8-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

_________________

FORM 8-K

CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of report (Date of earliest event reported) December 15, 2004
_______________________________________________

INTERNATIONAL FLAVORS & FRAGRANCES INC.
_______________________________________________________________________________________________
(Exact Name of Registrant as Specified in Charter)

New York
________________________________
(State or Other Jurisdiction of Incorporation) 1-4858
_________________________________
(Commission File Number) 13-1432060
______________________________
(I.R.S. Employer Identification Number)

521 West 57th Street, New York, New York
__________________________________________________________________
(Address of Principal Executive Offices) 10019
___________________(Zip Code)

Registrant’s telephone number, including area code (212) 765-5500
_________________________________________

        Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

INFORMATION TO BE INCLUDED IN THE REPORT

Item 1.01. Entry Into a Material Definitive Agreement

                 At its meeting held on December 15, 2004, the Board of Directors of International Flavors & Fragrances Inc. (the “Company”) determined, with the assistance of independent compensation consultants, to change certain elements of the compensation for directors who are not employees of the Company (“Non-Employee Directors”), with such changes to take effect on the date of the Company’s 2005 Annual Meeting of Shareholders, as follows:

(a) Each Non-Employee Director will receive an annual cash retainer of $50,000, an increase from the $30,000 each currently receives.

(b) The Chairperson of the Audit Committee will also receive an annual cash retainer of $15,000, an increase from the $7,500 he currently receives. The Chairpersons of the Compensation Committee and Nominating and Governance Committee will each also receive an annual cash retainer of $7,500, an increase from the $3,750 each currently receives.

(c) Non-Employee Directors will receive a cash fee of $2,000 for each meeting of the Board attended, an increase from the $1,500 they currently receive. Each member of the Audit Committee will receive a cash fee of $1,500 for each meeting of the Audit Committee attended, an increase from the $1,200 each currently receives. Members of the Compensation Committee and Nominating and Governance Committee will each receive a cash fee of $1,500 for each meeting of the respective Committee attended, an increase from the $1,000 each currently receives.

(d) The lead director will also receive an annual cash fee of $7,500. The lead director position was established in November 2004 and the compensation for this position was not set at that time.

(e) Non-Employee Directors will continue to 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. Non-Employee Directors will continue to be required to defer their annual stock grant.

(f) Non-Employee Directors will receive an annual grant, on the date of each Annual Meeting of Shareholders, of 750 Restricted Stock Units under the Company’s 2000 Stock Award and Incentive Plan, which will vest on the third anniversary of the date of grant. The 2000 Stock Option Plan for Non-Employee Directors (the “2000 Directors’ Plan”) was amended to provide that, beginning in 2005, the automatic grant of stock options to Non-Employee Directors under the 2000 Directors’ Plan will be suspended until such time as the Board further amends the 2000 Directors’ Plan to resume option grants.

(g) Non-Employee Directors will continue to be eligible to participate in the Company’s Deferred Compensation Plan. A Non-Employee Director may defer all or a portion of his or her cash compensation, as well as any Restricted Stock Units granted to him or her, all subject to any changes necessitated by recent changes in the tax law.

                 At its meeting held on December 15, 2004, the Board also approved certain revisions to the target incentive percentages under the Company’s Annual Incentive Plan (the “AIP”). Under the AIP, certain eligible employees, including the Company’s executive officers, have an AIP award target set at a percentage of the employee’s base salary, which the employee may be eligible to receive if specific quantitative corporate and/or regional and/or functional, performance goals are achieved. The Board reduced the target AIP percentages for most participants with respect to AIP awards that participants may be eligible to receive for 2005 and thereafter, subject to periodic review. These target percentages were adjusted primarily to reflect local competitive practices more closely. With respect to the Company’s executive officers, the targets were reduced as follows:

Chief Executive Officer – AIP target was reduced from 125% to 120% of base salary
Chief Operating Officer – AIP target was reduced from 80% to 75% of base salary
Executive Vice President – AIP target was reduced from 60% to 55% of base salary
Senior Vice President – AIP target was reduced from 50% to 45% of base salary
Vice President and equivalent – AIP target was reduced from 40% to 35% of base salary

                 At its meeting held on December 15, 2004, the Board also approved certain revisions to the Company’s Executive Separation Policy (the “Policy”), including the following:

(a) The Policy was amended to provide certain severance payments and benefits to designated officers and other key executives and employees of the Company and its subsidiaries in the event of certain types of termination of employment (i) prior to or more than two years after a “change in control” or (ii) within two years after a “change in control”. Prior to the Policy being amended, the time period in each case was three years after a “change in control” and thus the amendment reduced the time period following a “change in control” during which termination of employment would result in enhanced payments and benefits under the Policy.

(b) The Policy was amended to reduce the amount of cash severance payments that may be payable under the Policy. Cash severance payments now will include a cash payment of a prorated portion of (i) the participant’s target long-term incentive plan award for each performance cycle on-going at the time of termination and (ii) the participant’s target annual incentive award for the year of termination. Prior to this amendment, the cash payments were determined based on the greater of the target award or the award that would have become payable had the participant’s employment continued through the end of the performance period and a participant was entitled to his or her entire long-term incentive plan award, rather than a pro-rated portion based on the number of days in the cycle prior to the participant’s termination.

(c) The time period during which certain participants would be required not to compete with the Company, as a condition to receiving any payments and benefits under the Policy, was reduced from twenty-four months to eighteen months to conform to the time period during which such participants would be receiving such payments and benefits.

(d) The Policy was expanded to cover an additional category of employees with lesser severance payments and benefits than those provided to the Company’s executive officers.

(e) The Policy was amended to provide for a limited reduction in severance payments and benefits under certain circumstances to certain participants if such limited reduction would avoid imposition of the “golden parachute” excise tax and thus avoid the Company being obligated to pay a tax gross-up in circumstances in which the after-tax benefit to the participant would be relatively small.

(f) Certain additional technical amendments were made to the Policy, including (i) clarifying that payments and benefits under the Policy would be payable only upon culmination certain events defined as being a “change in control”, as opposed to shareholder approval of such an event, (ii) defining a failure of the Company to require a successor to assume Company obligations under the Policy as “Good Reason” for a participant to terminate employment and be entitled to severance payments and benefits, (iii) providing that the effect of a “change in control” on performance-based awards would be governed by the specific award agreement, rather than being accelerated automatically under the Policy, and (iv) providing that severance payments and benefits would not be payable if termination of the participant is due to the participant’s misconduct relating to financial reporting under The Sarbanes-Oxley Act of 2002.

                 In order to satisfy the deferred compensation provisions of the newly enacted American Jobs Creation Act of 2004, the Board of Directors also adopted resolutions, at its meeting held on December 15, 2004, to demonstrate the Company’s good faith efforts to comply with and to expedite the preparation of appropriate plan revisions upon the promulgation of implementing regulations by the Internal Revenue Service and to authorize all such plan modifications.

Item 9.01  Financial Statements and Exhibits

(c) Exhibits

10.1	Form of International Flavors & Fragrances Inc. 2000 Stock Award and Incentive Plan Non-Employee Directors’ Restricted Stock Unit Agreement
10.2	2000 Stock Option Plan for Non-Employee Directors as amended and restated as of December 15, 2004
10.3	Restated and Amended Executive Separation Policy (as amended through and including December 15, 2004)

SIGNATURE

          Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated:  December 20, 2004 INTERNATIONAL FLAVORS & FRAGRANCES INC.


