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International Flavors & Fragrances Inc – ‘DEF 14A’ for 5/11/04

On: Friday, 3/26/04, at 9:40am ET · Effective: 3/26/04 · For: 5/11/04 · Accession #: 950136-4-876 · File #: 1-04858

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/26/04  Int’l Flavors & Fragrances Inc    DEF 14A     5/11/04    1:155K                                   Capital Systems 01/FA

Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: DEF 14A     Definitive Proxy                                      43    251K

Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Arthur C. Martinez Compensation Committee Election of Directors Employment Contracts and Termination of Employment and Change-in-Control Arrangements Executive Separation Policy J. Michael Cook Margaret Hayes Adame Other Matters Peter A. Georgescu Ratification of Selection of Independent Accountant Shareholder Proposal Relating to Auditor Independence Summary Compensation Table
1	1st Page - Filing Submission
6	Item 1. Election of Directors
15	Compensation Committee
"	Peter A. Georgescu
"	Arthur C. Martinez
16	Summary Compensation Table
21	Employment Contracts and Termination of Employment and Change-in-Control Arrangements
24	Executive Separation Policy
30	J. Michael Cook
"	Margaret Hayes Adame
32	Item 2. Ratification of Selection of Independent Accountant
33	Item 3. Shareholder Proposal Relating to Auditor Independence
36	Other Matters

DEF 14A 1st Page of 43 TOC ↑Top Previous Next ↓Bottom Just 1st
SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. __)

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material under Rule 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)(1) and 0-11.
1) Title of each class of securities to which transaction applies:

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2) Aggregate number of securities to which transaction applies:

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3) Per unit price or other underlying value of transaction computed pursuant
to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee is
calculated and state how it was determined):

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4) Proposed maximum aggregate value of transaction:

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5) Total fee paid:

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[ ] Fee paid previously with preliminary materials.

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[ ] 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:

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2) Form, Schedule or Registration Statement No.:

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3) Filing Party:

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4) Date Filed:

DEF 14A 2nd Page of 43 TOC 1st Previous Next ↓Bottom Just 2nd
[IFF LOGO]

INTERNATIONAL FLAVORS & FRAGRANCES INC.
521 WEST 57TH STREET
NEW YORK, N.Y. 10019

----------------

NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 2004

------------------

The Annual Meeting of Shareholders of International Flavors & Fragrances
Inc., a New York corporation (the "Company"), will be held at the office of the
Company, 521 West 57th Street, New York, New York, on Tuesday, May 11, 2004, at
10:00 A.M., Eastern Time, to elect 8 directors for the ensuing year, to ratify
the selection by the Audit Committee of the Company's Board of Directors of
PricewaterhouseCoopers LLP as the Company's independent accountant for the
Company's 2004 fiscal year, to consider one shareholder proposal and to transact
such other business as may properly come before the meeting or any postponement
or adjournments thereof.

Only shareholders of record at the close of business on March 23, 2004 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 check the box on the enclosed proxy card.
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,

/s/ Dennis M. Meany

Dennis M. Meany
Senior Vice President, General
Counsel
and Secretary

March 18, 2004

DEF 14A 3rd Page of 43 TOC 1st Previous Next ↓Bottom Just 3rd
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 11, 2004 (the
"2004 Annual Meeting") 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 mailed to shareholders on or about March 26, 2004. Registered
shareholders may also vote by telephone or through the Internet, by following
the instructions on the proxy card. In addition to solicitation by mail, proxies
may be solicited personally or by telephone, facsimile or electronic mail. The
Company has retained Georgeson Shareholder to assist in proxy solicitation for a
fee of $6,000. The cost of soliciting proxies will be borne by the Company. The
Company will reimburse banks, brokers and other custodians, nominees and
fiduciaries for their costs in sending proxy materials to the beneficial owners
of Common Stock.

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 notice of revocation of
that proxy or by a new proxy bearing a later date, in each case received by the
Secretary of the Company prior to the meeting, or by voting in person at the
2004 Annual Meeting. Attendance at the 2004 Annual Meeting will not in itself
constitute revocation of a proxy.

When more than one record holder of the Company's Common Stock shares the
same address, the Company may deliver only one annual report and one proxy
statement to that address unless the Company has received contrary instructions
from one or more of those shareholders. Similarly, brokers and other
intermediaries holding shares of the Company's Common Stock in "street name" for
more than one beneficial owner with the same address may deliver only one annual
report and one proxy statement to that address if they have received consent
from the beneficial owners of the stock. The Company will deliver promptly upon
written or oral request a separate copy of the annual report and proxy statement
to any shareholder, including a beneficial owner of stock held in "street name,"
at a shared address to which a single copy of either of those documents was
delivered. To receive additional copies of the annual report and proxy
statement, you may call or write the Office of the Secretary, International
Flavors & Fragrances Inc., 521 West 57th Street, New York, New York 10019
(telephone: 212-765-5500). A copy of the annual report and proxy statement are
also available though the Company's website, www.iff.com. The information
contained on the website is not incorporated by reference in or considered to be
a part of this document.

You may also contact the Office of the Secretary of the Company at the
address or telephone number above if you are a shareholder of record of the
Company and you wish to receive a separate annual report and proxy statement in
the future, or if you are currently receiving multiple copies of the annual
report and proxy statement and want to request delivery of a single copy in the
future. If your shares are held in "street name" and you want to increase or
decrease the number of copies of the annual report and proxy statement delivered
to your household in the future, you should contact the broker or other
intermediary who holds the shares on your behalf.

The Company had outstanding at the close of business on March 1, 2004,
94,512,638 shares of Common Stock entitled to one vote per share. Only
shareholders of record at the close of business on March 23, 2004 will be
entitled to vote at the 2004 Annual Meeting.

DEF 14A 4th Page of 43 TOC 1st Previous Next ↓Bottom Just 4th
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN OTHER PERSONS

The following table sets forth certain information regarding the beneficial
ownership of the Company's Common Stock as of February 24, 2004, by each
director and nominee for director, the executive officers named in the Summary
Compensation Table in this proxy statement and all directors and executive
officers as a group.

[Enlarge/Download Table]

SHARES OF RIGHTS TO ACQUIRE
COMMON STOCK BENEFICIAL OWNERSHIP
BENEFICIALLY OF SHARES OF PERCENT
NAME OWNED (1) COMMON STOCK (2) OF CLASS
----------------------------------------------- ------------------ --------------------- ----------

Margaret Hayes Adame .......................... 7,127 23,000 (3)
Gunter Blobel ................................. 3,750 3,000 (3)
Stephen A. Block .............................. 10,437 201,667 (3)
Julian W. Boyden .............................. 7,171 81,667 (3)
J. Michael Cook ............................... 5,861 3,000 (3)
Rob J. M. Edelman ............................. 2 74,000 (3)
Peter A. Georgescu ............................ 10,991 8,000 (3)
Richard A. Goldstein .......................... 409,721(4) 794,001 1.3%
Alexandra A. Herzan ........................... 2,153,737(5) 0 2.3%
D. Wayne Howard ............................... 4,961 113,333 (3)
Arthur C. Martinez ............................ 6,861 3,000 (3)
Burton M. Tansky .............................. 1,049 0 (3)
William D. Van Dyke, III ...................... 7,491,940(6) 23,000 8.0%
Douglas J. Wetmore ............................ 17,026 209,208 (3)
All Directors and Executive Officers as a Group
(24 persons) ................................. 10,155,398 2,063,882 12.7%

CERTAIN OTHER OWNERS

The following table sets forth information regarding beneficial owners of
more than 5% of the Company's outstanding Common Stock as of February 24, 2004
(other than Mr. Van Dyke) based on a review of filings with the Securities and
Exchange Commission (the "SEC") and other information available to the Company.

[Enlarge/Download Table]

NUMBER OF SHARES AND NATURE OF BENEFICIAL OWNERSHIP
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SHARED SOLE SHARED
SOLE VOTING VOTING INVESTMENT INVESTMENT PERCENT
NAME AND ADDRESS OF BENEFICIAL OWNER POWER POWER POWER POWER OF CLASS
-------------------------------------- ------------- ----------- ------------ ------------ ---------

Henry P. van Ameringen (7) ........... 2,457,911 3,550,629 2,457,911 3,550,629 6.2%
509 Madison Avenue
New York, NY 10022
J.P. Morgan Chase & Co. (8) .......... 396,680 5,540,480 507,894 5,612,737 6.3%
270 Park Avenue
New York, NY 10017

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(1) This column includes share unit balances held in the IFF Stock Fund under
the Company's Deferred Compensation Plan and credited to participants'
accounts (where applicable), and, with respect to executive officers, may
include certain premium share units held under such plan which are
subject to vesting and may be forfeitable if the participant's employment
is terminated. The number of share units in the IFF Stock Fund was
calculated for participants based on the closing market price of the
Company's Common Stock on February 19, 2004.

DEF 14A 5th Page of 43 TOC 1st Previous Next ↓Bottom Just 5th
(2) The shares listed in this column are those which the named person has (or
will have within 60 days after February 24, 2004) the right to acquire by
the exercise of stock options granted by the Company.

(3) Less than 1%.

(4) The number of shares beneficially owned by Mr. Goldstein includes 200,000
restricted shares with respect to which he has sole voting power. Such
number of shares also includes 173,772 shares beneficially owned by Mr.
Goldstein's wife as to which Mr. Goldstein disclaims beneficial
ownership.

(5) Mrs. Herzan is a director of the van Ameringen Foundation, Inc., which
owns 1,384,791 shares, President and a director of the Lily Auchincloss
Foundation, which owns 32,000 shares, and a trustee of a trust, which
holds 736,946 shares, all of which shares are included in Mrs. Herzan's
ownership. Mrs. Herzan disclaims beneficial ownership of the shares owned
by the van Ameringen Foundation, Inc. and the Lily Auchincloss
Foundation.

(6) Mr. Van Dyke is retiring from the Board of Directors as of the date of
the 2004 Annual Meeting. The number of shares beneficially owned by Mr.
Van Dyke, 111 East Kilbourne Avenue, Suite 1900, Milwaukee, WI, 53202,
includes 7,957 shares with respect to which he has sole voting and
investment power and 7,354,557 shares over which he has shared voting and
investment power, including the holdings of the trust referred to in
footnote 9 below, three other trusts of which Mr. Van Dyke is co-trustee
and 31,767 shares held by Pollybill Foundation, Inc., of which Mr. Van
Dyke is a director. Such number also includes the beneficial interest of
Mr. Van Dyke's wife in 129,426 shares owned directly by her. Mr. Van Dyke
disclaims any beneficial ownership of the shares held by the various
trusts, Polybill Foundation and his wife.

(7) As reported in Schedule 13D/A dated as of October 16, 2003 and as updated
based on information available to the Company. The number of shares
beneficially owned by Mr. van Ameringen includes 736,946 shares held in a
trust of which each of Mr. van Ameringen and Mrs. Herzan is a trustee and
1,384,791 shares owned by the van Ameringen Foundation, Inc. of which Mr.
van Ameringen is an officer and director and Mrs. Herzan is a director.

(8) As reported in Schedule 13G dated as of February 12, 2004. Includes
5,523,783 shares beneficially owned by a trust of which Mr. and Mrs.
William D. Van Dyke, III and J. P. Morgan Chase are co-trustees. See
footnote 6 above for additional shares beneficially owned by Mr. Van
Dyke.

DEF 14A 6th Page of 43 TOC 1st Previous Next ↓Bottom Just 6th
ITEM 1. ELECTION OF DIRECTORS

At the meeting 8 directors will be elected to serve for the ensuing year
and until their successors are elected and shall qualify. Except as stated
below (see "Other Matters" at page 34), the shares of Common Stock represented
by the proxies being solicited will be voted FOR the election of the 8 nominees
whose names are listed below. If any of the nominees is unable to serve (which
is not anticipated), the shares of Common Stock represented by the proxies
being solicited will be voted for the balance of those named nominees and for
any substitute nominees as the Board of Directors may recommend.

INFORMATION ABOUT NOMINEES

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PRINCIPAL OCCUPATION DURING YEAR FIRST
LAST FIVE YEARS AND BECAME
NAME AGE OTHER DIRECTORSHIPS HELD DIRECTOR
---- --- ------------------------ --------

[GRAPHIC OMITTED] MARGARET HAYES ADAME 64 President, Fashion Group 1993
International, an international trade
organization; Director, Movado
Group, Inc.

[GRAPHIC OMITTED] GUNTER BLOBEL 67 Professor, Howard Hughes Medical 2000
Institute at The Rockefeller
University, a research medical
institution

[GRAPHIC OMITTED] J. MICHAEL COOK 61 Chairman and Chief Executive 2000
Officer Emeritus, Deloitte & Touche,
LLP, an accounting firm; Director,
The Dow Chemical Company,
Northrop Grumman Corporation,
Comcast Corporation; Trustee,
Fidelity Group of Mutual Funds

[GRAPHIC OMITTED] PETER A. GEORGESCU 65 Chairman and Chief Executive 1999
Officer Emeritus, Young & Rubicam
Inc., an advertising agency; Director,
Levi Strauss & Co., Toys "R" Us,
Inc., EMI

DEF 14A 7th Page of 43 TOC 1st Previous Next ↓Bottom Just 7th
[Enlarge/Download Table]

PRINCIPAL OCCUPATION DURING YEAR FIRST
LAST FIVE YEARS AND BECAME
NAME AGE OTHER DIRECTORSHIPS HELD DIRECTOR
---- --- ------------------------ --------

[GRAPHIC OMITTED] RICHARD A. GOLDSTEIN 62 Chairman and Chief Executive 2000
Officer of the Company since June
2000; President and Chief Executive
Officer of Unilever United States,
Inc., and Business Group President
of Unilever North American Foods, a
home, personal care and food
products company, prior thereto;
Director, Legacy Hotels REIT,
Fiduciary Trust Company
International, The Interpublic Group
of Companies, Inc. and Continuum
Health Partners, Inc.

[GRAPHIC OMITTED] ALEXANDRA A. HERZAN 44 President, Lily Auchincloss 2003
Foundation, Inc., a charitable
foundation

[GRAPHIC OMITTED] ARTHUR C. MARTINEZ 64 Chairman and Chief Executive 2000
Officer Emeritus, Sears, Roebuck and
Co., a retailer; Director, PepsiCo,
Inc., Liz Claiborne, Inc. and Martha
Stewart Living OmniMedia, Inc.;
Member of the Supervisory Board,
ABN AMRO Holding, N.V.

[GRAPHIC OMITTED] BURTON M. TANSKY 66 President and Chief Executive 2003
Officer since May 2001 and President
and Chief Operating Officer prior
thereto, The Neiman Marcus Group,
Inc., a retailer; Director, The Neiman
Marcus Group, Inc.

All of the nominees are presently directors of the Company and all of the
nominees except Mr. Tansky were elected by the shareholders at the Company's
2003 Annual Meeting of Shareholders. In October 2003, Mr. Tansky was elected by
the Board to fill a newly-created Board vacancy. Mr. Tansky was recommended to
the Nominating and Governance Committee of the Company's Board of Directors and
the Board by one of the Company's non-management directors who believed that,
based on Mr. Tansky's industry and financial experience, he would make a
valuable addition to the Company's Board.

The Company's By-laws provide that each director must retire effective as
of the annual meeting of shareholders following his or her 72nd birthday.
Accordingly, Mr. William D. Van Dyke, III, who is 72, will retire as a director
as of the 2004 Annual Meeting.

DEF 14A 8th Page of 43 TOC 1st Previous Next ↓Bottom Just 8th
BOARD AND COMMITTEE MEETINGS

The business of the Company is managed by the Board of Directors. The Board
has adopted Corporate Governance Guidelines which set forth the practices the
Board will follow with respect to Board membership and selection,
responsibilities of directors, Board meetings, evaluation of the chief executive
officer, succession planning, Board committees and compensation. A copy of the
Company's Corporate Governance Guidelines is available though the Company's
website, www.iff.com.

The Board has an Audit Committee, a Compensation Committee and a Nominating
and Governance Committee, each of which operates pursuant to a written charter
adopted by the Board. Each committee reviews its charter at least annually and
recommends charter changes to the Board as appropriate. Each committee charter
was most recently revised in January 2004. A copy of the charter of each
Committee is available through the Company's website, www.iff.com and a copy of
the Audit Committee Charter is also attached to this proxy statement as Exhibit
A. Until January 2004, the Board also had an Executive Committee.

