shareholder approval.
In connection with his transfer to the United States and his appointment as
President, Fragrance Division, Mr. Maconochie entered into an agreement with the
Company. Under that agreement, Mr. Maconochie's annual base salary was increased
to $475,000, with annual reviews in accordance with Company policy. He was also
granted a stock option award of 30,000 shares of Company Common Stock under the
Company's 1997 Employee Stock Option Plan. The Company also agreed to lease an
apartment in New York City for Mr. Maconochie's use, and to pay the rent
thereon. The Company will gross up taxes on income recognized by Mr. Maconochie
as a result of such rent payments by the Company. The agreement also entitles
Mr. Maconochie to the Company-paid services of an independent public accountant
selected by the Company to assist him in calculating his taxes. The agreement
also provides that, in the event Mr. Maconochie's employment with the Company is
terminated other than for cause prior to June 30, 2005 and Mr. Maconochie is not
entitled to the benefits of his "Agreement," as hereinafter defined, Mr.
Maconochie will retire from the Company's employ and, in addition to the pension
to which he will become entitled, will receive salary continuation payments for
a period of 18 months (or a shorter period if the termination occurs after
December 31, 2003).
9
<PAGE>
In connection with his transfer to Europe and his appointment as Area
Manager, Europe, Africa and Middle East Fragrances, Mr. Lobbosco entered into an
agreement with the Company. Under that agreement, Mr. Lobbosco's annual base
salary was set at the local currency equivalent of $385,000 per year, with
annual reviews in accordance with Company policy. He was also granted a stock
option award of 35,000 shares of Company Common Stock under the Company's 1997
Employee Stock Option Plan. The Company also agreed to cause its United Kingdom
subsidiary to lease an apartment in London, England for Mr. Lobbosco's use, and
to pay the rent thereon. Taxes on income recognized by Mr. Lobbosco as a result
of such rent payments by the Company's subsidiary will be grossed up by such
subsidiary. The agreement also provides that, to the extent that Mr. Lobbosco's
effective aggregate income tax rate on his salary and incentive compensation
exceeds 26%, the Company will reimburse Mr. Lobbosco, on a grossed up basis, for
all taxes in excess of such rate in respect of such compensation income. The
agreement also entitles Mr. Lobbosco to the Company-paid services of an
independent public accountant selected by the Company to assist him in
calculating his taxes. The agreement also provides that, under the pension
arrangement applicable to Mr. Lobbosco, see "Pension Plans" at page 11 below,
and depending on the date of his retirement, Mr. Lobbosco will receive an
aggregate minimum monthly pension ranging between $7,365 and $19,600. The
agreement contemplates that Mr. Lobbosco's assignment as Area Manager, Europe,
Africa and Middle East Fragrances will expire no later than July 1, 2001, and
provides that from the date his assignment terminates until his retirement date,
currently anticipated to be December 31, 2002, Mr. Lobbosco will remain an
employee of the Company, based in Buenos Aires, Argentina, performing such
services as the Chairman of the Board of Directors of the Company may request.
During such period, his base salary will not be lower than that at the end of
the assignment. The agreement also provides in, the event Mr. Lobbosco's
employment with the Company is terminated other than for cause prior to December
31, 2002 and Mr. Lobbosco is not entitled to the benefits of his "Agreement,"
as hereinafter defined, Mr. Lobbosco will retire from the Company's employ on
that date. He may elect to commence receiving his pension at that time or, in
lieu thereof, to receive salary continuation payments for a period of 18 months
(or a shorter period if the termination occurs after July 1, 2001).
Effective June 1, 1998, Brian D. Chadbourne, then Senior Vice-President,
President, Fragrance Division and a Director of the Company, resigned to pursue
other business opportunities. In connection with that resignation Mr. Chadbourne
and the Company entered into an agreement dated July 2, 1998 pursuant to which
Mr. Chadbourne is receiving salary continuation payments of $39,583 per month,
his base salary at the time of his resignation, through the earlier of November
30, 1999 or the date on which Mr. Chadbourne commences employment with a
business that competes with the Company. Until the earlier of November 30, 1999
or the date on which Mr. Chadbourne commences any new employment, the Company is
also paying premiums for Mr. Chadbourne and his eligible family members for
continuing medical and dental coverage under the Company's group plan. In
addition, the Company paid Mr. Chadbourne for his accrued but unused 1998
vacation, and transferred to him ownership of the Company-provided automobile
then in his possession.