By:       /s/ Dennis M. Meany
——————————————
Name:  Dennis M. Meany
Title:    Senior Vice President, General Counsel and
             Secretary

EXHIBIT INDEX

Exhibit No. Description

10.1 Form of International Flavors & Fragrances Inc. 2000 Stock Award and Incentive Plan Non-Employee Directors’ Restricted Stock Unit Agreement

10.2 2000 Stock Option Plan for Non Employee Directors as amended and restated as of December 15, 2004

10.3 Restated and Amended Executive Separation Policy (as amended through and including December 15, 2004)

EX-10.1

INTERNATIONAL FLAVORS & FRAGRANCES INC.
2000 Stock Award and Incentive Plan
As Amended and Restated

Restricted Stock Units Agreement—Non-Employee Director

This Restricted Stock Units Agreement (the “Agreement”) confirms the grant on ____________, 20____ (the “Grant Date”) by INTERNATIONAL FLAVORS & FRAGRANCES INC., a New York corporation (the “Company”), to __________________ (“Grantee”) of Restricted Stock Units (the “Units”), as follows:

Number granted:            _____ Units

Units vest:          All Units will vest on the third anniversary of the Grant Date, ____________, 20____ (the “Stated Vesting Date”), if not previously forfeited. In addition, the Units will become immediately vested upon a Change in Control or upon the occurrence of certain events relating to termination of employment, in accordance with Section 4 hereof.

Settlement :            Units granted hereunder will be settled by delivery of one share of the Company’s Common Stock, par value $.12-1/2 per share, for each Unit being settled. Subject to elective deferral under Section 6 below, such settlement shall occur upon the vesting (the lapse of the risk of forfeiture) of each Unit as specified above.

* * * * * * 

The Units are subject to the terms and conditions of the 2000 Stock Award and Incentive Plan, as amended and restated (the “Plan”), and this Agreement, including the Terms and Conditions of Restricted Stock Units attached hereto. The number of Units and the kind of shares deliverable in settlement of Units are subject to adjustment in accordance with Section 5 hereof and Section 11(c) of the Plan.

        Grantee acknowledges and agrees that (i) Units are nontransferable, except as provided in Section 3 hereof and Section 11(b) of the Plan, (ii) Units, and certain amounts of gain realized upon settlement of Units, are subject to forfeiture in the event of Grantee’s Termination of Service in certain circumstances prior to vesting, as specified in Section 4 hereof, (iii) sales of shares delivered in settlement of Units will be subject to the Company’s policies regulating trading by directors and (iv) a copy of the Plan and related prospectus have previously been delivered to Grantee or are being delivered to Grantee.

        IN WITNESS WHEREOF, INTERNATIONAL FLAVORS & FRAGRANCES INC. has caused this Agreement to be executed by its officer thereunto duly authorized, and Grantee has duly executed this Agreement, by which each has agreed to the terms of this Agreement.

Grantee




——————————————
Name INERNATIONAL FLAVORS & FLAVORS INC.


By:  
——————————————
Name:    
Title:             

TERMS AND CONDITIONS OF RESTRICTED STOCK UNITS

        The following Terms and Conditions apply to the Units granted to Grantee by INTERNATIONAL FLAVORS & FRAGRANCES INC. (the “Company”), as specified in the Restricted Stock Units Agreement (of which these Terms and Conditions form a part). Certain terms of the Units, including the number of Units granted, vesting date(s) and settlement date, are set forth on the preceding pages.

        1.        General.   The Units are granted to Grantee under the Company’s 2000 Stock Award and Incentive Plan (the “Plan”), a copy of which, along with other documents constituting the “prospectus” for the Plan, have previously been delivered to Grantee or are being delivered to Grantee. All of the applicable terms, conditions and other provisions of the Plan are incorporated by reference herein. Capitalized terms used in this Agreement but not defined herein shall have the same meanings as in the Plan. If there is any conflict between the provisions of this document and mandatory provisions of the Plan, the provisions of the Plan govern. By accepting the grant of the Units, Grantee agrees to be bound by all of the terms and provisions of the Plan (as presently in effect or later amended), the rules and regulations under the Plan adopted from time to time, and the decisions and determinations of the Company’s Compensation Committee of the Company’s Board of Directors (the “Committee”) made from time to time, provided that no such Plan amendment, rule or regulation or Committee decision or determination shall materially and adversely affect the rights of the Grantee with respect to outstanding Units.

        2.        Account for Grantee.   The Company shall maintain a bookkeeping account for Grantee (the “Account”) reflecting the number of Units then credited to Grantee hereunder as a result of such grant of Units.

        3.        Nontransferability.   Until Units become settleable in accordance with the terms of this Agreement, Grantee may not transfer Units or any rights hereunder to any third party other than by will or the applicable laws of descent and distribution, except for transfers to a Beneficiary or otherwise if and to the extent permitted by the Company and subject to the conditions under Section 11(b) of the Plan.

        4.        Termination Provisions.   The following provisions will govern the vesting and forfeiture of the Units in the event of Grantee’s Termination of Service (as defined below), unless otherwise determined by the Committee (subject to Section 8(a) hereof):

                (a)            Death or Disability.   In the event of Grantee’s Termination of Service due to death or Disability (as defined below) all of the Units, to the extent then outstanding but not previously vested, will vest and become non-forfeitable immediately, and such Units, together with any then-outstanding Units that previously became vested and non-forfeitable, will be settled as promptly as practicable thereafter if not previously settled.

                (b)             Retirement.   In the event of Grantee’s Termination of Service due to Retirement (as defined below), the Units, to the extent outstanding but not previously vested or otherwise forfeited, will continue to be outstanding and will vest at the time the Units would have become vested if Grantee had not Retired. Such Units will be settled as promptly as practicable following vesting.

                (c)            Other Terminations.   In the event of Grantee’s Termination of Service for any reason other than death, Disability, or Retirement, any then-outstanding Units not vested at the date of Termination of Service will be forfeited.

                (d)            Certain Definitions.   The following definitions apply for purposes of this Agreement:

                                                   (i)               “Disability” means Grantee’s physical or mental impairment which is expected to be of long-duration and which renders Grantee unable to perform his or her duties as a director. Determination of Disability will be in the sole discretion of the Board.

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                                                 (ii)              “Retirement” means retirement after attaining age 62.

                                                 (iii)              “Termination of Service” means the event by which Grantee ceases to be a director of the Company.

        5.        Dividends and Adjustments.

                  (a)            Dividends.   No Dividends or Dividend Equivalents of any kind (including cash dividends, non-Common Stock Dividends or Common Stock Dividends) will be credited or paid on any unvested Units. Units that, at the relevant dividend record date that occurs before the issuance of shares in settlement of Units, previously have been vested (i.e., Units deferred as to settlement under Section 6), shall be entitled to payments or credits equivalent to dividends that would have been paid if the Units had been outstanding shares at such record date. The form and timing of such payments will be in the discretion of the Committee.