The Board has affirmatively determined that each of Mrs. Adame, Mrs.
Herzan, Dr. Blobel and Messrs. Cook, Georgescu, Martinez and Tansky has no
material relationship with the Company affecting his or her independence as a
director and that each is "independent" within the meaning of the Board's
independence standards, which are the same categorical independence standards as
established by the New York Stock Exchange ("NYSE") in Section 303A.02 of the
NYSE Listed Company Manual. In making each of these independence determinations,
the Board considered and broadly assessed, from the standpoint of materiality
and independence, all of the information provided by each director in response
to detailed inquiries concerning his or her independence and any direct or
indirect business, family, employment, transactional or other relationship or
affiliation of such director with the Company. The Board has also determined
that each member of the Audit Committee, Compensation Committee and Nominating
and Governance Committee is independent under the foregoing independence
standards and, with respect to each member of the Audit Committee, is also
independent under the independence criteria established by the SEC for audit
committee members.

The Audit Committee, consisting of Mr. Cook, Chairman, Mrs. Adame and Mr.
Martinez, oversees and reviews the Company's financial reporting process and the
integrity of the Company's financial statements and financial reporting
practices, the Company's internal control environment, the qualifications,
independence and performance of the Company's independent accountant, the
performance of the Company's internal audit staff, and the procedures for
monitoring compliance with laws and regulations and with the Company's Code of
Business Conduct and Ethics. The Board has determined that each of Mr. Cook and
Mr. Martinez is an "audit committee financial expert" under applicable rules of
the SEC and has accounting or related financial management expertise as required
by applicable NYSE rules. The Board has also determined that all members of the
Audit Committee meet the financial literacy standards of the NYSE and that the
service by each of Mr. Cook and Mr. Martinez on the audit committee of more than
three public companies does not impair the ability of either of them to serve
effectively on the Company's Audit Committee.

The Compensation Committee, consisting of Mr. Georgescu, Chairman, and
Messrs. Martinez and Tansky, is responsible for establishing executive officer
compensation, for making recommendations to the full Board concerning director
compensation and for overseeing the compensation and benefit programs for other
employees.

The Nominating and Governance Committee, consisting of Mr. Martinez,
Chairman, Mrs. Adame and Messrs. Cook, Georgescu and Tansky, monitors Board
composition and director qualification requirements, identifies qualified
individuals to serve on the Board, recommends a slate of nominees for election
by the shareholders at the annual meeting of shareholders, reviews potential
Board candidates, reviews management succession plans and monitors corporate
governance issues.

The Executive Committee, which the Board determined to end in January 2004,
consisted of Messrs. Goldstein, Cook, Georgescu and Martinez. The Executive
Committee met only when decisions of the Board were required and it was
impractical under the circumstances to convene a meeting of the full Board.

DEF 14A 9th Page of 43 TOC 1st Previous Next ↓Bottom Just 9th
During 2003, the Board held six meetings, the Audit Committee held seven
meetings, the Compensation Committee held six meetings, the Nominating and
Governance Committee held three meetings, and the Executive Committee did not
meet. During 2003, each director attended greater than 75% of the total of the
number of meetings held by the Board and by the Committee(s) on which each such
director served. Of the nine directors who were serving on the day of the
Company's 2003 Annual Meeting of Shareholders, eight directors attended that
meeting. Pursuant to the Company's Corporate Governance Guidelines, unless there
are mitigating circumstances, such as medical, family or business emergencies,
Board members are to endeavor to participate (either in person or by telephone)
in all Board meetings and all Committee meetings of which the director is a
member and to attend the Company's annual meeting of shareholders.

The non-management directors of the Company meet in executive session,
without the presence of any corporate officer or member of management, in
conjunction with regular meetings of the Board. The non-management directors of
the Company have appointed Mr. Martinez as presiding director. Shareholders and
other parties interested in communicating directly with the presiding director,
with the non-management directors as a group or with all directors as a group
may do so by writing to Presiding Director or Non-Management Directors or Board
of Directors, in each case, c/o Secretary, International Flavors & Fragrances
Inc., 521 West 57th Street, New York, New York 10019. The Nominating and
Governance Committee has approved a process for handling letters received by the
Company and addressed to the presiding director, the non-management members of
the Board or the entire Board. Under that process, the Secretary of the Company
forwards to the presiding director all correspondence received, without opening
or screening.

DIRECTORS' COMPENSATION

Effective as of May 14, 2003, compensation for directors who are not
employees of the Company is as follows:

a. Directors receive an annual cash retainer of $30,000.

b. The Chairperson of the Audit Committee receives an annual cash retainer
of $7,500, and the Chairpersons of the Compensation Committee and
Nominating and Governance Committee each receive an annual cash
retainer of $3,750.

c. Directors receive a cash fee of $1,500 for each meeting of the Board
attended. Members of the Audit Committee receive a cash fee of $1,200
for each meeting of the Audit Committee attended, and members of other
committees receive a cash fee of $1,000 for each committee meeting
attended.

Directors who are not employees of the Company receive an annual grant, in
October of each year, of 1,000 shares of Common Stock of the Company from a pool
of shares authorized by the Board in September 2000, and through 2009, automatic
annual stock option grants on the date of each annual meeting of shareholders of
3,000 shares of Common Stock under the Company's 2000 Stock Option Plan for
Non-Employee Directors (the "2000 DSOP"). Options granted in 2003 under the 2000
DSOP vest in equal installments of 12, 24 and 36 months, and expire ten years
after the date of grant. Directors who are employees of the Company do not
receive any compensation for their service as a director.

In March 2003, the Board established minimum ownership requirements for all
directors with respect to the Company's Common Stock. Each director is required
to own shares whose market value equals seven times the director's annual
retainer, or $210,000, which the director must acquire during his or her first
five years of Board tenure (or within five years after the requirements were
established). The 1,000-share annual stock grant is credited toward this
obligation. Effective January 1, 2002, directors became eligible to participate
in the Company's Deferred Compensation Plan ("DCP"). Under the DCP, a director
may defer all or a portion of his or her cash compensation. In addition,
effective with the 1,000 share annual stock grant made in October 2003,
directors are required to defer their annual award of Common Stock.

Directors serving before May 14, 2003 may participate in the Director
Charitable Contribution Program (the "DCCP"). Under the DCCP, the Company
purchases 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

DEF 14A 10th Page of 43 TOC 1st Previous Next ↓Bottom Just 10th
by the director and $500,000 to The IFF Foundation. Individual directors derive
no financial benefit from the DCCP since all tax deductions relating to the
contributions accrue solely to the Company. Other than premiums, the DCCP
should have no long-term cost to the Company. Directors first elected on or
after May 14, 2003 do not participate in the DCCP. Those directors, together
with all other directors, are eligible to participate in the Company's Matching
Gift Program, under which The IFF Foundation matches, on a dollar for dollar
basis up to a maximum of $10,000 per year, contributions to qualifying
charitable organizations.

DIRECTOR CANDIDATES

The Nominating and Governance Committee has established a policy regarding
the consideration of director candidates, including those recommended by
shareholders. The Nominating and Governance Committee, together with other Board
members, will from time to time as appropriate identify the need for new Board
members. Particular proposed director candidates who would satisfy the criteria
set forth below and otherwise qualify for membership on the Board are identified
by the Nominating and Governance Committee. In identifying candidates, the
Nominating and Governance Committee will seek input and participation from other
Board members and other appropriate sources, to ensure that all points of view
can be considered and the best possible candidates can be identified. The
Nominating and Governance Committee may also engage a search firm to assist it
in identifying potential candidates. Members of the Nominating and Governance
Committee and other Board members, as appropriate, will interview selected
director candidates, evaluate the director candidates and determine which
candidates are to be recommended by the Nominating and Governance Committee to
the Board.

Shareholders wishing to submit a director candidate for consideration by
the Nominating and Governance Committee must submit such recommendation to the
Nominating and Governance Committee, c/o the Secretary of the Company, in
writing, not less than 150 days nor more than 180 days prior to the date of the
prior year's annual meeting of shareholders. The request must be accompanied by
the same information concerning the director candidate and nominating
shareholder as described in Section 3 of the Company's By-laws for shareholder
nominations for director to be presented at a shareholders meeting. The
Nominating and Governance Committee may also request any additional background
or other information from any director candidate or recommending shareholder as
it may deem appropriate.

Board candidates are considered based on various criteria which may change
over time and as the composition of the Board changes. The following factors, at
a minimum, are considered by the Nominating and Governance Committee as part of
its review of all director candidates and in recommending potential director
candidates to the Board:

o Judgment, character, expertise, skills and knowledge useful to the
oversight of the Company's business;

o Diversity of viewpoints, backgrounds, experiences and other
demographics;

o Business or other relevant experience; and

o The extent to which the interplay of the candidate's expertise, skills,
knowledge and experience with that of other Board members will build a
Board that is effective, collegial and responsive to the needs of the
Company and to the requirements and standards of the NYSE and the SEC.

CODE OF BUSINESS CONDUCT AND ETHICS

The Company has adopted a Code of Business Conduct and Ethics (the "Code
of Ethics") that applies to the Company's chief executive officer, principal
financial officer, principal accounting officer and to all other Company
directors, officers and employees. A copy of the Code of Ethics is available
through the Company's website, www.iff.com. The Code of Ethics is also
available in print to any shareholder who requests it. A waiver from any
provision of the Code of Ethics in favor of a director or executive officer may
only be granted by the Board and any such waiver will be publicly disclosed.
The Company will disclose substantive amendments to, and any waivers from, the
Code of Ethics granted to the Company's chief executive officer, principal
financial officer or principal accounting officer, as well as any other
executive officer or director, on the Company's website, www.iff.com.

DEF 14A 11th Page of 43 TOC 1st Previous Next ↓Bottom Just 11th
REPORT OF THE COMPENSATION COMMITTEE*

The Compensation Committee of the Board (the "Compensation Committee")
operates pursuant to a charter which gives the Compensation Committee
responsibility with respect to the compensation and benefits of the Company's
executive officers and other members of senior management. The Compensation
Committee's specific responsibilities include:

o reviewing and approving the Company's goals and objectives relevant to
the Company's Chief Executive Officer's ("CEO") compensation;

o based on an evaluation of the CEO's performance by the Nominating and
Governance Committee in relation to those goals and objectives,
determining the CEO's compensation level;

o reviewing the Company's general compensation and benefits policies,
plans and programs, including incentive compensation plans and
equity-based plans;

o overseeing the administration and competitiveness of such policies,
plans and programs;

o upon the recommendation of the CEO, reviewing the base salary and
annual and long-term incentive compensation and equity-based
compensation of the executive officers and other members of senior
management; and

o considering recommendations from the Nominating and Governance
Committee regarding the compensation of non-employee directors.

The Compensation Committee is authorized to retain as it deems appropriate
independent compensation consultants to assist it in carrying out its duties.

COMPENSATION PROGRAM

For 2003 the Company continued to operate under its comprehensive
Executive Compensation Program covering the Company's executive officers and
senior management (the "Program"). The Program consists of a Salary Plan
("SP"), an Annual Incentive Plan ("AIP"), a Long-Term Incentive Plan ("LTIP"),
a Stock Option Program ("SOP"), a perquisites program and the Company's
Executive Separation Policy ("ESP"). The AIP, LTIP and SOP are part of and
administered under the 2000 Stock Award and Incentive Plan (the "2000 SAIP").
Before its introduction, the Program was extensively benchmarked, with the
assistance of independent compensation consultants, against confidential
external marketplace data, and all positions, including those of the CEO and
the Company's other executive officers and members of senior management, were
internally valued as determined by their scope of responsibilities within the
Company. The external survey data are reviewed and updated biennially, and the
internal valuation of positions is reviewed and updated periodically. In
respect of 2003, external survey data were reviewed; since an internal
valuation of positions was conducted for 2001 when the Program was initiated,
no formal review of the internal valuation of positions was conducted for 2003.
The AIP, the LTIP and the SOP are designed to reward employees only if the
Company is successful under specific financial measures, including revenue
growth and increases in operating profit, earnings per share, return on net
tangible assets, return on invested capital and/or the market price of the
Company's Common Stock.

Under the SP, the Compensation Committee and the Board review salaries of
the CEO and the other executive officers periodically. The amount of salary
increases is generally based on the executive officer's ongoing performance
measured against achievement and satisfaction of financial and/or non-financial
objectives and responsibilities.

Under the AIP, each executive officer, including the CEO, has an annual
incentive award target based on the achievement of specific quantitative
corporate and, with respect to certain executive officers,

----------
* This report of the 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
or the Securities Exchange Act, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under either of such Acts.

DEF 14A 12th Page of 43 TOC 1st Previous Next ↓Bottom Just 12th
regional and/or functional, performance goals, which are determined no later
than March of each year by the Compensation Committee. For 2003, the corporate
objectives related to increases in revenue and improvements in operating profit
as a percentage of sales. Each executive officer has a range of potential
awards, both above and below target, which are specified each year when the
quantitative performance goals are established. The amount paid to each
executive officer, including the CEO, at the end of the year depends on the
extent to which the performance goals are achieved. Failure to meet threshold
performance, based on the performance goals, results in no AIP award to any
executive officer for that year.

Under the LTIP, each executive officer, including the CEO, has an award
target for each three-year performance cycle based on the achievement of
specific quantitative corporate performance goals, which are determined by the
Compensation Committee at the beginning of each performance cycle. For the
2001-2003 and 2002-2004 cycles, these objectives related to improvements in
earnings per share and return on net tangible assets. For the 2003-2005 cycle,
these objectives relate to improvements in earnings per share and return on
invested capital. For each award cycle each executive officer has a range of
potential awards, both above and below target, which are specified at the
beginning of the cycle. The amount paid at the end of the cycle depends on the
extent to which the Company achieves the quantitative corporate performance
goals. Failure to meet threshold performance for a cycle, based on the
corporate performance goals, results in no LTIP award for that cycle. The
Compensation Committee may not increase AIP and LTIP awards to any executive
officer beyond those actually earned based on the pre-established goals. It has
only negative discretion with respect to awards under these plans for the
applicable AIP year or LTIP cycle.

Under the SOP, each executive officer, including the CEO, has an annual
target award and a range of option awards both above and below that target.
Under the Memorandum of Understanding (the "MOU") approved by the Board in 2000
setting forth the terms of Mr. Goldstein's employment by the Company, Mr.
Goldstein's stock option award is to have a Black-Scholes value of not less
than $590,000. Otherwise, the actual size of an executive officer's award is
based on the scope of his or her position, individual performance, and ability
to drive enhanced long-term shareholder value. The Compensation Committee sets
the terms of stock options, including vesting, any performance requirements and
the expiration date (which, under the 2000 SAIP, may not be greater than ten
years after the grant date). The Compensation Committee has recently evaluated
alternative forms of equity compensation, in lieu of stock options, and intends
that all equity compensation grants to employees in 2004 will be in the form of
restricted stock or restricted stock units, which may also be granted under the
2000 SAIP and which will include performance conditions in connection with
vesting of restricted stock or restricted stock units for executive officers
and senior management.

Under the perquisites program, each executive officer receives a package
of perquisites that includes a Company-provided automobile, annual physical
examination, club membership, the right to travel via first or business class
for business purposes and annual financial and tax counseling and estate
planning assistance.

The Company has a Board-approved comprehensive Deferred Compensation Plan
(the "DCP"). The DCP allows certain United States-based employees, including
the CEO and the other United States-based executive officers, to defer, either
for a specified number of years or until retirement or termination of
employment, salary, annual and long-term incentive awards and, under certain
circumstances, profits from the exercise of stock options. Participating
employees may have changes in the value of their deferred compensation
measured, at their election, by the market performance of a variety of equity
and debt mutual funds offered by The Vanguard Group, which administers the DCP,
or by changes in the value of Company Common Stock, or they may have amounts
credited to their DCP accounts earn interest at an interest rate which is
established each year by the Compensation Committee and which is applicable to
all DCP participants. With respect to 2003, the Compensation Committee
established an interest rate of 5.79%. The DCP provides participating employees
with an incentive to defer compensation into the Company's Common Stock by
granting them a 25% premium, credited in Common Stock, on all compensation
deferred into that stock.

The Company's general policy has been, and will continue to be, to
structure executive compensation to be deductible under applicable law. The
Company also believes, however, that under some

DEF 14A 13th Page of 43 TOC 1st Previous Next ↓Bottom Just 13th
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 compensate certain key executives in excess of deductible
limits.

2003 COMPENSATION OF EXECUTIVE OFFICERS

The basic components of the Company's executive officer compensation in
2003 were annual salaries, stock options, annual incentive compensation and
long-term incentive compensation. In addition, the Company entered into
retirement agreements with two retiring executive officers.