Effective September 18, 1998, David G. Bluestein, then Senior
Vice-President, President, Fragrance Division and a Director of the Company,
resigned to accept a position with another corporation. In connection with that
resignation, Mr. Bluestein and the Company entered into an agreement dated
September 2, 1998 pursuant to which the Company transferred to Mr. Bluestein
ownership of the Company-provided automobile then in his possession, and agreed
to pay him a pro rata incentive compensation award in respect of 1998 under the
Company's Management Incentive Compensation Plan, the amount of which was to be
determined by the Stock Option and Compensation Committee of the Board at its
meeting on February 9, 1999. At such meeting, the Committee awarded Mr.
Bluestein $58,750 in such incentive compensation.
10
<PAGE>
The Board approved, and the Company has entered into agreements (the
"Agreements") with 12 of its present executives, including the executive
officers listed in the Summary Compensation Table. The Agreements provide that
if, within three years of a "change of control", as defined below, an executive
is involuntarily terminated from employment by the Company or resigns following
a substantial diminution in his duties, responsibilities or status or change in
workplace or a decrease in his compensation of 10% or more, in each case which
is not corrected following notice of objection by the executive, the executive
will be entitled to receive a lump sum payment in an amount equal to the sum of:
(i) three times the higher of (a) his previous compensation for the calendar
year prior to the year in which the change in control occurred or (b) the
compensation for the calendar year prior to the year of termination, in each
case including awards under the Company's Management Incentive Compensation
Plan, provided that such payment will not exceed three times the executive's
"base amount" allocable to such payment pursuant to Section 280 G of the
Internal Revenue Code, (ii) all unpaid compensation under the Company's
Management Incentive Compensation Plan or any other compensation plan of the
Company, payment of which has been deferred including interest or other
investment return thereon and (iii) for each share of Common Stock of the
Company subject to any option held by the executive, whether or not such option
is then exercisable, an amount equal to the difference between the exercise
price thereof and a price equal to the highest of (a) the market price on the
New York Stock Exchange at the close of business on the effective day of
termination, (b) the price contained in any published tender offer made within
one year before or after the date of 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 change in control, or (d) the
market price on the New York Stock Exchange on the date of change in control,
and, upon such payment, such option shall be deemed cancelled and annulled. The
Agreements also provide for a three-year continuation of certain benefits under
the Company's Pension Plan, Retirement Investment Fund Plan and any supplemental
pension provided by the Company. However, if any payments to the executive,
whether under the Agreement or otherwise, would be subject to the "golden
parachute" excise tax under Section 4999 of the Internal Revenue Code, as
amended, the payment to the executive above will be reduced by the amount
necessary to avoid the incurrence of such excise tax. Under the Agreements a
"change of control" means the earlier to occur of the following events: (i) when
any person, corporation, partnership, association, trust or other entity, or any
"group," as defined in Section 13(d)(3) of the Exchange Act, becomes the
"beneficial owner," as defined in Rule 13d-3 thereunder, directly or indirectly,
of securities of the Company representing 40% or more of the combined voting
power of the Company's then outstanding securities; or (ii) when persons not
nominated by the Board of Directors in the Company's most recent proxy statement
constitute a majority of the members of the Board.
PENSION PLANS
Of the executive officers named in the Summary Compensation Table, Mr.