                 (b)            Adjustments.   The number of Units credited to Grantee’s Account and/or the property deliverable upon settlement of Units shall be appropriately adjusted, in order to prevent dilution or enlargement of Grantee’s rights with respect to Units in connection with, or to reflect any changes in the number and kind of outstanding shares of Common Stock resulting from, any corporate transaction or event referred to in the first sentence of Section 11(c) of the Plan.

                (c)            Risk of Forfeiture and Settlement of Units Resulting from Adjustments.   Units (and other property deliverable in settlement of Units) which directly or indirectly result from adjustments to a Unit granted hereunder shall be subject to the same risk of forfeiture as applies to the granted Unit and will be settled at the same time as the granted Unit.

        6.        Deferral of Settlement.   Settlement of any Unit, which otherwise would occur upon the lapse of the risk of forfeiture of such Unit, will be deferred in certain cases if and to the extent validly elected by Grantee. Deferrals shall comply with requirements under Section 409A of the Internal Revenue Code. It is understood that Section 409A and regulations thereunder may make it impractical for any such deferral to take place. At any time that Units are deferred, they will be subject to accelerated settlement under Section 9(a) of the Plan only if the Change in Control constitutes a change in control under applicable regulations then in effect under Section 409A. Other provisions of this Agreement notwithstanding, under U.S. federal income tax laws and Treasury Regulations (including proposed regulations) as presently in effect or hereafter implemented, (i) if the timing of any distribution in settlement of Units would result in Grantee’s constructive receipt of income relating to the Units prior to such distribution, the date of distribution will be the earliest date after the specified date of distribution that distribution can be effected without resulting in such constructive receipt (or, if delayed distribution would not avoid such constructive receipt, distribution will be accelerated to the date that would avoid such constructive receipt, but in no event will distribution occur before the Stated Vesting Date); and (ii) any rights of Grantee or retained authority of the Company with respect to Units hereunder shall be automatically modified and limited to the extent necessary so that Grantee will not be deemed to be in constructive receipt of income relating to the Units prior to the distribution and so that Grantee shall not be subject to any penalty under Section 409A of the Internal Revenue Code (the “Code”).

        7.        Other Terms Relating to Units.

                (a)            Fractional Units and Shares.   The number of Units credited to Grantee’s Account shall include fractional Units, if any, calculated to at least three decimal places, unless otherwise determined by the Committee. Unless settlement is effected through a third-party broker or agent that can accommodate fractional shares (without requiring issuance of a fractional share by the Company), upon settlement of the Units Grantee shall be paid, in cash, an amount equal to the value of any fractional share that would have otherwise been deliverable in settlement of such Units.

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                 (b)            Taxes.   Grantee shall be responsible for any income taxes and other taxes resulting from the grant, vesting or settlement of Units.

                 (c)            Statements.   An individual statement of each Grantee’s Account will be issued to Grantee at such times as may be determined by the Company. Such a statement shall reflect the number of Units credited to Grantee’s Account, transactions therein during the period covered by the statement, and other information deemed relevant by the Committee. Such a statement may be combined with or include information regarding other plans and compensatory arrangements for non-employee directors. Any statement containing an error shall not, however, represent a binding obligation to the extent of such error.

                (d)            Grantee Consent.   By signing this Agreement, Grantee voluntarily acknowledges and consents to the collection, use processing and transfer of personal data as described in this Section 7(d). Grantee is not obliged to consent to such collection, use, processing and transfer of personal data; however, failure to provide the consent may affect Grantee’s ability to participate in the Plan. The Company and its subsidiaries hold, for the purpose of managing and administering the Plan, certain personal information about Grantee, including Grantee’s name, home address and telephone number, date of birth, social security number or other Grantee identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, and details of all options or any other entitlement to shares of stock awarded, canceled, purchased, vested, unvested or outstanding in Grantee’s favor (“Data”). The Company and/or its subsidiaries will transfer Data among themselves as necessary for the purpose of implementation, administration and management of Grantee’s participation in the Plan and the Company and/or any of its subsidiaries may each further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Plan. These recipients may be located in the European Economic Area, or elsewhere throughout the world, such as the United States. Grantee authorizes them to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing Grantee’s participation in the Plan, including any requisite transfer of such Data as may be required for the administration of the Plan and/or the subsequent holding of shares on Grantee’s behalf to a broker or other third party with whom Grantee may elect to deposit any shares acquired pursuant to the Plan. Grantee may, at any time, review Data, require any necessary amendments to it or withdraw the consents herein in writing by contacting the Company; however, withdrawing consent may affect Grantee’s ability to participate in the Plan.

                (e)            Consent to Electronic Delivery.   Grantee hereby consents to electronic delivery of the Plan, the Prospectus for the Plan and other documents related to the Plan (collectively, the “Plan Documents”). The Company will deliver the Plan documents electronically to Grantee by e-mail, by posting such documents on its intranet website or by another mode of electronic delivery as determined by the Company in its sole discretion. The company will send to the Grantee an e-mail announcement when a new plan document is available electronically for Grantee’s review, download or printing and will provide instructions on where the plan document can be found. Unless otherwise specified in writing to the Company, Grantee will not incur any costs for receiving the plan documents electronically through the Company’s computer network. Grantee will have the right to receive paper copies of any plan document by sending a written request for a paper copy to the address specified in Section 8(e) hereof. Grantee’s consent to electronic delivery of the plan documents will be valid and remain effective until the earlier of (i) the termination of Grantee’s participation in the Plan and (ii) the withdrawal company acknowledges and agrees that Grantee has the right at any time to withdraw his or her consent to electronic delivery of the Plan documents by sending a written notice of withdrawal to the address specified in Section 8(e) hereof. If Grantee withdraws his or her consent to electronic delivery, the Company will resume sending paper copies of the Plan documents within ten (10) business days of its receipt of the withdrawal notice. Grantee acknowledges that he or she is able to access, view and retain an e-mail announcement informing Grantee that the Plan documents are available in either HTML, PDF or such other format as the company determines in sole discretion.

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        8.        Miscellaneous.

                (a)            Binding Agreement; Written Amendments.   This Agreement shall be binding upon the heirs, executors, administrators and successors of the parties. This Agreement constitutes the entire agreement between the parties with respect to the Units, and supersedes any prior agreements or documents with respect thereto. No amendment or alteration of this Agreement which may impose any additional obligation upon the Company shall be valid unless expressed in a written instrument duly executed in the name of the Company, and no amendment, alteration, suspension or termination of this Agreement which may materially impair the rights of Grantee with respect to the Units shall be valid unless expressed in a written instrument executed by Grantee.

                (b)            No Promise of Continued Service as Director.   The Units and the granting thereof shall not constitute or be evidence of any agreement or understanding, express or implied, that Grantee has a right to continue as a director of the Company for any period of time, or at any particular rate of compensation.

                (c)            Unfunded Plan.   Any provision for distribution in settlement of Grantee’s Account hereunder shall be by means of bookkeeping entries on the books of the Company and shall not create in Grantee any right to, or claim against any, specific assets of the Company, nor result in the creation of any trust or escrow account for Grantee. With respect to Grantee’s entitlement to any distribution hereunder, Grantee shall be a general creditor of the Company.