SALARIES

In March 2003, Mr. Goldstein recommended to the Compensation Committee the
annual salaries for 2003 for executive officers other than himself. The
Compensation Committee considered the recommendations and discussed them with
Mr. Goldstein and recommended to the Board annual salaries for those executive
officers, which reviewed and approved such salaries. The approved salaries
became effective on April 1, 2003 for the following 12-month period. In making
its recommendations, the Compensation Committee relied on information provided
by Mr. Goldstein, based on his firsthand knowledge of the performance of each
executive officer against financial and/or non-financial goals and
responsibilities and his or her contribution to the Company and to his or her
respective area of concentration. The Compensation Committee also considered
information in terms of comparative compensation levels at comparable companies
(which is not the same group of companies as the peer group set forth in the
Company's performance graph at page 29 below). There was no precise test or
formula by which the recommended salaries of the executive officers for 2003
were related to performance. The Compensation Committee concluded, and the
Board agreed, that the Company's interests were best served by a flexible
policy that allowed the Compensation Committee and the Board to fix 2003 annual
salaries after considering and evaluating the factors enumerated above.

The Compensation Committee, following and based on a performance review of
Mr. Goldstein conducted by the Nominating and Governance Committee in relation
to the Company's performance and Mr. Goldstein's individual performance against
financial and non-financial objectives, and based on a reassessment of certain
provisions of the MOU, determined and recommended to the Board, and the Board
(with Mr. Goldstein recusing himself) approved, the 2003 annual base salary for
Mr. Goldstein. In 2001 and 2002, Mr. Goldstein was being reimbursed certain
business-related and other expenses up to $120,000 per year. In 2003, the
Committee recommended to the Board that the $120,000 expense reimbursement
provided for in the MOU be reclassified as salary with Mr. Goldstein thereafter
being reimbursed for expenses on the same basis as Company executive officers.
The 2003 annual base salary approved by the Board for Mr. Goldstein included
the recommended $120,000 reclassification.

STOCK OPTIONS

During the first quarter of 2003, the Compensation Committee established
2003 stock option award targets for the CEO and each of the other executive
officers under the Company's SOP and, with respect to the CEO, pursuant to the
terms of the MOU. The Compensation Committee reviewed and approved the
recommendations of the CEO for 2003 awards under the SOP for each executive
officer other than the CEO, including the CEO's recommendation that awards
under the SOP to certain executive officers be above their stock option award
targets, and determined the award for Mr. Goldstein. For 2003 certain executive
officers, other than Mr. Goldstein, received an award that was between 14% and
100% higher than his or her target stock option grant under the SOP. The
Compensation Committee made these greater than target awards to increase the
executive officers' alignment with shareholders, to provide them with further
incentive to increase shareholder value and to reward these executive officers
for outstanding individual performance. Other executive officers received their
target stock option grant. The Compensation Committee made all grants other
than to Mr. Goldstein after considering the recommendations of Mr. Goldstein.
Mr. Goldstein's stock option grant was made based on the recommendation of
independent compensation consultants and had a Black-Scholes value of more than
twice the minimum required by the MOU based on Mr. Goldstein's individual
performance.

DEF 14A 14th Page of 43 TOC 1st Previous Next ↓Bottom Just 14th
During 2003, the Compensation Committee adopted Share Retention Guidelines
applicable to executive officers and other members of senior management,
requiring them, effective from January 1, 2004, and upon exercising stock
options or realizing Company stock due to vesting of restricted stock or
restricted stock units, to retain a specified portion of the Company shares
realized after payment of the exercise price and income taxes related to the
exercise. A covered individual would be exempt from the requirement if the
individual owns shares of Common Stock having a value equal to a specified
multiple of that individual's base salary, depending on the individual's grade
level with the Company. The Compensation Committee adopted this requirement in
order to further align the interests of the Company's executive officers and
senior management with shareholders.

INCENTIVE COMPENSATION

During the first quarter of the year the Compensation Committee
established the specific quantitative corporate performance goals and award
targets for Mr. Goldstein and for each of the other executive officers for (i)
2003 under the AIP and (ii) the 2003-2005 cycle under the Company's LTIP. In
January 2004, the Compensation Committee also certified the level of
achievement of the pre-established corporate performance goals under the AIP
for 2003 and LTIP for the 2001-2003 performance cycle and determined the level
of incentive compensation under each of those plans based on those
achievements.

For 2003, all of the Company's executive officers participated in the AIP.
For 2003, annual incentive compensation based on corporate performance was
27.5% of target. Depending on the mix of corporate performance goals and
regional and/or functional performance goals applicable to each executive
officer, each executive officer, including Mr. Goldstein, received for 2003
annual incentive compensation between 13.75% and 51.25% of his or her target
incentive compensation for the year.

All of the Company's executive officers participated in the 2001-2003
cycle of the LTIP. For the 2001-2003 cycle, the Company achieved in the
aggregate 110.83% of the corporate performance goals, as a result of which each
executive officer, including Mr. Goldstein, received for 2001-2003 long term
incentive compensation equal to 110.83% of his or her target incentive
compensation for the cycle. Since the LTIP was a start-up plan in 2001 and
payments thereunder with respect to the 2001-2003 cycle are based on 3-year
performance criteria, no amounts were paid under the LTIP at the end of 2001 or
2002. Therefore, LTIP payments with respect to the 2001-2003 performance cycle
were based on targets at three times the annualized award level to start up the
plan. Although the Compensation Committee initially contemplated that
subsequent three-year LTIP performance cycles would continue on a biennial
basis, the decision was made to shift to annual cycles commencing with the
2002-2004 cycle. Accordingly, if any LTIP payments are made with respect to the
2002-2004 cycle or the 2003-2005 cycle, these payments would be based on
targets at one times the annualized award level.

MR. GOLDSTEIN'S 2003 COMPENSATION

As discussed above, Mr. Goldstein's base salary for 2003 was established
by the Board (with Mr. Goldstein recusing himself) on the recommendation of the
Compensation Committee, following and based on a performance review for 2002
conducted by the Nominating and Governance Committee of the Board and based on
a reassessment of certain provisions of the MOU. Both his target award and his
actual payout of annual incentive compensation were governed by and were
consistent with the terms of the AIP. His participation in the 2003-2005 cycle
of the LTIP is governed by and consistent with the terms of the LTIP. His stock
option award was 140,000 shares. The Compensation Committee and the Board (with
Mr. Goldstein recusing himself) determined that each element and the aggregate
of Mr. Goldstein's compensation in respect of 2003 were fair and reasonable and
within the range of compensation for chief executive officers of companies
comparable to the Company.

RETIREMENT ARRANGEMENTS

Julian W. Boyden retired as Executive Vice President and Stephen A. Block
retired as Senior Vice President, General Counsel and Secretary, effective as
of March 31, 2003 (after 35 years of service, including service with Bush Boake
Allen Inc., which was acquired by the Company in 2000) and

DEF 14A 15th Page of 43 TOC 1st Previous Next ↓Bottom Just 15th
December 31, 2003 (after 11 years of service), respectively. The terms of the
retirement agreements and payments that each of Messrs. Boyden and Block are
receiving as a result of their retirements, including payments pursuant to the
ESP, are described in "Employment Contracts and Termination of Employment and
Change-in-Control Arrangements" at page 21 below. The Compensation Committee
approved these retirement arrangements, taking into account a number of
factors, including the terms of the ESP and the Committee's judgment as to what
was appropriate and reasonable in light of each of Messrs. Boyden's and Block's
position with and contributions to the Company.

In summary, the Compensation Committee believes the Company has an
appropriate and competitive compensation policy, which is designed to attract
and retain qualified executive officers and motivate them to create and enhance
shareholder value. The Company's compensation policy soundly balances base
salary, annual and long-term cash incentives, and stock options and, for the
CEO, a restricted stock grant made in 2002. The Compensation Committee, with
the assistance of independent compensation consultants, periodically reviews
both compensation levels for the CEO and other executive officers and the
appropriate balance among the various components. This review is designed to
assure that the Company's compensation program remains competitive and enables
the Company to attract and retain high quality executives.

COMPENSATION COMMITTEE

Peter A. Georgescu
Chairman

Arthur C. Martinez
Burton M. Tansky*
William D. Van Dyke, III**

----------
* Committee member as of January 27, 2004.

** Retired as Committee member as of January 27, 2004.

DEF 14A 16th Page of 43 TOC 1st Previous Next ↓Bottom Just 16th
SUMMARY COMPENSATION TABLE

The following table sets forth information for 2003, 2002 and 2001
relating to the compensation of the Chairman and Chief Executive Officer, each
of the other four most highly compensated executive officers of the Company who
were serving at December 31, 2003 and a former executive officer who was not
serving as such at December 31, 2003.

[Enlarge/Download Table]

ANNUAL COMPENSATION
-----------------------------------------------------------
(A) (B) (C) (D) (E)
OTHER ANNUAL
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($)(1) COMPENSATION ($)(2)
-------------------------------- ------ ---------------- ------------- ---------------------

Richard A. Goldstein ........... 2003 $1,120,000 $308,000 $ 74,354
Chairman and Chief 2002 993,750 215,000 104,154
Executive Officer 2001 943,750 374,693 93,859

Julian W. Boyden ............... 2003 540,749(9) 0 17,486
Former Executive Vice 2002 518,750 84,656 23,546
President* 2001 493,750 160,125 13,751

D. Wayne Howard ................ 2003 448,250 74,415 16,131
Executive Vice President, 2002 430,000 70,950 16,709
Global Operations 2001 393,750 128,100 27,496

Douglas J. Wetmore ............. 2003 433,250 59,950 15,681
Senior Vice President and 2002 412,500 57,109 13,590
Chief Financial Officer 2001 363,750 120,094 15,464

Stephen A. Block ...............
Former Senior Vice President, 2003 417,500 57,750 16,617
General Counsel and 2002 405,000 55,094 16,526
Secretary* 2001 382,500 124,898 15,820

Rob J. M. Edelman (11) ......... 2003 374,967 96,085 17,164
Vice President and Regional 2002 298,903 20,528 14,335
Manager, Europe 2001 241,568 65,822 13,675

LONG TERM COMPENSATION
----------------------------------------------------------------------
AWARDS PAYOUTS
-------------------------------- -------------------------------------
(A) (F) (G) (H) (I)
SECURITIES ALL OTHER
RESTRICTED UNDERLYING LTIP COMPENSATION
NAME AND PRINCIPAL POSITION STOCK(3) OPTIONS (#) PAYOUTS ($)(4) ($)(5)
-------------------------------- ------------------ ------------- ---------------- --------------------

Richard A. Goldstein ........... $ -- 140,000 $2,682,433 $ 742,276(6)
Chairman and Chief 5,884,000(7) 140,000 -- 794,375(6)
Executive Officer -- 101,000 720,000(8) 832,947(6)

Julian W. Boyden ............... -- 50,000 866,163 1,207,069(10)
Former Executive Vice -- 57,500 -- 17,579
President* -- 50,000 -- 54,738

D. Wayne Howard ................ -- 50,000 715,429 22,650
Executive Vice President, -- 60,000 -- 13,875
Global Operations -- 50,000 -- 17,012

Douglas J. Wetmore ............. -- 70,000 684,950 21,308
Senior Vice President and -- 44,000 -- 23,001
Chief Financial Officer -- 35,000 -- 17,440

Stephen A. Block ...............
Former Senior Vice President, -- 35,000 676,083 1,367,822(10)
General Counsel and -- 42,500 -- 14,757
Secretary* -- 35,000 -- 12,604

Rob J. M. Edelman (11) ......... -- 15,000 464,053 --
Vice President and Regional -- 27,000 -- --
Manager, Europe -- 12,000 -- --

----------
* Mr. Boyden ceased service as an executive officer on March 31, 2003 and Mr.
Block ceased service as an executive officer on December 31, 2003. See
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements" at page 21 below.

(1) Except where noted for Mr. Goldstein, paid under the Company's AIP. Under
the AIP, each named executive officer other than Mr. Edelman had an award
target for 2003 based on the achievement of specific quantitative corporate
performance goals. Mr. Edelman had an award target for 2003 half of which
was based on the achievement of the same corporate performance goals and
half of which was based on specific quantitative regional goals. All of
these performance goals were determined by the Compensation Committee of
the Board at the beginning of 2003. For 2003, the corporate performance
goals related to increases in revenue and improvement in operating profit
as a percentage of sales. For 2003, the Company achieved in the aggregate
27.5% of the corporate performance goals under the AIP, as a result of
which each named executive officer other than Mr. Edelman received annual
incentive compensation equal to 27.5% of his target incentive compensation
for the year. For 2003, the Company achieved in the aggregate 75% of the
regional goals under the AIP for Mr. Edelman, as a result of which Mr.
Edelman received annual incentive compensation equal to 51.25% of his
target incentive compensation for the year.

(2) Includes amounts in respect of (a) the personal use of the automobile
provided by the Company in 2003: Mr. Goldstein--$14,250, Mr.
Boyden--$9,666, Mr. Howard-- $8,631, Mr. Wetmore-- $12,181, Mr.
Block--$10,617, Mr. Edelman--$17,164; in 2002: Mr. Goldstein--$13,150, Mr.
Boyden--$15,988, Mr. Howard--$8,709, Mr. Wetmore--$10,090, Mr.
Block--$13,526, Mr. Edelman--$14,335; in 2001: Mr. Goldstein--$16,035, Mr.
Boyden--$3,616, Mr. Howard--$10,243, Mr. Wetmore--$12,464, Mr.
Block--$8,320, Mr. Edelman--$13,675; (b) financial planning services in
2003: Mr. Goldstein --$37,458, Mr. Boyden--$7,820, Mr. Howard--$4,500, Mr.
Block--$6,000; in 2002: Mr. Goldstein--$23,295, Mr. Boyden--$7,558, Mr.
Howard--$4,500, Mr. Block--$3,000; in 2001: Mr. Goldstein--$15,869, Mr.
Boyden--$7,500; Mr. Howard--$8,200, Mr. Block--$7,500; (c) club memberships
in 2003: Mr. Goldstein--$22,646, Mr. Howard--$3,000, Mr. Wetmore-- $3,500;
in 2002: Mr. Goldstein--$22,733, Mr. Howard--$3,500, Mr. Wetmore--$3,500;
in 2001: Mr. Goldstein--$19,544, Mr. Boyden--$2,635, Mr. Howard--$3,000;
Mr. Wetmore--$3,000; (d)

DEF 14A 17th Page of 43 TOC 1st Previous Next ↓Bottom Just 17th
housing and personal expenses for Mr. Goldstein in 2002: $44,976; in 2001:
$42,411; and (e) a housing subsidy (including tax gross up of $2,754) in
2001: Mr. Howard--$6,053.

(3) Excludes premium share units in the IFF Stock Fund credited to the accounts
of the named executive officers who participate in the DCP. Based on the
closing price of the Company's Common Stock on December 31, 2003, the
aggregate number and dollar value of premium share units in the IFF Stock
Fund credited to such accounts was: Mr. Goldstein--4,623 shares or
$161,452, Mr. Boyden--1,204 shares or $42,035, Mr. Howard--426 shares or
$14,871, Mr. Wetmore--694 shares or $24,234, Mr. Block--254 shares or
$8,875. Such premium shares are subject to forfeiture. Except for such
premium shares and the restricted stock held by Mr. Goldstein described
below, no other named executive officer holds restricted stock.

(4) Except where noted for Mr. Goldstein, paid under the Company's LTIP. Under
the LTIP, each executive officer had an award target for the 2001-2003
performance cycle based on the achievement of specific quantitative
corporate performance goals, which were determined by the Compensation
Committee of the Board at the beginning of the performance cycle. For the
2001-2003 cycle, these objectives related to improvements in earnings per
share and return on net tangible assets. For the 2001-2003 cycle, the
Company achieved in the aggregate 110.83% of the corporate performance
goals under the LTIP, as a result of which each executive officer received
long-term incentive compensation for the cycle. Since the LTIP was a
start-up plan in 2001 and payments thereunder with respect to the 2001-2003
cycle are based on 3-year performance criteria, no amounts were paid under
the LTIP at the end of 2001 or 2002. Therefore, LTIP payments with respect
to the 2001-2003 performance cycle were based on targets at three times the
annualized award level to start up the plan. Awards under the LTIP are made
in cash, but executive officers may elect to defer LTIP awards under the
Company's DCP.