Grisanti and Mr. Schaffner are participants in the Company's Pension Plan, a
defined benefit plan, under which the Company makes periodic payments computed
on an actuarial basis providing for fixed benefits for members in the event of
retirement at age 65 (normal retirement date contemplated by the Plan). Benefits
under the Pension Plan are calculated with respect to a five-year average of
participating employees' covered compensation (base salary or wage plus cash
bonus), subject to an offset for amounts received as Social Security benefits
for service after November 30, 1979. The table below indicates, for purposes of
illustration, the approximate amounts of annual retirement income (subject to
the above Social Security offset and without taking into account any limitations
under the Internal Revenue Code) that would have been payable upon retirement at
December 1, 1998 on a straight life basis under various assumptions as to salary
and years of service to employees in higher salary classifications who
participate in the Pension Plan. Messrs. Grisanti and Schaffner have 38 and 6
years of service, respectively under the Pension Plan, which does not include
service with foreign subsidiaries. To the extent that the amounts of annual
retirement income exceed the maximum
11
<PAGE>
benefit limitations, including limitations under Section 415 of the Internal
Revenue Code, such amounts are payable in the same form and manner under the
Company's unfunded Supplemental Retirement Plan adopted on October 29, 1986,
effective January 1, 1987. Mr. Maconochie and Mr. Lobbosco, who are not United
States citizens, have significant amounts of service with foreign subsidiaries
of the Company not covered by the Company's Pension Plan as a result of which
they participate in separate unfunded arrangements providing pension benefits.
Under Mr. Maconochie's arrangement, he will receive a pension benefit in
accordance with a letter agreement between him and the Company's United Kingdom
subsidiary dated March 31, 1990. As of December 31, 1998, at age 65 Mr.
Maconochie is entitled to an annual benefit under this arrangement of $220,846.
Under the arrangement applicable to Mr. Lobbosco, certain employees who serve in
foreign countries other than the countries of which they are nationals receive
additional pension benefits to the extent that the aggregate of the amounts
payable by law or under the pension plans of the Company and its subsidiaries
are less than the amount payable under this arrangement. As of December 31,
1998, at age 65 Mr. Lobbosco is entitled to an annual benefit under this
arrangement of $117,450. No other named executive officer participates in this
arrangement. Mr. Merz is a participant in the pension plan of the Company's
Swiss subsidiary.
<TABLE>
<CAPTION>
Estimated annual pension for specified years of service
Average ------------------------------------------------------------------------------------------
Compensation 5 10 15 20 25 30 35 40
- ------------- -------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 400,000 ..... $ 34,884 $ 69,768 $104,652 $136,663 $157,183 $177,703 $198,223 $218,743
500,000 ..... 43,605 87,210 130,815 170,829 196,479 222,129 247,779 273,429
600,000 ..... 52,326 104,652 156,978 204,995 235,775 266,555 297,335 328,115
700,000 ..... 61,047 122,094 183,141 239,161 275,071 310,981 346,891 382,801
800,000 ..... 69,768 139,536 209,304 273,326 314,366 355,406 396,446 437,486
900,000 ..... 78,489 156,978 235,467 307,492 353,662 399,832 446,002 492,172
1,000,000 ..... 87,210 174,420 261,630 341,658 392,958 444,258 495,558 546,858
1,100,000 ..... 95,931 191,862 287,793 375,824 432,254 488,684 545,114 601,544
1,200,000 ..... 104,652 209,304 313,956 409,990 471,550 533,110 594,670 656,230
1,300,000 ..... 113,373 226,746 340,119 444,155 510,845 577,535 644,225 710,915
1,400,000 ..... 122,094 244,188 366,282 478,321 550,141 621,961 693,781 765,601
1,500,000 ..... 130,815 261,630 392,445 512,487 589,437 666,387 743,337 820,287
1,600,000 ..... 139,536 279,072 418,608 546,653 628,733 710,813 792,893 874,973
</TABLE>
12
<PAGE>
REPORT OF THE
STOCK OPTION AND COMPENSATION COMMITTEE*
The Stock Option and Compensation Committee of the Board of Directors (the
"Committee") (all of the members of which are "outside directors" as that term
is defined in Section 162(m) of the Internal Revenue Code (the "Code")) is
responsible for setting and administering the policies which govern the annual
compensation paid to the executive officers, including the chief executive
officer.
The Committee recommends, for approval by the Board, the annual salaries of
such officers, makes awards under the Management Incentive Compensation Plan
(the "MICP"), grants stock options under the Company's stock option plans and
determines the form and amount of compensation to be given to the President, who
is the chief executive officer.