                (d)            Governing Law.   THE VALIDITY, CONSTRUCTION, AND EFFECT OF THIS AGREEMENT SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS (INCLUDING THOSE GOVERNING CONTRACTS) OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAWS, AND APPLICABLE FEDERAL LAW.

                 (e)             Notices.  Any notice to be given the Company under this Agreement shall be addressed to the Company at 521 West 57^th Street, New York, NY 10019, attention: Corporate Secretary, and any notice to the Grantee shall be addressed to the Grantee at Grantee’s address as then appearing in the records of the Company.

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EX-10.2

INTERNATIONAL FLAVORS & FRAGRANCES INC.
2000 STOCK OPTION PLAN FOR NON-EMPLOYEE DIRECTORS
AS AMENDED AND RESTATED AS OF DECEMBER 15, 2004

                 International Flavors & Fragrances Inc., a New York corporation (herein called “IFF”, hereby establishes the 2000 Stock Option Plan for Non-Employee Directors (herein called the “Plan”) on the following terms and conditions:

                 1.     Purpose: To attract and retain the services of qualified independent directors of IFF who are not employees of IFF and provide additional incentive for such directors to work for the best interest of IFF and its shareholders.

                 2.     Method of Adoption: By the approval of the Board of Directors of IFF (herein called the “Board”) and of the holders of a majority of the shares of IFF Common Stock, par value of $.12-1/2 each (“Common Stock”).

                 3.     Grant of Options: An option to purchase 3,000 shares of Common Stock will be automatically granted to each non-employee director in each year commencing in 2000 and ending in 2009, and each such grant in each year shall be made on the date of the Annual Meeting of Shareholders of IFF in that year. The foregoing notwithstanding, beginning in 2004 the automatic grant of options under this Section 3 shall be suspended (i.e., will not occur as provided above), such suspension to continue in subsequent years until such time as the Board further amends this Plan to resume option grants as provided herein or as otherwise then determined by the Board.

                 4.     Number of Shares: The Plan shall cover an aggregate of 450,000 shares of Common Stock. Either authorized and unissued shares or treasury shares may be used. If any options expire or terminate without being exercised in full, including options voluntarily surrendered for cancellation, the shares subject thereto which have not been purchased in accordance with the terms of such options shall be available for the grant of new options under the Plan.

                 5.     Purchase Price: The purchase price per share for any stock optioned at any time under this Plan shall be the fair market value thereof on the date of granting the option. Upon exercise of any stock option the director may pay for the stock covered by the stock option with Common Stock of IFF taken at its fair market value, providing the director has held such Common Stock for at least six months or such longer period as determined by the Board.

                 6.     Eligibility: All members of the Board who are not employees of IFF or one of its subsidiaries (including subsidiaries which may become such after adoption of this Plan), at the close of business on the date of grant of an option, including any such members elected to the Board by the shareholders on the date of grant.

                 7.     Individual Options: The maximum number of shares for which stock options may be granted to any individual under the Plan shall be 30,000.

                 8.     Exercise of Options: Each stock option may be exercised as follows: up to one-third of the shares covered at any time after 24 months from the date of grant, up to two-thirds of such shares at any time after 36 months from such date; and all the shares at any time after 48 months from such date. The foregoing notwithstanding, the Board may modify this vesting schedule or accelerate the vesting of any option and vary the post-termination exercise period thereof. An option may not be exercised, if, in the opinion of counsel for IFF, exercise of the option or delivery of shares pursuant thereto might result in a violation of any law or regulation of an agency of government or have an adverse effect on the listing status or qualification of the IFF shares on any securities exchange.

                 9.     Exercise Period; Persons Entitled to Exercise Options: Except as otherwise provided in Section 14 and Section 16, each stock option shall be exercisable as follows:

                (a)                  An active director who has not transferred the option to a “Beneficiary”, as hereinafter defined, or a Beneficiary to whom an active director has transferred the option may exercise the option as to shares which the director is at any time entitled to purchase under the terms of the option until the tenth anniversary after the date of its grant.

                (b)              If on or after his or her 65th birthday a director resigns, is not reelected by the shareholders of IFF, becomes totally disabled or retires, then he or she (or in the event of his or her incapacitation his or her legal representatives), or, if he or she has transferred the option to a Beneficiary, the Beneficiary, may exercise the option until its expiration date as to the balance, if any, of the shares which the director was entitled to purchase under the terms of the option at the date of such resignation, failure of reelection, disability or retirement.

                (c)              If before his or her 65th birthday a director resigns, is not reelected by the shareholders of IFF, becomes totally disabled or retires, then he or she (or in the event of his or her incapacitation his or her legal representatives), or, if he or she has transferred the option to a Beneficiary, the Beneficiary, may exercise the option within three (3) months thereafter (but not later than the expiration date of the option) as to the balance, if any, of the shares which the director was entitled to purchase under the terms of the option at the date of such resignation, failure of reelection, disability or retirement.

                (d)              If a director dies while a director of IFF or after having ceased to be a director of IFF,

                                                (i)               if he or she has not transferred the option to a Beneficiary, then his or her legal representatives, distributees or legatees, as the case may be, or

                                                (ii)               if he or she has transferred the option to a Beneficiary, then the Beneficiary may exercise the option within twelve (12) months after his or her death or such longer period as the Committee may permit (but in no event later than the expiration date of the option) as to the balance, if any, of the shares which the director was entitled to purchase under the terms of the option at the date of his or her death or, in case such death occurs less than 48 months from the date of the grant of the option, that proportion of the shares covered by the option which the number of days in the period from the date of grant to the date of the director’s death bears to the number 1460, less any shares previously purchased under the option.

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For purposes of the Plan, the term “Beneficiary” shall mean any family member or members, including by marriage or adoption, any trust in which the Employee or any family member or members have more than fifty percent (50%) of the beneficial interest, and any other entity in which the Employee or any family member or members own more than fifty percent (50%) of the voting interests, in each case designated by the Employee in his or her most recent written Beneficiary designation filed with the Committee as entitled to exercise the option (or any portion thereof), or if there is no surviving designated Beneficiary, then the person, persons, trust or trusts entitled by will or the laws of descent and distribution to exercise the option on behalf or in lieu of such non-surviving designated Beneficiary.

                 10.        Rights of Optionees Before Issuance of Stock Certificates: No optionee or Beneficiary shall have any rights as a shareholder with respect to any shares covered by any stock option until the date of the issuance of the stock certificate for such shares following exercise of the options. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued.

                 11.        Anti-Dilution Provisions: Each option agreement shall contain such provisions as the Board or the Committee shall deem to be appropriate, including provisions for appropriate adjustment of the option price and the number of shares covered, or both, to protect the optionee in the event of a reorganization, recapitalization, stock split, stock dividend, combination of shares, merger or consolidation (except as otherwise stated below) or in the event of any other change in the corporate capital structure of IFF. In the event of any such adjustment, the aggregate number and class of shares available under the Plan, the maximum number of shares as to which options may be granted to any director and the number of shares subject to options automatically granted each year under Section 3 may also be appropriately adjusted.