(5) Includes the following amounts paid, matched or set aside by the Company
under the Company's Retirement Investment Fund Plan, a defined contribution
plan, and the DCP (including the dollar amount, on the date of
contribution, of premium shares credited to the accounts of participants in
the DCP), for 2003: Mr. Goldstein--$30,156, Mr. Boyden--$12,610, Mr.
Howard--$21,832, Mr. Wetmore--$20,568, Mr. Block--$19,363; for 2002: Mr.
Goldstein--$82,938, Mr. Boyden--$15,188, Mr. Howard--$13,200, Mr.
Wetmore--$22,251, Mr. Block--$12,663; for 2001: Mr. Goldstein--$121,985,
Mr. Boyden--$52,781, Mr. Howard--$16,374, Mr. Wetmore--$16,880, Mr. Block--
$11,100. Also includes the following amounts in respect of life insurance
coverage under the Company's Executive Death Benefit Program: for 2003: Mr.
Goldstein--$5,870, Mr. Boyden--$2,544, Mr. Howard--$818, Mr. Wetmore--$740,
Mr. Block--$1,959; for 2002: Mr. Goldstein-- $5,187, Mr. Boyden--$2,391,
Mr. Howard--$675, Mr. Wetmore--$750, Mr. Block--$2,094; for 2001: Mr.
Goldstein--$4,712, Mr. Boyden--$1,957, Mr. Howard--$638, Mr. Wetmore--$560,
Mr. Block--$1,504. No participant in the Program has or will have any
interest in the cash surrender value of the underlying insurance policy.

(6) In addition to the amounts described in note (5) above, includes $706,250
paid to Mr. Goldstein pursuant to the MOU in respect of long term incentive
payments that he forfeited by leaving his prior employer. See "Employment
Contracts and Termination of Employment and Change-in-Control Arrangements"
at page 19 for the terms of the MOU.

(7) On August 1, 2002 Mr. Goldstein received a Performance Incentive Award
("PIA") of 200,000 restricted shares of the Company's Common Stock. See
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements" at page 20. Mr. Goldstein's entitlement to all or a portion
of the award is subject to (a) the Company's achieving certain levels of
shareholder returns compared to those of a specified group of other
companies, over the three-, four-and five-year periods commencing August 1,
2002, and (b) Mr. Goldstein's remaining employed by the Company during such
periods. He may earn up to 25% of the award (50,000 shares) at the end of
three years, an additional 25% of the award (50,000 shares) at the end of
four years, and the remaining 50% of the award (100,000 shares) at the end
of five years. If any portion of the award is not earned during the first
two performance periods, it may be earned if the performance

DEF 14A 18th Page of 43 TOC 1st Previous Next ↓Bottom Just 18th
objective is met for the full five-year period. Although the stock is
restricted, Mr. Goldstein has voting and dividend rights on all shares.
Based on the closing price of the Company's Common Stock on December 31,
2003, the dollar value of the restricted stock held by Mr. Goldstein on
that date was $6,984,000.

(8) Pursuant to the terms of the MOU entered into in connection with Mr.
Goldstein's appointment as Chairman and Chief Executive Officer. See
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements" at page 19.

(9) Includes $336,055 paid in 2003 under the terms of a retirement agreement
with Mr. Boyden. See "Employment Contracts and Termination of Employment
and Change-in-Control Arrangements" at page 21.

(10) In addition to the amounts described in note (5) above, includes the
following amounts paid or payable through 2006 under terms of retirement
agreements with Mr. Boyden--$1,191,915 and Mr. Block--$1,346,500. See
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements" at page 21.

(11) Amounts were paid in Euro and are translated into U.S. Dollars at average
exchange rates during the year. Mr. Edelman's base salary in Euro was
(Euro)333,156, (Euro)317,982 and (Euro)269,397 for 2003, 2002 and 2001,
respectively.

OPTION/SAR GRANTS IN 2003

The following table shows all grants of options in 2003 to the executive
officers named in the Summary Compensation table. No stock appreciation rights
(SARs) were granted in 2003.

[Enlarge/Download Table]

(A) (B) (C) (D) (E) (F)
% OF TOTAL
OPTIONS EXERCISE
NUMBER OF SHARES GRANTED TO OR BASE GRANT DATE
UNDERLYING OPTIONS EMPLOYEES PRICE EXPIRATION PRESENT VALUE
NAME GRANTED (#)(1) IN FISCAL YEAR ($/SH)(2) DATE(1) ($)(3)
------------------------ -------------------- ---------------- ----------- ------------ --------------

R.A. Goldstein ......... 140,000 5.2 29.86 3/11/2013 $1,310,400
J.W. Boyden ............ 50,000 1.9 29.86 3/11/2013 468,000
D.W. Howard ............ 50,000 1.9 29.86 3/11/2013 468,000
D.J. Wetmore ........... 70,000 2.6 29.86 3/11/2013 655,200
S.A. Block ............. 35,000 1.3 29.86 3/11/2013 327,600
R.J.M. Edelman ......... 15,000 0.6 29.86 3/11/2013 140,400

----------
(1) All options to the named executive officers were granted on March 11,
2003 under the 2000 Stock Award and Incentive Plan ("2000 SAIP"), which
was initially approved by shareholders at the Company's 2000 Annual
Meeting of Shareholders and which was amended by approval of shareholders
at the Company's 2002 Annual Meeting of Shareholders. All options expire
ten years after grant and become exercisable in three equal installments
12, 24 and 36 months, respectively, after the date of grant.

(2) All options to the named executive officers were granted at the closing
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, that 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 believe that the Black-Scholes
model can accurately determine the value of an option. The assumptions
used by the Company are as follows: a grant date stock price and exercise
price of $29.86 per share; an option term of 10 years; a stock price
volatility based on

DEF 14A 19th Page of 43 TOC 1st Previous Next ↓Bottom Just 19th
the calendar year closing prices of the Company's Common Stock (plus
dividends) for the period December 31, 1993 through December 31, 2003; a
dividend yield of 2.08% (the dividend yield is calculated by annualizing
the average of the quarterly dividend yields, which are developed by
dividing each dividend payment between January 1, 2003 and December 31,
2003 by the stock price on the ex-dividend date with respect to such
payment); and a risk-free interest rate of 3.99% (the yield on the date of
grant on the U.S. Government Zero Coupon Bond with a maturity closest to
the option term).

AGGREGATED OPTION EXERCISES IN 2003 AND OPTIONS/SAR VALUES AT DECEMBER 31, 2003

The following table provides information as to options exercised in 2003
by each of the executive officers named in the Summary Compensation Table and
the value of options held by each such executive officer at December 31, 2003
measured in terms of the closing price of the Common Stock in consolidated
trading on December 31, 2003. No stock appreciation rights (SARs) are
outstanding.

[Enlarge/Download Table]

(A) (B) (C) (D) (E)
NUMBER OF SECURITIES
SHARES UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN THE
ACQUIRED ON VALUE OPTIONS AT FY END (#) MONEY OPTIONS AT FY END($)
NAME EXERCISE(#) REALIZED($) EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE
---- ----------- ----------- ------------------------- -------------------------

R.A. Goldstein ......... 0 $ 0 747,334/333,666 $1,009,295/1,208,175
J.W. Boyden ............ 0 0 52,500/117,500 $ 300,915/676,116
D.W. Howard ............ 0 0 96,666/128,334 $ 719,094/675,556
D.J. Wetmore ........... 89,625 1,034,945 136,000/160,875 $ 227,565/1,021,537
S.A. Block ............. 114,375 1,414,382 170,000/133,125 $ 226,515/982,443
R.J.M. Edelman ......... 0 0 74,000/0 $ 329,690/0

EQUITY COMPENSATION PLANS

The following table provides information about the Company's Common Stock
that may be issued upon the exercise of options, warrants and rights under all
of the Company's equity compensation plans as of December 31, 2003.

[Enlarge/Download Table]

-----------------------------------------------------------------------------------------------------------------------
NUMBER OF SECURITIES
NUMBER OF SECURITIES TO WEIGHTED-AVERAGE REMAINING AVAILABLE FOR
BE ISSUED UPON EXERCISE EXERCISE PRICE OF FUTURE ISSUANCE UNDER
OF OUTSTANDING OPTIONS, OUTSTANDING OPTIONS, EQUITY COMPENSATION PLANS
PLAN CATEGORY WARRANTS AND RIGHTS WARRANTS AND RIGHTS (EXCLUDING SECURITIES
REFLECTED IN COLUMN (A))
(A) (B) (C)
-----------------------------------------------------------------------------------------------------------------------

Equity compensation plans 7,660,382(2) $ 33.07(3) 8,679,643(4)
approved by security
holders (1)
-----------------------------------------------------------------------------------------------------------------------
Equity compensation plans 2,794,170(6) $ 25.91(3) 4,253,662(7)
not approved by security
holders (5)\
-----------------------------------------------------------------------------------------------------------------------
Total 10,454,552 $ 31.18(3) 12,933,305

----------
(1) Represents the 2000 SAIP, the 2000 Stock Option Plan for Non-Employee
Directors, the 1997 Employee Stock Option Plan, the Employee Stock Option
Plan of 1992, the 1990 Stock Option Plan for Non-Employee Directors, the
Employee Stock Option Plan of 1988 and the Global Employee Stock Purchase
Plan ("GESPP"). Also includes the 1997 Employee Stock Option Plan for The
Netherlands, the Employee Stock Option Plan of 1992 for The Netherlands
and the Employee Stock Option Plan of 1988 for The Netherlands, each of
which forms a subpart of and as to which shares are issuable under the
1997 Employee Stock Option Plan, the Employee Stock Option Plan of 1992
and the Employee Stock Option Plan of 1988, respectively. The 2000 SAIP
provides for the award of stock options and other equity-based awards.

DEF 14A 20th Page of 43 TOC 1st Previous Next ↓Bottom Just 20th
(2) Excludes the Performance Incentive Award ("PIA") of 200,000 shares of
restricted Common Stock granted to Mr. Goldstein, Chairman and Chief
Executive Officer, on August 1, 2002. See "Employment Contracts and
Termination of Employment and Change-in-Control Arrangements" at page 20.
Excludes 4,448,341 shares remaining available for issuance under the
GESPP, which was approved by shareholders.

(3) Weighted average exercise price of outstanding options; excludes the PIA
granted to Mr. Goldstein, restricted stock units and shares credited to
accounts of participants in the DCP.

(4) Includes 4,448,341 shares available for future issuance under the GESPP.
Does not include 1,744,750 options outstanding as of December 31, 2003
under the 1997 Employee Stock Option Plan (including the 1997 Employee
Stock Option Plan for The Netherlands). Pursuant to approval of
shareholders at the Annual Meeting held on May 7, 2002, shares authorized
under the 1997 Employee Stock Option Plan, but not used thereunder for
any reason, are added to shares available for awards under the 2000 SAIP.
As a result, any outstanding options under the 1997 Employee Stock Option
Plan that are cancelled become available for grant under the 2000 SAIP.

(5) Represents the 2000 Supplemental Stock Award Plan (the "2000 Supplemental
Plan), the DCP and the pool of shares to be used for annual awards of
1,000 shares to each non-employee director.

(6) Includes 37,229 restricted stock units (including dividend equivalents
through December 31, 2003) granted under the 2000 Supplemental Plan.
Excludes shares of the Company's Common Stock credited to participant's
accounts as of December 31, 2003 and issuable under the DCP. Also
excludes deferred annual awards of 1,000 shares each made to non-employee
directors.

(7) Includes 3,996,256 shares remaining available for issuance under the DCP
and 67,750 shares remaining available for issuance from the pool of
shares to be used for annual awards of 1,000 shares to each non-employee
director.

2000 SUPPLEMENTAL STOCK AWARD PLAN AND DIRECTORS' ANNUAL STOCK AWARD POOL

On November 14, 2000 the Company's Board of Directors approved the 2000
Supplemental Plan. Under applicable NYSE rules the 2000 Supplemental Plan does
not require approval, and has not been approved by shareholders. The 2000
Supplemental Plan is a stock-based incentive plan designed to attract, retain,
motivate and reward employees and certain other persons who provide substantial
services to the Company, excluding all executive officers and directors of the
Company, to provide for equitable and competitive compensation opportunities,
to recognize individual contributions and reward achievement of Company goals
and to promote the creation of long-term value for shareholders. Under the 2000
Supplemental Plan, eligible participants may be granted nonqualified stock
options, stock appreciation rights, restricted stock, deferred stock, stock
granted as a bonus or in lieu of another award, dividend equivalents, other
stock based awards or conditional rights to receive stock or other awards
(performance awards) (collectively, "Awards") under terms and conditions that
are identical to those under the Company's shareholder-approved 2000 SAIP.
Unlike under the 2000 SAIP, however, no cash awards may be granted under the
2000 Supplemental Plan. In addition the Company's executive officers are not
eligible to receive awards under the 2000 Supplemental Plan. The total number
of shares of the Company's Common Stock reserved for Awards under the 2000
Supplemental Plan is 4,500,000 of which a total of 2,794,170 options and
unvested restricted stock units were outstanding as of December 31, 2003, and
189,656 remained available for grant as of that date. On February 6, 2004,
37,229 restricted stock units granted in November 2000 vested.

In September 2000, the Company's Board of Directors authorized and
reserved a pool of 100,000 shares of the Company's Common Stock to be used for
annual awards of 1,000 shares to each non-employee director of the Company on
October 1 each year. The shares may be issued out of authorized but unissued or
treasury shares. Under applicable NYSE rules this pool did not require
approval, and has not been approved by shareholders.

DEF 14A 21st Page of 43 TOC 1st Previous Next ↓Bottom Just 21st
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT AND
CHANGE-IN-CONTROL ARRANGEMENTS

In connection with Mr. Goldstein's appointment as Chairman and Chief
Executive Officer of the Company in 2000, the Company negotiated with Mr.
Goldstein, and the Board approved, a Memorandum of Understanding ("MOU") setting
forth the terms of Mr. Goldstein's employment by the Company. The principal
terms of the MOU are:

(a) Mr. Goldstein is employed by the Company as its Chairman and Chief
Executive Officer for a term of five years effective June 1, 2000.

(b) Mr. Goldstein's annual base salary will not be less than $900,000,
the level established by the Board.

(c) For 2000 Mr. Goldstein was guaranteed and received an annual
incentive compensation award of $540,000, 60% of his $900,000 base salary.
For years after 2000 Mr. Goldstein's annual incentive compensation is
subject to the attainment of certain annual corporate performance goals
approved by the Board under the 2000 SAIP. For 2001, 2002 and 2003 those
corporate performance goals were identical to the corporate performance
goals applicable to all other executive officers of the Company.

(d) For 2000 Mr. Goldstein was guaranteed and received a long-term
incentive compensation award of $720,000, 80% of his $900,000 base salary.
For periods after 2000 Mr. Goldstein's long-term incentive compensation is
subject to the attainment of certain corporate long-term performance goals
approved by the Board under the 2000 SAIP. For the 2001-2003, 2002-2004 and
2003-2005 cycles of the Long-Term Incentive Plan, those corporate
performance goals are identical to those applicable to all other executive
officers of the Company.

(e) On June 1, 2000 Mr. Goldstein was granted options to purchase
700,000 shares of the Company's Common Stock. Of these options, an option
for 500,000 shares was a "sign-on" grant; an option for 100,000 shares was
to compensate Mr. Goldstein for his forfeiture, upon his leaving Unilever
United States, Inc. ("Unilever US"), of unvested options to purchase stock
of Unilever plc; and an option for 100,000 shares was Mr. Goldstein's 2000
annual grant. The "sign-on" grant, made under the Company's 1997 Stock
Option Plan, was immediately exercisable and will remain exercisable for
the full option term irrespective of Mr. Goldstein's employment status, or
until death, if earlier, except that if Mr. Goldstein's employment is
terminated for cause prior to a "Change-in-Control" (see "Executive
Separation Policy" below at page 22), the unexercised portion of the option
will be immediately forfeited. The other grants were made under the 2000
SAIP, and are subject to the same terms and conditions as grants to other
employees under the 2000 SAIP. Mr. Goldstein is also entitled to, and has
received, annual option grants with a value, based on the Black-Scholes
model of option valuation, of not less than $590,000.

(f) Mr. Goldstein was entitled to receive from the Company $2,118,750
in respect of long term incentive payments that he forfeited by leaving
Unilever US ("Unilever LTIP"). Payments in respect of Unilever LTIP were to
be made at the same times, and in the same amounts, as they would have been
made to Mr. Goldstein had he remained an employee of Unilever US. An
installment of $706,250 was paid to Mr. Goldstein in each of March 2001,
March 2002 and March 2003.

(g) Mr. Goldstein participates in all of the Company's benefit plans
and programs applicable to all Company executive officers. In addition, the
Company is required to provide Mr. Goldstein with (i) those benefits that
he was receiving at Unilever US that are not provided under the Company's
plans and programs, and (ii) with respect to benefits provided by both
Unilever US and the Company but as to which the Company's benefits are less
generous than those Mr. Goldstein was receiving from Unilever US, the same
benefit level as he was receiving from Unilever US. Mr. Goldstein is not
receiving any additional benefits pursuant to this understanding.