COMPENSATION POLICIES
The Company's executive compensation policies are based on several criteria
including, but not limited to, the goals established by the Company, the
performance of the executive in accomplishing them, the performance of the
Company itself, and finally, the competitive realities relating to the
compensation required to secure the services and motivational commitment of the
executive involved. Among other factors, the Committee takes into consideration
the Company's sales and earnings, the return on equity and the performance of
the Company's stock. The Committee is generally familiar with and also takes
into consideration the sales, earnings and return on equity, as well as the
performance of the stock, of other comparable companies. Those companies include
companies which were selected on the basis of their lines of business set forth
on the Performance Graph on page 16, but they also include companies in other
lines of business as competition for executives extends beyond the Company's
line of business. The Committee has not made an analysis of the compensation
practices of other companies (which include non-public companies with which the
Company competes for executives) but the Committee is generally familiar with
the compensation practices of other companies and believes that the Company's
compensation practices including both the type and amount of compensation paid
to its executive officers are fair and appropriate under the circumstances.
The Company, in general, intends to structure executive compensation to be
deductible under Section 162(m) of the Internal Revenue Code. The Company also
believes, however, that, under some circumstances, such as to attract or retain
key executives or to recognize outstanding performance, it may be in the best
interests of the Company and its shareholders to pay executive compensation in
excess of that which may be deductible.
The three basic components of the Company's executive compensation in 1998
were annual salaries, stock options and incentive compensation.
SALARIES
The annual salaries for executive officers for the following fiscal year
are usually recommended by the Committee and approved by the Board in December.
Recommendations for the annual salaries for the officers other
- -----------
* The report of the Stock Option and Compensation Committee shall not be deemed
incorporated by reference by any general statement incorporating by reference
this proxy statement into any filing under the Securities Act of 1933 (the
"1933 Act") or under the Exchange Act, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
13
<PAGE>
than the President are made by the President to the Committee, based on his
firsthand knowledge of the contribution of each executive officer to his
respective area of concentration. The Committee also reviews financial and other
data reflecting the performance of the various executives' areas of
responsibility and how such areas of responsibility contributed to the Company's
overall performance, but there is no precise test or formula by which the
recommended salary is related to performance. Rather than follow such a rigid
standard, the Committee believes that the Company's interests are best served by
having a flexible compensation policy that gives the Committee the leeway to fix
compensation after considering the factors enumerated above and evaluating such
factors as each situation requires.
The annual salary recommendation for the President is determined separately
by the Committee after reviewing the overall results of the Company during the
prior year taking into account economic conditions. The President has an
employment contract with the Company effective January 1, 1997, which was
approved by the Committee. Under the contract, he is to receive a salary of
$930,000 unless the Company's Board of Directors shall have fixed a higher
salary. It has been the Board's practice to have the Committee review all
executive officers' salaries, including the President's salary, on an annual
basis and make recommendations with respect to such salaries to the Board.
Although consideration is given by the Committee to compensation for earlier
years, the determination of the annual salary increase of the President as well
as the other officers is based primarily upon events occurring during the most
recent year including the Company's sales and earnings, the return on equity,
the performance of the Company's stock, inflation and cost of living factors.
While again not employing a precise test or formula with respect to the
President's performance, the Committee in granting in December 1997 the
President's salary increase effective January 1, 1998 took into account the
factors stated above with respect to other executive officers and found that
such factors fully justified the President's salary increase.
STOCK OPTIONS
Stock options have long been a significant part of the long-term incentives
awarded by the Company to its officers and its employees. Such plans have been
successful in motivating the officers consistently to promote long-term
shareholder value. Stock options, which return no monetary value to the
recipient unless the shareholders as a whole also benefit from an increase in
the stock price, have been a particularly effective means of promoting
shareholder value and of attracting and retaining the services of qualified
officers of the Company.