                 12.        Nonassignability: No option shall be assignable or transferable by an optionee except by will or by the laws of descent and distribution or to a Beneficiary, and shall not be pledged, mortgaged, hypothecated or otherwise encumbered, or otherwise subject to the claims of creditors by the director or any Beneficiary. The provisions of Sections 8 and 9 notwithstanding, the Stock Option and Compensation Committee of the Board (herein called the “Committee”) may reserve to itself the right to extend or vary the terms of any option to allow the exercise of the option by a director or his or her Beneficiary as to any or all of the shares subject to the option and/or for periods after the director for any reason ceases to serve (but not later than the expiration date of the option).

                 13.     Administration: The Plan is intended to be self-operative to the maximum extent consistent with prudent business practice. Otherwise, the Plan shall be administered by vote of a majority of the Board, or by a majority of the Committee.

                 14.     Acceleration of Option upon Merger or Consolidation: In the event of the merger or consolidation of IFF with or into another corporation as a result of which IFF is not the surviving corporation, then the optionee shall have the right (a) to exercise the option, as to the entire number of shares subject thereto, on and after the effective date of such merger or consolidation, or (b) if such exercise is no longer possible, to receive in cash for such option the difference between (i) the value of the consideration paid for a share of Common Stock in such merger or consolidation to holders of Common Stock and (ii) the option exercise price of such share, and the option shall cease and terminate as to any shares as to which it has not been so exercised or cashed out on a date 180 days after the effective date of such merger or consolidation or on the expiration date of such option, whichever is earlier.

                 15.     Agreements: Options issued under the Plan shall be evidenced by agreements in such form as the Board or the Committee may approve. The terms of such agreements shall comply with the applicable terms of the Plan contained herein. The option agreement shall not impose on IFF or its subsidiaries any obligation to continue any individual as a director for any period.

                 16.     Change in Control: In the event of a “change in control” of IFF, all options previously granted to a director shall become immediately exercisable in full, and he or she or his or her legal representatives, distributees or legatees in the event of the death of a director may exercise within 12 months thereafter (but not later than the respective expiration dates of the options) any and all outstanding options.

                 “Change in control” shall have the same meaning set forth in Section 9 of IFF^’s 2000 Stock Award and Incentive Plan.

                 17.     Interpretation: In the event of any difference of opinion between an optionee or any Beneficiary and IFF concerning the meaning or effect of the Plan, such difference shall be resolved by the Board.

                 18.     Compliance with Applicable Laws: All options granted under the Plan are not intended to qualify as incentive stock options under Section 422 of the Internal Revenue Code of 1986, as amended. No shares shall be offered under the Plan, and no stock certificate shall be delivered upon exercise of options, until such offering has been registered under the Securities Act of 1933, as amended, and any other applicable governmental laws and regulations, unless in the opinion of counsel such offering is exempt from registration under such Act, and until IFF shall have complied with any applicable provisions of the Securities Exchange Act of 1934, as amended, and applicable requirements of the New York Stock Exchange.

                 19.     Amendment and Termination of the Plan: The Board may amend, alter, suspend, discontinue or terminate the Plan or the Committee’s authority to grant options under the Plan without the consent of shareholders or any optionee, except that any such action shall be subject to the approval of the shareholders of IFF at or before the next Annual Meeting of Shareholders for which the record date is after such Board action if such shareholder approval is required by any federal or state law or regulation of the rules of any stock exchange or automated quotation system on which the Common Stock may then be listed or quoted, and the Board may otherwise, in its discretion, determine to submit other such changes to the Plan to shareholders for approval; provided, however, that, without the consent of an affected optionee, no such action may materially impair the rights of such optionee under any option previously granted to him or her (as such rights are set forth in the Plan and in any stock option agreement evidencing the grant of such option).

EX-10.3

INTERNATIONAL FLAVORS & FRAGRANCES INC.

Restated and Amended
Executive Separation Policy Document
(As Amended through and including December 13, 2004)

INTERNATIONAL FLAVORS & FRAGRANCES INC.

Executive Separation Policy

		Page
1.	Purpose	1
2.	Definitions	1
3.	Eligibility	5
4.	Severance Payments and Benefits	6
5.	Acceleration of Equity Awards Upon a Change in Control; Certain Provisions Applicable to Equity Awards	6
6.	Excise Tax Gross-Up	6
7.	Employee Obligations and Conditions to Receipt of Payments and Benefits	9
8.	Other Provisions Applicable to Severance Payments and Benefits	12
9.	Other Plans and Policies; Non-Duplication of Payments or Benefits	13
10.	Miscellaneous	14

INTERNATIONAL FLAVORS & FRAGRANCES INC.

Executive Separation Policy

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

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

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

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

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

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

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

    (d)        “Cause” means (i) the willful and continued failure by the Employee to perform substantially his duties with the Company (other than any such failure resulting from the Employee’s incapacity due to physical or mental illness) after a written demand for substantial performance is delivered to the Employee by the Chairman of the Board of Directors or the President of the Company which specifically identifies the manner in which the Employee has not substantially performed his duties, (ii) the willful engagement by the Employee in conduct which is not authorized by the Board of Directors of the Company or within the normal course of the Employee’s business decisions and is known by the Employee to be materially detrimental to the best interests of the Company or any of its subsidiaries, including any misconduct that results in material noncompliance with any financial reporting requirement under the Federal securities laws if such noncompliance results in an accounting restatement (as these terms are used in Section 304 of the Sarbanes-Oxley Act of 2002), or (iii) the willful engagement by the Employee in illegal conduct or any act of serious dishonesty which adversely affects, or, in the reasonable estimation of the Board of Directors of the Company, could in the future adversely affect, the value, reliability or performance of the Employee to the Company in a material manner. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board of Directors of the Company or based upon the advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by the Employee in good faith and in the best interests of the Company. Notwithstanding the foregoing, an Employee shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to the Employee a copy of the resolution duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board of Directors after reasonable notice to the Employee and an opportunity for him, together with his counsel, to be heard before the Board of Directors, finding that, in the good faith opinion of the Board of Directors, the Employee was guilty of the conduct set forth above in (i), (ii) or (iii) of this Section 2(c) and specifying the particulars thereof in detail.

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

    (i)        Any “person,” as such term is used in Section 13(d) and 14(d) of the Exchange Act (other than the Company, any trustee or other fiduciary holding securities under an employee benefit plan of the Company, or any company owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company), acquires voting securities of the Company and immediately thereafter is a “40% Beneficial Owner.” For purposes of this provision, a “40% Beneficial Owner” shall mean a person who is the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company’s then-outstanding voting securities; provided, however, that the term “40% Beneficial Owner” shall not include any person who was a beneficial owner of outstanding voting securities of the Company at February 20, 1990, or any person or persons who was or becomes a fiduciary of any such person or persons who is, or in the aggregate, are a “40% Beneficial Owner” (an “Existing Shareholder”), including any group that may be formed which is comprised solely of Existing Shareholders, unless and until such time after February 20, 1990 as any such Existing Shareholder shall have become the beneficial owner (other than by means of a stock dividend, stock split, gift, inheritance or receipt or exercise of, or accrual of any right to exercise, a stock option granted by the Company or receipt or settlement of any other stock-related award granted by the Company) by purchase of any additional voting securities of the Company; and provided further, that the term “40% Beneficial Owner” shall not include any person who shall become the beneficial owner of 40% or more of the combined voting power of the Company’s then-outstanding voting securities solely as a result of an acquisition by the Company of its voting securities, until such time thereafter as such person shall become the beneficial owner (other than by means of a stock dividend or stock split) of any additional voting securities and becomes a 40% Beneficial Owner in accordance with this Section;

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

    (iii)        There is consummated a merger, consolidation, recapitalization, or reorganization of the Company, or a reverse stock split of any class of voting securities of the Company, if, immediately following consummation of any of the foregoing, either (A) individuals who, immediately prior to such consummation, constitute the Board do not constitute at least a majority of the members of the board of directors of the Company or the surviving or parent entity, as the case may be, or (B) the voting securities of the Company outstanding immediately prior to such recommendation do not represent (either by remaining outstanding or by being converted into voting securities of a surviving or parent entity) at least 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 and there occurs a distribution or other substantive step pursuant to such plan of complete liquidation, or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets (or any transaction have a similar effect), and in each case all material contingencies to the completion of the transaction have been satisfied or waived.