(h) In no event will Mr. Goldstein receive aggregate pensions from the
Company and Unilever US that are less than the pension he would have
received had he continued to be employed by Unilever US for an additional
five-year period. If he retires from the Company after completing five

DEF 14A 22nd Page of 43 TOC 1st Previous Next ↓Bottom Just 22nd
years of service, his Company pension will be based on the period of his
service with the Company only. If he retires from the Company before
completing five years of service, his Company pension will be based on a
combination of his service with the Company and his service with Unilever
US totaling five years. After calculating the aggregate of his actual
Company pension and his actual pension from Unilever US, the Company will
supplement that total with an amount equal to the difference between what
his pension would have been had he continued to be employed by Unilever US
for the additional five-year period and such aggregate actual pensions.

(i) Mr. Goldstein participates in and is entitled to the benefits of
the Company's Executive Separation Policy (the "ESP"), described below at
page 22.

(j) Mr. Goldstein was reimbursed for incidental business-related and
other expenses up to $120,000 per year. In 2001 and 2002, housing and
personal expenses of $42,411 and $44,976, respectively, were reimbursed to
Mr. Goldstein. In 2003 the Compensation Committee recommended, and the
Board approved, that the $120,000 amount be reclassified as salary,
effective January 1, 2003, and that Mr. Goldstein would not be reimbursed
for any expenses other than expenses that would be reimbursed to Company
executive officers.

Effective August 1, 2002, the Board granted a Performance Incentive Award
(the "PIA") under the 2000 SAIP to Mr. Goldstein. The PIA has two objectives:
(a) to drive superior long term corporate performance on behalf of
shareholders; and (b) to retain and reward Mr. Goldstein for such performance
over the following five years. The PIA has the following terms and conditions:

(a) The PIA has three performance/vesting periods, commencing as of
August 1, 2002:

------------------------------------------------------------
PERIOD AWARD OPPORTUNITY
------------------------------------------------------------
3 years ending July 31, 2005 25% of grant
(50,000 shares)
------------------------------------------------------------
4 years ending July 31, 2006 25% of grant
(50,000 shares)
------------------------------------------------------------
5 years ending July 31, 2007 50% of grant
(100,000 shares)
------------------------------------------------------------

(b) To earn any award, Mr. Goldstein must continue to serve as the
Company's Chief Executive Officer through the end of such
performance/vesting period.

(c) During each performance period, Mr. Goldstein may earn the
following portions of each installment of the award based on the Company's
Total Shareholder Return ("TSR") during the performance periods as measured
against a selected group of 21 companies (the "Comparison Group"):

(i) 100% of the installment if the Company's TSR is above the
75th percentile of the Comparison Group; or

(ii) 50% of the installment if the Company's TSR is above the
50th percentile and up to the 75th percentile of the Comparison Group.

(d) Unless otherwise determined by the Compensation Committee, the
installment of the PIA for any performance period is to be forfeited if:

(i) the Company's TSR is at or below the 50th percentile of the
Comparison Group; and/or

(ii) the Company's TSR is negative, irrespective of the Company's
ranking within the Comparison Group.

(e) If all or a portion of an installment of the PIA for either of the
first two performance periods is not earned, up to the full PIA may still
be earned based on the Company's TSR for the full five-year PIA performance
award period.

(f) The Compensation Committee may adjust the composition of the
Comparison Group or other provisions of the PIA in the event of changes in
the business or performance of a Comparison

DEF 14A 23rd Page of 43 TOC 1st Previous Next ↓Bottom Just 23rd
Group company or the Company or in the event of other factors deemed
relevant by the Compensation Committee. The Compensation Committee has not
adjusted the composition of the Comparison Group or other provisions of the
PIA since the PIA was granted to Mr. Goldstein.

(g) Prior to vesting or forfeiture, Mr. Goldstein has voting rights
over and rights to receive dividends on all shares subject to the PIA.

As of March 31, 2003 Mr. Boyden and the Company entered into a contract
(the "Boyden Contract") in connection with Mr. Boyden's contemplated retirement
from the Company. The principal features of the Boyden Contract are:

(a) Mr. Boyden resigned as Executive Vice President of the Company
effective as of March 31, 2003, but will remain a full-time employee of the
Company through March 31, 2006, his retirement date. Until March 31, 2006,
he reports to the Company's Chief Executive Officer and performs such
services as the Chief Executive Officer may reasonably assign to him.

(b) Mr. Boyden continued to receive his base salary of $538,000 through
March 31, 2003. For the period April 1, 2003 through March 31, 2006, he is
being paid $36,722 per month, or an aggregate of $1,322,000, representing
his severance entitlement under the Company's Executive Separation Policy
("ESP") (paid over 36 months instead of the 24 months contemplated by the
ESP). During this period he also continues to be eligible to participate in
all benefit plans to the same extent as all exempt United States executive
employees of the Company and to receive all perquisites that he received as
an executive officer of the Company. In addition, pursuant to an amendment
to the Boyden Contract also dated as of March 31, 2003, Mr. Boyden was
requested by Mr. Goldstein to perform certain additional services for the
Company through December 31, 2003, not contemplated under clause (a) above,
for which Mr. Boyden received $1,000 for each day or portion of a day
during which he performed such additional services. Between April 1, 2003
and December 31, 2003, Mr. Boyden was paid an aggregate of $79,000 for such
additional services. This arrangement has been extended until March 31,
2004 under the same terms.

(c) Mr. Boyden is not eligible to participate in the Company's Annual
Incentive Plan ("AIP") for any year after 2002 or in any cycle of the
Company's Long-Term Incentive Plan ("LTIP") commencing after 2002. He
continued to participate in the three-year LTIP cycle that commenced in
2001 and continues to participate in the LTIP cycle that commenced in 2002.

(d) Mr. Boyden is not eligible to receive any stock-based awards
(whether stock options or restricted stock) in respect of any year after
2003. The exercisability, lapsing and forfeiture of his outstanding stock
options are governed by the terms of his various stock option agreements
and the stock award plans under which such options were granted.

(e) Mr. Boyden continues to accrue benefits and age and service credit
under the Company's Pension Plan and Supplemental Retirement Plan through
March 31, 2006.

As of March 31, 2003 Mr. Block and the Company entered into a contract
(the "Block Contract") in connection with Mr. Block's contemplated retirement
from the Company. The principal features of the Block Contract are:

(a) Mr. Block continued as Senior Vice President, General Counsel and
Secretary of the Company through December 31, 2003 and will remain a
full-time employee of the Company through December 31, 2006, his retirement
date. Until December 31, 2006, he reports to the Company's Chief Executive
Officer and performs such services as the Chief Executive Officer may
reasonably assign to him, including continued service as the Company's
representative on the boards of directors of various United States and
international industry trade associations.

(b) Mr. Block continued to receive his base salary of $420,000 per year
through December 31, 2003. For the period January 1, 2004 through December
31, 2006, he is being paid $35,000 per month, or an aggregate of
$1,260,000, of which $29,444 per month (a total of $1,060,000) represents
his severance entitlement under the ESP (paid over 36 months instead of the
24 months contemplated by the ESP), and the remaining $5,556 per month (a
total of $200,000) is additional compensation in respect of the services
that he is performing for the Company during that period. During this
period

DEF 14A 24th Page of 43 TOC 1st Previous Next ↓Bottom Just 24th
he also continues to be eligible to participate in all benefit plans to the
same extent as all exempt United States executive employees of the Company
and to receive all perquisites that he received as an executive officer of
the Company.

(c) Mr. Block is not eligible to participate in the AIP in respect of
any year after 2003 or in any cycle of the LTIP commencing after 2003. He
continues to participate in the three-year LTIP cycles commencing in 2002
and 2003.

(d) Mr. Block is not eligible to receive any stock-based awards
(whether stock options or restricted stock) in respect of any year after
2003. The exercisability, lapsing and forfeiture of his stock options
outstanding at the end of 2003 are governed by the terms of his various
stock option agreements and the stock award plans under which such options
were granted.

(e) Mr. Block continues to accrue benefits and age and service credit
under the Company's Pension Plan and Supplemental Retirement Plan through
December 31, 2006. For purposes of calculating his "final average
compensation" under these plans, his compensation is deemed to be $630,000
for each of 2004 and 2005 and $0 for 2006.

In November 2001 the Board initiated an "Eligible Executive Officer Share
Value Option Exercise Loan Program" (the "Option Exercise Loan Program"), which
permitted loans by the Company to certain executive officers who were not Board
members and who held share value options ("SVOs") granted on November 14, 2000
containing certain features requiring their exercise prior to the expiration of
the initial seven-year option exercise period. On November 13, 2001, the
Compensation Committee authorized a loan by the Company to Mr. Howard of
$986,563 (the "Howard Loan") to cover the option exercise price for the
exercise of his SVO, which expired on November 23, 2001. As security for the
loan, Mr. Howard pledged to the Company the 55,000 shares of the Company's
Common Stock acquired on exercise of the option and assigned to the Company all
rights to dividends on those shares. Mr. Howard repaid the Howard Loan in full
on September 9, 2003. In the three quarters of 2003 before the loan was repaid,
the interest rates were 3.3%, 3.2% and 3.2%, respectively. During the Company's
2003 fiscal year, the largest aggregate amount of the Howard Loan outstanding
was $988,897. There were no material modifications to or waivers of the terms
of the Howard Loan, which was made prior to the enactment of the Sarbanes-Oxley
Act of 2002. The Option Exercise Loan Program has been discontinued.

In June 1999, Nicolas Mirzayantz, currently Vice President, Global
Business Development, Fine Fragrances and Toiletries, who became an executive
officer of the Company in December 2002, received a full recourse job-related
loan in the amount of $300,000 (the "Mirzayantz Loan") to assist him in the
purchase of a residence in connection with his accepting an assignment in
France. The interest rate on the Mirzayantz Loan was 7.21% and the loan was to
be repaid in 20 quarterly installments of $18,000 commencing September 30, 1999
and continuing through June 30, 2004. Mr. Mirzayantz made 6 quarterly payments
aggregating $108,000, reducing the principal balance of the loan at January 1,
2001 to $220,962. As of January 1, 2001, Mr. Mirzayantz returned to the United
States to assume his current position and at that time, the Company suspended
payment of the quarterly installments. Mr. Mirzayantz repaid the loan in full
on January 29, 2004. During the Company's 2003 fiscal year, the largest
aggregate amount of the Mirzayantz Loan outstanding was $251,048. There were no
material modifications to or waivers of the terms of the Mirzayantz Loan, which
was made prior to the enactment of the Sarbanes-Oxley Act of 2002.

EXECUTIVE SEPARATION POLICY

On April 13, 2000, the Board approved the ESP, and authorized
participation in the ESP by the then executive officers of the Company. The ESP
covers separations from the Company, including within three years following a
"Change-in-Control," as defined below ("CIC"). All of the executive officers
named in the Summary Compensation Table (see "Summary Compensation Table" at
page 14), except Mr. Edelman, are or were covered by the ESP's "Tier I"
payments and benefits, described below; Mr. Edelman is covered by "Tier II"
payments and benefits, described below. Except with respect to benefits
specifically provided in retirement agreements executed with each of Mr. Boyden
and Mr. Block (see the descriptions of the Boyden Contract and the Block
Contract above at page 21), Mr. Boyden ceased to participate in the ESP as of
March 31, 2003 and Mr. Block ceased to participate in the ESP as of December
31, 2003.

Under the ESP, a participant whose employment with the Company is
terminated without cause at any time other than within the three years
following a CIC receives severance, calculated on a monthly

DEF 14A 25th Page of 43 TOC 1st Previous Next ↓Bottom Just 25th
basis, equal to the sum of (1) the covered executive's monthly base salary at
the date of termination and (2) 1/12th of the average of the participant's
three most recent annual incentive compensation awards, in each case payable as
"salary continuation" over a period of 24 months, in the case of a Tier I
participant, and 18 months, in the case of a Tier II participant. The executive
is also entitled to a pro rata bonus in respect of the year of termination and
continuation of medical, dental and insurance benefits for the 24-month or
18-month severance period. The executive receives no additional pension credit,
and stock options and other long-term awards are exercisable only in accordance
with their original terms.

A participant terminated without cause or electing to terminate his or her
employment with the Company for "good reason," as defined below, during the
three years following a CIC is entitled to the following:

(a) a lump sum payment equal to three times, in the case of a Tier I
participant, and two times, in the case of a Tier II participant, the
aggregate of (i) the participant's highest annual salary during the five
years immediately preceding separation and (ii) the higher of (A) the
participant's average annual incentive award for the most recent three
years or (B) his or her target annual incentive award for the year of
separation;

(b) a lump sum payment of long-term incentive awards for the long-term
incentive plan cycle(s) then in progress, with the amount of the award
payment based on the higher of target or actual performance (the award is
initially paid at target, and if actual performance at the end of the cycle
is higher, is supplemented by an amount equal to the difference between the
award associated with such performance and target);

(c) 100% vesting of outstanding options, with the remainder of the
option term to exercise them; provided that, if any stock option plan under
which any such option has been issued does not permit such option to become
vested and exercisable upon occurrence of a CIC and to remain outstanding
for the remainder of the option term, for each share of Common Stock of the
Company subject to any such option, whether or not such option is then
exercisable, in exchange for the cancellation of the option, the
participant receives a payment equal to the difference between the exercise
price of such option share and a price equal to the highest of (i) the
market price of Common Stock on the NYSE at the close of business on the
effective day of employment termination, (ii) the price of Common Stock
contained in any published tender offer made within one year before or one
year after the date of the CIC, (iii) the price of Common Stock contained
in any merger or acquisition agreement entered into by the Company and any
third party within one year before or one year after the date of the CIC,
or (iv) the closing market price of Common Stock on the NYSE on the date of
the CIC;

(d) 100% vesting of outstanding restricted stock and stock unit awards
and, unless waived or deferred by the participant, settlement of stock unit
awards as promptly as practicable following termination;

(e) credit for an additional three years, in the case of a Tier I
participant, and two years, in the case of a Tier II participant, of
service and age for pension calculation purposes; and

(f) continuation of medical and dental coverage for the lesser of three
years, in the case of a Tier I participant, and two years, in the case of a
Tier II participant, or until the participant obtains new employment
providing similar benefits.

If following a CIC a Tier I or Tier II participant in the ESP becomes
entitled to payments that are or would be subject to the tax imposed by Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code"), or any
similar tax that may be imposed (the "Excise Taxes"), the Company will pay to
that participant an additional amount (a "Gross-Up Payment") such that, after
the payment by the Employee of all taxes (including without limitation all
income and employment tax and Excise Tax and treating as a tax the lost tax
benefit resulting from the disallowance of any deduction of the Employee by
virtue of the inclusion of the Gross-Up Payment in the Employee's adjusted
gross income), and interest and penalties with respect to such taxes, imposed
on the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment
equal to the Excise Taxes imposed on the severance payments.

DEF 14A 26th Page of 43 TOC 1st Previous Next ↓Bottom Just 26th
Under the ESP (a) a CIC is deemed to have occurred if:

(i) any "person," as that term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act, acquires voting securities of the Company and
immediately thereafter is the "beneficial owner" (as defined in Rule 13d-3
under the Securities Exchange Act), directly or indirectly, of securities
of the Company representing 40% or more of the combined voting power of the
Company's then-outstanding voting securities;

(ii) individuals who on September 1, 2000 constituted the Board, and
any new director (other than a director whose initial assumption of office
is in connection with an actual or threatened election contest, including
but not limited to a consent solicitation relating to the election of
directors of the Company) whose election by the Board or nomination for
election by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors on September 1, 2000 or whose election or nomination for election
was previously so approved or recommended, cease for any reason to
constitute at least a majority of the Board;

(iii) immediately after a merger, consolidation, recapitalization, or
reorganization of the Company, either (A) individuals who immediately prior
to consummation of such an event constituted the Board do not constitute at
least a majority of the members of the board of directors of the Company or
the surviving or parent entity, as the case may be, or (B) the voting
securities of the Company outstanding immediately prior to such event do
not represent (either by remaining outstanding or by being converted into
voting securities of a surviving or parent entity) at least 60% or more of
the combined voting power of the outstanding voting securities of the
Company or such surviving or parent entity; or

(iv) the shareholders of the Company have approved a plan of complete
liquidation of the Company, or a transaction resulting in the sale or
disposition by the Company of all or substantially all of the Company's
assets (or any transaction having a similar effect) is consummated;

and (b) "good reason" means the occurrence of any of the following events,
unless the executive has consented in writing to such event:

(i) a reduction by the Company in the executive's base salary as in
effect immediately prior to the CIC;

(ii) (a) the failure by the Company to continue in effect any
compensation or employee benefit plan in which the executive was a
participant prior to the CIC, unless the plan (x) is replaced by a
successor plan providing to the executive substantially similar
compensation and benefits or (y) terminates as a result of the normal
expiration of the plan in accordance with its terms, as in effect
immediately prior to the CIC, or (b) the taking of any other action, or the
failure to act, by the Company which would materially adversely affect the
executive's continued participation in any such plan as compared to the
terms of such participation on the date of the CIC;

(iii) effecting a change in the position of the executive that does not
represent a position commensurate in level, authority and responsibilities
with or a promotion from the executive's position with the Company
immediately prior to the date of the CIC, or assigning to the executive
responsibilities that are materially inconsistent with such prior position;
or

(iv) the Company's requiring the executive to be based anywhere more
than 45 miles from the location of the executive's office immediately prior
to the CIC;

in each case after notice in writing from the executive to the Company and a
period of 30 days after such notice during which the Company fails to correct
such conduct.