The selection of the executive officers of the Company other than the
President for participation in the plans, and the timing, pricing and the number
of shares covered by individual options, are determined by the Committee, after
considering the recommendations of the President and applying the above
criteria, as well as taking into account options previously granted. As in the
case of salaries, the Committee does not use a precise test or formula of
corporate performance in determining either the timing or number of shares to be
granted. The granting of stock options to the President is considered separately
by the Committee applying the above policy guidelines taking into account
options and restricted stock previously granted. Recognizing the President's
contribution to the Company's overall performance in the past, the Committee
made the 1998 option grant to the President in order to motivate him to continue
in his efforts to improve the Company's performance. Without such an improvement
as reflected in increased shareholder value, the option will have no value.
INCENTIVE COMPENSATION
Under the MICP as amended in 1995, the amount of bonus paid to the
executive officers of the Company is determined from year to year. All of the
Company's executive officers participate in the MICP. Under the MICP, the
incentive compensation of those selected for participation by the Committee for
each year is paid from an incentive
14
<PAGE>
fund for such year, the existence and amount of which is subject to a
performance goal, specified in the MICP, equal to 10% of the amount by which the
pretax consolidated earnings of the Company for such year exceed the sum of 20%
of net capital (defined as the average of the amounts of the Company's
consolidated capital and surplus at the beginning and end of such year) for such
year, provided that the fund may not exceed for any year 10% of the amount of
cash dividends paid by the Company in such year. No award to any participant may
exceed the lesser of 15% of the incentive fund or 100% of his annual rate of
salary. The Committee may exercise negative discretion to reduce the maximum
award to any participant. Under regulations adopted by the Committee pursuant to
the MICP, awards are payable in cash either currently in a lump sum or in
installments that may be deferred in various ways. Under the MICP the Committee,
following the criteria set forth above, and after the year-end results have been
certified by the Company's independent public accountants, determines whether
the MICP's performance goal has been met and, if it has been, so certifies. The
Committee then allocates the incentive fund, or such portion thereof as the
Committee has determined, to the participants and designates the manner in which
awards are to be paid. For 1998, the performance goal was satisfied and the
Committee so certified. With respect to 1998 incentive compensation under the
MICP, the Committee did not use a precise test or formula in determining whether
to reduce the maximum award to the executive officers including the President.
The Committee considered both the President's performance and the results
achieved by the Company in 1998 in determining the award for that year given to
the President under the MICP.
RESTRICTED STOCK AWARD
In connection with the restricted stock award to the President, his
employment contract requires that at least one of two alternative performance
goals specified in the contract must be met with respect to the applicable
installment of the award for the restrictions on that installment to lapse. The
Committee has certified that this provision has been satisfied for the year
1998. Accordingly, the restrictions on the second installment of 50,000 shares
of the award lapsed on February 28, 1999.
In summary, the Company has an appropriate and competitive compensation
program, which is designed to promote shareholder value and attract and retain
qualified executives. The Company's compensation soundly balances base salary,
bonus based on annual performance and the use of long-term incentives.
William D. Van Dyke, III, Chairman
Richard M. Furlaud
Stanley M. Rumbough, Jr.
15
<PAGE>
INTERNATIONAL FLAVORS & FRAGRANCES
TOTAL CUMULATIVE SHAREHOLDER RETURN FOR PERIOD ENDING DECEMBER 31, 1998*
(The following tabular information is a description, pursuant to Rule 304
of Regulation S-T, of a graph contained in the paper format of this Proxy
Statement being sent to Shareholders.)
===========================================================================
December 31 .... 1993(1) 1994 1995 1996 1997 1998
---------------- ------ ------ ------ ------ ------ ------
($) ($) ($) ($) ($) ($)
IFF ............ 100.00 125.40 133.52 128.97 152.30 135.44
S&P 500 ........ 100.00 101.32 139.37 171.35 228.50 293.79
Peer Group(2)... 100.00 100.14 127.24 155.05 202.58 220.43
===========================================================================
- ----------
(1) Total return assumes that the value of an investment in the Company's
common stock and each index was $100 on December 31, 1993, and that all
dividends were reinvested.