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

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

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

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

    (j)        “Effective Date” means the date the Policy became effective, as set forth in Section 10(i) hereof.

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

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

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

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

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

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

    (v)        the failure of the Company to obtain the binding agreement of any successor to the Company expressly to assume and agree to fully perform the Company’s obligations under this Policy, as contemplated in Section 10(f) hereof;

in each case after notice in writing from the Employee to the Company and a period of 30 days after such notice during which the Company and its subsidiaries fail to correct such conduct.

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

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

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

    (p)        “Retirement” means retirement after attaining age 62.

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

        3.        Eligibility. Each officer of the Company or other key executive or employee of the Company or its subsidiaries who has been designated in writing by the Committee shall be eligible for the severance payments and benefits and other provisions of this Policy if his termination of employment qualifies hereunder. Eligible persons shall include persons employed outside the United States, if designated by the Committee and subject to Section 10(h) of this Policy.

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

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

    (a)        Acceleration Upon Change in Control. In the event of a Change in Control, the following provisions will apply to any stock options, restricted stock and other awards based on stock then held by the Employee, other than Designated Awards and limited stock appreciation rights relating thereto:

    (i)        Any such option or other award carrying a right to exercise that was not previously vested and exercisable shall become fully vested and exercisable as of the time of the Change in Control.

    (ii)        All forfeiture conditions, deferral of settlement conditions, and other restrictions applicable to such restricted stock and other equity awards shall lapse and such awards shall be fully payable or settleable as of the time of the Change in Control without regard to deferral and vesting conditions, except to the extent of any waiver by the Employee or other express Employee election to defer beyond a Change in Control.

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

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

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

        6.        Excise Tax Gross-Up. If an Employee who has been designated as eligible for benefits under this Section 6, as set forth in the Annex hereto designating the terms of such Employee’s participation, becomes entitled to one or more payments in connection with a Change in Control or termination of employment during the two years following a Change in Control, other than a termination by the Company for Cause, (with a “payment” including, without limitation, the vesting of an option or other non-cash benefit or property, including under Section 5 of this Policy) pursuant to any plan, agreement or arrangement of the Company (together, “Severance Payments”) which are or would be subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (or any similar tax that may be imposed) (the “Excise Taxes”), the Company shall pay to the Employee an additional amount (“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 upon the Gross-Up Payment, the Employee retains an amount of the Gross-Up Payment equal to the Excise Taxes imposed upon the Severance Payments. The foregoing notwithstanding, if a reduction of any compensation under Section 4 or vesting of equity awards under Section 5 by an amount not exceeding 10% of the Safe Harbor Amount would avoid the imposition of the Excise Taxes on Employee, compensation pursuant to Section 4 and/or vesting of equity awards under Section 5 of this Agreement shall be reduced to the extent necessary, but not more than 10% of the Safe Harbor Amount, to result in no imposition of the Excise Taxes on Employee. This “cut-back” provision shall apply to cash payments under Section 4 and/or vesting under Section 5 so as to minimize the amount of compensation that is reduced (i.e., it applies to payments or vesting that to the greatest extent represent parachute payments), with the amount of compensation based on vesting to be measured (for purposes of this provision) by the intrinsic value of the equity award at the date of such vesting. “Safe Harbor Amount” shall mean one dollar less than 300% of the “base amount” as determined in accordance with Section 280G(b)(3) of the Code.

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

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

    (ii)        The amount of the Severance Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of (A) the total amount of the Severance Payments or (B) the total amount of excess parachute payments within the meaning of Section 280G(b)(1) of the Code (after applying clause (i) above).

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

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        For purposes of determining the amount of the Gross-Up Payment, the Employee shall be deemed (A) to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made; (B) to pay any applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of the Employee’s adjusted gross income); and (C) to have otherwise allowable deductions for federal, state, and local income tax purposes at least equal to those disallowed because of the inclusion of the Gross-Up Payment in the Employee’s adjusted gross income. In the event that the Excise Tax is subsequently determined to be less than the amount taken into account hereunder at the time the Gross-Up Payment is made, the Employee shall repay to the Company at the time that the amount of such reduction in Excise Tax is finally determined (but, if previously paid to the taxing authorities, not prior to the time the amount of such reduction is refunded to the Employee or otherwise realized as a benefit by the Employee) the portion of the Gross-Up Payment that would not have been paid if such Excise Tax had been applied in initially calculating the Gross-Up Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined to exceed the amount taken into account hereunder at the time the Gross-Up Payment is made (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalties payable with respect to such excess) at the time that the amount of such excess is finally determined.

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

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

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

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

    (i)        The Employee, acting alone or with others, directly or indirectly, shall not, during the Non-competition Period, either as employee, employer, consultant, advisor, or director, or as an owner, investor, partner, or shareholder unless the Employee’s interest is insubstantial, engage in or become associated with a “Competitive Activity.” For this purpose, (A) the “Non-competition Period” means the period prior to a Change in Control and during Employee’s employment and within two years (or such other period as the Committee may specify) following termination of such employment with the Company and any subsidiary or for such shorter period following such termination as may be provided by applicable law; and (B) the term “Competitive Activity” means any business or other endeavor that engages in a line of business in any geographic location that is substantially the same as either (1) any line of operating business which the Company or a subsidiary engages in, conducts, or, to the knowledge of the Executive, has definitive plans to engage in or conduct, or (2) any operating business that has been engaged in or conducted by the Company or a subsidiary and as to which, to the knowledge of the Employee, the Company or subsidiary has covenanted in writing, in connection with the disposition of such business, not to compete therewith. The Committee shall, in the reasonable exercise of its discretion, determine which lines of business the Company and its subsidiaries conduct on any particular date and which third parties may reasonably be deemed to be in competition with the Company and its subsidiaries. For purposes of this Section 7(a) (including clause (ii) below), the Employee’s interest as a shareholder is insubstantial if it represents beneficial ownership of less than five percent of the outstanding class of stock, and the Employee’s interest as an owner, investor, or partner is insubstantial if it represents ownership, as determined by the Committee in its discretion, of less than five percent of the outstanding equity of the entity.