PENSION PLANS

Of the executive officers named in the Summary Compensation Table, Messrs.
Goldstein, Boyden, Howard, Wetmore and Block 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

DEF 14A 27th Page of 43 TOC 1st Previous Next ↓Bottom Just 27th
benefits for members in the event of retirement on or after age 55 with 10
years of service. Unreduced benefits are payable after age 62. Benefits under
the Pension Plan are calculated with respect to a five-year average of
participating employees' covered compensation (base salary or wage plus 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 (the "Code")) that would have been
payable upon retirement at December 1, 2003 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, including the
executive officers named above in the Summary Compensation Table other than Mr.
Edelman. Messrs. Goldstein, Boyden, Howard, Wetmore and Block currently have 4,
3, 3, 12 and 11 years of service, respectively, under the Pension Plan. To the
extent that the amounts of annual retirement income exceed the maximum benefit
and compensation limitations, including limitations under Section 415 and
Section 401(a)(17) of the Code, such amounts are payable in the same form and
manner under the Company's unfunded Supplemental Retirement Plan ("SERP"). Mr.
Goldstein, in addition to being a participant in the Company's Pension Plan and
SERP, has a separate unfunded arrangement under the MOU providing for pension
benefits which are not presently calculable. See "Employment Contracts and
Termination of Employment and Change-in-Control Arrangements" at page 19. Mr.
Howard also has a separate unfunded arrangement, under which, once he has
completed five years of service with the Company, he will receive service
credit for an additional five years of service. Mr. Boyden and Mr. Block
continue to accrue benefits under the Company's Pension Plan and SERP pursuant
to the terms of the Boyden Contract and Block Contract, respectively. See
"Employment Contracts and Termination of Employment and Change-in-Control
Arrangements" at page 21. Mr. Edelman, who is not a United States citizen, is a
participant in the pension plan of the Company's Netherlands subsidiary, and
has 11 years of service under that plan. Amounts that would be payable to Mr.
Edelman are not materially different than those set forth in the table below.

[Enlarge/Download Table]

ESTIMATED ANNUAL PENSION FOR SPECIFIED YEARS OF SERVICE
AVERAGE --------------------------------------------------------------------------------------------------------------
COMPENSATION 5 10 15 20 25 30 35 40
------------- ---------- ---------- ----------- ----------- ----------- ------------ ------------ ------------

$ 400,000 $ 34,544 $ 69,088 $103,632 $138,176 $169,875 $ 190,195 $ 210,515 $ 230,835
500,000 43,180 86,360 129,540 172,720 212,344 237,744 263,144 288,544
600,000 51,816 103,632 155,448 207,264 254,813 285,293 315,773 346,253
700,000 60,452 120,904 181,356 241,808 297,282 332,842 368,402 403,962
800,000 69,088 138,176 207,264 276,352 339,750 380,390 421,030 461,670
900,000 77,724 155,448 233,172 310,896 382,219 427,939 473,659 519,379
1,000,000 86,360 172,720 259,080 345,440 424,688 475,488 526,288 577,088
1,100,000 94,996 189,992 284,988 379,984 467,157 523,037 578,917 634,797
1,200,000 103,632 207,264 310,896 414,528 509,626 570,586 631,546 692,506
1,300,000 112,268 224,536 336,804 449,072 552,094 618,134 684,174 750,214
1,400,000 120,904 241,808 362,712 483,616 594,563 665,683 736,803 807,923
1,500,000 129,540 259,080 388,620 518,160 637,032 713,232 789,432 865,632
1,600,000 138,176 276,352 414,528 552,704 679,501 760,781 842,061 923,341
1,700,000 146,812 293,624 440,436 587,248 721,970 808,330 894,690 981,050
1,800,000 155,448 310,896 466,344 621,792 764,438 855,878 947,318 1,038,758
1,900,000 164,084 328,168 492,252 656,336 806,907 903,427 999,947 1,096,467
2,000,000 172,720 345,440 518,160 690,880 849,376 950,976 1,052,576 1,154,176
2,100,000 181,356 362,712 544,068 725,424 891,845 998,525 1,105,205 1,211,885
2,200,000 189,992 379,984 569,976 759,968 934,314 1,046,074 1,157,834 1,269,594
2,300,000 198,628 397,256 595,884 794,512 976,782 1,093,622 1,210,462 1,327,302

Following the acquisition by the Company of Bush Boake Allen Inc. ("BBA")
in November 2000, the Pension Plan for Eligible Employees of Bush Boake Allen
Inc. was merged with the Company's Pension Plan as of December 31, 2000.
Benefit accruals under the BBA Pension Plan were frozen as of that date.
Benefit service for former BBA employees under the Company's Pension Plan
starts as of December 1, 2000. Former BBA employees will receive a frozen
accrued benefit under the BBA Pension Plan plus a benefit under the Company's
Pension Plan for service after December 1, 2000. In addition to the benefit
determined under the table above for service after December 1, 2000, Mr.
Boyden, formerly an employee

DEF 14A 28th Page of 43 TOC 1st Previous Next ↓Bottom Just 28th
of BBA, is entitled, as of December 31, 2003, to an annual benefit of $13,568
based on his service in the United States with BBA and an annual benefit of
(pounds sterling)84,384 based on his service in the United Kingdom with BBA.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION AND OTHER RELATED
PARTY MATTERS

The members of the Compensation Committee during 2003 were Messrs.
Georgescu, Martinez, Van Dyke, and Mr. Henry P. van Ameringen. Mr. van
Ameringen served on the committee until his retirement from the Board on May
14, 2003. Mr. Van Dyke served on the committee until January 2004. 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 which amounted
to $388,073 in 2003. Mr. van Ameringen was a former officer (until 1979) of the
Company.

Dr. Blobel is a cofounder of Chromocell Corporation ("Chromocell").
Chromocell pays Dr. Blobel a nominal advisory fee of $2,000 per year for
scientific advice to Chromocell with respect to its research efforts and
programs. Dr. Blobel does not receive any other compensation from Chromocell
(other than reimbursement of expenses). In addition, Dr. Blobel has received
equity as a founder of Chromocell and has a 3.9% equity interest in Chromocell.

The Company and Chromocell have entered into a Research Agreement under
which Chromocell has engaged in a program to develop for the Company cell lines
to assist the Company in creating new flavor and fragrance ingredients. In 2003
the Company paid Chromocell $590,000 to fund the research program and acquire
certain rights to the cell lines. In addition, the Company has also retained
the right to provide equity capital or debt financing to Chromocell at such
times as Chromocell may determine to increase its equity or debt. The terms of
any such equity investment or debt financing will be negotiated in good faith
at arms-length between the Company and Chromocell. The Company is currently
finalizing an additional research agreement pursuant to which the Company will
pay Chromocell $1,119,000 to continue the initial research program and $565,000
to fund a new research program to develop additional cell lines. The Company is
also considering an equity capital and/or debt financing arrangement with
Chromocell.

DEF 14A 29th Page of 43 TOC 1st Previous Next ↓Bottom Just 29th
REPORT OF THE AUDIT COMMITTEE*

The Audit Committee of the Board assists the Board in fulfilling its
oversight of:

o the Company's financial reporting process and the integrity of the
Company's financial statements and related financial information;

o the Company's internal control environment, systems and performance;

o the qualifications and independence of the Company's independent
accountant;

o the performance of the Company's independent accountant and internal
auditors; and

o the Company's compliance with laws and regulations and with the
Company's Code of Business Conduct and Ethics.

In carrying out these responsibilities, the Audit Committee, among other
things:

o oversees the preparation of annual and quarterly financial statements
by the Company's management and reviews with management and the
independent accountant, prior to issuance, the information to be
released and the Company's Annual Reports on Form 10-K and Quarterly
Reports on Form 10-Q;

o oversees the work of the independent accountant, including appointment,
reviewing the scope of audit services, approving all audit and
non-audit services and fees to be paid, evaluating performance, and
confirming independence; and

o oversees management's implementation and maintenance of effective
systems of internal and disclosure controls, including review of the
Company's processes with respect to the certifications required by
Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 (the "SOA"), the
Company's internal auditing plans and programs and the Company's
policies relating to legal and regulatory compliance.

The Committee operates under a written Charter, reviews that Charter
annually and recommends Charter changes, as appropriate, to the Board. The
Charter was most recently revised on January 27, 2004 and a copy of the
Committee's revised Charter is attached to this proxy statement as Exhibit A.
Pursuant to the Committee's Charter, the Committee reviews annually the
Committee's own performance. In addition, the Committee has established,
together with members of the Company's management, a hiring policy for
employees or former employees of the Company's independent accountant,
consistent with the requirements of the Securities and Exchange Commission
("SEC") and/or the New York Stock Exchange ("NYSE").

The Audit Committee reviews with the Company's independent accountant the
results of its audits and reviews, its evaluation of the Company's internal
controls, and the overall quality of the Company's financial reporting. The
Company's independent accountant periodically updates the Audit Committee about
new accounting developments and their potential impact on the Company's
reporting. The Audit Committee meets regularly with the Company's independent
accountant without Company management present.

The Audit Committee also meets regularly with Company management without
the Company's independent accountant present, to discuss management's
evaluations of the performance of the independent accountant. In addition, the
Audit Committee meets regularly with the Company's Director of Internal Audit
without either the Company's independent accountant or management present, to
discuss the Company's internal audit process and the results of ongoing or
recently completed internal audits.

----------
* This report of the Audit 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 or the Securities
Exchange Act, except to the extent that the Company specifically
incorporates this information by reference, and shall not otherwise be
deemed filed under either of such Acts.

DEF 14A 30th Page of 43 TOC 1st Previous Next ↓Bottom Just 30th
With respect to the Company's 2003 fiscal year, the Audit Committee:

o appointed PricewaterhouseCoopers LLP ("PwC") as the Company's
independent accountant for the year ended December 31, 2003;

o reviewed and discussed the Company's audited financial statements with
management and PwC;

o discussed with PwC the scope of PwC's services, including its plans for
audits and reviews and the identification of audit risks;

o adopted procedures under which the Audit Committee reviews and
pre-approves all audit and non-audit services performed by PwC;

o approved the audit and non-audit services provided during 2003 by PwC;

o reviewed with PwC the quality of the Company's financial reporting and
such other matters as are required to be discussed with the Audit
Committee under generally accepted auditing standards, including those
described in Statement of Auditing Standards No. 61 (Communication with
Audit Committees);

o reviewed with PwC the effectiveness of the Company's disclosure and
control processes designed to ensure accurate and fair financial
reporting, including those relating to the certifications, by the
Company's Chief Executive Officer and Chief Financial Officer, that are
required in periodic reports filed by the Company with the SEC;

o discussed with the Board, management and PwC the requirements of the
SOA, SEC regulations, and the corporate governance standards of the
NYSE as they impact the Audit Committee, the financial reporting
process and internal controls procedures; and

o received from PwC written disclosures and the letter regarding its
independence as required by Independence Standards Board Standard No. 1
(Independence Discussions with Audit Committees), describing all
relationships between PwC and the Company that might bear on PwC's
independence from management and the Company, and discussed this
information with PwC; thereafter the Committee concluded that the
independence of PwC was not compromised by the provision of non-audit
services.

Management is responsible for the preparation, presentation and integrity
of the Company's financial statements, accounting and financial reporting
principles, internal controls and procedures designed to ensure compliance with
accounting standards, applicable laws and regulations. The Company's
independent accountant, PwC, annually performs an independent audit of the
financial statements and expresses an opinion on the conformity of those
financial statements with generally accepted accounting principles.

In reliance on the reviews and discussions referred to above, the Audit
Committee recommended to the Board of Directors that the audited financial
statements be included in the Annual Report on Form 10-K for the Year Ended
December 31, 2003 for filing with the SEC. The Audit Committee also evaluated
and selected PwC as the Company's independent accountant for the Company's 2004
fiscal year, subject to shareholder ratification.

AUDIT COMMITTEE

J. Michael Cook
Chairman

Margaret Hayes Adame
Arthur C. Martinez

DEF 14A 31st Page of 43 TOC 1st Previous Next ↓Bottom Just 31st
PERFORMANCE GRAPH*

INTERNATIONAL FLAVORS & FRAGRANCES INC.

Total Cumulative Shareholder Return for Five-Year
Period Ending December 31, 2003(1)

[GRAPHIC OMITTED]

[Download Table]

December 31 1998 1999 2000 2001 2002 2003
---------------------------------- ------ ------ ------ ----- ----- ------
International Flavors & Fragrances 100.00 88.54 50.18 74.95 89.97 91.03
S&P 500 100.00 121.04 110.02 96.96 75.54 97.19
Peer Group (2) 100.00 93.41 95.31 88.92 86.22 100.92

----------
(1) Total Cumulative Shareholder Return assumes that the value of an
investment in the Company's Common Stock and each index was $100 on
December 31, 1998, and that all dividends were reinvested.

(2) The companies in the Peer Group are Alberto-Culver Company, Avon
Products, Inc., Campbell Soup Company, Church & Dwight Co., Inc., The
Clorox Company, The Coca-Cola Company, Colgate-Palmolive Company, ConAgra
Foods, Inc., The Dial Corporation, The Estee Lauder Companies Inc.,
General Mills, Inc., The Gillette Company, H.J. Heinz Company, Hershey
Foods Corporation, Hormel Foods Corporation, Kellogg Company, McCormick &
Company, Incorporated, McDonald's Corporation, Nestle S.A., PepsiCo,
Inc., The Procter & Gamble Company, Revlon, Inc., Sara Lee Corporation,
Sensient Technologies Corp., Yum! Brands, Inc., Unilever N.V. and Wm.
Wrigley Jr. Company.

----------
* This 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 Securities Act
or the Securities Exchange Act, except to the extent that the Company
specifically incorporates this information by reference, and shall not
otherwise be deemed filed under either of such Acts.

DEF 14A 32nd Page of 43 TOC 1st Previous Next ↓Bottom Just 32nd
ITEM 2. RATIFICATION OF SELECTION OF INDEPENDENT ACCOUNTANT

The Audit Committee has selected PricewaterhouseCoopers LLP to be the
Company's independent accountant for the Company's 2004 fiscal year and has
further directed that management submit the selection of independent accountant
for ratification by the Company's shareholders at the 2004 Annual Meeting.
Representatives of PricewaterhouseCoopers LLP are expected to be present at the
2004 Annual 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.

Shareholder ratification of the selection of PricewaterhouseCoopers LLP as
the Company's independent accountant is not required by the Company's By-laws
or otherwise. However, the Board is submitting the selection of
PricewaterhouseCoopers LLP to shareholders for ratification as a matter of good
corporate practice. If shareholders fail to ratify the selection, the Audit
Committee will reconsider whether or not to retain that firm. Except as stated
below (See "Other Matters" at page 34), the shares of Common Stock represented
by the proxies being solicited will be voted FOR the ratification of the
selection of PricewaterhouseCoopers LLP as the Company's independent accountant
for the Company's 2004 fiscal year.

PRINCIPAL ACCOUNTANT FEES AND SERVICES

Aggregate fees for professional services rendered for the Company by
PricewaterhouseCoopers LLP as of or for the years ended December 31, 2003 and
2002 were:

[Download Table]

2003 2002
-------------- --------------

Audit Fees $ 3,049,400 $ 2,288,700
Audit-Related Fees 774,300 733,300
Tax Fees 2,171,500 4,862,900
All Other Fees 33,500 1,828,000
----------- -----------
Total $ 6,028,700 $ 9,712,900
=========== ===========

The Audit fees for the years ended December 31, 2003 and 2002,
respectively, were for professional services rendered for the audits of the
consolidated financial statements of the Company and statutory and subsidiary
audits, consents, income tax provision procedures and assistance with review of
documents filed with the SEC.