(2) The Peer Group consists of the following companies: Alberto Culver
Company, Avon Products, Inc., Block Drug Co., Inc., Church & Dwight Co.,
Inc., Ecolab Inc., Ethyl Corp., W.R. Grace & Co., Hershey Foods Corp.,
McCormick & Company, Inc., Morton International, Inc., NCH Corp., Nalco
Chemical Company, The Quaker Oats Company, Ralston Purina Company, and
Wm. Wrigley Jr. Company. The performance of the Peer Group is weighted
based on market capitalization. For the years ended December 31, 1994 and
earlier, Borden, Inc. was included in the Peer Group but was omitted for
the years ended December 31, 1995 and after, since, in light of its
acquisition by Kohlberg Kravis Roberts & Co., it is no longer a separate
reporting entity. For the years ended December 31, 1995 and earlier,
Helene Curtis Industries, Inc. was included in the Peer Group, but was
omitted for the years ended December 31, 1996 and after, since, in light
of its acquisition by Unilever United States, Inc., it is no longer a
separate reporting entity. For the years ended December 31, 1996 and
earlier, Tambrands Inc. was included in the Peer Group, but was omitted
for the years ended December 31, 1997 and after, since, in light of its
acquisition by The Procter & Gamble Company, it is no longer a separate
reporting entity.
* The Comparison of Five Year Cumulative Total Return shall not be deemed
incorporated by reference by any general statement incorporating by
reference this proxy statement into any filing under the 1933 Act or
under the Exchange Act, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under such Acts.
16
<PAGE>
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Stock Option and Compensation Committee of the Board of Directors
consists of Messrs. Furlaud, Rumbough and Van Dyke. Mr. Van Dyke is Senior
Vice-President of Salomon Smith Barney, Inc. which has received commissions for
brokerage services performed in connection with securities transactions on
behalf of the Company and its retirement plans.
STOCK OWNERSHIP
The following is a tabulation as of December 31, 1998 of those shareholders
of the Company who own beneficially in excess of 5% of the Company's Common
Stock determined in accordance with Rule 13d-3 under the Exchange Act.
<TABLE>
<CAPTION>
No. of Shares and Nature of
Beneficial Ownership
----------------------------------------------------------
Title Sole Voting Sole Sole Shared Voting Percent
of Name and Address and Voting Investment and of
Class of Beneficial Owner Investment Power Power Power Investment Power Class
- ------ --------------------- ---------------- ------- ---------- ---------------- --------
<S> <C> <C> <C> <C> <C> <C>
Common George Rowe, Jr. .......... 10,500 0 0 7,652,511(1) 7.2%
Stock One Rockefeller Plaza
New York, NY 10020
Common State Farm Mutual
Stock Automobile Stock
Insurance Company
and related entities ..... 7,028,668 0 0 0 6.6%
One State Farm Plaza
Bloomington, IL 61701
Common Henry van Ameringen ....... 2,564,011 0 0 5,479,865(1) 7.6%
Stock 509 Madison Avenue
New York, NY 10022
Common Trust, c/o J.P. Morgan
Stock Florida, FSB ............. 0 0 0 5,442,762(2) 5.1%
109 Royal Palm Way
Palm Beach, FL 33480
Common Henry G. Walter, Jr. (3) .. 160,135 0 0 6,590,150(1) 6.4%
Stock 509 Madison Avenue
New York, NY 10022
Common Capital Research &
Stock Management Co. ........... 0 0 9,405,000 0 8.9%
333 South Hope St.
Los Angeles, CA 90071
Common T. Rowe Price
Stock Associates, Inc. ......... 0 1,089,405 5,931,995 0 6.6%
100 East Pratt St.
Baltimore, MD 21202 (4)
</TABLE>
- ------------
(1) See Note 6 on page 4.
17
<PAGE>
(2) Held of record by CEDE & Co. as nominee for a trust of which Mr. and Mrs.
William D. Van Dyke, III and J. P. Morgan Florida, FSB are co-trustees,
who should be considered the beneficial owners of such shares with shared
voting and investment power. Mrs. Van Dyke is also beneficial owner of
1,830,774 shares in which she has sole voting and investment power and
129,426 shares over which she has shared voting and investment power. See
footnote 7 on page 4 for additional shares beneficially owned by Mr. Van
Dyke. J. P. Morgan and related entities also beneficially own 25,343
shares over which they have sole voting power and 21,359 shares over
which they have sole investment power, and 16,200 shares over which they
have shared voting power and 20,484 shares over which they have shared
investment power.