    (ii)        During the period prior to a Change in Control and during the Employee’s employment and within two years (or such other period as the Committee may specify) following termination of such employment with the Company or any subsidiary or for such shorter period following termination as may be provided by applicable law, the Employee, acting alone or with others, directly or indirectly, shall not (A) induce any customer or supplier of the Company or a subsidiary or affiliate, or other company with which the Company or a subsidiary or affiliate has a business relationship, to curtail, cancel, not renew, or not continue his or her or its business with the Company or any subsidiary or affiliate; or (B) induce, or attempt to influence, any employee of or service provider to the Company or a subsidiary or affiliate to terminate such employment or service.

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    (iii)        The Employee shall not disclose, use, sell, or otherwise transfer, except in the course of employment with or other service to the Company or any subsidiary or affiliate, any confidential or proprietary information of the Company or any subsidiary or affiliate, including but not limited to information regarding the Company’s current and potential customers, organization, employees, finances, and methods of operation and investments, so long as such information has not otherwise been disclosed to the public or is not otherwise in the public domain, except as required by law or pursuant to legal process, and the Employee shall not make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any other action which may, directly or indirectly, disparage or be damaging to the Company or any of its subsidiaries or affiliates or their respective officers, directors, employees, advisors, businesses or reputations, except as required by law or pursuant to legal process.

    (iv)        The Employee shall cooperate with the Company or any subsidiary or affiliate by making himself available to testify on behalf of the Company or such subsidiary or affiliate in any action, suit, or proceeding, whether civil, criminal, administrative, or investigative, and otherwise to assist the Company or any subsidiary or affiliate in any such action, suit, or proceeding by providing information and meeting and consulting with members of management of, other representatives of, or counsel to, the Company or such subsidiary or affiliate, as reasonably requested.

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

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

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

    (d)        Clawback Provision. In the case of any termination of the Employee’s employment prior to a Change in Control, if the Employee has failed to comply with the obligations under Section 7(a) (other than an inadvertent and inconsequential event constituting non-compliance) during the two years prior to termination or during the period following termination which is the lesser of two years or the period during which the obligations under Section 7(a) continue to apply, all of the following forfeitures will result:

    (i)        The unexercised portion of any option, whether or not vested, and any other award not then vested will be immediately forfeited and canceled.

    (ii)        The Employee will be obligated to repay to the Company, in cash, within five business days after demand is made therefor by the Company,

    (A)        the total amount of any cash payments made to the Employee under this Policy, other than (i) such Employee’s annual salary that had been payable as of the date of termination of employment, together with salary, incentive compensation and benefits which had been earned or become payable as of the date of termination but which had not yet been paid to the Employee and unreimbursed business expenses reimbursable under Company policies then in effect, and (ii) cash payments under welfare benefit plans;

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

    (C)        the Award Gain (as defined below) realized by the Employee upon each exercise of an option or settlement of a restricted stock or stock unit award (regardless of any elective deferral) since the date two years prior to Employee’s termination of employment. For purposes of this Section 7(d), the term “Award Gain” shall mean (1), in respect of a given option exercise, the product of (X) the fair market value per share of stock at the date of such exercise (without regard to any subsequent change in the market price of shares) minus the exercise price times (Y) the number of shares as to which the option was exercised at that date, and (ii), in respect of any other settlement of an award granted to the Employee, the fair market value of the cash or stock paid or payable to the Employee (regardless of any elective deferral) less any cash or the fair market value of any stock or property (excluding any payment of tax withholding) paid by the Employee to the Company as a condition of or in connection such settlement.

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        8.              Other Provisions Applicable to Severance Payments and Benefits.

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

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

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

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

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

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

    (g)        Modifications to Rights to Avoid Constructive Receipt. Other provisions of this Policy notwithstanding, if under U.S. federal income tax laws as presently in effect or hereafter amended the terms (including timing) of any payment hereunder would result in an Employee’s constructive receipt of income relating to such right to payment prior to the payment date, any deferral of such payment date from the time the right to payment arises and is non-forfeitable shall be of no effect, so that the payment will be made to the Employee at the date he or she would be deemed to constructively receive the payment.

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

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

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

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

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        10.              Miscellaneous

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

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

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

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

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

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

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

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

    (i)        Effective Date. This Policy became effective as of April 13, 2000. This amendment and restatement of the Policy is effective as of __________, 2004.

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Annex I

Executive Separation Policy

TIER I

Designation of Participants and Terms

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

I.                Designation of Participants in Tier I.

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

II.                Terms of Participation in Tier I

        Subject to all of the terms and conditions of the Policy, the terms and conditions set forth below apply to Employees designated as Tier I participants. This Annex shall have no application to Employees designated as participants at a level other than Tier I, unless the Committee shall adopt such terms and conditions and so specify in a separate Annex to the Policy.

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

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

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

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

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

    (v)        Unless otherwise determined by the Committee, the Employee’s restricted stock and stock unit grants and LTIP awards which have not vested at the time of the Employee’s termination of employment shall be immediately forfeited.

    (vi)        For a period terminating on the earliest of 24 months following the date of termination of employment, the commencement of eligibility for benefits under a new employer’s welfare benefits plan, or the Employee’s attaining age 65, the maintenance in effect for the continued benefit of the Employee and his dependents of:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    (v)        A cash payment of a prorated portion of each of the Employee’s LTIP awards that would have become payable for each performance cycle on-going at the time of termination had Employee’s employment continued through the end of such performance cycle, with such LTIP award prorated based on the number of days during the performance cycle preceding the Employee’s termination (divided by the total number of days in the performance cycle). This amount will be payable at such time as the LTIP awards for the applicable performance cycle otherwise become payable, except the Committee may instead make a good faith estimate of the actual performance achieved through the date of termination and rely on this estimate to determine the amount payable in settlement of such LTIP award, in which case such payment will constitute full settlement of such LTIP award.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    (g)        Entitlement to Gross-Up. Tier I level participants shall be entitled to the Gross-Up Payment in accordance with Section 6 of the Policy.

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Annex II

Executive Separation Policy

TIER II

Designation of Participants and Terms

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

I.                Designation of Participants in Tier II.

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

II.                Terms of Participation in Tier II

        Subject to all of the terms and conditions of the Policy, the terms and conditions set forth below apply to Employees designated as Tier II level participants. This Annex shall have no application to Employees designated as participants at a level other than Tier II, unless the Committee shall adopt such terms and conditions and so specify in a separate Annex to the Policy.

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

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

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

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

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

    (v)        Unless otherwise determined by the Committee, the Employee’s restricted stock and stock unit grants and LTIP awards which have not vested at the time of the Employee’s termination of employment shall be immediately forfeited.

    (vi)        For a period terminating on the earliest of 18 months following the date of termination of employment, the commencement of eligibility for benefits under a new employer’s welfare benefits plan, or the Employee’s attaining age 65, the maintenance in effect for the continued benefit of the Employee and his dependents of:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    (v)        A cash payment of a prorated portion of each of the Employee’s LTIP awards that would have become payable for each performance cycle on-going at the time of termination had Employee’s employment continued through the end of such performance cycle, with such LTIP award prorated based on the number of days during the performance cycle preceding the Employee’s termination. This amount will be payable at such time as the LTIP awards for the applicable performance cycle otherwise become payable, except the Committee may instead make a good faith estimate of the actual performance achieved through the date of termination and rely on this estimate to determine the amount payable in settlement of such LTIP award, in which case such payment will constitute full settlement of such LTIP award.