The Audit-Related fees as of the years ended December 31, 2003 and 2002,
respectively, were for assurance and related services with respect to employee
benefit plan audits, accounting consultations and audits in connection with
specific transactions, internal control reviews, attest services that are not
required by statute or regulation and consultations concerning financial
accounting and reporting standards.

Tax fees as of the years ended December 31, 2003 and 2002, respectively,
were for services related to tax compliance, including the preparation of tax
returns and claims for refund; and tax planning and tax advice, including
assistance with and representation in tax audits and appeals, tax services for
employee benefit plans and expatriate tax compliance services.

All Other fees as of the years ended December 31, 2003 and 2002,
respectively, were for services rendered for: other accounting and auditing
services for government filings and other non-financial statement audits,
software license fees and other professional services. The year ended December
31, 2002 included $1,735,200 in fees for financial information systems
implementation and design services which fees were incurred through October 2,
2002 when the consulting services group of PricewaterhouseCoopers LLP was sold
to IBM Corporation.

AUDIT COMMITTEE PRE-APPROVAL POLICIES AND PROCEDURES

The Audit Committee has adopted a formal policy concerning the
pre-approval of audit and non-audit services to be provided by the independent
accountant to the Company. The policy requires that all services to be
performed by PricewaterhouseCoopers LLP, the Company's independent

DEF 14A 33rd Page of 43 TOC 1st Previous Next ↓Bottom Just 33rd
accountant, including audit services, audit-related services and permitted
non-audit services, be pre-approved by the Audit Committee. Specific services
being provided by the independent accountant are regularly reviewed in
accordance with the pre-approval policy. At subsequent Audit Committee
meetings, the Committee receives updates on services being provided by the
independent accountant, and management may present additional services for
approval. All services rendered by PricewaterhouseCoopers LLP to the Company
are permissible under applicable laws and regulations. Since the May 6, 2003
effective date of the new SEC rule applicable to services being provided by the
independent accountant, each new engagement of PricewaterhouseCoopers LLP was
approved in advance by the Audit Committee.

ITEM 3. SHAREHOLDER PROPOSAL RELATING TO AUDITOR INDEPENDENCE

The Company has received a shareholder proposal from International
Brotherhood of Electrical Workers' Pension Benefit Fund (the "IBEW Fund"), 1125
Fifteenth St. N.W., Washington, DC 20005. The IBEW Fund has requested that the
Company include the following proposal and supporting statement in the
Company's proxy statement for the 2004 Annual Meeting, and if properly
presented, this proposal will be voted on at the 2004 Annual Meeting. The IBEW
Fund beneficially owns 3,282 shares of Company Common Stock. The shareholder
proposal and supporting statement are quoted verbatim in italics below.

The Board disagrees with the adoption of the resolution proposed below and
asks shareholders to read through the Board's response, which follows the
shareholder proposal.

THE BOARD RECOMMENDS A VOTE AGAINST THE FOLLOWING PROPOSAL.

Proponent's Proposal:

Auditor Independence Proposal

Resolved, that the shareholders of International Flavors Corporation
("Company") request that the Board of Directors and its Audit Committee
adopt a policy stating that the public accounting firm retained by our
Company to audit the Company's financial statements will perform only
"audit" and "audit-related" work for the Company and not perform services
generating "tax fees" and "all other fees" as categorized under U.S.
Securities and Exchange Commission ("SEC") regulations.

Supporting Statement: The issue of auditor independence has been a major
concern for investors and the markets since the demise of Enron. In
response to numerous incidences of accounting fraud that shook the
foundations of the corporate financial auditing and reporting system, both
Congress and the SEC have responded with important reforms. However, we
believe that more needs to be done to limit the potential impairment of
auditor independence.

The Sarbanes-Oxley Act ("Sarbanes-Oxley") was a strong effort to deal with
various aspects of the auditor independence issue. Sarbanes-Oxley enhanced
the role of board audit committees in retaining and monitoring audit firms,
while limiting the types of non-audit services that audit firms are
permitted to perform for audit clients. The SEC followed-up with enhanced
reporting requirements (Release No. 33-8183, May 6, 2003) that provide
investors better insight into the range of services beyond audit services
for which an audit firm is being utilized. The following categories of
service fees must be reported: (1) Audit Fees; (2) Audit-Related Fees; (3)
Tax Fees, and (4) All Other Fees.

We believe important steps have been taken to protect auditor independence,
but we also believe more needs to be done. The Congress and the SEC have
acted. Now we think it is important that shareholders use the enhanced
disclosure to protect the integrity of the financial reporting system.

Fee disclosures indicate that our Company paid the firm retained to audit
the Company's financial statements more for non-audit services than for the
audit work. Specifically, our Company paid more in combined fees for
"audit-related," "tax" and "all other" work performed by the audit firm
than it did for the "audit" work performed by the firm. We believe this
imbalance is unhealthy and a potential threat to auditor independence at
our Company. Further, when this imbalance occurs we believe it is time for
the Board's Audit Committee to adopt a policy that addresses the issue.

DEF 14A 34th Page of 43 TOC 1st Previous Next ↓Bottom Just 34th
Our resolution presents a straightforward and effective response: The Board
and the Audit Committee should adopt a policy that limits the public
accounting firm retained to audit the Company's financial statements to
performing only "audit" and "audit-related" work. We believe that limiting
the audit to providing only audit and audit-related services would be
another positive step in protecting auditor independence.

We urge your support for this reasonable measure to advance auditor
independence.

BOARD OF DIRECTORS' STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL

The Board of Directors takes the integrity of the audit process seriously.
Over the past two years, Congress, the SEC and the NYSE have established
important new corporate governance standards strengthening the requirements of
auditor independence. The Board believes that the Company's outside auditors are
and have been independent. The Board also believes that the new laws, rules and
listing standards will further enhance this process. The Board recommends a vote
AGAINST the adoption of this proposal because the Board believes that it would
impair the Company's flexibility and create additional expense for the Company.

The SEC's rules contain principles that guide the determination of auditor
independence. The Company respects and endorses these principles. Sarbanes-Oxley
strengthens the application of these principles by, among other things,
specifically targeting non-audit services provided by an independent accountant.
Sarbanes-Oxley prohibits the provision of certain non-audit services to an audit
client where those services present a high degree of risk of conflicts of
interest. The Company's Audit Committee has adopted specific policies consistent
with these rules in order to avoid such conflicts of interest.

Sarbanes-Oxley further requires that an Audit Committee, comprised only of
independent directors, pre-approve all audit and permitted non-audit services
provided by the Company's independent accountant. The rules recently adopted by
the SEC require the Company to disclose for the two most recent years, fees paid
to the independent accountant for: (1) audit services, (2) audit-related
services, (3) tax services and (4) other services. The Company must also
describe, in qualitative terms, the types of non-audit services provided under
the other three categories. The disclosures must include the Audit Committee's
policies and procedures for pre-approval of services to be rendered by the
independent accountant. This process, overseen by the Company's independent
Audit Committee, preserves the Company's commitment to the independence of its
accountants.

The Board believes that the laws, rules and regulations, as well as the
Company's independent Audit Committee's oversight procedures, sufficiently
protect the integrity of the auditing process and assure the independence of the
Company's independent accountant. Prohibiting the independent accountant from
providing certain permitted non-audit services may result in inefficiencies and
increased costs to the Company. Moreover, the SEC has greatly restricted the
types of non-audit services that may permissibly be provided by independent
accountants.

In 2003, the Company's independent accountants provided no significant
non-audit services to the Company other than tax services, and the Company
currently anticipates that tax services will represent the only significant
non-audit services to be provided to the Company by its independent accountants
in 2004.

The Board believes that certain tax services are more efficiently conducted
by the Company's independent accountants. In fact, Sarbanes-Oxley specifically
permits an independent accountant to perform certain tax services for an audit
client, and only such permitted tax services will be performed by the
independent accountants for the Company. Such services must still be
pre-approved by the Company's independent Audit Committee and disclosed in
public filings.

The Company's current practices provide investors with assurance that the
Company's independent accountant will remain independent from the Company.
Prohibiting the Company's Audit Committee, comprised solely of independent
directors, from exercising its judgment and engaging independent accountants to
perform certain permitted non-audit services is unnecessary to achieve the
Proposal's stated goal of protecting auditor independence.

As such, the Board recommends a vote AGAINST the adoption of this proposal
because the Board believes that it would impair the Company's flexibility and
create additional expense for the Company.

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SHAREHOLDER PROPOSALS

Any shareholder proposal intended to be presented at the next annual
meeting of shareholders must be received by the Secretary of the Company for
inclusion in the Company's proxy statement, notice of meeting and form of proxy
with respect to that meeting by November 26, 2004. Section 3 of the By-laws of
the Company provides that in order for a shareholder to transact business or
nominate any director at an annual meeting of shareholders, the shareholder
must satisfy the provisions of the By-laws, including giving written notice to
the Secretary of the Company not less than 60 days nor more than 90 days prior
to the anniversary date of the immediately preceding annual meeting of
shareholders. The notice must contain specified information about the proposed
business or candidate and the shareholder making the proposal. If the annual
meeting is called for a date that is not within 30 days before or after such
anniversary date, the notice given by the shareholder must be received not
later than the close of business on the tenth day following the day on which
the notice of the date of such annual meeting was mailed or public disclosure
of the date of such annual meeting was made, whichever first occurs.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act requires the Company's
executive officers and directors to file reports regarding beneficial ownership
of the Company's Common Stock with the SEC, and to furnish the Company with
copies of all such filings. Based on a review of these filings, the Company
believes all such filings were timely made.

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OTHER MATTERS

As of the date of this proxy statement the Board is not aware that any
matters other than those specified above are to be presented for action at the
2004 Annual 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. In accordance with the Board's recommendations, executed proxies
returned by shareholders will be voted, if no contrary instruction is
indicated, FOR the election of the 8 nominees described herein, FOR the
ratification of the selection of PricewaterhouseCoopers LLP as the Company's
independent accountant for the Company's 2004 fiscal year and AGAINST the
shareholder proposal described herein.

A quorum at the 2004 Annual Meeting is established if the holders of a
majority of the votes that shareholders are entitled to cast are present at the
meeting, either in person or by proxy. Broker non-votes and abstentions are
counted for purposes of determining a quorum, but are not counted for purposes
of determining the approval of the proposals to be acted upon. 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. The 8
nominees for director receiving a plurality of the votes cast at the meeting in
person or by proxy will be elected as directors. A majority of the votes cast
is required to ratify the appointment of independent accountant and to
recommend that the Board consider adoption of a shareholder proposal. Under New
York law, abstentions and broker non-votes, if any, will not be counted as
votes cast. Therefore, they will have no effect on the outcome of the matters
to be voted on at the meeting.

A broker non-vote occurs when a brokerage firm or other nominee holding
shares for a beneficial owner does not vote on a particular proposal because the
nominee does not have authority to vote on that particular proposal without
receiving voting instructions from the beneficial owner. Under the NYSE rules,
certain proposals, such as the election of directors and the ratification of the
selection of independent accountants, are considered "routine" matters and
brokers generally may vote on behalf of beneficial owners who have not furnished
voting instructions, subject to the rules of the NYSE concerning transmission of
proxy materials to beneficial owners, and subject to any proxy voting policies
and procedures of such brokerage firms. For "non-routine" proposals, such as
proposals on equity compensation plans, brokers may not vote on the proposals
unless they have received voting instructions from the beneficial owner, and
these are called "broker non-votes". An "abstention" is a properly signed proxy
card which is marked abstain. If a person is a participant in the Company's
Retirement Investment Fund (401(k)) plan or employee stock purchase plan and has
Common Stock in a plan account, the proxy also serves as voting instructions for
the plan trustee.

THE COMPANY WILL ON A REQUEST IN WRITING PROVIDE WITHOUT CHARGE TO EACH
PERSON FROM WHOM PROXIES ARE BEING SOLICITED FOR THE COMPANY'S 2004 ANNUAL
MEETING A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED
DECEMBER 31, 2003, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO,
REQUIRED TO BE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. A REQUEST FOR
THE COMPANY'S ANNUAL REPORT ON FORM 10-K SHOULD BE MADE TO SECRETARY,
INTERNATIONAL FLAVORS & FRAGRANCES INC., 521 WEST 57TH STREET, NEW YORK, N.Y.
10019. THE COMPANY'S ANNUAL REPORT ON FORM 10-K IS ALSO AVAILABLE FREE OF CHARGE
THROUGH THE COMPANY'S WEBSITE, WWW.IFF.COM.

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,

Dennis M. Meany
Senior Vice President, General Counsel
and Secretary
March 18, 2004

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EXHIBIT A

INTERNATIONAL FLAVORS & FRAGRANCES INC.
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
(AS ADOPTED JANUARY 27, 2004)

I. PURPOSE. The Audit Committee (the "Committee") of the Board of
Directors (the "Board") of International Flavors & Fragrances Inc.
(the "Corporation") assists the Board in fulfilling its oversight
responsibilities. The Audit Committee oversees and reviews the
financial reporting process and the integrity of the Corporation's
financial statements and related financial information, the
Corporation's internal control environment, systems and performance,
the audit process of the independent accountant and the internal
auditor, the qualifications, independence and performance of the
independent accountant and the internal auditor, and the procedures
for monitoring compliance with laws and regulations and with the
Corporation's Code of Business Conduct and Ethics (the "Code"). In
performing its duties, the Committee maintains effective working
relationships with the Board, management and the Corporation's
independent accountant and internal auditors.

The Committee serves in an oversight capacity and is not part of the
Corporation's operational or managerial decision-making process. The
Corporation's management is responsible for preparing the
Corporation's financial statements and the independent accountant is
responsible for auditing the financial statements. Additionally, the
Committee recognizes that the Corporation's financial management,
including the internal auditors, and the independent accountant have
more time, knowledge and detailed information concerning the
Corporation than Committee members. As a result, in carrying out its
oversight responsibilities, the Committee is not providing any expert
or special assurance as to the Corporation's financial statements or
any certification as to the work of the independent accountant.

II. MEMBERSHIP. The Committee is comprised of at least three members,
including a Chairperson, all of whom are selected by, and who serve at
the pleasure of, the Board. All members of the Committee must be
"independent directors," meaning directors who are independent of
management of the Corporation, who are free from any relationship
that, in the opinion of the Board, would interfere with the exercise
of independent judgment as Committee members, and who otherwise
satisfy the "independence" requirements of the United States
Securities and Exchange Commission ("SEC") and the New York Stock
Exchange ("NYSE"), or any other exchange on which shares of the common
stock of the Corporation are listed. No member of the Audit Committee
is permitted to receive any consulting, advisory or other compensation
payments directly or indirectly from the Corporation, other than the
compensation received for service as a director and as a member of any
committee of the Board. All members of the Committee must be
financially literate (as determined by the Board in its business
judgment) or must become financially literate within a reasonable
period of time after appointment to the Committee. At least one member
of the Committee must have in the Board's judgment such accounting or
related financial management expertise as to satisfy NYSE requirements
and qualify as an "audit committee financial expert" in accordance
with applicable SEC rules. In addition, no person may be a member of
the Committee if his or her service on the Committee would violate any
restriction on service imposed by any SEC or NYSE rule or standard.

Additionally, if a Committee member simultaneously serves on the audit
committee of more than three public companies, then the Board shall
determine whether or not such simultaneous service would impair the
ability of such member to effectively serve on the Committee, and the
Corporation will disclose such determination in the annual proxy
statement.

III. MEETINGS. The Committee meets approximately seven times each year and
more frequently as circumstances warrant. The Committee may ask
members of management, the Corporation's independent accountant and/or
internal auditors, or others whose advice and counsel are relevant to
the issues then being considered by the Committee, to attend any
meetings and to provide such pertinent information as the Committee
may request, in either open or executive session. The Committee keeps
written minutes of its meetings. The Committee may, when appropriate,
delegate authority to one or more of its members or to one or more
subcommittees of its members.