(3) The number of shares beneficially owned by Mr. Walter listed above does
not include the beneficial interest of Mr. Walter's wife in 18,024 shares
owned directly by her. Mr. Walter disclaims any beneficial interest in
any such shares.
(4) These securities are owned by various individual and institutional
investors which T. Rowe Price Associates, Inc. (Price Associates) serves
as investment adviser with power to direct investments and/or sole power
to vote the securities. For purposes of the reporting requirements of the
Securities Exchange Act of 1934, Price Associates is deemed to be a
beneficial owner of such securities; however, Price Associates expressly
disclaims that it is, in fact, the beneficial owner of such securities.
As of December 31, 1998 the executive officers and directors of the Company
(20 persons) and Messrs. Lobbosco, Merz and Schaffner beneficially owned in the
aggregate shares of the Company's Common Stock as setforth below:
<TABLE>
<CAPTION>
Amount of Percent
Title of Class Name Beneficial Ownership(1)(2) of Class
- -------------- ---- -------------------------- --------
<S> <C> <C> <C>
Common Stock ...... All directors and officers as a group ... 18,501,407 17.4%
Common Stock ...... C. A. Lobbosco .......................... 41,500 (3)
Common Stock ...... R. Merz ................................. 44,333 (3)
Common Stock ...... T. Schaffner ............................ 5,666 (3)
</TABLE>
- ------------
(1) Includes 650,252 shares of Common Stock which the directors and officers
of the Company have (or will have as of 60 days after such date) the
right to acquire under stock options granted by the Company.
(2) Adjusted to eliminate duplicate holdings of the same shares by two or
more officers and directors. Except for the shares included in footnotes
6 and 7 on page 4, the remaining shares listed as beneficially owned by
all directors and officers in the aggregate are subject to the sole
voting and investment power of the individual directors or officers whose
shares are included in such number.
(3) Less than .1%.
SHAREHOLDER PROPOSALS
Any shareholder proposal intended to be presented at the next Annual
Meeting of Shareholders must be received by the Company for inclusion in the
Company's Proxy Statement and form of proxy with respect to that meeting by
November 30, 1999. If any shareholder of Registrant intends to present a
proposal at the next annual meeting of shareholders of Registrant but not to
include the proposal in the Registrant's Proxy Statement and form of proxy with
respect to that meeting and fails to notify the Registrant of such proposal
prior to February 13, 2000, then the Board of Directors' proxies will be allowed
to use their discretionary voting authority when the proposal is raised at the
annual meeting without any discussion of the matter in the proxy statement.
18
<PAGE>
ADDITIONAL INFORMATION
The Company has selected PricewaterhouseCoopers LLP to be its principal
independent accountants for 1999. Representatives of PricewaterhouseCoopers LLP
are expected to be present at the shareholders' meeting with the opportunity to
make a statement if they desire to do so and are expected to be available to
respond to appropriate questions.
The Company paid to Messrs. Fulton, Rowe, Hart & Coon, of which Mr. Rowe, a
director of the Company, is a member, $262,412 for legal services in 1998.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
In 1998, Mr. Philip P. Gaetano, an officer of the Company, did not file on
a timely basis one report required by Section 16 of the Exchange Act relating to
his appointment as an officer of the Company, and Mr. Merz did not file on a
timely basis one report required by Section 16 of the Exchange Act relating to a
transaction in Company stock.
OTHER MATTERS
As of the date of this Proxy Statement the Board of Directors is not aware
that any matters other than those specified above are to be presented for action
at the meeting. If any other matters should come before the meeting, proxies in
the enclosed form will be voted on such matters in accordance with the judgment
of the person or persons voting the proxies, unless otherwise specified. Shares
of Common Stock represented by executed proxies received by the Company will be
counted for purposes of establishing a quorum at the meeting, regardless of how
or whether such shares are voted on any specific proposal. All executed proxies
will be voted in accordance with the instructions contained therein. In
accordance with the Board of Directors' recommendations, executed proxies
returned by shareholders will be voted, if no contrary instruction is indicated,
FOR the election of the 11 nominees described herein. With respect to the
required vote on any particular matter, abstentions and votes withheld by
nominee recordholders will not be treated as votes cast or as shares present or
represented.