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

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

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

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

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

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

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

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

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

    (viii)        The Employee will be credited with additional age and years of service under any Excess Benefit Plan as though the Employee continued to be employed for a period of 24 months after termination at a rate of compensation equal to his or her Annual Compensation, and the Employee will be deemed to be fully vested under any such Excess Benefit Plan, with the time or times at which benefits are payable under any such Plan unchanged; provided, however, that if an Excess Benefit Plan does not permit such additional crediting of age and years of service, then Employee will be paid in a lump sum the present value of the additional benefits he would have received under such Plan had Employee’s employment continued to the third anniversary of his termination at an annual rate of compensation equal to his or her Annual Compensation; provided further, that the Company’s obligations under any such Excess Benefit Plan shall be fully funded by deposits into a “rabbi trust” the trustee of which shall be independent of the Company and the terms of which shall preclude access by the Company to any of the trust assets, except for attachments by creditors of the Company upon insolvency or bankruptcy of the Company, until all obligations to the Employee and his beneficiaries have been satisfied; and provided further, that the Company may elect to satisfy all obligations to the Employee and his beneficiaries by payment, as a lump sum, of the present value of the accrued benefit under any Excess Plan.

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

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

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

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

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

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

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

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

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

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

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

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

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

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    (iii)        Except for Designated Awards, the Employee’s options which have not vested at the time of the Employee’s termination of employment shall be immediately fully vested and exercisable, and the Employee’s options shall remain outstanding and exercisable after termination for the following periods (but in no event past the stated expiration date of the option): (A) for one year if termination resulted from the Employee’s death, (B) three years if termination resulted from the Employee’s Disability, (C) for the remaining period until the stated expiration date of the option if termination resulted from Retirement or (D), unless otherwise determined by the Committee, for 90 days. At the end of the applicable post-termination exercise period, such options shall be canceled.

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

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

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

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

    (g)        Entitlement to Gross-Up. Tier II level participants shall be entitled to the Gross-Up Payment in accordance with Section 6 of the Policy.

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

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Annex III

Executive Separation Policy

TIER III

Designation of Participants and Terms

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

I.                Designation of Participants in Tier III.

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

II.                Terms of Participation in Tier III

        Subject to all of the terms and conditions of the Policy, the terms and conditions set forth below apply to Employees designated as Tier III level participants. This Annex shall have no application to Employees designated as participants at a level other than Tier III, unless the Committee shall adopt such terms and conditions and so specify in a separate Annex to the Policy.

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

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

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

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

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

    (v)        Unless otherwise determined by the Committee, the Employee’s restricted stock and stock unit grants and LTIP awards which have not vested at the time of the Employee’s termination of employment shall be immediately forfeited.

    (vi)        For a period terminating on the earliest of 12 months following the date of termination of employment, the commencement of eligibility for benefits under a new employer’s welfare benefits plan, or the Employee’s attaining age 65, the maintenance in effect for the continued benefit of the Employee and his dependents of:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    (v)        A cash payment of a prorated portion of each of the Employee’s LTIP awards that would have become payable for each performance cycle on-going at the time of termination had Employee’s employment continued through the end of such performance cycle, with such LTIP award prorated based on the number of days during the performance cycle preceding the Employee’s termination. This amount will be payable at such time as the LTIP awards for the applicable performance cycle otherwise become payable, except the Committee may instead make a good faith estimate of the actual performance achieved through the date of termination and rely on this estimate to determine the amount payable in settlement of such LTIP award, in which case such payment will constitute full settlement of such LTIP award.

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

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

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

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

    (iii)        A lump-sum cash severance payment equal to the product of the Employee’s Annual Compensation, multiplied by 1.5.

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

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

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

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

    (viii)        The Employee will be credited with additional age and years of service under any Excess Benefit Plan as though the Employee continued to be employed for a period of 18 months after termination at a rate of compensation equal to his or her Annual Compensation, and the Employee will be deemed to be fully vested under any such Excess Benefit Plan, with the time or times at which benefits are payable under any such Plan unchanged; provided, however, that if an Excess Benefit Plan does not permit such additional crediting of age and years of service, then Employee will be paid in a lump sum the present value of the additional benefits he would have received under such Plan had Employee’s employment continued to the third anniversary of his termination at an annual rate of compensation equal to his or her Annual Compensation; provided further, that the Company’s obligations under any such Excess Benefit Plan shall be fully funded by deposits into a “rabbi trust” the trustee of which shall be independent of the Company and the terms of which shall preclude access by the Company to any of the trust assets, except for attachments by creditors of the Company upon insolvency or bankruptcy of the Company, until all obligations to the Employee and his beneficiaries have been satisfied; and provided further, that the Company may elect to satisfy all obligations to the Employee and his beneficiaries by payment, as a lump sum, of the present value of the accrued benefit under any Excess Plan.

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    (ix)        For a period terminating on the earlier of 18 months following the date of termination of employment or the commencement of eligibility for benefits under a new employer’s welfare benefits plan, the maintenance in effect for the continued benefit of the Employee and his dependents of:

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

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

provided, however, that if the Company so elects, or if such continued participation is not possible under the general terms and conditions of such plans or under such policies, the Company, in lieu of the foregoing, shall arrange to have issued for the benefit of the Employee and the Employee’s dependents individual policies of insurance providing benefits substantially similar (on an after-tax basis) to those described in this Part II(d)(ix), or, if such insurance is not available at a reasonable cost to the Company, shall otherwise provide the Employee and the Employee’s dependents substantially equivalent benefits (on an after-tax basis); provided further that, in no event shall the Employee be required to pay any premiums or other charges in an amount greater than that which the Employee would have paid in order to participate in the Company’s plans and policies. Notwithstanding anything to the contrary contained herein, in the event the Employee becomes eligible for benefits under a new employer’s welfare benefit plan during the 18-month period following the date of termination, the benefits required to be provided to the employee pursuant to this Part II(d)(iv) shall be reduced by the amount of substantially similar benefits provided to the Employee at no additional cost by such new employer.

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

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

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

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

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

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

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

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

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

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    (iii)        Except for Designated Awards, the Employee’s options which have not vested at the time of the Employee’s termination of employment shall be immediately fully vested and exercisable, and the Employee’s options shall remain outstanding and exercisable after termination for the following periods (but in no event past the stated expiration date of the option): (A) for one year if termination resulted from the Employee’s death, (B) three years if termination resulted from the Employee’s Disability, (C) for the remaining period until the stated expiration date of the option if termination resulted from Retirement or (D), unless otherwise determined by the Committee, for 90 days. At the end of the applicable post-termination exercise period, such options shall be canceled.

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

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

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

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

    (g)        Entitlement to Gross-Up. Tier III level participants shall be entitled to the Gross-Up Payment in accordance with Section 6 of the Policy.

    (h)        Period During Which Restrictions Under Section 7(a)(i) and (ii) Apply. Tier III level participants shall be subject to the Non-competition Period under Section 7(a)(i) of this Policy for 12 months following termination of employment rather than two years, and shall be subject to the restrictions under Section 7(a)(ii) of this Policy for 12 months following termination of employment rather than two years. Except for this limitation, Sections 7(a)(i) and 7(a)(ii) apply to each such participant in accordance with their terms.

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