A-1

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IV. COMMITTEE RESPONSIBILITIES. The Committee has the following
responsibilities:

o INDEPENDENT ACCOUNTANT

a. To appoint on behalf of the Corporation the independent
accountant to conduct audits and reviews of the financial
statements of the Corporation and to assure that the
independent accountant is ultimately accountable and reports
directly to the Committee; to oversee the services of the
independent accountant; to establish the terms of the
retention of the independent accountant, including all fees
and other payments to the independent accountant, all of
which shall be funded by the Corporation; to resolve any
disagreements between management and the independent
accountant concerning financial reporting; to establish
policies and procedures for the pre-approval by the
Committee of all audit and non-audit services to be provided
by the independent accountant, consistent with rules of the
SEC and NYSE, and designed to assure the continued
independence of the independent accountant; to evaluate the
qualifications, performance and independence of the
independent accountant, including a review and evaluation of
the lead partner, and to consider, in order to assure
continuing independence, rotation of the independent
accountant and lead partner; to present annually to the
Board the Committee's conclusions concerning the
independence of the independent accountant; and, where
appropriate, to discharge the independent accountant.

b. To review the scope and plans for the independent
accountant's annual audit and quarterly reviews.

c. To require the independent accountant to submit to the
Committee at least annually a formal written statement
delineating all relationships between the independent
accountant and the Corporation, including but not limited to
non-audit services provided by the independent accountant
and related fees; to discuss with the independent accountant
all such relationships and, based on such written statement
and discussions, to review and assess the independence of
the independent accountant in accordance with the
requirements of the SEC and the NYSE; and, where
appropriate, take action in response to the independent
accountant's statement to enable the Committee to satisfy
itself of the independent accountant's independence.

d. To obtain from the independent accountant at least annually,
and review, (a) a report by the independent accountant
describing the independent accountant's internal
quality-control procedures and any material issues raised by
the most recent internal quality-control review, or peer
review, of the independent accountant, or by an inquiry or
investigation by governmental or professional authorities,
within the preceding five years, respecting one or more
independent audits carried out by the independent
accountant, and any steps taken to deal with any such
issues; and (b) other required reports from the independent
accountant.

o INTERNAL AUDIT

a. To review and concur in the appointment or replacement and
oversee the evaluation and compensation of the Corporation's
Director of Internal Audit in order to ensure the
independence of the internal audit function.

b. To consider at least annually, in consultation with the
independent accountant, the Director of Internal Audit, and
financial management of the Corporation, the audit scope,
plan, staffing and budget of the internal auditors.

c. To review at least annually the internal audit program and
projects to be undertaken by the Director of Internal Audit
and to receive and review periodic reports of the results of
and follow-ups to internal audits.

d. To review with the independent accountant, the Director of
Internal Audit, and financial management, the adequacy and
effectiveness of the systems of internal controls (including
any significant deficiencies and significant changes in
internal controls reported to the Committee by the
independent auditor or management), accounting practices,
and disclosure controls and procedures (and management
reports thereon).

A-2

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o FINANCIAL REPORTING

a. To discuss with financial management and with the
independent accountant any significant financial reporting
issues and judgments made in connection with the preparation
of the Corporation's financial statements, including any
significant changes in the Corporation's selection or
application of accounting principles; the effect of
regulatory or accounting initiatives; the development,
selection and disclosure of critical accounting policies and
the effect of alternative assumptions, estimates or
generally accepted accounting principles ("GAAP") and
methods on the Corporation's financial statements; and all
material written communications between the independent
accountant and management.

b. To review and discuss with the independent accountant and
financial management of the Corporation at the conclusion of
the year-end audit and each quarterly review and prior to
finalizing and filing, each annual or interim report of the
Corporation, including, as applicable:

i. the Corporation's annual and interim financial
statements and related footnotes;

ii. disclosure under management's discussion and
analysis of financial condition and results of
operations ("MD&A");

iii. the independent accountant's audit or review of and
report on such financial statements, including any
significant accounting matters and findings and
management's responses to them;

iv. any significant changes in the audit or review scope
or plan from that previously presented to the
Committee;

v. any significant transactions not a normal part of
the Corporation's business and the manner in which
they were accounted for in such financial
statements;

vi. the independent accountant's qualitative judgments
and recommendations about the appropriateness of the
Corporation's accounting principles and practices,
any proposed changes in such accounting principles
and practices and the Corporation's implementation
of previously recommended changes in accounting
principles and practices;

vii. the independent accountant's communications with
respect to any reportable conditions or material
weaknesses in the Corporation's internal controls
(which, for purposes of this Charter, will include
disclosure controls where appropriate);

viii. any lack of cooperation, disputes or disagreements
with management, audit problems or other
difficulties encountered by the independent
accountant during the course of the audit or review,
including any restrictions on the scope of its work
or access to requested information, and management's
responses thereto;

ix. the process conducted by the Chief Executive Officer
and Chief Financial Officer with respect to the
certifications required to be filed by them with the
SEC and NYSE; and

x. other matters related to the conduct of the audit of
the annual financial statements and review of the
interim financial statements that are to be
communicated to the Committee under generally
accepted auditing standards ("GAAS") and the rules
of the SEC and NYSE.

c. To recommend to the Board whether the audited financial
statements are to be included in the annual report of the
Corporation to be filed with the SEC.

d. To prepare the report required to be included in the
Corporation's annual proxy statement disclosing whether the
Committee has reviewed and discussed the audited financial
statements with management and has discussed matters
specified by GAAS and by SEC rules and regulations with the
independent accountant, and has taken whatever action and
prepared such other reports and letters as may be required
from time to time by the SEC and/or the NYSE.

A-3

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e. To review, together with counsel for the Corporation, legal
and regulatory matters that may have a material effect on
the Corporation's financial statements, accounting policies
or compliance policies, including any correspondence or
communications from or with regulators or governmental
agencies.

f. To discuss with management the Corporation's earnings press
releases, including the presentation of pro forma or other
non-GAAP information, as well as the type of financial
information or earnings guidance or type of presentation
provided or to be provided to the public, the investment
community or rating agencies.

o CONTROL SYSTEMS AND ENVIRONMENT

a. To consider and review with the independent accountant, the
Director of Internal Audit and the financial management of
the Corporation the adequacy of the Corporation's internal
controls, including computerized information system controls
and security, and any related significant findings and
recommendations by the independent accountant or the
Director of Internal Audit, together with management's
responses.

b. To review the annual internal control report of management
as and when required by SEC rules promulgated under Section
404 of the Sarbanes-Oxley Act of 2002 and the attestation
and report of the independent accountant as and when
required in connection therewith, and management's quarterly
and annual evaluations of and conclusions about the
effectiveness of and changes to internal controls and
procedures for financial reporting.

c. To establish, monitor and review procedures for (i) the
receipt, retention and treatment of complaints received by
the Corporation regarding accounting, internal accounting
controls or auditing matters, and (ii) the confidential,
anonymous submission by employees of the Corporation of
concerns regarding questionable accounting or auditing
matters.

d. To review the Corporation's program to monitor compliance
with the Code, and to meet periodically with the
Corporation's General Counsel, Chief Financial Officer and
Director of Internal Audit to discuss compliance with the
Code.

e. To review periodically the Corporation's Global
Authorization Limits or comparable document relating to
approval authority and to recommend to the Board appropriate
changes thereto.

f. To review officers' expense accounts and perquisites
reported on such expense accounts, including officers' use
of corporate assets, and to consider the results of any
review by the internal auditors or independent accountant;
results of the review will be forwarded to the Compensation
Committee for review of reasonableness and appropriateness
of disclosure of all such items.

g. To discuss with management the Corporation's major risk
exposures and the guidelines or policies implemented by
management to monitor and control such exposures, including
the Corporation's financial risk assessment and financial
risk management policies.

h. To establish with management hiring policies for employees
or former employees of the independent accountant,
consistent with the requirements of the SEC and/or the NYSE.

i. To review and, if appropriate, approve all material
transactions with related parties.

j. To provide regular reports to the Board of Directors of the
Corporation.

k. To review annually the Committee's own performance.

l. To review this Charter annually and update it when
appropriate.

o EXECUTIVE SESSIONS

To meet periodically with the Director of Internal Audit, with
the independent accountant, and with management, in separate
executive sessions, to discuss matters then being considered by
the Committee or that the Committee or any of these groups
concludes should be discussed privately with the Committee.

A-4

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V. INVESTIGATIONS AND STUDIES; FUNDING. The Committee may conduct or
authorize investigations into or studies of matters within the
Committee's scope of responsibilities as described above, and may
retain, at the expense of the Corporation, independent counsel,
accountants or other advisors or consultants, as the Committee
considers necessary or appropriate to assist in any such investigation
or study or otherwise in connection with the performance of its
responsibilities. The Corporation will provide all funding necessary
for the performance by the Committee of all matters within the scope
of its responsibilities.

A-5

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[IFF LOGO]

ADMISSION TICKET
INTERNATIONAL FLAVORS & FRAGRANCES INC.

ANNUAL MEETING OF SHAREHOLDERS

MAY 11, 2004 AT 10:00 A.M.
INTERNATIONAL FLAVORS & FRAGRANCES INC.
521 WEST 57TH STREET
NEW YORK, NY 10019

ADMITS ONE SHAREHOLDER

INTERNATIONAL FLAVORS & FRAGRANCES INC.
PROXY/VOTING INSTRUCTION CARD

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
INTERNATIONAL FLAVORS & FRAGRANCES INC. FOR THE ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD MAY 11, 2004 OR ANY POSTPONEMENT(S) OR ADJOURNMENT(S) THEREOF.

- FOLD AND DETACH HERE -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

The undersigned shareholder of INTERNATIONAL FLAVORS & FRAGRANCES INC. (the
"Company") hereby appoints each of Messrs. RICHARD A. GOLDSTEIN, DOUGLAS J.
WETMORE and DENNIS M. MEANY as the attorney and proxy of the undersigned, with
full power of substitution, to act by a majority present, to vote the number of
shares of stock the undersigned is entitled to vote at the Annual Meeting of
Shareholders to be held at the headquarters of the Company, 521 West 57th
Street, New York, New York, on Tuesday, May 11, 2004 at 10:00 A.M. Eastern Time,
and any postponement(s) or adjournment(s) thereof (the "Meeting").

PLEASE INDICATE ON THE REVERSE SIDE OF THIS CARD HOW YOUR SHARES OF STOCK
ARE TO BE VOTED. THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS GIVEN ON AN
EXECUTED PROXY, THIS PROXY WILL BE VOTED FOR EACH OF THE NAMED NOMINEES AS A
DIRECTOR, FOR THE RATIFICATION OF THE SELECTION OF PRICEWATERHOUSECOOPERS LLP AS
INDEPENDENT ACCOUNTANT FOR THE 2004 FISCAL YEAR, AGAINST THE SHAREHOLDER
PROPOSAL RELATING TO AUDITOR INDEPENDENCE AND IN THE DISCRETION OF THE PROXY
COMMITTEE ON ANY OTHER MATTER PROPERLY BEFORE THE MEETING, UNLESS OTHERWISE
SPECIFIED.

(CONTINUED AND TO BE SIGNED ON REVERSE SIDE)

DEF 14A Last Page of 43 TOC 1st Previous Next ↓Bottom Just 43rd
Dear Shareholder:

The Annual Meeting of Shareholders (the "Meeting") of International Flavors
& Fragrances Inc. (the "Company") will be held at 10:00 A.M. Eastern Time on
Tuesday, May 11, 2004 at the headquarters of the Company, 521 West 57th Street,
New York, NY 10019. The Company is now offering shareholders three alternative
ways of voting their proxies:

[Enlarge/Download Table]

BY MAIL BY TELEPHONE THROUGH THE INTERNET
Mark, sign and date your OR (Available only until 5:00 p.m. OR (Available only until 5:00 p.m.
proxy card and return it in Eastern Time on May 10, 2004) Eastern Time on May 10, 2004)
the enclosed envelope to Call toll free 1-866-205-9060 on Access the website at
Wachovia Bank, N.A. any touch-tone telephone to https://www.proxyvotenow.com/iff
Attn: Proxy Tabulation authorize the voting of your to authorize the voting of your
NC 1153 shares. You may call 24 hours a shares. You may access the site
PO Box 217950 day, 7 days a week. You will be 24 hours a day, 7 days a week.
Charlotte, NC 28254-3555 prompted to follow simple Follow the instructions that
instructions. appear on your computer screen.

The giving of such proxy does not affect your right to vote in person if you ----------------------------
attend the Meeting. The prompt vote of your proxy will aid the Company in
reducing the expense of additional proxy solicitation. In order to assist the ----------------------------
Company in preparing for the Meeting, please also indicate whether you currently ----------------------------
plan to attend the Meeting. If you wish to attend the Meeting in person, you
must bring this letter and picture identification in order to be admitted to the
Meeting. ----------------------------

If you vote by telephone or through the Internet, please DO NOT mail back this
proxy card.

- FOLD AND DETACH HERE -
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

[X] PLEASE MARK VOTES AS IN THIS EXAMPLE.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" PROPOSALS 1 AND 2.

1. Election of directors:
(01) Margaret Hayes Adame (02) Gunter Blobel (03) J. Michael Cook
(04) Peter A. Georgescu (05) Richard A. Goldstein
(06) Alexandra A. Herzan (07) Arthur C. Martinez (08) Burton M. Tansky

FOR all nominees [ ] WITHHOLD authority [ ]
listed (except as to vote for all nominees
indicated to the
contrary)

INSTRUCTIONS: TO WITHHOLD AUTHORITY TO VOTE FOR ANY INDIVIDUAL NOMINEE(S) WRITE
THE NAME(S) OF SUCH NOMINEE(S) IN THE SPACE PROVIDED.

____________________________________________________________________

2. To ratify the selection of PricewaterhouseCoopers LLP as independent
accountant for the 2004 fiscal year

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

THE BOARD OF DIRECTORS RECOMMENDS A VOTE "AGAINST" PROPOSAL 3.

3. A shareholder proposal relating to auditor independence

FOR AGAINST ABSTAIN
[ ] [ ] [ ]

CHANGE OF ADDRESS -- MARK HERE [ ]

I WILL ATTEND THE ANNUAL MEETING [ ]

Please sign this proxy and return it promptly whether or not you expect to
attend the Meeting. Please sign exactly as your name or names appear(s) on this
proxy. If you are signing as an attorney, trustee, executor, administrator,
custodian, guardian or corporate officer, please give full title. For an account
in the name of two or more persons, each person should sign, or if one signs,
please attach evidence of authority.

DATED____________________ SIGNED________________________________________________

________________________________________________

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Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘DEF 14A’ Filing	Date	First	Last	Other Filings

	12/31/06	23	24	10-K, 5
	3/31/06	23		10-Q, 4
	11/26/04	35
	6/30/04	24		10-Q, 4
For Period End:	5/11/04	2	43	3, 4, 8-K
	5/10/04	43
	3/31/04	23		10-Q, 4
Filed on / Effective on:	3/26/04	3		4
	3/23/04	2	3
	3/18/04	2	36
	3/1/04	3		4
	2/24/04	4	5	4
	2/19/04	4		4
	2/12/04	5		4, SC 13G/A
	2/6/04	20		4
	1/29/04	24		4
	1/27/04	15	37	8-K
	1/1/04	14	23	3
	12/31/03	15	36	10-K, 11-K, 5
	12/1/03	27		4
	10/16/03	5		4, SC 13D/A
	9/9/03	24
	5/14/03	9	28	3, 3/A, 4, 8-K, DEF 14A
	5/6/03	33
	4/1/03	13	23	4
	3/31/03	14	24	10-Q, 4
	3/11/03	18		4, 4/A
	1/1/03	19	22
	12/31/02	32		10-K, 11-K, 5
	10/2/02	32		4
	8/1/02	17	22
	5/7/02	20		DEF 14A
	1/1/02	9
	11/23/01	24
	11/13/01	24
	1/1/01	24
	12/31/00	27		10-K
	12/1/00	27
	11/14/00	20	24	10-Q
	9/1/00	26
	6/1/00	21
	4/13/00	24
	9/30/99	24		10-Q
	12/31/98	31		10-K
	12/31/93	19		10-K
				List all Filings

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Filing Submission 0000950136-04-000876 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

International Flavors & Fragrances Inc – ‘DEF 14A’ for 5/11/04

On: Friday, 3/26/04, at 9:40am ET · Effective: 3/26/04 · For: 5/11/04 · Accession #: 950136-4-876 · File #: 1-04858

Previous ‘DEF 14A’: ‘DEF 14A’ on 3/25/03 for 5/14/03 · Next: ‘DEF 14A’ on 3/24/05 for 5/10/05 · Latest: ‘DEF 14A’ on 3/21/24 for 5/1/24

Definitive Proxy Solicitation Material — Schedule 14AFiling Table of Contents

Document Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

Definitive Proxy Solicitation Material — Schedule 14A
Filing Table of Contents