THE COMPANY WILL ON A REQUEST IN WRITING PROVIDE WITHOUT CHARGE TO EACH
PERSON FROM WHOM PROXIES ARE BEING SOLICITED FOR THE COMPANY'S ANNUAL MEETING A
COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31,
1998, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO, REQUIRED TO
BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 13A-1
UNDER THE EXCHANGE ACT. A REQUEST FOR THE COMPANY'S ANNUAL REPORT ON FORM 10-K
SHOULD BE MADE TO STEPHEN A. BLOCK, SECRETARY, INTERNATIONAL FLAVORS &
FRAGRANCES INC., 521 WEST 57TH STREET, NEW YORK, N.Y. 10019.
THE BOARD OF DIRECTORS INVITES YOU TO ATTEND THE MEETING IN PERSON. IF YOU
ARE UNABLE TO DO SO, PLEASE SIGN, DATE AND RETURN THE ENCLOSED PROXY PROMPTLY IN
THE ENCLOSED ENVELOPE, SO THAT YOUR SHARES WILL BE REPRESENTED AT THE MEETING.
By Order of the Board of Directors,
STEPHEN A. BLOCK
Secretary
March 30, 1999
19
<PAGE>
================================================================================
[LOGO] PROXY
INTERNATIONAL FLAVORS & FRAGRANCES INC.
THIS PROXY IS SOLICITED ON BEHALF OF THE COMPANY'S BOARD OF DIRECTORS
FOR ANNUAL MEETING OF SHAREHOLDERS TO BE HELD MAY 20, 1999
The undersigned shareholder of INTERNATIONAL FLAVORS & FRAGRANCES INC.
(hereinafter called the Company) hereby appoints Messrs. EUGENE P. GRISANTI,
GEORGE ROWE, JR. and STEPHEN A. BLOCK, the attorneys and proxies, and each of
them the attorney and proxy, of the undersigned, with full power of
substitution, to act by a majority present, for and in the name, place and stead
of the undersigned, to attend the Annual Meeting of Shareholders to be held at
the headquarters of the Company, 521 West 57th Street, New York, New York, on
Thursday, May 20, 1999 at 10 A.M., and any adjournment or adjournments thereof,
and thereat to vote the number of votes or shares of stock the undersigned would
be entitled to vote if then and there personally present.
IFF
P.O. BOX 11117
NEW YORK, N.Y. 10203-0117
PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW
YOUR SHARES OF STOCK ARE TO BE VOTED.
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED.
(Continued and to be signed on the other side)
================================================================================
================================================================================
_______________________________________________________________________________
1. Election of all Directors M. H. Adame, R. G. Corbett, R. C. Duke, R. M.
Furlaud, P. A. Georgescu, E. P. Grisanti, S. R. Maconochie, G. Rowe, Jr., H. P.
van Ameringen, W. D. Van Dyke, III, D. J. Wetmore
For /X/ Withheld /X/ Exceptions* /X/
*Exceptions ...................................................................
..............................................................................
_______________________________________________________________________________
To vote your shares for all Director nominees, mark the "For" box on Item 1. To
withhold voting for all nominees, mark the "Withhold" box. If you do not wish
your shares voted "For" a particular nominee, mark the "Exceptions" box and
enter the name(s) of the exception(s) in the space provided.
_________________________________
Change of address and/or Comments
/X/_______________________________
_______________________________________________________________________________
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
_______________________________________________________________________________
(This Proxy will be voted FOR
each of the above nominees as
a director, and in the
discretion of the proxy
committee on any other matter
properly before the meeting,
unless otherwise specified)
Please sign exactly as name or
names appear on this proxy. If
stock is held jointly, each
holder should sign. If signing
as attorney, trustee,
executor, administrator,
custodian, guardian, or
corporate officer, please give
full title.
DATED ________________, 1999
SIGNED ______________________
_____________________________
SIGN, DATE AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
VOTES MUST BE INDICATED IN BLACK OR BLUE INK. /X/
================================================================================
